iSentium, LLC v. Bloomberg Finance L.P.

Background

iSentium developed “iSENSE,” an application that analyzed social-media opinions about investments. Bloomberg made the application available through its Bloomberg Terminals for a period of time. The parties entered into a Mutual Nondisclosure Agreement in June 2013 and a Developer Agreement in May 2014.

The nondisclosure agreement required confidentiality and provided for exclusive jurisdiction in New York courts, but it did not set a shortened deadline for filing claims. The Developer Agreement stated that it and the nondisclosure agreement together formed the parties’ entire agreement, that the Developer Agreement controlled if the agreements conflicted, and that no action arising out of or relating to the Developer Agreement could be brought by iSentium more than one year after the claim accrued. It also contained an arbitration provision, subject to Bloomberg’s election to have a dispute heard in state or federal court.

Bloomberg later announced its own sentiment-analysis application. iSentium filed this lawsuit on October 4, 2017, alleging patent infringement, violation of the Defend Trade Secrets Act, breach of contract, and trade-secret misappropriation under New York law. The court had previously dismissed the patent-infringement claim and dismissed unjust-enrichment and promissory-estoppel claims as duplicative of the contract claim. The claims remaining in this opinion were the Defend Trade Secrets Act claim, the New York trade-secret-misappropriation claim, and the breach-of-contract claim.

Summary-judgment standard

Summary judgment is a decision without a trial when the evidence shows that no genuine dispute over an important fact requires a trial and the moving party is entitled to judgment under the law. The court must view the facts favorably to the party opposing the motion. If the moving party produces evidence supporting judgment, the opposing party must identify admissible evidence creating a real factual issue.

Contract interpretation and one-year deadline

The court held that the Developer Agreement’s one-year limitations period applied to iSentium’s claims. The two agreements addressed the same business transaction and contained related confidentiality and anti-reverse-engineering provisions. The Developer Agreement expressly incorporated the nondisclosure agreement and stated that it controlled in the event of a conflict. Because the nondisclosure agreement’s court-selection provision and the Developer Agreement’s dispute-resolution and one-year-filing provisions conflicted, the court applied the Developer Agreement.

The court also held that it could decide timeliness in federal court. Bloomberg had elected to proceed in court rather than require arbitration, and the court concluded that Bloomberg’s litigation conduct also waived any right to invoke arbitration under the Developer Agreement.

The court rejected iSentium’s argument that the agreements were separate or ambiguous. It concluded that the contract language was clear and that iSentium’s executive’s declaration describing his understanding of the agreements could not create ambiguity in otherwise clear written contracts.

Accrual and disposition

The court concluded that Bloomberg presented evidence permitting a reasonable factfinder to determine that iSentium’s claims accrued, at the latest, in July 2016, when Bloomberg issued a press release about its own sentiment-analysis application. The court explained that, under New York law, a contract claim generally accrues when the contract is breached, not when the injured party learns of the breach. A New York trade-secret-misappropriation claim generally accrues when the defendant discloses the secret or first uses the plaintiff’s ideas. Under the Defend Trade Secrets Act, the claim accrues when the misappropriation is discovered or reasonably should have been discovered.

iSentium disputed having actual or firsthand knowledge in July 2016, but it did not present evidence that it learned of the alleged breach or misappropriation later. It also did not argue that further discovery was needed to determine the accrual date. Because the action was filed on October 4, 2017, the court found that iSentium had not shown that the remaining claims were timely under the contractual one-year period.

Disposition

The court granted Bloomberg’s motion for summary judgment. It directed the Clerk to terminate the motion and enter judgment for the defendants.