Medidata Solutions, Inc. v. Veeva Systems Inc.

Background

Medidata Solutions, Inc. and MDSOL Europe Limited sued Veeva Systems, Inc. under the federal Defend Trade Secrets Act and New York trade-secret law. Medidata also asserted four New York common-law claims: interference with contracts, unfair competition, aiding and abetting breaches of fiduciary duties, and unjust enrichment.

Medidata alleged that Veeva hired former Medidata employees who helped develop Veeva’s clinical-trial software and that Veeva thereby obtained Medidata’s confidential information. The claimed information concerned Medidata’s electronic data-capture software, clinical-trial-management software, product-development work, customer and sales information, pricing, training materials, business plans, and marketing strategies.

Medidata moved for summary judgment on its federal and state trade-secret claims and on Veeva’s defenses of waiver and equitable estoppel. Veeva moved for summary judgment on all six claims. Summary judgment is granted when the evidence shows no genuine dispute over an important fact and the moving party is entitled to win under the law.

Trade-Secret Claims

The court held that Medidata described ten of sixteen classes of alleged trade secrets with enough specificity for a reasonable jury to evaluate them. The descriptions and supporting evidence created factual disputes about whether those trade secrets were valuable, whether Medidata took reasonable steps to protect them, and whether Veeva acquired, disclosed, or used them improperly. Accordingly, the trade-secret claims survived summary judgment only as to those ten classes.

The surviving classes included specified aspects of Medidata’s electronic data-capture software, including integration technology, particular product-development features, and certain implementation information. They also included specified clinical-trial-management product features and implementation methods. The surviving business-information classes covered customer and sales information, pricing information, sales-team training materials, and go-to-market strategies.

The court found that other alleged trade secrets were too vague or unsupported to proceed. These included the electronic data-capture and clinical-trial-management software-architecture principles, broad clinical-trial-management integration concepts, certain customer-specific development information, broad product-implementation descriptions, and overall business plans. The Appendix identifies the specific information that was sufficiently described; it does not decide whether that information was actually valuable, kept secret, or misappropriated.

The court also found factual disputes about misappropriation. Medidata relied on documents retained by former employees, emails and conversations involving former employees and Veeva, other circumstantial evidence, and expert testimony. Veeva argued that the information was public, too old to be valuable, or not used by Veeva. Because a reasonable jury could accept either side’s evidence, neither party was entitled to summary judgment on the surviving trade-secret claims.

New York Common-Law Claims

The court granted Veeva’s motion for summary judgment on Counts III through VI. It concluded that California law governed those claims because Veeva was headquartered in California, most alleged misappropriation and related business decisions occurred there, and Medidata identified no specific injuries occurring in New York.

The court determined that California and New York law conflicted because California’s Uniform Trade Secrets Act preempts non-contract claims based on the same facts as a trade-secret claim, while New York law does not preempt such claims in the same way. The court concluded that Medidata’s claims for interference, unfair competition, aiding and abetting breach of fiduciary duties, and unjust enrichment relied on the same facts as the alleged trade-secret misappropriation. It therefore held those claims preempted under California law.

Affirmative Defenses

The court granted Medidata’s motion for summary judgment on Veeva’s defenses of waiver and equitable estoppel. Veeva presented evidence that Medidata knew former employees were leaving for Veeva and did not object to alleged noncompetition violations, which could support waiver of noncompetition provisions. But Veeva did not identify evidence that Medidata waived confidentiality duties or intended Veeva to rely on such a waiver. The court also found no genuine dispute supporting equitable estoppel.

Disposition

Judge Lorna G. Schofield concluded that Medidata’s motion was granted in part and denied in part, and Veeva’s motion was granted in part and denied in part. Counts I and II survived solely as to the ten trade-secret classes identified in the Appendix. Counts III through VI were preempted under California law. Medidata won summary judgment on Veeva’s waiver and equitable-estoppel defenses. Veeva’s letter motion for oral argument was denied as moot, and the clerk was directed to close docket numbers 311, 327, 332, and 363.