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Attorney Software Provider Sues Rival Over Trade Secrets

Sept. 21, 2020, 6:34 PM

CourtAlert.com Inc. accused American LegalNet Inc. in Manhattan federal court of hiring away its head of sales, stealing its confidential information and using it to solicit CourtAlert clients.

CourtAlert provides case tracking software, case management software, and other computer services to large law firms. It told the U.S. District Court for the Southern District of New York on Sept. 18 that ALN “has built a business out of attempting to copy CourtAlert product offerings and aggressively marketing those copycat products.”

According to the complaint, ALN hired Robert Loeb away from CourtAlert in May. The complaint says a recovered email from Loeb’s work computer indicated that ALN’s president drafted a version of Loeb’s resignation letter that included confidential information about CourtAlert’s clients, sales, and revenue.

The email “shows that even before Loeb resigned, he was providing—at the very least—CourtAlert’s confidential revenue and pricing information to ALN,” CourtAlert says.

Loeb also allegedly took other confidential information in the days before his resignation to bring to ALN, including client lists, financial data, and internal analyses of CourtAlert’s products. The complaint says Loeb attempted to delete the files before he surrendered his company laptop, but a forensic expert was able to recover them.

Four CourtAlert clients told it that ALN and Loeb had solicited their business, the complaint says.

Causes of Action: Federal trade secret misappropriation, New York unfair competition and misappropriation, breach of contract, tortious interference with contract, breach of fiduciary duty, unjust enrichment.

Relief: Injunctive relief, damages, attorneys’ fees and costs.

Response: ALN told Bloomberg Law it was “not surprised that one of our competitors is trying to hurt us by attempting to assert baseless allegations” given its “dominance in the marketplace for workflow solutions in the legal industry.”

“In our experience, if a competitor cannot win market share, they try to improve their business through the courts,” ALN said. “While we always find a competitor’s attempt to interfere with someone’s ability to earn a living distasteful, that is especially so in the current COVID-19 crisis.”

Attorneys: Roche Cyrulnik Freedman LLP represents CourtAlert.

The case is CourtAlert.com Inc. v. Am. LegalNet Inc., S.D.N.Y., No. 1:20-cv-07739, complaint filed 9/18/20.

To contact the reporter on this story: Blake Brittain in Washington at bbrittain@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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