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Arkeyo, LLC v. Cummins Allison Corp.

United States District Court, E.D. Pennsylvania

June 29, 2017

ARKEYO, LLC, Plaintiff,
v.
CUMMINS ALLISON CORPORATION, Defendant.

          MEMORANDUM

          ANITA B. BRODY, J.

         I. INTRODUCTION

         Plaintiff Arkeyo, LLC (“Arkeyo”) brings state law claims against Defendant Cummins Allison Corporation (“Cummins”) for breach of contract, misappropriation of trade secrets, conversion, and tortious interference.[1] Arkeyo creates software that integrates with coin counting machines. Cummins manufactures and sells coin counting machines. Prior to working together, the parties entered into a Non-Disclosure Agreement (“NDA”) to protect the disclosure of proprietary and confidential information to third parties. Thereafter, Arkeyo collaborated with Cummins to create software compatible with Cummins' MM2 coin counting machine (the “MM2 Machine”). Arkeyo would purchase MM2 Machines from Cummins, attach them to its custom computers and configure them with Arkeyo software, and then resell the MM2 Machines to Metro Bank plc (“Metro Bank”) for installation in banks located in the United Kingdom.

         Currently before me is Arkeyo's motion for a preliminary injunction. Arkeyo alleges that Cummins misappropriated its trade secret software. Arkeyo moves solely on the basis of its misappropriation of trade secrets claim to preliminarily enjoin Cummins from selling its coin counting machines directly to Metro Bank, as well as to any other customer in circumstances where the machine is sold as part of a system that includes software derived in whole or in part from the Arkeyo software.

         During the course of discovery, Cummins informed the Court that Arkeyo's purported trade secret software had been posted on Arkeyo's website on the internet. Cummins now contends that Arkeyo has no protectable trade secret because of its publication of the Arkeyo software on the internet. On May 2 and 3, 2017, I held an evidentiary hearing to address Arkeyo's motion for a preliminary injunction that was limited to whether Arkeyo can establish a likelihood of success on its claim that Cummins violated the Illinois Trade Secrets Act.[2]

         For the reasons set forth below, after consideration of the testimony from the witnesses, the documentary evidence, and the relevant law, I will deny Arkeyo's motion for a preliminary injunction.

         II. FINDINGS OF FACT[3]

         At the evidentiary hearing, Cummins presented three witnesses: (1) Expert Dan Schonfeld; (2) Expert Peter Fry; and (3) Cummins engineer Kevin Carrera.[4] Arkeyo also presented three witnesses: (1) Expert Hunter Jones; (2) Arkeyo President Daniel Taylor; and (3) Arkeyo employee Michael Yetter. Upon consideration of the evidence presented, I make the following findings:[5]

         On January 4, 2016, Arkeyo emailed Cummins to inform Cummins that it had posted the Arkeyo software, known as the “Metro Bank UK 2.15 software, ” on its website on the internet. The Arkeyo software remained posted on Arkeyo's website for the next fifteen months. The software was available at the URL: http://arkeyo.com/newsoftware/. URL stands for Uniform Resource Locator. As explained by the Third Circuit, “the domain name portion of the URL- everything before the ‘.com'-instructs a centralized web server to direct the user to a particular website, but post-domain name portions of the URL are designed to communicate to the visited website which webpage content to send the user.” In re Google Inc. Cookie Placement Consumer Privacy Litig., 806 F.3d 125, 139 (3d Cir. 2015). Accordingly, the “arkeyo” portion of the URL: http://arkeyo.com/newsoftware/ instructed a centralized web server to direct the user to Arkeyo's website and the “newsoftware” portion of the URL informed Arkeyo's website to display the webpage that contained the new software.

         When a person visited the URL: http://arkeyo.com/newsoftware/, the following text would appear: “click to download Metro Bank UK 2.15 software.” When a user clicked on the text, a zip file[6] that contained the Arkeyo software would appear on the computer, and the user would be given the option to either open or save the zip file. By simply selecting to save the zip file, a user could download the entire zip file onto a computer in minutes.

         Some of the Arkeyo software that could be downloaded from the zip file appeared as source code. However, much of the Arkeyo software that could be downloaded from the zip file appeared as executable code. Source code is the human readable form of software-it is comprised of human words that are written in a programming language. Whereas executable code is the form of software that can be understood by a computer -it is comprised of zeros and ones. Compilation is the process of taking the human readable source code and translating it into executable code. Decompilation is the process of taking executable code and translating it back into human readable source code.

         The Arkeyo software that was available in executable code could easily be decompiled and translated back to source code by using a decompiler such as “Dot Peek.” Dot Peek is available on the internet to anyone to download for free. By using a decompiler such as Dot Peek to decompile Arkeyo's executable code, any user could obtain the full functional equivalent of the Arkeyo source code.

         Arkeyo identified ten areas of software functionality in its source code that it claimed were trade secrets.[7] Either immediately upon download of the zip file, or upon completion of the decompilation process, all of the areas of functionality that Arkeyo identified as trade secrets in its source code were obtainable from the software that Arkeyo put on its website.

         In order to use the Arkeyo software on a computer, a long sequence of installation steps had to be followed. One of the key installation steps was changing the administrator[8] name to “Metro.” If the administrator name was not changed to “Metro, ” then the installation of the software would fail. Only three people at Arkeyo had knowledge of the installation process. The zip file, however, contained a folder called “Installer, ” and inside the folder was a text file called “Install Instructions.” The text file contained instructions on how to install the software, including an instruction that the user or administrator name had to be changed to “Metro.”

         In addition to needing the installation instructions, a person who wanted to install the Arkeyo software also needed the base operating software referred to by Arkeyo as version 2.8.1. Thus, the Arkeyo software could not properly be installed and would not work if a computer did not already have the base operating software installed. The zip file, however, contained a piece of software called “Arkeyo Updater, ” that would install base operating software version 2.8 onto the computer and enable a user to then properly install the Arkeyo software. Arkeyo version 2.8 is an earlier version of the base operating software 2.8.1. No discernible differences that would impact the functionality of the Arkeyo software have been identified between these two versions of the base operating software.

         The Arkeyo software on the Arkeyo website was a full set of software that could be installed and used immediately in MM2 Machines. All of Arkeyo's source code was readily available from the zip file, which also included the required base operating software and instructions for installing the Arkeyo software.

         When Arkeyo placed its full set of software on its website, and made it readily available for download onto any computer, it did not take the standard precautions in the industry to protect the confidentiality of its source code.[9] Although the URL: http://arkeyo.com/new software/ did not appear as a visible link on the Arkeyo website and would not appear in response to any web searches, [10] Arkeyo did not give the URL a random name, a basic precaution that should be taken any time sensitive information is posted on the internet. Rather, Arkeyo named the URL “newsoftware, ” which described exactly what was posted at that internet address. Moreover, Arkeyo's website at http://arkeyo.com/newsoftware/ was not secure because Arkeyo elected to use an HTTP site rather than an HTTPS site.[11] Therefore, any transmission of data between a user's browser and the website was not encrypted. Additionally, Arkeyo had no other encryption protection. Arkeyo also had no password protection-no password was required to enter the website, to access the zip file, or to access the individual files within the zip file once it was downloaded. Arkeyo did not employ any code obfuscation, a standard tool used to protect executable code from reverse engineering, which makes it difficult to convert executable code to human readable source code. Furthermore, Arkeyo did not identify the software as confidential. It did not require visitors to the website to agree to any terms of use that would limit their use of the Arkeyo software. The source code itself also did not include any standard legal language to protect its use. As a consequence, anyone who visited the “newsoftware” URL had unlimited access to Arkeyo's full set of software.

         III.STANDARD OF REVIEW

         In deciding whether to grant a preliminary injunction, a district court should balance the following four factors so long as the moving party meets the requisite showing on the first two: (1) the movant has shown a likelihood of success on the merits; (2) the movant will suffer irreparable harm in the absence of a preliminary injunction; (3) the possibility of harm to other interested persons from a grant or denial of the injunction; and (4) the public ...


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