USA Today Accused of Swiping Trade Secrets
MANHATTAN (CN) - Gannett Co. and USA Today stole trade secrets to win a digital publishing contract with Hilton Hotels worth hundreds of millions of dollars, web developer UrbanDaddy claims in court.
UrbanDaddy accuses Gannett and USA Today of breach of contract, theft of trade secrets and unjust enrichment, in New York County Supreme Court.
UrbanDaddy claims Gannett approached it in February 2011, seeking help to win back a contract to create a locally focused digital media service called "The Point," to be sold to Hilton Hotels Worldwide.
After learning that the Hilton contract would be renewed, USA Today used "continuous promises of a lucrative joint venture to induce UrbanDaddy to invest even more time and resources into the Hilton project," the lawsuit states.
Despite UrbanDaddy's protests, USA Today hired Boston-based technology firm Sapient Corp. to begin work on the project, according to the lawsuit. This was the "first step taken by USA Today to cut UrbanDaddy out of the Hilton project while still continuing to benefit from UrbanDaddy's knowledge of the digital media business and hospitality sector that had won USA Today the Hilton project," the complaint states.
UrbanDaddy claims that Gannett assured it that Sapient would maintain the confidentiality of UrbanDaddy's proprietary business information.
But in November 2011, "without engaging in any good-faith negotiations regarding a definitive joint venture agreement, USA Today informed UrbanDaddy that it would not consummate any joint venture with UrbanDaddy, and the parties' relationship ceased," according to the complaint.
USA Today continued working with Sapient after UrbanDaddy was removed; six months later, the parties announced a multiyear deal under which USA Today was to provide hard-copy newspapers and a new digital network for Hilton guests to use, UrbanDaddy says.
Sapient was awarded a multimillion-dollar contract to implement the digital service, to be known as "The Point," according to the complaint.
The site "is functionally identical to the service that UrbanDaddy helped USA to create for presentations to Hilton at various times in 2011," the lawsuit states.
"USA Today will earn millions of dollars from UrbanDaddy's ideas and work product," it adds.
Sapient is not a party to the lawsuit.
Gannett did not immediately respond Tuesday to a request seeking comment.
UrbanDaddy seeks damages for breach contract, misappropriation of trade secrets and unjust enrichment.
It is represented by Jacob W. Buchadahl with Susman Godfrey.