Entertainment Data Oracle, Inc. v. iSpot.tv, Inc.
N22C-06-133 PRW CCLD
Del. Super. Ct.Dec 7, 2022Background:
- iSpot.tv (television analytics) licensed its TV-ad database to Entertainment Data Oracle (EDO) from 2014–2018; iSpot says the license forbade use to build a competing TV analytics product.
- EDO’s license expired in March 2018; EDO later launched EnGage, a competing advertising-analytics product focused on movies/TV.
- iSpot filed suit in the Central District of California on March 7, 2022 alleging trade-secret misappropriation, copyright violation, and breach of contract against EDO (and an EDO employee).
- EDO filed a Delaware suit alleging tortious interference with a prospective business relationship (an alleged $80M Shamrock investment), claiming iSpot filed the California suit in bad faith to derail funding.
- iSpot moved to dismiss or stay the Delaware action under the McWane first-filed doctrine (Superior Ct. Civ. R. 12(b)(3)) and sought dismissal under the litigation/judicial proceedings privilege (12(b)(6)).
- The Delaware court denied dismissal under 12(b)(6) (privilege) but granted a stay under McWane, directing the parties to file a joint status report after any dispositive ruling in California.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether EDO's tortious-interference claim is barred by the litigation/judicial proceedings privilege (12(b)(6)) | EDO: claim is based on filing a baseless suit and alleges malice/bad faith; not grounded in defamatory statements, so privilege doesn't defeat claim at pleading stage | iSpot: filing a lawsuit and statements in the California complaint are privileged; privilege bars tortious-interference claim | Denied dismissal. Court held privilege does not bar EDO's claim at pleading stage because the claim rests on the filing itself and EDO sufficiently alleged bad faith/malice to survive 12(b)(6) review |
| Whether the Delaware action should be stayed or dismissed under the McWane first-filed doctrine (12(b)(3)) | EDO: Delaware claim is a distinct response to iSpot's suit; witnesses/timeframes differ; suit can proceed without undue duplication | iSpot: California was first-filed; parties/issues substantially overlap; comity, efficiency, and overlapping discovery favor stay (or dismissal) in favor of California | Granted stay (preferred over dismissal). Court found substantial functional identity and likely overlapping discovery/outcomes; stayed Delaware action pending resolution of the California Action |
Key Cases Cited
- McWane Cast Iron Pipe Corp. v. McDowell–Wellman Eng'g Co., 263 A.2d 281 (Del. 1970) (establishes first-filed doctrine favoring litigation in forum where first commenced)
- LG Elecs., Inc. v. InterDigital Commc'ns, Inc., 114 A.3d 1246 (Del. 2015) (articulates McWane three-part inquiry for first-filed cases)
- Barker v. Huang, 610 A.2d 1341 (Del. 1992) (describes judicial proceedings privilege for statements made in course of judicial proceedings)
- Hoover v. Van Stone, 540 F. Supp. 1118 (D. Del. 1982) (applied absolute privilege where defamatory statements were made in judicial context)
- Spence v. Funk, 396 A.2d 967 (Del. 1978) (pleading standard for motions to dismiss under Rule 12(b)(6))
- Vinton v. Grayson, 189 A.3d 695 (Del. 2018) (reiterates standards for evaluating Rule 12(b)(6) motions)