Fitspot Ventures, LLC v. Solomon Bier
2:15-cv-06454
C.D. Cal.Sep 1, 2015Background
- Fitspot developed a mobile app connecting customers and fitness trainers; source code, customer data, and access credentials were stored on Github and Heroku and integrated with Slack.
- Solomon Bier was engaged as a "Technical Co‑Founder," given company hardware and access to cloud accounts, and signed a Founder Restricted Unit Agreement and a Confidentiality & IP Assignment Agreement.
- After Bier’s termination on August 5, 2015, Fitspot alleges he wiped the company laptop, kept a copy of its data on an external drive, changed passwords, and disabled Heroku‑Slack integration, cutting off Fitspot’s access and operations.
- Fitspot sued, obtained a state court ex parte TRO, the matter was removed to federal court, and Fitspot filed an ex parte application in this Court for a TRO and order to show cause re: preliminary injunction.
- Fitspot sought return of hardware, account credentials, source code, customer/trainer data, and an injunction preventing Bier from accessing, using, deleting, or disclosing Fitspot’s code, customer data, or other confidential information.
- The Court granted the TRO, ordered Bier to show cause why a preliminary injunction should not issue, and mandated delivery of specified items and credentials to Fitspot’s counsel, conditioned on a $5,000 bond.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Misappropriation of trade secrets | Fitspot: source code, customer lists, credentials are trade secrets; Bier changed passwords, retained copies, and threatened use | Bier: did not contest trade secret status in pleadings; asserted fraud induced signatures (no evidence) | Court: Likely to succeed; information qualifies as trade secrets and Bier’s acts constitute actual/threatened misappropriation |
| Breach of written contract | Fitspot: Bier violated Confidentiality & IP Assignment and FRU Agreement by withholding data and credentials | Bier: contracts were void due to alleged fraud inducing signature (unsupported) | Court: Likely to prevail on breach; Bier did not rebut with evidence |
| Conversion | Fitspot: Bier wrongfully retained company data, external drive, credit card, parking pass, etc. | Bier: claims accounts frozen by prior TRO (but actions occurred post‑termination) | Court: Likely to prevail on conversion claim |
| Irreparable harm & balance of equities | Fitspot: loss of access prevented bug fixes, disrupted service, damaged goodwill and customer relationships | Bier: did not show cognizable harm from returning data; argued account freeze | Court: Irreparable harm likely; equities favor Fitspot; public interest favors protecting trade secrets |
Key Cases Cited
- Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunction/TRO requires likelihood of success and irreparable harm)
- Perfect 10, Inc. v. Google, Inc., 653 F.3d 976 (9th Cir. 2011) (preliminary injunction standard applied in Ninth Circuit)
- Frontline Med. Assocs., Inc. v. Coventry Healthcare Workers' Comp., Inc., 620 F. Supp. 2d 1109 (C.D. Cal. 2009) (TRO subject to preliminary‑injunction standard)
- Agency Solutions.Com, LLC v. TriZetto Group, Inc., 819 F. Supp. 2d 1001 (E.D. Cal. 2011) (source code is a trade secret)
- Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210 (2010) (source code may remain a secret despite distribution of executables)
- Courtesy Temp. Serv., Inc. v. Camacho, 22 Cal. App. 3d 1278 (1972) (customer lists protected as trade secrets when developed by substantial effort)
- Greenly v. Cooper, 77 Cal. App. 3d 382 (1978) (subscriber/customer lists are employer property and goodwill)
- Whyte v. Schlage Lock Co., 101 Cal. App. 4th 1443 (2002) (requiring nondisclosure agreements is a reasonable secrecy measure)
- ReadyLink Healthcare v. Cotton, 126 Cal. App. 4th 1006 (2005) (employee NDAs support trade secret protection)
- Herb Reed Enters., LLC v. Florida Entm't Mgmt., Inc., 736 F.3d 1239 (9th Cir. 2013) (loss of control over reputation and goodwill can constitute irreparable harm)
- Latona v. Aetna U.S. Healthcare, Inc., 82 F. Supp. 2d 1089 (C.D. Cal. 1999) (California interest in protecting trade secrets can outweigh competition concerns)
- Fremont Indem. Co. v. Fremont Gen. Corp., 148 Cal. App. 4th 97 (2007) (elements of conversion claim)