Recoop LLC v. Outliers Inc. d/b/a Thesis Nootropics Inc.
1:24-cv-01810
S.D.N.Y.Jun 20, 2025Background
- Recoop LLC, a maker of nutritional supplements, sued competitor Outliers Inc. (d/b/a Thesis Nootropics) and its founder Daniel Freed, alleging that Freed, while employed at Recoop, inserted tracking code on Recoop’s website to misappropriate trade secrets for Thesis’s benefit.
- Freed was an employee and officer of Recoop during the time at issue and installed the tracking tags with Recoop’s knowledge and for its benefit, not secretly or improperly.
- The central allegation was that Thesis/Freed improperly accessed and used Recoop’s proprietary data after Freed left Recoop in February 2020.
- The Court ordered a joint forensic investigation by Stroz Friedberg, which found no evidence that Freed or Thesis accessed, copied, or used Recoop data after Freed’s departure.
- During litigation, Recoop’s counsel withdrew; Recoop failed to timely oppose summary judgment or retain new counsel during key deadlines.
- After summary judgment was granted for Thesis, Recoop sought reconsideration, and Thesis moved for sanctions and attorney’s fees under Rule 11 and the Defend Trade Secrets Act (DTSA).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Summary judgment on trade secrets | Thesis misappropriated trade secrets via tracking pixels installed by Freed | No evidence of improper access/use after Freed left; tags were installed for Recoop, not Thesis | Granted for Defendant. |
| Reliability of Forensic Report | Stroz Friedberg’s forensic report was incomplete/inaccurate; did not subpoena enough records | Report was sufficient and conclusive; no evidence of misappropriation or unauthorized data transfer | Recoop's objections rejected. |
| Reconsideration of summary judgment | Report/declaration issues warranted new consideration; alleged material fact disputes | All issues and evidence known or available at summary judgment stage; no new evidence or controlling law presented | Motion for reconsideration denied. |
| Rule 11 sanctions and DTSA fees | (n/a) | Plaintiff’s claims were meritless and maintained in bad faith, justifying sanctions and fees | Motions for sanctions/fees denied. |
Key Cases Cited
- Universal Instruments Corp. v. Micro Sys. Eng’g, Inc., 924 F.3d 32 (2d Cir. 2019) (elements of trade secret misappropriation claim)
- PepsiCo, Inc. v. Coca-Cola Co., 315 F.3d 101 (2d Cir. 2002) (movant’s summary judgment burden is showing lack of evidence)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment procedure where non-movant bears burden of proof)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (non-movant must provide evidence, not mere doubt)
- CRST Van Expedited, Inc. v. E.E.O.C., 578 U.S. 419 (2016) (definition of prevailing party)
- Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994) (statutory fee awards are discretionary)