Jenner & Block

Website Misappropriation Claim Rejected: Firm Obtains New York Appellate Division Victory in Pinterest Trade Secrets Dispute

The firm secured a victory for one of the initial investors in the social media website Pinterest.com when the New York Appellate Division upheld an earlier dismissal of claims that the investor stole website concepts and shared them with the Pinterest creators.  A unanimous panel of judges ruled 5-0 that the plaintiffs’ ideas “amount to nothing more than a collection of broad concepts, and there is very little information in the record about how those concepts were actually employed in practice.”  The court further ruled that the plaintiffs failed to maintain confidentiality over their supposedly misappropriated ideas.  Moreover, the court found that plaintiffs’ claims “were also properly dismissed because there is no evidence in the record that [the investor] actually conveyed their ideas to Pinterest.”  Thus, the court ruled, the trial court correctly rejected plaintiffs’ claims of trade secret misappropriation; idea misappropriation; misappropriation of labor, skills and expenditures; and breach of fiduciary duty.

The plaintiffs are Columbia Law School graduate Theodore Schroeder and two corporate entities formed to support his website projects, one of which allowed users to share their physical locations and personal interests with friends.  In 2007, in their attempts to explore fund-raising ideas, they reached out to a non-profit angel investing consortium called New York Angels, Inc. (NYA).  Through NYA, they met investor Brian S. Cohen.  The firm represents Mr. Cohen and NYA.

The plaintiffs abandoned their original plans and instead worked with Mr. Cohen to create a different site that was intended to be a free, direct-to-consumer newswire for announcing new product launches.  In 2007, after professional differences arose, that project was abandoned.

More than a year later, Mr. Cohen met an entrepreneur named Ben Silbermann and decided to invest in his company, Cold Brew Labs.  Cold Brew Labs pivoted to create Pinterest, which launched in 2010.

The long-running litigation dates back to 2012, when Mr. Schroeder saw an article in which Mr. Cohen was quoted discussing his investment in Pinterest.  The plaintiffs sued, claiming that Mr. Cohen and other defendants had misappropriated the plaintiffs’ confidential and proprietary intellectual property, ideas and business plans to create Pinterest.  Pinterest was dismissed from the case early on, as the complaint did not plead any direct connection between Mr. Schroeder and Pinterest.  However, the majority of the claims against Mr. Cohen and the NYA were left to be litigated.

Mr. Cohen and NYA moved for summary judgment.  In November 2017, the New York Supreme Court (Commercial Division, Manhattan) granted to motions, dismissing the claims against Mr. Cohen and NYA.

On February 5, 2019, the New York Appellate Division upheld the New York Supreme Court’s opinion, ruling across the board for the firm’s clients that plaintiffs’ failed to come forward with evidence that they had protectable, confidential, novel ideas in the first place, or that there was any kind of conveyance (wrongful or otherwise) of their ideas to Pinterest’s founders. 

The team representing Mr. Cohen and NYA included Partners Brian J. Fischer and Andrew H. Bart and Associate Jessica A. Martinez.  Others who have contributed to the case over its long lifespan include Partner Alison I. Stein, Associate Natalie K. Orpett, and former Associate Gretchen O. Stertz. 

To read the opinion, click here.