and new prototypes, was a member of the elite strategic planning
committee together with the top personnel of Cybex and attended
high level meetings in which future restructuring of Cybex was
discussed, together with detailed financial information,
including costs and Lumex profit margins.").
In addition, a serious question remains as to whether the
"strategic thinking" behind EarthWeb's websites is necessarily
revealed when those websites are launched on the Internet, and
therefore not entitled to trade secret protection. See Hudson
Hotels Corp. v. Choice Hotels Intern., 995 F.2d 1173, 1177 (2d
Cir. 1993) (once a new product is introduced, it can no longer be
used secretly and continuously in business, and therefore cannot
constitute a protectible trade secret); Boyle v. Stephens, Inc.,
1997 WL 529006, *45 (S.D.N.Y. Aug.26, 1997) (97 Civ.1351 (SAS))
(new product concept for allocating risk among investors in
mutual fund did not constitute trade secret); Eagle Comtronics,
Inc. v. Pico, Inc., 89 A.D.2d 803, 453 N.Y.S.2d 470, 472 (4th
Dep't 1982) (trap and filter device used in the cable television
industry is not a trade secret because, inter alia, any secrecy
in its design "was lost when it was placed upon the market"),
appeal denied, 58 N.Y.2d 601, 458 N.Y.S.2d 1025, 444 N.E.2d 1012
(1982). Finally, even if Schlack knows where the "gaps or holes"
remain in particular websites (Gollan Aff. ¶ 6), EarthWeb has
not cited any case law for the proposition that a product's
perceived deficiencies are trade secrets.
With respect to licensing agreements and acquisitions, EarthWeb
similarly fails to make out a compelling case. Schlack claims
that the existence and terms of licensing agreements are
generally not secret. Further, Schlack's knowledge of such
matters is limited to his recollection; EarthWeb does not allege
that he has misappropriated copies of any contracts or client
lists. Both factors weigh heavily against EarthWeb's argument
that its licensing activities are trade secrets. See, e.g., Reed,
Roberts Assocs., 40 N.Y.2d at 308, 386 N.Y.S.2d at 680,
353 N.E.2d 590 (where former employer's past or prospective customer
names can be readily ascertained from sources outside its
business, "trade secret protection will not attach"); Briskin v.
All Seasons Services, Inc., 206 A.D.2d 906, 615 N.Y.S.2d 166, 167
(4th Dep't 1994) (identity of potential customers were readily
available and price structures varied depending on needs and
preferences of customer); Arnold K. Davis & Co., Inc. v.
Ludemann, 160 A.D.2d 614, 616, 559 N.Y.S.2d 240 (1st Dep't 1990)
(denying injunctive relief where former employee was able to
contact employer's customers based on his recollection and not a
misappropriated list). Finally, although Schlack may have some
knowledge of EarthWeb's future acquisition plans, such
information, while confidential, is generally not considered a
trade secret. See Lehman, 783 F.2d at 297-98 (information
regarding availability of a certain company for merger, and the
attractiveness of such an endeavor, was not a "process or device
for continuous use in the operation of a business," but rather
"information as to single or ephemeral events" that does not
qualify as a trade secret under the Restatement definition);
Emtec, Inc. v. Condor Technology Solutions, Inc., 1998 WL 834097,
at *8 (E.D.Pa. Nov. 30, 1998) ("The identities of two companies
as possible acquisition targets is not the type of information
meant to be protected as a trade secret.").
Turning to the last two categories of alleged trade secrets,
advertising and technical knowledge, the Court finds little in
the record that could rise to the status of a trade secret.
Schlack's involvement with advertising at EarthWeb was
tangential, and it is well established that "an employee's
recollection of information pertaining to specific needs and
business habits of particular customers is not confidential."
Walter Karl, Inc. v. Wood, 137 A.D.2d 22, 28, 528 N.Y.S.2d 94, 98
Dep't 1988); see also Ivy Mar Co., Inc. v. C.R. Seasons Ltd.,
907 F. Supp. 547, 558 (E.D.N.Y. 1995); Catalogue Serv. of
Westchester, Inc. v. Henry, 107 A.D.2d 783, 784, 484 N.Y.S.2d 615,
616 (2d Dep't 1985).
With respect to technical matters, the Court doubts that
Schlack's generalized level of input permitted him access to the
type of information traditionally afforded trade secret
protection. (Gollan Reply Aff., Ex. A, pp. 418-19, 425-27,
505-16, 681-84, 828-44, 845-50, 851-55, 856-57, 905, 993-1003,
1004-1034, 1051-52, 1053-54) Here, as in Inflight Newspapers, the
Court draws a distinction between pursuing "a general conceptual
goal [by] incorporating specific needs and wants in the form of
instructions for a programmer" and the nuts and bolts of actually
designing the software and hardware architecture. Inflight
Newspapers, 990 F. Supp. at 130. Schlack appears to have done
only the former, and thus contrary to EarthWeb's assertion, this
case is distinguishable from Integrated Cash Mgmt. Services, Inc.
v. Digital Transactions, Inc., 732 F. Supp. 370, 375-76 (S.D.N Y
1989), aff'd, 920 F.2d 171 (2d Cir. 1990), where the former
employees actively participated in writing the computer programs
at issue. Obviously, Schlack need not have been a programmer to
have been exposed to technology constituting a trade secret, but
it does not appear that his editorial responsibilities placed him
in the requisite proximity. Further, while Schlack's experience
at EarthWeb in addressing costly, developmental problems may
prove useful in his position at ITworld.com or elsewhere, "an
employee may not be restrained from using the general techniques
learned during his [former] employment." Advance Biofactures
Corp. v. Greenberg, 103 A.D.2d 834, 836, 478 N.Y.S.2d 344, 346
(2d Dep't 1984); see also Cataphote Corp. v. Hudson,
444 F.2d 1313, 1316-17 (5th Cir. 1971).
4. The Risk of Disclosure
To the limited extent that EarthWeb has shown that Schlack is
aware of information that could be afforded trade secret
protection, EarthWeb has not established an imminent and
inevitable risk of disclosure warranting preliminary relief.
ITworld.com's ability to generate the bulk of its content
in-house sets it apart from EarthWeb in important ways, even though
both companies will target the IT market. For example, Schlack
would compromise his independence as an editor at ITworld.com if
he involved himself in the advertising aspects of that entity.
(Schlack Aff. ¶ 13) Moreover, ITworld.com has indicated that
Schlack's position will simply not involve matters involving
licensing, subscription pricing or acquisitions. (Reinstein Aff.
¶¶ 43, 45-47)
Based on these facts, the Court finds no imminent risk that
Schlack will disclose or use EarthWeb's trade secrets in
connection with his employment at ITworld.com. Consequently,
EarthWeb has failed to demonstrate a likelihood of irreparable
injury entitling it to judicial enforcement of the restrictive
covenant, even if that covenant were applicable by its terms and
otherwise reasonable in duration. The Court further finds that
enforcement of this provision would work a significant hardship
on Schlack. When measured against the IT industry in the Internet
environment, a one-year hiatus from the workforce is several
generations, if not an eternity. Clearly, the balance of
hardships tips decidedly in favor of the defendant.
D. The Non-Disclosure Provision
Having found that EarthWeb cannot establish irreparable harm
based, on the possible disclosure of trade secrets, this Court is
unable to conclude that a similar risk looms with respect to the
disclosure of confidential information as that term is defined in
the employment agreement.
This branch of EarthWeb's application will have to abide pretrial
E. The Sealing Order
Both parties have moved separately to seal certain portions of
the papers submitted in connection with EarthWeb's motion for
preliminary relief. Having reviewed the materials in question and
considered, inter alia, the factors suggested by Bergen Brunswig
Corp. v. Ivax Corp., 1998 WL 113976 (S.D.N.Y. Mar.12, 1998) (97
Civ. 2003 (PKL)), both motions are granted. As to the four-page
memorandum titled "Our Mission and the Opportunity", that entire
document shall be filed under seal, and all excerpts from it
appearing in the parties' respective motion papers shall be
redacted to the extent such excerpts contain "confidential"
information as defined in paragraph 8 of the October 8, 1999
affidavit of William Reinstein.
For all these reasons, plaintiff's motion for a preliminary
injunction is denied, and the temporary restraining order entered
by this Court on September 28, 1999 and thereafter extended on
October 12, 1999 is dissolved. In addition, the parties'
respective applications to seal portions of the record on
plaintiff's motion for a preliminary injunction are granted as
set forth above.