Synygy, Inc. v. ZS Assocs., Inc.

Full title: SYNYGY, INC. v. ZS ASSOCIATES, INC., et al.

Court: UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

Date published: Feb 11, 2015

CIVIL ACTION No. 07-3536 (E.D. Pa. Feb. 11, 2015)

Opinion

CIVIL ACTION No. 07-3536

02-11-2015

SYNYGY, INC. v. ZS ASSOCIATES, INC., et al.

O'NEILL, J.

MEMORANDUM

Now before me are four summary judgment motions by Novo Nordisk, Inc., ZS Associates, Inc. and ZS Associates International, Inc. (collectively, defendants) for summary judgment on the issues of: (1) causation (Dkt. No. 178); (2) Synygy's trade secrets claims (Dkt. No. 179); (3) Synygy, Inc.'s copyright claims (Dkt. No. 180); and (4) Synygy's state law claims for unfair competition, breach of contract, tortious and intentional interference, conversion and unjust enrichment/quantum meruit (Dkt. No. 181).¹ For the reasons that follow, I will: (1) deny defendants' motion for summary judgment on causation; (2) grant in part and deny in part defendants' summary judgment motion on trade secrets; (3) grant in part and deny in part defendants' summary judgment motion on copyright; and (4) grant in part and deny in part defendants' motion for summary judgment on plaintiff's state law claims.

1 Also pending in this case is Synygy's motion for summary judgment with respect to ZS's counterclaims for defamation, commercial disparagement and alleged violations of the Lanham Act (Dkt. No. 37 in Civ. A. No. 10-4274). I will decide this motion separately.

BACKGROUND

The claims in this case arise out of incentive compensation or "IC" services that Synygy and ZS delivered to Novo, a pharmaceutical company. IC "is focused on structuring and delivering the correct financial incentives to motivate the performance of sales representatives . . . and managers." Defs.' Causation Mem. at 6. Synygy and ZS "compete in providing software and services for managing sales compensation, sales quotas, and sales objectives." ZS's Answer to Second Am. Compl. at ¶ 34. "Synygy is a global software and services company in the business of providing sales compensation management . . . and sales performance management . . . software and services to its clients, many of whom are in the pharmaceutical industry." Second Am. Compl. ¶ 10. "ZS is a global management consulting firm specializing in sales and marketing strategy, operations, and execution that, among other things, provides software and services for managing sales compensation, sales quotas, sales objectives, and other sales processes." ZS's Answer to Second Am. Compl. at ¶ 10. Among ZS's clients are corporations in the "financial, pharmaceutical and biotech industries." Id. at ¶ 27.

In the fall of 2005, Novo was in the final months of an automatically-renewed one year contract term with Synygy for "outsourced services in the form of monthly data processing and reporting used in the administration of Novo's incentive compensation program for its sales force - often called TC administration' or 'IC operations.'" Defs.' Causation Mem. at 1. In October 2005, Novo informed Synygy that it would "not renew [its] contract automatically." Id. at 16. In December 2005, Novo's "manager of incentive compensation," Raja Selvanathan, id. at 9, emailed a final termination notice to Synygy in which he explained, inter alia, that Novo had located "an alternate provider that is better aligned with our long term plan and strategies" and would not renew its contract with Synygy. Id. at 16-17.

Novo transitioned its IC administration work to ZS from Synygy. Id. at 17. In or around October 2005, ZS and Novo entered into a three-year agreement for ZS to provide IC administration services for Novo. Pl.'s Causation Opp'n Mem. at 22. During the proposal process and the transition of IC administration work from Synygy to ZS, Novo provided ZS with samples of IC reports that Synygy had delivered to Novo in prior years. Defs.' Causation Mem. at 17. Synygy contends that "Novo has stipulated that it disclosed incentive compensation reports designed by Synygy [to] ZS" and that "[t]his is also true with respect to the compensation simulators and software macros contained within those reports." Pl.'s Trade Secret Opp'n Mem. at 38; see Pl.'s Ex. 57 (ZS Stipulation). ZS has stipulated that it "received those materials from Novo in electronic native format." Pl.'s Trade Secret Opp'n Mem. at 38. Novo disclosed the materials in question to ZS "without the knowledge or consent of Synygy." Id.

Certain documents or software files that Novo provided to ZS included notations marking the documents as confidential and/or subject to copyright by Synygy. Pl.'s Causation Opp'n Mem. at 23. Also, at least some of the information included in the disclosed reports was password protected. See Pl.'s Trade Secret Opp'n Mem. 4, citing Pl.'s Ex. 13 ("there are two worksheet tabs in the Excel file: a static page one (which conveys information to the sales representative in terms of how they were performed, (and is also password protected); and a dynamic page 2 compensation simulator, which enables the sales representatives to change variables and simulate how they would have performed if the variables changed."); Pl.'s Trade Secret Opp'n Mem. at 15 ("the overwhelming majority of the files it sent to Novo were password protected."); see also id. at 39 (same). Synygy contends that "in order to access and use the Synygy reports ZS received from Novo, ZS was required to crack the Synygy passwords." Id. at 15. Defendants' expert, Cliff Ragsdale testified that to access information in a document that was password protected, ZS effectively had two options, first, to request the password from Synygy, something which ZS did not do, and second to, break through the password using "an online program or a hexadecimal file editor." Id. at 39, citing Ragsdale Dep. at 150:4-22.

Plaintiff contends that "as a mandatory prerequisite to receiving [the] custom reports and other deliverables [that Synygy prepared for Novo], Novo was required to sign a confidentiality agreement in which it agreed not to disclose any of the documents, including, but not limited to the report designs, to any third parties." Pl.'s Trade Secret Opp'n Mem. at 3. Effective April 9, 1999, Synygy and Novo entered into an agreement entitled "Incentive Compensation Services Agreement." Defs.' State Law Mem. at 7, citing Defs.' Ex. 14 (Dep. Ex 72). In section 8 of the agreement, under the heading "Confidentiality," Synygy and Novo

agree[d] not to divulge, disclose, convey or permit the disclosure of any of the Proprietary Information of the other, either verbally or in writing, to any person, corporation, or third party, other than employees, agents, subcontractors or independent contractors of Synygy or [Novo] and their parent corporations, subsidiaries, or affiliates who are engaged in performing this Agreement.

Defs.' Ex. 14 at SYN0000700. They further agreed

to bind their employees, agents, subcontractors and independent contractors, individually, and their parent corporations, subsidiaries, and affiliates, which have access to the other party's Proprietary Information, to the same standard of confidentiality and nondisclosure contained [there]in, and additionally to prohibit them from using any Proprietary Information for any purpose other than for the purposes described in [the] Agreement.

Id. Proprietary Information is defined in the agreement as information "which may include but is not limited to (a) Synygy's Software Processes, Documents, Report Designs, and other confidential information and (b) [Novo's] data, business affairs, methods of operation, and other confidential information." Id. Documents are defined as "all documents created, in whole or in part, by Synygy, - except for those parts of documents which contain [Novo's] proprietary information." Id. at SYN0000699. Processes are defined as "the data processing, report design, and report creation processes and methodologies used by Synygy to complete the" incentive compensation services for Novo. Id. Report designs are defined as "the format, layout, structure and algorithms associated with all reports designed, in whole or in part, by Synygy, except for those parts of report designs which contain [Novo's] proprietary information." Id. at SYN0000699-700.

The parties agreed that:

Synygy is and shall be the sole and exclusive owner and author of:



(i) the system of software programs and documentation known as ADEPT used to process and manage data and to design, create and view reports (the "Software"),



(ii) the data processing, report design, and report creation processes and methodologies used by Synygy to complete the Services (the "Processes"),



(iii) all documents created, in whole or in part, by Synygy, - except for those parts of documents which contain [Novo's] proprietary information (the "Documents"), and



(iv) the format, layout, structure and algorithms associated with all reports designed, in whole or in part, by Synygy, except for those parts of report designs which contain Novo's proprietary information (the "Report Designs").

Id. They further agreed that Novo "shall be the sole and exclusive owner of [Novo's] proprietary information and nothing [in their agreement] shall be deemed to transfer to Synygy any right or title to [Novo's] proprietary information." Id. at SYN0000700. Novo also retained "the right to copy and distribute all reports created for [Novo] by Synygy under th[eir] Agreement for the purposes intended [there]in." Id. The agreement also provided that

Synygy's rights of ownership with respect to the Software, Processes, Documents and Report designs include, but are not limited to, the exclusive right to make derivative works of the Software, Processes, Documents and Report Designs and to exploit such works commercially. Synygy agrees that any derivative works made available commercially shall not include references to Client or its proprietary information.

Id.

I will consider each of the pending motions in turn.

STANDARD OF REVIEW

Summary judgment will be granted "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The party moving for summary judgment bears the burden of demonstrating that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see Celotex, 477 U.S. at 322-23. If the movant sustains its burden, the nonmovant must set forth facts demonstrating the existence of a genuine dispute. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A dispute as to a material fact is genuine if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. A fact is "material" if it might affect the outcome of the case under governing law. Id.

To establish "that a fact cannot be or is genuinely disputed," a party must:

(A) cit[e] to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials; or



(B) show[ ] that the materials cited do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact.

Fed. R. Civ. P. 56(c)(1). The adverse party must raise "more than a mere scintilla of evidence in its favor" in order to overcome a summary judgment motion and cannot survive by relying on unsupported assertions, conclusory allegations, or mere suspicions. Williams v. Borough of W. Chester, 891 F.2d 458, 460 (3d Cir. 1989). The "existence of disputed issues of material fact should be ascertained by resolving all inferences, doubts and issues of credibility against" the movant. Ely v. Hall's Motor Transit Co., 590 F.2d 62, 66 (3d Cir. 1978) (citations and quotation marks omitted).

DISCUSSION

I. Causation

In their first motion for summary judgment, defendants seek summary judgment on all claims in Synygy's Second Amended Complaint "based on the failure of proof as to the essential element of causation and plaintiff Synygy, Inc.'s failure to demonstrate the existence of any genuine issues of material fact to the contrary." Defs.' Causation Mot. at 1. Defendants argue that "each of Synygy's 11 pending claims includes causation as an essential element, for which Synygy carries the burden of proof." Defs.' Causation Mem. at 28. They contend that "[t]he essential causation question at the heart of this case is whether there is any causal relationship between what Synygy claims to be copying and misuse of its .'intellectual property' and Novo's decision to switch IC administration to ZS at the end of 2005." Id. at 29. Defendants argue that "the evidence is overwhelming that Novo would have made the very same decision, based on the long track record of problems in the Synygy-Novo client relationship, Synygy's lack of effort to improve the situation, and Synygy's failure to support Novo's in-sourcing project." Id.

In response, Synygy contends that defendants cannot prevail on summary judgment with their two "flawed arguments: 1) [that they] could steal Synygy's work product because Novo had an alleged bad relationship with Synygy; and 2) [that] Novo did not desire Synygy's work product." Pl.'s Causation Opp'n Mem. at 27. Synygy asserts that "[e]ven if Novo was so displeased with Synygy's services that it was compelled to terminate its contract with Synygy, that would not provide Novo with a license to steal and use Synygy's intellectual property." Id. at 26. Synygy argues that even if defendants could establish that Novo was displeased with Synygy's services

and therefore, was compelled to leave Synygy, . . . it is irrelevant. Novo was always free to terminate its contract with Synygy and ZS was always free to provide IC services. What either of them was never free to do is engage in the wholesale misappropriation of Synygy's intellectual property - regardless of their putative justification.

Id. Synygy also argues that it "can easily show the reasonable relationship between the defendants' wrongful conduct and the direct revenues received from that conduct." Id.

I find that defendants are off the mark with respect to their characterization of "[t]he essential causation question at the heart of this case." Defs.' Causation Mem. at 29. With respect to Synygy's non-copyright claims, what matters is not simply whether defendants' alleged improper use of the materials prepared by Synygy caused Novo to switch IC administration to ZS, but rather whether Synygy can show that ZS's and/or Novo's allegedly wrongful use of Synygy's claimed proprietary information caused Synygy to suffer damages. There is sufficient disagreement between the parties with respect to this question that I find that material questions of fact remain on the issue of causation.

Further, to establish defendants' liability for copyright infringement, Synygy need only prove: (1) Synygy's ownership of a valid copyright, and (2) the claimed infringers' copying of protected elements of the copyrighted material. See Feist Publ'ns, Inc. y. Rural Telephone Service Co., Inc., 499 U.S. 340, 361 (1991). If defendants' liability is established, then what matters for purposes of Synygy's copyright claim, which seeks an award based on defendants' alleged profits resulting from their alleged infringement of Synygy's copyrights, is whether Synygy can show that the profits that it seeks to recover are "'reasonably related to the [claimed] infringement.'" William A. Graham Co. v. Hauehey, 568 F.3d 425, 443 (3d Cir. 2009), quoting On Davis v. Gap, Inc., 246 F.3d 152, 160 (2d Cir. 2001). In Graham, the Court of Appeals found that the plaintiff satisfied its burden with respect to causation by showing that customers of the defendant received sales proposals containing infringing language, "that the written proposals were important to [the defendants'] clients, that the infringed language . . . contributed to the success of those proposals, and that [the defendant] urged its employees to use the [infringed materials]." Graham, 568 F.3d at 443. Here, I find that there are material factual disputes with respect to whether defendants' allegedly infringing acts are reasonably related to Synygy's claimed lost profits. Specifically, Synygy has set forth facts that raise a question as to whether ZS and Novo's use of the allegedly infringed materials contributed to ZS's success in obtaining and retaining its contract with Novo. If proven at trial, the alleged repeated use and copying of software macros and/or reports derived from Synygy's copyrighted materials may establish that the content of Synygy's incentive compensation report designs was important to ZS and Novo and support Synygy's claims that the macros and/or reports had sufficient value to Novo and ZS such that defendants might be liable for Synygy's claimed lost profits.

Accordingly, I will deny defendants' motion for summary judgment on the issue of causation.

II. Trade Secrets

In their second motion for summary judgment, defendants seek summary judgment on Counts II and III of Synygy's Second Amended Complaint, which assert claims for misappropriation of trade secrets pursuant to New Jersey common law and the Pennsylvania Uniform Trade Secrets Act (PUTSA), 12 Pa. C.S.A. § 5301-5308.

In its response to defendants' motion, Synygy asserts that it

has trade secrets in the specific incentive compensation reports and management reports it custom designed for Novo. Synygy has trade secrets that include all aspects of the design (including visual design as well as background design not visually apparent to the

end user) of the following types of reports: Incentive Compensation Reports . . . ; Preliminary Payout Factors Report . . . ; Parameter Verification Report . . . ; Roster Verification Report . . . ; Circle of Excellence Report . . . ; Earnings Summary-Nation Report . . . ; IC Report-Nation . . . .

Pl.'s Trade Secret Opp'n Mem. at 34. Synygy's response identifies examples of each of the types of reports identified. Id. Synygy contends that it "does not claim trade secret protection over the Novo logos, trademarks or trade names that appear in the reports and were provided to Synygy by Novo." Id. Instead, it claims that it has "trade secrets in all other aspects of the design including the text, formatting, graphics, design, organization, calculations, formulas, selection and arrangement of information." Id. at 34-35. Synygy contends that it "has trade secrets the use of an interactive simulator, or 'what-if' calculator Id. at 35. Synygy also claims it "has trade secrets in the software macro codes which appeared with the Deliverables" and cites certain examples of the macro codes. Id.

A. Specificity

The "starting point" in misappropriation cases is "whether, in fact, there is a trade secret to be appropriated." Van Prods. Co. v. Gen. Welding & Fabricating Co., 213 A.2d 769, 780 (Pa. 1965); see also Continental Data Sys., Inc. v. Exxon Corp., 638 F. Supp. 432, 442 (E.D. Pa. 1986) ("even wrongful appropriation is not actionable unless the information in question is a trade secret"). To prevail on its trade secrets claims, Synygy first must

show the existence of a trade secret with "reasonable degree of precision and specificity . . . such that a reasonable jury could find that plaintiff established each statutory element of a trade secret." This identification must be particular enough as to separate the trade secret from matters of general knowledge in the trade of or special knowledge of persons skilled in the trade.

Dow Chem. Canada Inc. v. HRD Corp., 909 F. Supp. 2d 340, 346 (D. Del. 2012); see also Sit-Up Ltd. v. IAC/InterActiveCorp., No. 05-9292, 2008 WL 463884, at *11 (S.D.N.Y. Feb. 20, 2008) ("[S]pecificity is required before the court so that the defendant can defend himself adequately against claims of trade secret misappropriation, and can divine the line between secret and non-secret information, and so that a jury can render a verdict based on a discriminating analysis of the evidence of disclosure and misappropriation."). Accordingly, in response to defendants' motion to compel trade secrets discovery, I previously ordered "Synygy to serve defendants with sworn supplemental answers to defendants' interrogatories setting forth with reasonable particularity the trade secrets that Synygy claims were misappropriated." Synygy, Inc. v. ZS Assocs., Inc., No. 07-3536, 2013 WL 3716518, at *5 (E.D. Pa. Jul. 15, 2013). Defendants now contend that summary judgment is warranted in their favor on Synygy's trade secrets claims because Synygy "has failed to meet its burden of identifying the trade secrets with reasonable particularity." Defs.' Trade Secret Mem. at 24. In response, Synygy asserts the converse: that it has identified the confidential information that it claims defendants misappropriated. Pl.'s Trade Secret Opp'n Mem. at 41.

In support of its argument that it has sufficiently identified its claimed trade secrets, Synygy contends that its CEO, Mark Stiffler "repeatedly testified that the confidential information of Synygy at issue in this case was the design of the reports Synygy did for Novo." Id. Stiffler testified that "the easiest way to think about it is that all of the information that Synygy produces is Synygy confidential except for those pieces or values of data that belong to the client." Pl.'s Ex. 12 (Stiffler Dep.) at 377:21-378:6. Synygy also cites to the deposition transcript of its corporate designee Jeff Evernham which "is over 300 pages long and goes into the most minute detail about every aspect of the incentive compensation reports that are unique and confidential to Synygy." Pl.'s Trade Secret Opp'n Mem. at 42, citing Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)).² Synygy does not, however, identify any specific testimony by Evernham that identifies its purported trade secrets. Id. Instead, Synygy explains only that "Evernham's testimony includes things such as selection and placement of logos and names, products, and the use of fonts, among many elements." Id. Evernham testified that "[t]he report designs, . . . all the materials, all the elements and the combination of all of those elements together are confidential information." Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 240:21-24. Thus broadly defined, I find that Stiffler and Evernham's references to all of Synygy's allegedly confidential information are not sufficient to define Synygy's claimed trade secrets. See IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 583-84 (7th Cir. 2001) (holding that "a plaintiff must do more than just identify a kind of technology and then invite the court to hunt through the details in search of items meeting the statutory definition" of a trade secret and finding that "a 43 page description of the methods and processes underlying and the inter-relationships among various features making up IDX's software package" was not sufficiently specific to show that the information in question was a trade secret); TNS Media Research, LLC v. TRA Global, Inc., 984 F. Supp. 2d 205, 238-39 (S.D.N. Y. 2013) (rejecting the plaintiff's "Dance of the Seven Veils approach to its trade secret claim" as "manifestly prejudicial and taxing to the Court" where "even though [the plaintiff] narrowed its list of trade secrets, it reserved the right to rely upon additional documents or testimony related to each trade secret"); qad. Inc. v. ALN Assocs., Inc., No. 88 C 2246, 1990 WL 93362, at *3 (N.D. Ill. June 20, 1990) (finding it "wrong as a matter of law" that a party could "simply persist in the blunderbuss statement that 'Everything you got from us was a trade secret'" and prevail on its trade secrets claim).

2 Evernham's designee deposition is found at both Plaintiff's Exhibit 10 and Defendant's Exhibit 53.

I decline, however, to grant summary judgment in favor of defendants solely based on the specificity of Synygy's designation of its trade secrets. In its first amended answer to ZS's first set of interrogatories, Synygy specifically claims trade secret protection over aspects of the design of its reports including Defs.' Ex. 65 (Synygy's 1st Am. Answer to 1st Set of Interrogs.) at 3-4. I find that this list, when combined with Synygy's claim in its response to defendants' motion that Synygy has "trade secrets that include all aspects of the design (including visual design as well as background design not visually apparent to the end user)" with respect to a list of identified examples of specific documents, Pl.'s Trade Secret Opp'n Mem at 34,³ Is sufficiently specific to permit me to proceed to consider whether genuine issues of material fact remain regarding Synygy's misappropriation claims. See Do It Best Corp. v. Passport Software, Inc., No. 01-C-7674, 2005 WL 743083, at *13 (N.D. Ill. Mar. 31, 2005) (denying summary judgment because the plaintiff "did identify specific lines of code and specific software features" as its claimed trade secrets even though the plaintiff came "dangerously close" to being too general to sustain its trade secret claim where the plaintiff had explained that "to determine its trade secret, [the] defendant need merely look at the lines of code which [the] plaintiff identified and examine the design, structure and programming techniques and the integration into the code which [the plaintiff] is using"); see also Olympus Managed Health Care, Inc. v. Am. Housecali Physicians, Inc., 853 F. Supp. 2d 559, 572 (W.D.N.C. 2012) (finding that a list of "broad categories of trade secrets" including "contract templates," "marketing materials," "product designs," "provided services," and "financials" was sufficient to withstand summary judgment); see also Mike's Train House, Inc. v. Lionel, L.L.C., 472 F.3d 398, 411 (6th Cir. 2007) ("When materials . . . are trade secrets based on a unique combination of both protected and unprotected material, a plaintiff should not be obligated to identify which components of the protected material [are] secret.").

3

As is noted above, in its response to defendants' motion, Synygy asserts that it has trade secrets that include all aspects of the design (including visual design as well as background design not visually apparent to the end user) of the following types of reports: Incentive Compensation Reports . . . ; Preliminary Payout Factors ReportParameter Verification Report . . . ; Roster Verification Report . . . . ; Circle of Excellence Report . . . ; Earnings Summary-Nation Report...; IG Report-Nation . . . .

Pl.'s Trade Secret Opp'n Mem. at 34. Synygy's response identifies specific examples of each of the types of reports identified. Id.

Indeed, in their reply brief, defendants concede that Synygy's identification of "certain particular design features" including . . . was indeed sufficiently specific to" permit consideration of "whether these design concepts were general knowledge or not." Defs.' Trade Secret Reply at 3-4.

I will also consider as sufficiently specific Synygy's claim that it "has trade secrets in the software macro codes which appeared with the Deliverables . . .. " Pl.'s Trade Secret Opp'n Mem. at 35. In particular, Synygy claims as trade secrets: (1) "the macro code identified in the Second Amended Complaint as Synygy Macros No. 1, which appeared within the Deliverables, for example within the December 2005 Circle of Excellence Report produced as SYN0075531;" and (2) "the macro code identified in the Complaint as Synygy Macros No. 2, which appeared in whole or in part, within the Deliverables . . . ." Defs.' Ex. 65 (Synygy's 1st Am. Answer to 1st Set of Interrogs.) at 2. Synygy has identified a number of examples of specific reports which contain Synygy Macros No. 2. Id.

Finally, I will consider as sufficiently specific Synygy's claim that it has trade secrets in "custom designed compensation simulator" - an interactive simulator, or 'what-if' calculator that Pl.'s Trade Secret Opp'n Mem. at

B. Existence of a Trade Secret

The question of whether certain information constitutes a trade secret ordinarily is "best resolved by a fact finder after full presentation of evidence from each side," DSMC, Inc. v. Convera Corp., No. 479 F. Supp. 2d 68, , 79 (D.D.C. 2007) (citations and quotations omitted); see also Bro-Tech Corp, v. Thermax, Inc., 651 F. Supp. 2d 378, 410 (E.D. Pa. 2009) ("Whether information qualifies for trade secret status is ordinarily a question of fact for the jury."). "[A]though the issue is easily framed, the resolution is more difficult, for the law provides no precise definition or litmus test of what constitutes a trade secret." Anaconda Co. v. Metric Tool & Die Co., 485 F. Supp. 410, 421 (E.D. Pa. 1980). "A trade secret is one of the most elusive and difficult concepts in the law to define." DSMC, Inc., 479 F. Supp. 2d at 79 (citations and internal quotation omitted). Under the PUTSA, a trade secret is defined as:

Information, including a formula, drawing, pattern, compilation including a customer list, program, device, method technique or process that:



(1) Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.



(2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

12 Pa. C.S.A. § 5302. "In New Jersey, a common law trade secret may consist of any formula, pattern, device, or compilation of information that is used in business to obtain an advantage over competitors who do not know or use it." Mu Sigma, Inc. v. Affine, Inc., No. 12-1323, 2013 WL 3772724, at *8 n.6 (D.N.J. July 17, 2013). citing Sun Dial Corp. v. Rideout, 16 N.J. 252, 257, 108 A.2d 442 (N.J. 1954) (further citations omitted). "Determining whether the information in question qualifies as a trade secret must be made on a case-by-case basis." Hill v. Best Medical Int'l, Inc., Nos. 07-1709, 08-1404, 09-1194, 2011 WL 5082208, at *10 (W.D. Pa. Oct. 25, 2011) (citation omitted). As is set forth below, "to the extent the Court can discern the parameters of [Synygy's] trade secret claim[s] from the instant record," at least some of Synygy's trade secrets claims must fail because not all of what Synygy has identified as its trade secrets can be found to constitute a trade secret. Big Vision Private Ltd. v. E.I. DuPont De Nemours & Co., 1 F. Supp. 3d 224, 265 (S.D.N.Y. Mar. 3,2014).

1. Secrecy

What is certain is that for something to qualify as a trade secret it must be secret. Rvcoline Prods., Inc. v. Walsh, 756 A.2d 1047, 1052 (N.J. App. Civ. 2000); Youtie v. Macy's Retail Holding, Inc., 653 F. Supp. 2d 612, 620 (E.D. Pa. 2009). "Secrecy is essentially a question of fact . . . . [N]o one factor is dispositive of whether [plaintiff] took reasonable precautions to protect its purported trade secrets." Merckle GmbH v. Johnson & Johnson, 961 F. Supp. 721, 731-32 (D.N.J. 1997) (citations omitted) (internal quotation marks omitted). "To be a trade secret, information must not be generally known in the wider business community or capable of being easily derived from public information." Fishkin v. Susquehanna Partners, G.P., 563 F. Supp. 2d 547, 582 (E.D. Pa. 2008) aff'd in part, 340 F. App'x 110 (3d Cir. 2009).

The owner of a trade secret, unlike the owner of a patent, does not have a monopoly over the process or formula. He is only protected from other persons' gaining access to it either by stealing it directly from him, or having another to whom it was lawfully disclosed do so. Others in the field are free to arrive at precisely the same method and to use the method so long as they obtain their knowledge through their own independent efforts.

Continental Data Sys., Inc. v. Exxon Corp., 638 F. Supp. 432, 442 (E.D. Pa. 1986), quoting Greenberg v. Croydon Plastics, 378 F. Supp. 806, 812 (E.D. Pa. 1974).

a. Text, Graphics, Formatting, Design, Organization or Arrangement

Defendants argue that certain of the identified "design features [in Synygy's reports] are widely known and therefore they are not trade secrets." Defs.' Trade Secret Reply at 4. I agree. Many of the things which Synygy claims to be trade secrets are readily observable including the text, formatting, graphics, design, organization and arrangement of the reports in question. For example, anyone who views one of the identified exemplar reports can easily observe Defs.' Ex. 65 (Synygy's 1st Am. Answer to 1 st Set of Interrogs.) at 3-4. "'[T]hings that any user or passer-by sees at a glance are 'readily ascertainable by proper means'" and cannot be trade secrets. IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 584 (7th Cir. 2002). Accordingly, in IDX Systems, the Court of Appeals for the Seventh Circuit affirmed the district court's grant of summary judgment in favor of the defendants on the plaintiff's trade secret claims where "many of the items that appea[ed] in the 43-page description [of the plaintiff's claimed trade secrets], such as the appearance of data-entry screens, [were] exceedingly hard to call trade secrets." Id. The Court explained that "[p]erhaps screen displays could be copyrighted, but no copyright claim ha[d] been advanced, and a trade-secret claim based on readily observable material is a bust." Id.

Further, defendants have shown that many of the features which Synygy claims as its trade secrets were disclosed to the public in a book authored by Synygy's CEO and owner, Mark Stiffler, which was published in 2006. Defs.' Ex. 66 (Stiffler Book). "'[I]nformation that is public knowledge or that is generally known in an industry cannot be a trade secret,' including information that is available in publications." Big Vision Private Ltd., 1 F. Supp. 3d at 270, quoting Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1984) (further citations omitted). In Chapter 10 of his book, Stiffler explains the principles underlying Synygy's report design methodology:

Good incentive compensation reports show how performance is translated into some currency - whether it is money, gifts or other

rewards. They should clearly explain how the incentive compensation plan works and how results are calculated. The reports should answer three basic questions: (1) What did I make? (2) How was it calculated? (3) Why did I make what I did?

Defs.' Ex. 66 (Stiffler Book) at 134 (emphasis in original). He explains that when businesses prepare an incentive compensation report they "are telling a story" and shouldn't "just show the calculations," instead, they should

show step-by-step the build up of how the data were used to create those calculations. Creating visual consistency and visual links across sections will also help [employees] follow the story. You might even want to include some "what-if" analyses to reinforce the relationship between compensation and performance. . . .

Id. In Figure 11, Stiffler's book identifies list of 12 "design principles" to make incentive compensation reports "more effective," including:

2. To peel away the story of how the person is paid, major sections of the report should appear in the following order from top to bottom: payment calculations, earnings calculations (by component), and performance measures. . . .



4. The payment should be shown in a distinct box on the line directly below the report banner typically in the upper-right-hand corner of the report. . . .



6. For every number used in the payment and earnings calculations, there should be an area of the report that shows how it was derived. . . .

Id. at 139.

Also, in Figures 9 and 10 of his book, Stiffler includes examples of generic incentive compensation reports. Id. at 137-38. The example reports clearly feature, inter alia,

The overlap between the information disclosed in Stiffler's book and the report design elements identified as trade secrets in Synygy's interrogatory response is clear. Through Stiffler's book, Synygy "effectively 'freely disclosed' its information [about the effective individual components of an incentive compensation report] to 'all comers' . . . ." Big Vision Private Ltd., 1 F. Supp. 3d at 269

In further support of their argument that there has been public disclosure of the design elements included in Synygy's incentive compensation reports, defendants note that Synygy shared "similarly formatted generic Incentive Compensation Reports . . . as marketing documents at public trade shows." Defs.' Trade Secret Mem. at 27. At his designee deposition, Evernham explained that the generic reports were "clearly created for marketing purposes . . . ." Defs.' Ex. 53 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 153:15-153:7. In particular, defendants point to a "Sample Generic IC Report for Company ABC," Defs.' Ex. 74, which was supplied in a business pitch to a company called Ventiv health. See Defs.' Ex. 73 (Dan McDunn email, Feb. 6, 2001). In supplying the report to Ventiv, Synygy's marketing employee explained that the report "demonstrates our basic incentive compensation reporting philosophy at the sales rep level." Id. As with the sample reports included in Stiffler's book, the sample report provided to Ventiv clearly features the design elements identified by Synygy as its trade secrets including

On this record, no reasonable factfinder could find that [Synygy] undertook reasonable efforts to maintain the secrecy of its alleged trade secret[s]" in the text, graphics, formatting, design, organization or arrangement of its reports when they are considered standing alone. Big Vision Private Ltd., 1 F. Supp. 3d at 269. Accordingly, I will grant defendants' motion for summary judgment with respect to plaintiff's trade secret claims insofar as they relate individually to the text or graphics included in or the formatting, design, organization or arrangement of the types of reports identified by Synygy in its response to defendants' motion (i.e., Incentive Compensation Reports, Preliminary Payout Factors Report, Parameter Verification Report, Roster Verification Report, Circle of Excellence Report, Earnings Summary-Nation Report, IC Report-Nation). See Pl.'s Trade Secret Opp'n Mem. at 34-35. My finding with respect to the reports that Synygy specifically prepared for Novo as they exist in their entirety is further set forth below.

b. Identified reports viewed in their entirety

Viewed in their entirety, it is appropriate to consider the identified reports as potential combination trade secrets independent from Synygy's identified list of report design elements. See Ozburn-Hessev Logistics, LLC v. 721 Logistics, LLC, No. 12-0864, 2014 WL 4055826, at *12 (E.D. Pa. Aug. 15, 2014) (a "spreadsheet document . . . might qualify as a trade secret, because it is a compilation that took time and effort to create"). Under the laws of Pennsylvania and New Jersey, "even though each and every element of plaintiff s process is known to the industry, the combination of those elements may be a trade secret if it produced a product superior to that of competitors"). Rohm & Haas Co. v. Adco Chem. Co., 689 F.2d 424, 433 (3d Cir. 1982); see also Svnthes, Inc. v. Emerge Med., Inc., No. 11-1566,2014 WL 2579286, at *72 (E.D. Pa. June 5, 2014) (finding manufacturing costs and usage data were "protectable trade secret information" where "[t]he value of the information was in the compilation, categorization, and organization of information on thousands of customers and products, which could not be easily recreated by a competitor's mere talking with the customers"); Youtie, 653 F. Supp. 2d at 621-22 ("A compilation of data that has independent economic value can be protected as a trade secret").

As Evernham testified, Novo's logo "and the color blue that Novo Nordisk uses" are not "Synygy confidential information, but their use in the presentation and in . . . in the format [in a particular document] and the totality of what's shown [in the document] for the purpose of Novo Nordisk's incentive compensation report is Synygy confidential information." Defs.' Ex. 53 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 243:6-17. Evernham explained,

[a]n individual design decision . . . by itself is not . . . going to have a dramatic impact on the overall value [of an incentive compensation report]. The design decision in the context of all of the other information that needs to be conveyed because th[e] distance [between text and a logo] is a function of the report and is a part of the total [and] is valuable to Synygy . . . .

Id. at 249:11-19. Although there is evidence before me that Synygy publicly disclosed similar reports including similar information that was formatted in a similar manner, I find that defendants have not shown that there is no question of fact that the specific reports that Synygy prepared for Novo were not known or readily ascertainable by proper means. Cf. Giasson Aerospace Sci., Inc. v. RCO Eng'g, Inc., 680 F. Supp. 2d 830, 841-42 (E.D. Mich. 2010) ("Plaintiffs need not show that each component of their trade secrets are secret, or even nonobvious over what exists in the public domain. . . . . [A] trade secret can exist in combination of characteristics each of which, by itself, is in the public domain.").

Further, I find that material questions of fact remain with respect to whether Synygy undertook reasonable efforts to maintain the secrecy of the specifically identified types of reports: the Incentive Compensation Reports, Preliminary Payout Factors Report, Parameter Verification Report, Roster Verification Report, Circle of Excellence Report, Earnings Summary-Nation Report, and IC Report-Nation. As Synygy explains, "[e]ach employee is required to sign a confidentiality and non-competition agreement as a mandatory prerequisite to employment at Synygy." Pl.'s Trade Secret Opp'n Mem. at 14. Synygy also has internal security measures in place that "include restriction of access to confidential information to only those with a significant business need and password protections." Id. Information to be shared outside of Synygy is subject to a "written policy of marking the documents as "confidential" or copyrighted as necessary." Id. Under the facts presented, a reasonable jury could conclude that the secrecy element of the trade secret test has been met with respect to the reports.

c. Compensation Simulator

Synygy also claims trade secrets in its use of a "custom designed compensation simulator." Pl.'s Trade Secret Opp'n Mem. at 35. It explains that the reports it creates "often include a single-page incentive compensation report and a 'what-if' calculator. This complex 'what-if calculator enables sales reps. to simulate their compensation and calculate how certain variable factors can affect their compensation." Id. at 31-32. Defendants argue that Synygy's what-if calculators do not constitute trade secrets. Defs.' Trade Secret Reply at 6. I agree with defendants. On the record before me no reasonable factfinder could find that Synygy's what-if calculators are trade secrets.

First, in its response to defendants' motion, Synygy provides no support for its contention that it "has trade secrets in the use of an interactive simulator, or 'what-if calculator Pl.'s Trade Secret Opp'n Mem. at 35. Merely because Synygy calls something a trade secret does not make it a trade secret. See Diodato v. Wells Fargo Ins. Servs., USA. Inc., No. 12-2454, 2014 WL 4411591, at *29 (M.D. Pa. Sept. 8. 2014) (granting summary judgment where "Wells Fargo direct[ed] the court to no record evidence to prove its ipse dixit assertion that the information generally identified in its pleading constitute[d] a trade secret"); Bodemer v. Swanel Beverage, Inc., 884 F. Supp. 2d 717, 726 (N.D. Ind. 2012) (finding that "one person's subjective belief about the secrecy of a potential trade secret is [not] dispositive on the issue of trade secret protection").

Second, I am not persuaded that, without more, the use of passwords to protect worksheets containing what-if calculators is sufficient to show that the what-if calculators are trade secrets. At his deposition, Synygy's designee Thomas Hausch testified that "it was generally a practice to protect any report sheet with a what-if calculator so that end-users, specifically sales reps, didn't break them, just so they could only click on buttons and click in certain places where they were allowed to be in." Pl.'s Ex. 29 (Hausch Designee Dep.) at 126:17-21. Asked whether the password did anything "[o]her than protecting the report sheet from changes by the sales rep," Hausch responded "No. Well, it would have protected it from changes from anyone who didn't know the password, but . . . ." Id. 126:22-127:2. This testimony is not sufficient to support a conclusion that the primary intention behind password protection was to maintain the what-if calculators as confidential trade secrets and the use of passwords alone is thus not enough to make the calculators into trade secrets.

Finally, in his book Stiffler explained that in designing incentive compensation reports,

[y]ou might even want to include some "what if analyses to reinforce the relationship between compensation and performance (for example, had you sold 10 more units, your commission rate would have increased to 3%. Had you sold 15 more units, your commission rate would have increased to 3%. Had you sold 15 more units, etc.).

Defs.' Ex. 66 (Stiffler Book) at 135. The sample report included at Figure 9 in Stiffler's book clearly includes "what if calculators. Id. at 137. Additionally, defendants point to the report prepared by their expert who explains that "using an Excel worksheet as an interactive calculator and to create charts and graphs cannot possibly be regarded as a secret as this is precisely what Excel is designed to do." Pl.'s Ex. 34 (Ragsdale Report) at 66, ¶ 166. As defendants contend, "[t]he use of 'what if calculators is so common within Microsoft's Excel[ ] that it is prominently featured in a drop-down menu." Defs.' Trade Secret Reply at 7. Cf. Fishkin, 563 F. Supp. 2d at 584 (noting that "[t]he spreadsheet itself was a publicly-available Microsoft Excel program" in support of its finding that a formula and spreadsheet used for futures trading were not trade secrets). Synygy's "what if" calculators are based on concepts that are "too widely known and too readily ascertainable to constitute trade secrets. At most, they constitute general secrets of the trade . . . ." Id. (quotation omitted).

I find that defendants are entitled to summary judgment on Synygy's trade secrets claim to the extent that it pertains to the use of compensation simulators/what-if calculators.

d. Software Macros

Synygy also contends that it "has trade secrets in the software macro codes which appeared with the Deliverables." Pl.'s Trade Secret Opp'n Mem. at 35. Defendants contend that the software macros are not trade secrets as "discovery has shown that large portions of the macros were written by Microsoft, contain publicly available ideas from user forums, and reflect Novo's plan design and therefore Novo's ideas, rather than Synygy's." Defs.' Trade Secret Mem. at 28. In response, Synygy explains that "[t]he specific function of every line of code was discussed in great detail in the deposition testimony of Thomas Hausch" and cites broadly to more than 70 pages of Hausch's deposition transcript. Pl.'s Trade Secret Opp'n Mem. at 35, citing Pl.'s Ex. 29 (Hausch Dep.) 72:1-144:25.

Defendants correctly contend that at least some portion of the relevant software macros were created with the assistance of information obtained in online user forums. Danesh Sakhrani, a former Synygy employee, testified that:

if I had a question about how to do something specific in Excel, a good - nine times out often, eight times out of ten, I find a similar question has already been posted and people, generally, will pose questions like those in a forum, so I go see what the question was, see what the answer was . . . . I would look at how they did it, modify it to how it's applicable, made it nicer if I needed to and then implement it myself.

Defs.' Ex. 19 (Sakhrani Dep.) at 93:11-94:2. And indeed, according to Sakhrani's testimony, some portions of the relevant software macros were created using Record Macro: "a function in Excel that when you select it, whatever movements or whatever tasks you have Excel perform, it will record that for you into the [Visual Basic for Applications programming language]." Id. at 89:12-16; see, e.g., id. at 108:16-23 ("my best recollection of that general snippets of code was I did use Record Macro definitely I used Record Macro to figure out how to do that but I remember having to tweak it quite a bit to finally get it the way I wanted it to work, so that's why I defined it as partially"); 113:17-21 119:2-5 ("the designation of the different series, I got that designation from the macro, Record Macro, when the equation was what I built"); 120:17-23 ("Yes, it's based off the Record Macro for the most part. It is a repetition of something that was done earlier in the report, so I could just - it wouldn't have been two separate Record Macro, but it would have been based off of it initially.").

However, consistent with Sakhrani's cited testimony the entirety of the macros were not written using Record Macro. See also Pl.'s Ex. 29 (Hausch Dep.) at 89:25-90:5 ("Q. So the idea was Synygy's, but the expression was determined by Microsoft, correct? . . . THE WITNESS: As far as I can tell on page 365, that's correct. In no other portion of this exhibit is that correct."). Further, even though Record Macro may have been used to capture some elements of the code that makes up Synygy's macros, the Macros would not exist without Synygy's decisions regarding the information that should be programmed into the creation of its IC reports. Hausch testified that

Synygy's claiming that it authored all the code in [Synygy Macros No. 1]. Whether or not that code was handwritten or whether that code was captured through the Visual Basic editor's application to convert your keystrokes and mouse movements in individual basic language, somebody at Synygy still determined what the movement and the keystrokes ought to be that was then translated into the language - . . . And mouse movement and other functions ought to be. So the process was still defined by Synygy, and the majority of the code behind that process was written by Synygy. And some elements of that code, as captured on page 365, only were recorded, but the concept was still defined and authored by Synygy.

Pl.'s Ex. 29 (Hausch Dep.) at 89:5-23. Synygy's macros include at least some information that cannot be determined by simply looking at Synygy's reports or online user forums or by using Record Macro. Hausch and Sakhrani's testimony raises an issue of material fact with respect to whether the software macros are capable of being easily derived from public information. Under the facts presented, including evidence of Synygy's efforts to maintain confidentiality through confidentiality and non-disclosure agreements,⁴ a reasonable jury could conclude that the secrecy element of the trade secret test has been met with respect to the software macros.

4 Hausch testified that

The two primary mechanisms that we use to keep Synygy software macros, among other things, secret are nondisclosure agreements with our client base through the services agreement and confidentiality agreements with every employee at Synygy as part of their employment acceptance. I'm under one myself. As part of the . . . employee confidentiality agreement, we're obligated not to disclose our client's information basically outside of the client team with, you know, some flexibility as we go up through the organization; but we don't talk to one client about -- you know, one client with another client or share the intimate details of one client with another client team at Synygy. The nondisclosure agreement with our clients prevents them from distributing our material outside of their organization. That is a standard part of our boilerplate services agreements with our client base.

Pl.'s Ex. 29 (Hausch Designee Dep.) at 194:25-195:20.

2. Peculiar Importance and Competitive Value

Because I have found that questions of fact remain with respect to whether the identified reports in their entirety and/or the software macros were publicly known or readily accessible, I must proceed to consider whether a genuine dispute remains with respect to whether Synygy's identified reports or its software macros derive independent economic value from not being generally known. Defendants contend that summary judgment is warranted because "Synygy has failed to say how any of what it admits were sui generis reports reflecting Novo's plan design and containing Novo information could conceivably be of any value to Synygy in any other context." Defs.' Trade Secret Reply at 17 n.9. They argue that "custom designed materials that do not reflect any of a plaintiff's concepts or business rules but instead reflect those of the defendant/customer are not trade secrets because they cannot have 'peculiar importance to the plaintiff and do not constitute processes or devices 'for continuous use in the operation' of the plaintiff's business." Id. (citation omitted). On the evidence now before me, I disagree.

a. Reports in Their Entirety

To withstand defendants' motion for summary judgment, Synygy must show that a question of fact remains as to whether its reports have independent economic value from not being generally known to the public or to other persons who can obtain economic value from their disclosure or use. "Certainly it is possible that a new combination of known steps or processes can be entitled to trade secret protection." Arco Indus. Corp. v. Chemcast Corp., 633 F,2d 435, 442 (6th Cir. 1980). But to succeed, plaintiff must show "that the combination achieved in its overall layout and approach [is] in [some] way novel," id., or has value from not being generally known. Accordingly, in National Risk Management, Inc. v. Bramwell, 819 F. Supp. 417, 431 -32 (E.D. Pa. 1993), the Court explained that "[t]he fact that individual forms in marketing material or in [the] plaintiff's proposal book were compilations of public information does not itself preclude a finding that the combination of the included elements affords a plaintiff a competitive advantage and is not itself in the public domain."

[T]he combination of information in [the plaintiff's] proposal book reflected market research performed by [the] plaintiff and decisions to include and exclude certain elements from a larger poo! of data. It is this, rather than the Data contained in the individual forms generally known in the self insurance business, which may arguably contain a sufficient degree of novelty, however slight, to be excluded from general knowledge and may qualify the proposal book as a trade secret,

Id. at 432.

On the record before me, I find that whether the identified reports derive independent economic value from not being generally known is a question of fact, Synygy's expert, Peter Lee, when asked if "what[ is] valuable is the [incentive compensation] report as a whole," responded "[c]orrect. . . . I would say the thing of most value here is the report has a whole, yes." Defs.' Ex. 47 (Lee Dep.) at 259:10-17. In his expert report, Lee, opines that, when compared to incentive compensation reports prepared by other entities,

the reports created by [Synygy], using their proprietary report design process, provided the clearest communication to an uneducated reader of incentive compensation plan details. These details were arranged at the top of the reports in a manner that enable readers to determine, without additional data and without reviewing data from multiple sources, how much their incentive payout would be and how the calculation was performed.

This specific arrangement and design philosophy created a competitive advantage. Because the [Synygy] reports communicated payment amounts and payment calculations quickly and efficiently to readers, this would have reduced the amount of time that readers/sales people would need to spend to determine whether they were being paid the right amount.

Defs.' Ex. 4 (Lee Report) at 23.

In contrast, defendants' expert, Tony Buglione, explains that other IC report "designs referenced in Mr. Lee's report, as well as other designs available to Novo, are also effective, and require no greater time to comprehend than does the design of Synygy's." Defs.' Ex. 8 (Buglione Report) at 58. Buglione opines that "the payout number and other elements can be located in various places on the report and still be effective. This is just common sense: Sales reps quickly learn where to find the information that is most important to them." Id. at 60-61.

In his rebuttal report, Lee writes "incremental improvements in effectiveness and efficiency are critical. Although it is possible to have any number of IC report layouts and formats, the subtleties may be difficult to grasp for those whose primary experience with IC reporting is as a recipient of reports rather than as a designer of reports." Defs.' Ex. 89 at 7. Lee contends that Synygy's reports provide "sales representative[s] with imperfect knowledge of their IC plan" with "a much better chance of correctly deciphering" the information contained therein. Id. at 10.

Based on the conflicting testimony of the parties' experts, a jury could reasonably find that Synygy's reports derive independent economic value from not being generally known. Cf., Latuszewski v. Valic Fin. Advisors. Inc., No. 03-540,2007 WL 4462739, at *17 (W.D. Pa. Dec. 19, 2007) ("The fact that the same information can be gathered on any one customer by talking with the customer herself is irrelevant. The value in [a company's] customer information is in the compilation, categorization, and organization of information on thousands of customers, combined with the ability to search and format it into a readily usable form. This is what a competitor does not have and cannot easily recreate."), aff'd, 393 F. App'x 962 (3d Cir.2010).

b. Software Macros

Defendants argue that "the macros perform trivial functions, such as highlighting certain rows in a sales contest report for Novo Nordisk - something that is not only trivial, but useless other than in a particular Novo Report dating from 2005." Defs.' Trade Secret Reply at 6. They contend that the testimony of Thomas Lenox and Dhanesh Sakhrani, who are former Synygy employees, shows that the macros in question are so specific to the work Synygy performed for Novo that they would not have value for other Synygy clients. Defs.' Trade Secret Mot. at 30; citing Defs.' Ex. 19 (Sakhrani Dep.) at 124:24-125:4 (agreeing that "macrocode was specifically designed . . . for particular reports being prepared for Novo"); Defs.' Ex. 32 (Lenox Dep.) at 171:10-172:9 ("no client has the same IC plan"), 242:1-11 ("Q. And is it the case that these macros are so specific . . . that it doesn't really make sense to borrow something from some other source? . . . [A.] In a lot of cases, you could say that, yeah."). Defs.' Ex. 53 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 289:18-23 (responding that there are no "instances where Synygy registered reports or parts thereof were used in connection with clients of Synygy other than Novo Nordisk"). But the macros would have value to Novo. And competitors such as ZS, if given access to Synygy's software macros would be able to produce incentive compensation reports for Novo without expending the time and money required to develop proprietary software macros for the task. See Ecolaire Inc. v. Crissman, 542 F. Supp. 196, 206 (E.D. Pa. 1982) (finding drawings might qualify as trade secrets where, "[a]bsent access to such drawings, competitors must resort to a costly, time consuming process of reverse engineering in order to produce many of the parts described in the drawings."). Synygy's claim is that Novo and ZS misappropriated the macros for Novo's use. Am. Compl. ¶¶ 76-77. I find that a question of fact remains as to whether the software macros derive independent economic value from not being generally known.

E. Evidence of Misappropriation

Even if Synygy has trade secrets in the identified reports or the software macros, to withstand defendants' motion for summary judgment, Synygy must show that a genuine dispute remains as to whether defendants misappropriated its trade secrets. To prove misappropriation of a trade secret under the PUTSA, Synygy must establish that its trade secrets were disclosed or used without its consent and that defendants:

(i) used improper means to acquire knowledge of the trade secret;



(ii) at the time of disclosure or use, knew or had reason to know that his knowledge of the trade secret was:

(A) derived from or through a person who had utilized improper means to acquire it;



(B) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or



(C) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or

(iii) before a material change of his position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake.

12 Pa. C.S.A. § 5302. See also Hill v. Best Medical Intern., Inc., Nos. 07-1709, 08-1404, 09-1194, 2011 WL 5082208, at *10 (W.D. Pa. Oct. 25, 2011), citing 12 Pa. C.S. § 5302 (finding that a misappropriation plaintiff "must show that the defendant used or disclosed information that it knew or had reason to know was a trade secret and that the defendant acquired such information by improper means."). Similarly,

To prevail on a claim for misappropriation of trade secrets under New Jersey law, a party must establish: "(1) the existence of a trade secret; (2) communicated in confidence by the plaintiff to the employee; (3) disclosed by the employee in breach of that confidence; (4) acquired by the competitor with knowledge of the breach of confidence, and (5) used by the competitor to the detriment of the plaintiff."

Ameriprise Fin. Servs., Inc. v. Koenig, No 11-6140, 2012 WL 379940, at *6 (D.N.J. Feb. 6, 2012). quoting Merckle GmbH v. Johnson & Johnson, 961 F. Supp. 721, 730 (D.N.J, 1997); Rvcoline Prods., Inc. v. Walsh, 756 A.2d 1047, 1052 (N. J. Super. Ct. App. Div. 2000).

Defendants have stipulated that Novo sent certain of Synygy's reports to ZS. See Pl.'s Ex. 37 (Mulroney Dep.) at 161:11-163:5; Pl.'s Ex. 57 (ZS Stipulation). The question is whether, in doing so, Novo improperly disclosed the information or ZS improperly acquired the information.

5 ⁵ Defendants' argument that Synygy cannot show misappropriation because it has not proven that a trade secret exists is unavailing for the reasons set forth in my above discussion.

1. Novo

Novo argues that it "acquired all the reports quite properly" and, as a result, cannot be held liable for misappropriation of Synygy's trade secrets. Defs.' Trade Secret Reply at 10. But if Novo disclosed Synygy's trade secrets to ZS and, "at the time of disclosure . . . knew or had reason to know that [its] knowledge of the trade secret was . . . acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use," Synygy can prevail on its trade secrets claim against Novo. "Improper means" is defined under the PUTSA as including "breach or inducement of a duty to maintain secrecy." 12 Pa. C.S.A. § 5302. Thus "a claim for trade secret misappropriation may . . . be premised on the defendant's disclosure of a trade secret in violation of a duty of secrecy." Wentworth-Douglass Hosp. v. Young & Novis Prof'l Ass'n, 10-CV-120-SM, 2012 WL 1081172, at *5 (D.N.H. Mar. 30,2012) (applying parallel provision in the New Hampshire Uniform Trade Secrets Act).

Synygy contends that "[t]he evidence in this case is unequivocal in that Novo was only permitted to receive the incentive compensation reports designed by Synygy under the strict confidentiality protections contained in the Synygy-Novo Agreement." Pl.'s Trade Secret Mem. at 37. Under the terms of the agreement, Novo "agree[d] not to divulge, disclose, convey or permit the disclosure of any of the Proprietary Information of [Synygy], either verbally or in writing, to any person, corporation, or third party, other than employees, agents, subcontractors or independent contractors of Synygy or [Novo] and their parent corporations, subsidiaries or affiliates who are engaged in performing this Agreement." Pl.'s Ex. 33 at SYN00035. Prior to finalizing its contract with Novo, Synygy explained to Novo that its "intent [in making certain modifications to the contract] is to protect our intellectual property. For that reason we state ownership of documents that we create and design. This prevents our work from being copied and is very important to us." Pl.'s Ex. 26 (Email re: Comments on Draft Incentive Compensation Services Agreement, March 23, 1999) at SYN0109537.

Defendants counter that "the summary judgment record does not support a reasonable conclusion that Novo disclosed any 'Proprietary Information' under its contract with Synygy." Defs.' Trade Secret Mem. at 32. They argue that "Novo reasonably believed its reports were its reports" and "there is no evidence that Novo was put on notice by Synygy that whatever Synygy now contends are its trade secrets were trade secrets." Id. at 32-33. Defendants contend that "any argument that Novo 'should have known' that Synygy was somehow claiming that something in these thousands of reports was its 'trade secret[ ]' [is] unreasonable as a matter of law." Id. at 32. They also argue that no dispute of fact remains with respect Novo's non-liability for misappropriation because Synygy did not follow its own policy on marking any of the documents or software in question "Synygy Confidential" and claim that because Synygy did not "put Novo . . . on notice that Synygy believed any of its trade secrets were in [the reports provided to Novo], it cannot be reasonably concluded that Novo . . . [was] aware of any breaches of confidences." Id. at 35.

On the record before me, plaintiff can withstand defendant's motion for summary judgment on its claim for misappropriation of trade secrets against Novo. Material questions of fact remain with respect to whether Novo was aware that the information it shared with ZS included confidential trade secrets. As a result, material questions of fact also remain with respect to the question of whether Novo violated the PUTS A or breached a confidence under New Jersey law when it disclosed the Synygy-prepared reports and software macros to ZS. Accordingly, I will deny defendants' request for summary judgment on Synygy's PUTSA claim against Novo insofar as it pertains to the reports and the software macros.

2. ZS

I am likewise satisfied that the question of whether ZS misappropriated any of Synygy's trade secrets must be left to the jury given the issues of disputed fact that remain with respect to whether ZS had reason to know that any of the information that Novo shared with it was "derived from or through a person who owed a duty to [Synygy] to maintain its secrecy," 12 Pa. C.S.A. § 5302, or, in other words, that it was "acquired by [ZS] with knowledge of [a] breach of confidence." Ameriprise Fin. Servs., 2012 WL 379940, at *6.

Defendants argue that "Synygy can point to no evidence in the record that ZS knew or had a reason to know that whatever it is that Synygy now claims is its trade secret was acquired by improper means by Novo." Defs.' Trade Secret Mot. at 33. Synygy counters that "ZS was aware of Synygy's contractual relationship with Novo and that Synygy was a direct competitor who was aggressive about protecting its intellectual property rights." Pl.'s Trade Secret Opp'n Mem. at 38. Synygy also asserts that it "took the extra step of ensuring that the overwhelming majority of the files it sent to Novo were password protected," and despite the presence of passwords, "ZS simply and unlawfully hacked the Synygy passwords." Pl.'s Trade Secret Opp'n Mem. at 39.

Defendants argue that "review of the various reports Synygy . . . asserts are representative samples of Novo deliverables . . . clearly show that Synygy did not use passwords to protect anything it is now arguing constitute its 'trade secrets.'" Defs.' Trade Secret Reply at 14. Defendants contend that "Synygy failed to use any passwords to protect the macros in the Incentive Compensation report . . . . Nor were the macros protected in the Circle of Excellence Report, Parameter Verification Report and Earnings Summary-Nation Report . . . which were management-level reports of limited distribution." Defs.' Trade Secret Reply at 15. They contend that "Synygy's only argument is that one ZS employee provided instructions to another ZS employee about how to use a publicly-available tool to unlock one password-protected sheet in one report." Defs.' Trade Secret Reply at 14. Defendants maintain that "no reasonable jury could find that ZS should have understood that password protection of one worksheet of Novo data in one workbook meant that Synygy was trying to protect something not found in that one worksheet . . . ." Defs.' Trade Secret Reply at 17 (emphasis omitted). I disagree.

Construing the record in favor of Synygy as the non-movant, I find that there is sufficient evidence to raise material questions of fact with respect to whether ZS had knowledge that the reports and software macros were acquired from Novo in violation of any duty Novo owed to Synygy to maintain the secrecy of the information in question. There is evidence that ZS removed information associated with Synygy from documents it intended to use as its own. See Pl.'s Ex. 69 (Neeraj Vashisht email, Dec. 13, 2005) ("Please check the File>Properties>Summary Tab to ensure that we have no references of Synygy/any other company than ZS."); Pl.'s Ex. 22 (Lee Report) at 3 ("A comparison of SYNYGY reports and report templates with ZS reports and report templates for NOVO reveals a strong derivative relationship between the reports generated by ZS and SYNYGY for NOVO and the templates used to generate those reports."). At least some of the information that Novo provided to Synygy was protected by passwords. See, e.g., Pl.'s Ex. 34 (Ragsdale Report Report) at 52-54 (report of defendants' expert analyzing password protection for various documents and identifying numerous documents with password protected software macros). There is also evidence that ZS undertook efforts to "unprotect" password protected files. See Pl.'s Ex. 35 (Sandeep Upadhyay email, Nov. 25, 2005) (providing instructions regarding removal of password protection and explaining that "it takes around 2-3 minutes for the sheet to get unprotected"). Thus I will deny defendants' request for summary judgment on Synygy's misappropriation claims against ZS insofar as it pertains to the reports and the software macros.

III. Copyright

In their third motion for summary judgment, defendants seek summary judgment on Count I of Synygy's second amended complaint, which asserts a claim against defendants for copyright infringement. Synygy claims that defendants have infringed its copyrights in Synygy Macros No. 1 and No. 2. See Second Am. Compl. ¶¶ 38, 94. Synygy also claims that defendants have infringed its copyrights in Synygy Reports No. 1. See Id. at ¶ 38, 94.

Effective October 14, 2008, Synygy received a certificate of copyright registration for Synygy Macros No. 1. Pl.'s Ex. 74. Synygy also received a certificate of copyright registration for Synygy Macros No. 2 effective June 8, 2009. Pl.'s Ex. 75. Synygy Macros No. 1 and No. 2 are "an original set of proprietary software macros to be used with an off-the-shelf software program (Microsoft Excel) to generate analyses of sales compensation and sales performance of pharmaceutical sales people." ⁶See Second Am. Compl. ¶¶ 38, 94

6 In its Second Amended Complaint, Synygy also claims that it has received copyright registration numbers for the following software products: "ADEPT Viewer," "ADEPT 4.1 Viewer," IC Viewer 7.1; IC Expert 8.0" and "IC Viewer 8.1." Second Am. Compl. ¶ 73. However, Synygy's Second Amended Complaint does not allege that ZS or Novo have infringed Synygy's copyrights in these software products. See id.at ¶ 94 (asserting a claim for infringement of "Synygy's copyrights in the Synygy Software Macros and the Synygy Reports," and not the "Synygy Software Products" or "Synygy Software").

Effective June 29, 2009,⁷ Synygy also registered with the Copyright Office a collection of reports called "Synygy Reports No. 1." Pl.'s Ex. 63. Synygy Reports No. 1 is a collection of two categories of documents that Synygy custom designed and delivered to Novo during their business relationship from 1999 to 2005. Pl.'s Copyright Opp'n Mem. at 3. The first are incentive compensation report scorecards which "tell[ ] the pharmaceutical sales rep how he or she is measuring up against the sales goals set by Novo." Defs.' Copyright Mem. at 4. "[S]corecards were distributed to Novo's sales force monthly via email, and they showed how much the rep could expect to make for a particular POA and how Novo had computed the rep's payout." Id. at 4-5. The second category of documents in Synygy Reports No. 1 are "intended for sales operations management at company headquarters, not for individual sales reps in the field." Id. at 5. Defendants refer to these documents as "home office reports." Id. Plaintiff refers to these documents as "management reports." Pl.'s Copyright Opp'n Mem. at 3. "[M]anagement reports . . . communicate information to management regarding data verifications, earnings summaries, and rankings of employees for sales contests." Id.

7 Synygy registered and deposited Synygy Reports No. 1 with the Copyright office two months before amending its complaint to assert a claim for copyright infringement. See Defs.' Copyright Mem. at 9.

Specifically, the reports in Synygy Reports No. 1, the collection deposited with the Copyright Office, are identified as "Incentive Compensation Report" scorecards for DC, Maine, Nation (DCS, DBM, RBD), Regional Business Director and Mid Atlantic" and "Verification Report - Parameters," "Verification Report - Payout Factor Tables," "Roster Verification Report - Comparison of Current and Previous Territory/Role/EmpID Combinations," "Roster Verification Report - Comparison of Current and Previous Eligibility," "Roster Verification Report - Comparison of Current and Previous Names and Email Addresses," "COE Measures & Rankings by POA - Based on COE 2005 Criteria," "Circle of Excellence Ranking Report (As of Dec 2005 YTD)," Earnings Summary - Nation," "Circle of Excellence Ranking Report" and "Preliminary Payout Factor Report." See Pl.'s Ex. 64. Synygy explains that before it deposited these reports \"with the Copyright Office, Synygy modified data values from the reports, in order to protect the confidentiality of the data that Novo licensed from a third party data aggregator . . . , modified Novo employee ID numbers, and replaced names of Novo employees with 'Lastname, Firstname."' Pl.'s Copyright Opp'n Mem. at 4.

Synygy claims that "[b]y reproducing, distributing, and using copies of the Synygy Software Macros, the Synygy Reports, and other Confidential Information and creating derivative works therefrom, ZS and Novo have infringed and will continue to infringe Synygy's copyrights in the Synygy Software Macros and the Synygy Reports." Dkt. No. 85, at ¶ 94. To prevail on its claim for copyright infringement, Synygy must show that it had ownership of a valid copyright and that defendants engaged in unauthorized copying of original elements of the copyrighted work. See Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991); Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 203 (3d Cir. 2005); Dam Things from Denmark, a/k/a Troll Company ApS v. Russ Berrie & Co., Inc., 290 F.3d 548, 561 (3d Cir. 2002).

A. Valid Copyright

I must determine whether Synygy's documents and software macros are subject to copyright protection. Copyright protects original works of authorship fixed in any tangible medium of expression from which they can be perceived and which are not "any idea, procedure, process, system, method of operation, concept, principle, or discovery . . . ." 17 U.S.C. § 102. An original work is one that is both independently created (i.e., not copied) and creative. Feist, 499 U.S. at 345. "[T]he requisite level of creativity is extremely low; even a slight amount will suffice. The vast majority of works make the grade quite easily, as they possess some creative spark, no matter how crude, humble or obvious it might be." Id.

In response to defendants' summary judgment motion on copyright, Synygy contends that its copyrighted reports and software macros are presumptively valid under 17 U.S.C. § 410(c). Pl.'s Copyright Opp'n Mem. at 26. Section 410(c) provides that:

[i]n any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate. The evidentiary weight to be accorded the certificate of a registration made thereafter shall be within the discretion of the court.

17 U.S.C. § 410(c).

The principle that a certificate represents prima facie evidence of copyright validity has been established in a long line of court decisions and is a sound one. . . . [E]ndowing a copyright claimant who has obtained a certificate with a rebuttable presumption of the validity of the copyright does not deprive the defendant in an infringement suit of any rights; it merely orders the burdens of proof. The plaintiff should not ordinarily be forced in the first instance to prove all of the multitude of facts that underlie the validity of the copyright unless the defendant, by effectively challenging them, shifts the burden of doing so to the plaintiff.

Mortgage Mkt. Guide, LLC v. Freedman Report. LLC, No. 06-CV-140-FLW, 2008 WL 2991570, at *15 (D.N.J. July 28, 2008), quoting H.R. Rep. No. 1476, 94th Cong., 2d Sess. 157, reprinted in 1976 U.S. Code. Cong. & Ad. News 5659, at 5773: see also Masquerade Novelty, Inc. v. Unique Indus., Inc., 912 F.2d 663, 668-69 (3d Cir. 1990) (finding that the presumption is rebuttable and "shifts to the defendant the burden to prove the invalidity of the plaintiff's copyrights").

1. Synygy Macros No. 1 and No. 2.

The certificates of copyright registration for Synygy Macros Nos. 1 and 2 are prima facie evidence of the validity of their copyrights. 17 U.S.C. § 410(c). Defendants thus bear the burden to establish a material dispute as to whether Synygy Macros Nos. 1 and 2 are validly copyrighted.

Instead of setting forth evidence to show that the copyrights in Synygy Macros No. 1 and No. 2 are invalid, defendants argue that "Synygy appears to have effectively dropped liability theories based on [the software macros] from the case" because, inter alia "Synygy's damages expert conceded at deposition that Synygy's damages claim did not include the 'Synygy Software Macros' because Synygy has no evidence that Defendants used the macros." Defs.' Copyright Mem. at 11 n.4. This argument is misguided, however, as it goes to the question of whether defendants engaged in unauthorized copying of the software macros and cannot satisfy defendants' burden of establishing a material dispute with respect to the presumed validity of Synygy's copyrights in Synygy Macros No. 1 and No. 2. I find that defendants are not entitled to summary judgment based on an invalidity argument with respect to the software macros.

2. Synygy Reports No. 1

a. Applicability of the Presumption of Validity

The certificate of copyright registration for the Synygy Reports No. 1 notes that "material excluded from this claim" included "NOVO NORDISK logos, trademarks and trade names" and lists as "[n]ew material included in claim: text, Formatting, graphics, organization, selection and arrangement of information." Defs.' Ex. 76. However, under "Copyright office notes" at the bottom of the certificate of registration for Synygy Reports No. 1, the certificate of registration states "[rjegarding author information and new material included: Formatting not copyrightable."⁸ Defs.' Ex. 76.

8 Despite the Copyright Office's note on the certificate of registration for Synygy Reports No. 1, the regulations of the Copyright Office do not specifically include "formatting" in the following list of items that may not be copyrighted:

(a) Words and short phrases such as names, titles, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, lettering or coloring; mere listing of ingredients or contents;



(b) Ideas, plans, methods, systems, or devices, as distinguished from the particular manner in which they are expressed or described in a writing;



(c) Blank forms, such as time cards, graph paper, account books, diaries, bank checks, scorecards, address books, report forms, order forms and the like, which are designed for recording information and do not in themselves convey information;



(d) Works consisting entirely of information that is common property containing no original authorship, such as, for example: Standard calendars, height and weight charts, tape measures and rulers, schedules of sporting events, and lists or tables taken from public documents or other common sources.



(e) Typeface as typeface.

37 C.F.R. § 202.1.

Defendants thus contend that there can be no presumption of validity for Synygy Reports No. 1 because "the Copyright Office expressly found that no copyright extended to any formatting in the reports." Defs.' Copyright Mem. at 1, citing Defs.' Ex. 76. Defendants argue that "no presumption attaches to any color shading, use of color, borders, fonts, border thicknesses, font sizes, font styles, breaking the report into sections with borders, or the way the sections relate in Reports No. 1."⁹ Dels.' Copyright Reply at 2-3. Defendants further contend that

9 When asked what aspects of a report were "formatting," Synygy's 30(b)(6) designee suggested that formatting includes: "[c]olor shading, use of color, the borders, the fonts, the border thicknesses, the font sizes, the font styles, the breaking the report into sections with borders, the way the sections relate." Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 121:10-122:13.

because Synygy has disclaimed ownership over everything else in the reports - e.g., Novo's name, its product names, data, text, and standard industry terminology - and Synygy does not own any parts of the reports or reports designs that contain Novo's proprietary information . . . , there is nothing in the reports over which any arguable presumption of validity would apply.

Id. at 2.

I find that the Copyright Office's footnote creates an ambiguity with respect to the scope of any copyright in Synygy Reports No. 1. "The mere fact that a work is copyrighted does not mean that every element of the work may be protected." Feist, 499 U.S. at 348. Those items which are specifically excluded from the copyright registration under the heading "Limitation of copyright claim" - Novo logos, trademarks and trade names - cannot be subject to the presumption. Further, the Copyright Office's footnote leaves me with no way to distinguish between formatting, which is "not copyrightable," and the other material which is included in Synygy's copyright claim: "text, . . . graphics, organization, selection and arrangement of information." Pl.'s Ex. 63. "Formatting" is not defined on the certificate of registration, is not defined by the Copyright Act, 17 U.S.C. § 101, and is not defined by the regulations of the Copyright Office. 37 C.F.R. § 202.1. Because of the ambiguity created by the Copyright Office's footnote, I decline to apply the presumption of validity to Synygy Reports No. 1. Accordingly, I must consider whether plaintiff has otherwise met its burden to prove that some or all of the materials included in Synygy Reports No. 1 are sufficiently original to warrant copyright protection.

b. The Blank Forms Doctrine

Defendants argue that Synygy's management reports and incentive compensation report scorecards are "not copyrightable as a matter of law" because they are blank forms. Defs.' Copyright Mem. at 17-21.

The basic principle behind denying copyright protection to "blank forms" lies in the concern that providing such protection would give the copyright owner undue protection over the idea underlying the form, i.e., there are often very few methods to express the content of a form such as a calendar or time sheet and one individual could draw up these variations, copyright them, and thus obtain a virtual monopoly on such clearly useful ideas as a record of the days and of one's time and activities. Further, the majority of such forms are simple and require like [sic] ingenuity to design, so little incentive (protection) is required to motivate designers, while the use (communication) of the form is very important to society.

Digital Commc'ns Assocs., Inc. v. Softklone Distrib. Corp., 659 F. Supp. 449, 462 (N.D. Ga. 1987).

Although the copyright regulations provide that "applications for registration of [blank forms] cannot be entertained," 37 C.F.R. § 202.1, "this circuit, like the majority of courts that have considered the issue, has . . . held that blank forms may be copyrighted if they are sufficiently innovative that their arrangement of information is itself informative." Whelan Assocs., Inc. v, Jaslow Dental Lab., Inc., 797 F,2d 1222, 1243 (3d Cir. 1986); see also Digital Commc'ns Assocs, 659 F. Supp. at 457 ("'blank forms' which are designed for recording information and which do not themselves convey information are not copyrightable"). "Whether a form conveys information is a fact-bound determination . . . ." Safeguard Bus. Sys., Inc. v. Reynolds and Reynolds Co., No. 88-1426, 1990 U.S. Dist. LEXIS 3617, at *7 (E.D. Pa. March 30, 1990). But cf. Tastefully Simple, Inc. v. Two Sisters Gourmet. L.L.C., 134 F. App'x 1, 4 (6th Cir. 2005) ("Whether a form is a "blank form," and therefore not entitled to copyright protection, is a question of law for the court to decide."). Blank forms do not convey information if the

headings [are] so obvious that their selection cannot be said to satisfy even minimal creativity . . . . Such a work conveys no information, not just because it contains blanks, but because its selection of headings is totally uninformative. On the other hand, if a scorecard or diary contained a group of headings whose selection (or possibly arrangement) displayed cognizable creativity, the author's choice of those headings would convey to users the information that this group of categories was something out of the ordinary.

Kregos v. Associated Press, 937 F.2d 700, 708-09 (2d Cir. 1991). Examples of non-copyrightable blank forms include "time cards, graph paper, account books, diaries, bank checks, scorecards, address books, report forms, order forms and the like, which are designed for recording information and do not in themselves convey information." 37 C.F.R. § 202.1(c). I must decide whether the documents included in Synygy Reports No. 1 are like these non-copyrightable blank forms, or whether they convey sufficient information to warrant copyright protection.

In support of their argument "[t]hat Synygy's blank forms convey no information," Defs.' Copyright Resp. at 7, defendants submit the report of their expert Tony Buglione, who considered "demonstrative exhibits" presented to him by Counsel for ZS that Buglione found to "fairly and accurately reflect those aspects of the Incentive Compensation Reports . . . that do not include Novo text, numbers and colors." Defs.' Ex. 8 (Buglione Report) at 54; see also Defs.' Copyright Mem. at 19-20 ("In analyzing the scorecards, one should also mentally remove the material that Synygy has admitted it does not own."). Scrubbed of "terms that are standard industry parlance, . . . the titles of the reports, the name Novo Nordisk, the names of Novo Nordisk's products, Novo Nordisk's Apis bull logo, the blue color scheme used in the reports, dates, the numbers of actual product volume targets and attainments," id. at 53, the exhibits in question indeed appear to be nothing more than a blank grid. Id. at 55.

Defendants also argue that the reports "plainly do not by themselves convey any information: they are replete with zeros for things like payout amounts, the individual variables from which payout amounts are calculated and employee ID numbers, and have entries like "LAST NAME, FIRST NAME" and "TERR_NAME" instead of actual employee or territory names." Defs.' Copyright Mem at 1. They contend that "the blank report forms do not convey any information until they are populated with the pertinent factual information" that Synygy removed from the reports before their submission to the Copyright Office. Id. Plaintiff counters that "[e]ven if the Court gives credence to defendants' argument that the zeroed out values of the copyright deposits affects whether the copyrighted reports convey information, the evidence is still such that a reasonable jury could find that Synygy's copyrighted reports are not blank forms." Pl.'s Copyright Opp'n Mem. at 33.

I agree with defendants that Synygy cannot have a copyright in the "numbers and words" or other facts included in Synygy Reports No. 1. Defs.' Copyright Mem. at 19. First, facts are not subject to copyright protection. Feist, 499 U.S. at 344 ("facts are not copyrightable; . . . compilations of facts generally are"); see also Whelan, 797 F.2d at 1234 ("It is axiomatic that copyright protects only the expression of ideas and not the ideas themselves."). Further, the data contained in the reports (e.g., earnings calculations, territories, employee IDs, product names, etc.) belongs to Novo or to a third party data aggregator, not to Synygy. See Pl.'s Ex. 39 (Incentive Compensation Services Agreement) at ¶ 7 ("[Novo] shall be the sole and exclusive owner of [Novo's] proprietary information."); see Defs.' Ex. 4 (Lee Report) at 26-27 ("most pharmaceutical manufacturers ... purchase their sales data from the same small set of data vendors").

However, in its copyright registration application for Synygy Reports No. 1, Synygy claimed a copyright in, inter alia, the "organization, selection and arrangement of information." Dels.' Ex. 77 at 1. Synygy's "claims of copyright protection are [appropriately] predicated upon each report as a whole - how all of the elements in a report are selected, arranged, and visualized in a way that communicates information to the recipient in what Synygy believes to be the most clear, effective, and aesthetic [ally] pleasing manner." Pl.'s Copyright Opp'n Mem. at 41 (emphasis added), citing Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 80:7-96:22; 108:24-110:25; 169:6-176:25. As plaintiff contends, "[t]o determine copyrightability, a court need not - and, indeed, should not - dissect every element of the allegedly protected work. Rather, the court need only identify those elements that are copyrightable, and then determine whether those elements, considered as a whole, have been impermissibly copied." Allen-Myland, Inc. v. IBM Corp., 770 F. Supp. 1004, 1006-07; see also Pl.'s Copyright Opp'n Mem. at 39 ("defendants engage in an improper 'dissection' analysis in challenging the expressive and informative nature of Synygy's copyrighted reports"). As the Court explained in Rottlund Co. v. Pinnacle Corp., when considering the copyrightability of technical drawings containing known architectural elements where the plaintiff claimed protection in its selection, arrangement and coordination of the elements:

[d]efendants would have the Court find that nothing protectible remains after filtering the individual elements; the drawings merely being sheets of paper shareable amongst architects and builders to copy at will. That would be acceptable if no expression remains in the drawings for copyright "encourages others to build freely upon the ideas and information conveyed by a work." . . . As urged by Rottlund, however, the Court finds that the selection, arrangement, and combination of the elements expressed in the technical drawings are sufficiently original and detailed to be afforded copyright protection.

No. 01-1980, 2004 WL 1879983, at *14 (D. Minn. Aug. 20, 2004), report and recommendation adopted (Oct. 19, 2004), quoting Feist, 499 U.S. at 350; see also Boisson v. Banian, Ltd., 273 F.3d 262, 272 (2d Cir. 2001) ("[A] court is not to dissect the works at issue into separate components and compare only the copyrightable elements. To do so would . . . result in almost nothing being copyrightable because original works broken down into their composite parts would usually be little more than basic unprotectible elements like letters, colors and symbols.") (internal citation omitted); Real View, LLC v. 20-20 Techs., Inc., 683 F. Supp. 2d 147, 157 (D. Mass. 2010) ("The fact that each individual icon or feature on a screen cannot be necessarily copyrighted does not deny the screen itself, as the sum of those icons or features, copyright protection.").

"Although a work may contain numerous unprotectable elements, the work may still be entitled to copyright protection as a compilation." Id. at 152. I find that even though Synygy's copyright registration application characterized Synygy Reports No. 1 as "text," rather than as a compilation, Defs.' Ex. 77 at 1, the documents included in Synygy Reports No. 1 are more properly characterized as compilations of incentive compensation data. "A 'compilation' is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship." 17 U.S.C. § 101. "[E]ven a purely factual compilation is copyrightable when it involves: (1) the assembly of pre-existing material, factors, or data; (2) the selection, coordination, or arrangement of those materials; and (3) the creation, by virtue of the particular selection, coordination, or arrangement, of an 'original' work of authorization." Thornton v. J Jargon Co., 580 F. Supp. 2d 1261, 1272 (M.D. Fla. 2008) (internal quotations and citation omitted).

It is possible to consider whether Synygy's reports are worthy of copyright protection as compilations even when they are scrubbed of their original data values and include only the placeholder values included in the reports deposited with the Copyright Office. What I must decide is "whether the arrangement . . . viewed in the aggregate, is original." Key Publ'ns, Inc. v. Chinatown Today Publ'g Enters., Inc., 945 F.2d 509, 514 (2d Cir. 1991: see also Feist, 499 U.S. at 357 (holding that copyright protection may extend to original selection, coordination or arrangement of facts even though the facts themselves are not protected); Gemel Precision Tool Co. v. Pharma Tool Corp., No. 94-5305, 1995 WL 71243, at *5 (E.D. Pa. Feb. 13, 1995) (finding defendants had not met their burden to show invalidity where they had "not proffered any evidence which indicates that the facts contained in the [computer] databases are devoid of any particularized selection or arrangement such that they could not be considered protected compilations"). "When it comes to the selection or arrangement of information, creativity inheres in making non-obvious choices from among more than a few options." Matthew Bender & Co. v. West Publ'g Corp., 158 F.3d 674, 682 (2d Cir. 1998). "[C]reativity in selection and arrangement . . . is a function of (i) the total number of options available, (ii) external factors that limit the viability of certain options and render others non-creative, and (iii) prior uses that render certain selections 'garden variety.'" Id. at 682-83.

1. Management Reports

I find that plaintiff has not met its burden to show that the management reports included in Synygy Reports No. 1 warrant copyright protection. On the evidence before me, I find that no reasonable factfinder could find that the management reports are sufficiently informative or original to constitute something other than non-copyrightable blank forms such as those identified in 37 C.F.R. § 202.1(c).

Defendants analogize Synygy Reports No. 1 to the documents considered in Safeguard Business Systems, Inc. v. Reynolds and Reynolds Co., No. 88-1426, 1990 U.S. Dist. LEXIS 3617, at *7 (E.D. Pa. March 30, 1990), aff d without op., 919 F.2d 136 (3d Cir. 1990). See Defs.' Copyright Mem. at 14-15. There, following a non-jury trial, the Court considered whether Safeguard's "day sheets" which were "intended to provide healthcare practitioners with a complete system for review and control of billing, collections, and receivables" were blank forms not subject to copyright. Safeguard, 1990 U.S. Dist. LEXIS 3617 at *2. Safeguard had argued that its day sheets taught "how to prepare accounts receivable control and month-to-month proof of accounts" with the use of "color coding and lettering," Id. at *8, but the Court found that there was evidence that the forms were "usable only after training or with written instructions," Id. at *9, and concluded that the day sheets were "forms that merely ease the recording of information." Id. at * 10. Also, the Register of Copyrights had determined that the day sheets "were not copyrightable" and the Court found that the Register's decision was "entitled to deference." Id. at * 14. The Court concluded that the "day sheets are designed to record information and do not convey sufficient information to entitle them to copyright protection," instead, they conveyed only "de minimis information." Id. at * 13-14.

Confronted with similar facts in Utopia Provider Systems, Inc. y. Pro-Med Clinical Systems, L.L.C., 596 F.3d 1313, 1324 (11th Cir. 2010), on appeal from a decision on summary judgment, the Court of Appeals for the Eleventh Circuit declined to find that a set of forms used by treating physicians was copyrightable. To make its determination, the Court explained that "[w]e look first to whether the headings are anything other than what would be expected . . . , and second to whether the terms actually convey information . . . ." Id. at 1322. The Court noted that the forms called for "personal information such as the patient's name, date of birth, sex, and chief complaint . . . [,] the history of the present illness, a review of systems, medical and social history, physical exam, medical decision making, clinical impressions, and finally, consultation, disposition, and instructions." Id. at 1323. The Court observed that there was testimony that the content in the forms was consistent with what "a physician doing a systems review of an emergency room patient would consider as a part of his job," although the physician might not necessarily consider the terms in the same order or document them in the same fashion. Id. (internal quotation omitted). The Court found that the selection and arrangement of terms in the forms was not original and did not convey information, Id. at 1324. Instead, the forms were "better analogized to [a] non-copyrightable baseball scorecard or travel diary with generic headings." Id. at 1323; see also Bibbero Sys., Inc. v. Colwell Sys., Inc., 893 F.2d 1104 (9th Cir. 1990) (affirming district court's determination that a medical "superbill" was not copyrightable where it was a blank form that included only "simple instructions to the patient on how to file an insurance claim using the form, such as 'complete upper portion of this form'"); M.M, Bus. Forms Corp. v. Uarco, Inc., 472 F.2d 1137, 1140 (6th Cir. 1973) (finding no valid copyright in a form for television servicemen where there was "no distinguishable variation in any of [the] simplistic legal arrangements [identified in the form] that can be attributed to the drafter's own creativity").

Ultimately, I find that plaintiff has not distinguished the management reports from the documents considered in Safeguard Business Systems or Utopia Provider Systems. Even if the management reports were "very useful" for determining certain product performance information, see Pl.'s Ex. 66 (Apr. 27, 2006 Novo-ZS Email at ZSA 000259270), plaintiff has not shown that a genuine dispute exists with respect to whether the management reports are sufficiently creative or original to warrant copyright protection. The management reports are comprised of various spreadsheets that include fields for categories including, inter alia, territory, role, name, rank, status, eligibility, goal attainment and earnings. Pl.'s Ex. 64 at 8-23. The tabular headings identified in the management report spreadsheets are not the result of "making non-obvious choices from among more than a few options." Matthew Bender & Co., 158 F.3d at 682. Rather, they are terms whose use would be expected in order to convey the information transmitted in the reports. Indeed, Synygy's own expert opined that the incentive compensation terms that appeared on the reports created by Synygy for Novo were "commonly occurring terms within pharmaceutical incentives and used across many pharmaceutical incentive compensation plans. This phenomenon is, in large part, caused by the unique restrictions placed on pharmaceutical sales tracking, which then drives most pharmaceutical manufacturers to purchase their sales data from the same small set of data vendors." Defs.' Ex. 4 (Lee Report) at 26-27. Asked whether there were "any words" in a Circle of Excellence Report "that are not standard industry terminology," former Synygy employee Thomas Lenox responded, "[n]o." Defs.' Ex. 32 (Lenox Dep.) at 117:12-17. Asked the same question about a Verification Report - a "report[ ] that show[s] us . . . just general parameters . . . trying to highlight anything that could potentially be an issue," Lenox again answered "[n]o." Id. at 118:1-12. Lenox also responded "[n]o" when he was asked whether there were any words in an Earnings Summary Report that were "not either the names of Novo Nordisk products or standard industry terminology." Id.at 122:1-17.

Defendants contend that "Novo would . . . instruct Synygy about which fields should appear in the reports and in what order." Defs.' Copyright Mot. at 6; see, e.g., Defs.' Ex. 19 (Sakhrani Dep.) at 254:2-259:15 (testifying with respect to Novo's involvement in the inclusion of data in a Circle of Excellence report). Synygy's Rule 30(b)(6) witness provided conflicting testimony that Synygy employees "would have designed the -- selected which data to be displayed, selected what headings were going to be used, and selected the order in which that information was going to be presented." Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 202:2-6. However, as defendants argue, Evernham "admitted that the order of the headings was 'functional' and based on a 'logical decision.'" Defs.' Copyright Mem. at 17, quoting Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 200:8-201:13. Specifically, describing one of the management reports, Evernham testified that:

In this case it's a tabular report. There's a lot less complexity on this report than some of the others that we've looked at. But even so, the order in which the information is presented is presented in a functional way and in a way that establishes understanding and clarity based on how the recipient will use the report.



So, yes, I do expect that they designed - maybe not the, you know, the sequence that - territory was the first one; that's just maybe a logical decision.

Pl.'s Ex. 10 (Synygy Rule 30(b)(6) Dep. (Evernham)) at 200:23-201:9. Similarly, Lenox was asked whether he could "say one way or the other whether it was Synygy as opposed to Novo that determined the order of the headings that we see, beginning with "Territory" and ending with "YTD Payout" in an Earnings Summary Report. Id. at 125:24-126:4. He responded, "I think the layout of this is sort of logical in the way that it flows, so I don't know - I would say it's more Synygy than Novo, but I can't answer the question with 100% yes or no." Id.at 126:7-13. Asked what he meant by the term "logical," Lenox responded:

So you basically, have your product earnings and you have them sort of in order of importance to Novo. And then you have a total earnings column which sort of gives you a breakout of your product and then you can see what your totals are. And then eligibility is applied and added to - and, you know, eligibility is applied to the total earnings and you sort of get your final payout. So if you're thinking about it, it's like very brand specific and then it gets, you know, like more towards the final payout as you go to the right.



And then sort of, at the far right, you could see how you did in the first POA, how you would have done in the second. I would imagine that POA 2 would be next to that and then year-to-date would be following that.

Id. at 126:17-11. Likewise, a Preliminary Payout Factors Report "sort of has the same logical flow to it. You know, you start with your volume, you have your goal. The volume divided by your goal is attainment." Id. at 131:2-6.

"[S]ummary judgment may properly be granted where a jury could not, as a matter of law, find that the alleged copied material was original to the plaintiff." Mid Am. Title Co. v. Kirk, 867 F. Supp. 673, 681 (N.D. Ill. 1994). I find that plaintiff has not shown that a genuine dispute remains with respect to whether the arrangement of the data transmitted in the management reports is the result of an "exercise of subjective selection and judgment," id. at 683 (N.D. Ill. 1994), that is sufficiently original or informative to warrant a finding that Synygy has a valid copyright in the management reports. Accordingly, I will grant summary judgment in favor of defendants on Synygy's copyright infringement claim insofar as it pertains to the management reports contained in Synygy Reports No. 1.

2. Incentive Compensation Report Scorecards

The other documents included in Synygy Reports No. 1 are various incentive compensation report scorecards. Pl.'s Ex. 64 at 2-7. Plaintiff asserts that the reports "are creative and original works designed to convey inventive compensation-related information to the recipient." Pl.'s Copyright Opp'n Mem. at 28. I find that, unlike with the management reports, Synygy has set forth evidence sufficient to raise a material question of fact with respect to whether the incentive compensation report scorecards convey sufficient information and are sufficiently original to warrant copyright protection.

Defendants argue that "[a]lthough the scorecards are not in the format of tables and contain more headings, they, like the home office tables, do not convey any information until the particular data and information concerning the particular sales rep and his/her particular performance in the particular time period are recorded in the scorecard." Defs.' Copyright Mot. at 18-19. They contend that "without the correctly recorded information [which Synygy omitted from the reports deposited with the Copyright Office], the scorecard conveys no information." Id. at 19. Plaintiff counters that "even an IC report with a payout of $0 conveys valuable information to the recipient regarding why the payout was $0 and what calculations and business rules led to that determination . . . ." Pl.'s Copyright Opp'n Mem. at 33-34. Viewing the summary judgment record in the light most favorable to plaintiff, I find that whether the incentive compensation report scorecards are sufficiently informative to warrant copyright protection is an issue for the jury.

The incentive compensation report scorecards are designed to guide Novo's sales representatives through an understanding of their incentive compensation. Asked about the purpose of incentive compensation report scorecards similar to those included in Synygy's copyright deposit, see Pl.'s Ex. 79, Novo Nordisk's 30(b)(6) witness, Kathleen Mulroney, testified that "the reports are just actually really sort of like report cards going through the year." Pl.'s Ex. 37 (Mulroney Dep.) at 148:12-14. She explained,

we would train -- teach the reps, we would communicate to the reps what the -- through their sales management, what the [incentive compensation] plan was and that was constantly reiterated in all communications, meet your goal, beat your goal and the reports were some of the underlying context were saying, okay, where do I stand this month relative to making my goal.

Id. at 58:1-8. Lenox testified about the information conveyed by a payout factor graph on an incentive compensation report scorecard:

So the darker blue line with the I guess little diamond points is the payout curve and the blue dotted - light blue dotted line or bright blue dotted line is the goal . . . . [T]he sort of dark grayish blue line would be the rep's performance and how that relates to the goal and/or the payout curve.

Defs.' Ex. 32 (Lenox Dep.) at 77:25-78:8. As defendants' expert explained when considering a report from a 2004 presentation showing ZS Associates' IC administration capabilities," that included information "comparable" to information contained in Synygy's incentive compensation report scorecards,

[t]he graphs toward the bottom of the report are graphical expressions of the data in the table above. The line graph illustrates the rep's attainment performance over the current period, and the bar graph shows the relative attainments for each product of the nation as well as the sales rep's region and district in order to allow the sales rep to measure how his or her performance falls among each of those three divisions. This type of data can also motivate a sales force by giving them feedback about the company as a whole, which ties their performance to something bigger than just their own territory and own payout.

Defs.' Ex. 8 (Buglione Report) at 64-66.

In F.A. Davis Company v. Wolters Kluwer Health, Inc., 413 F. Supp. 2d 507, 514 (E.D. Pa. 2005), the Court considered whether copyright protection could attach to blank forms which were "apparently designed to assist a nurse in recording a brief, general report regarding each patient . . ." The Court found that the forms "seem[ed] to evince the requisite originality and informativeness to be protected" because, "[b]eyond merely structuring a nurse's notes, the assessment forms actually guide nurses step-by-step through the information they need to obtain from a patient." Id. (emphasis added). From the evidence before me, I cannot conclude that the selection and arrangement of the information contained in the incentive compensation report scorecards is not similarly informative to the forms considered in F.A. Davis - as the scorecards are designed to guide Novo's sales representatives through an understanding of their incentive compensation.

I also find that questions of fact remain with respect to whether the design of the incentive compensation report scorecards is sufficiently original to warrant copyright protection. In Digital Communications Associates, Inc. v. Softklone Distributing Corporation, 659 F. Supp. 449, 463 (N.D. Ga. 1987), the Court held that a status screen for a computer program could be copyrighted where "[t]he specific placement, arrangement and design of the parameter/command terms on the status screen is neither arbitrary nor predetermined, but rather, is the result of extensive original human authorship." The Court held that "the status screen, which is a compilation, is copyrightable to the extent of its arrangement and design of parameter/command terms," explaining that "[w]hile some of the choices of the two symbols to represent certain parameter/command terms may not be original, . . . other choices of symbols are clearly original." Id. Similarly, copyright protection was found to be appropriate for "the selection, coordination and arrangement of the information contained in ... (1) screen displays, (2) action grids, (3) data compilations, and (4) data tables" in O.P. Solutions Inc. v. Intellectual Property Network, Ltd., No. 96-7952, 1999 WL 47191, at *20 (S.D.N.Y. Feb. 2, 1999). The Court made its finding while considering "copyright protection of so-called 'blank forms'" because the screen displays included a grid that was "to a large extent a form in which the user enters information. Id.at * 12. The Court held that" a form will be entitled to protection so long as it conveys a minimal degree of creativity." Id. at *13. Likewise, in Bucklew v. Hawkins, Ash, Baptie &Co., LLP, 329 F.3d 923, 928 (7th Cir. 2003), the Court found that the plaintiff had an enforceable claim to copyright in tables in a computer program where the tables were "configured in an optional way, . . . the product of format choices that are not unavoidable, for which indeed there were an immense number of alternative combinations any one of which [the defendant] was free to use instead of [the [plaintiff's]."

"When there is essentially only one way to express an idea, the idea and its expression are inseparable and copyright is no bar to copying that expression." Concrete Machinery Co. v. Classic Lawn Ornaments. Inc., 843 F.2d 600, 606 (1st Cir. 1988). But that is not the circumstance before me with the incentive compensation report scorecards. Synygy's expert Peter Lee opines that

it is clear that there is no industry standardization with respect to incentive compensation report design - the selection of data, the arrangement of data, and the visual representation of the data. Each vendor takes a unique approach that is a clear departure from the others with respect to the placement of client logos, information contained in the report header, ratio of text vs. charts, selection of color palette, placement of summary payout information, decision to show or not show earning calculations, selection of relevant supporting data, size of the report page, and other design features.

Defs.' Ex. 4 (Lee Report) at 22. Defendants' expert agreed that "[a]ny number of layouts and formats are effective and clear at conveying the substance and elements of the IC plan design and the accuracy of calculations." Defs.' Ex. 8 (Buglione Report) at 58. Indeed, Buglione's report opines at length with regard to the different ways in which incentive compensation reports can be formatted. Id. at 58-76. He explains that "[c]ompanies might have different reasons for opting for a text-based IC report over the type of one-page, multi-color, graphical IC reports at issue in this case." Id. at 74. Novo's designee also testified that Novo had more than one option with respect to how to format their incentive compensation reports. See. Pl.'s Ex. 37 (Mulroney Dep.) at 183:13-15 ("Well, in terms of ultimate reports and what they looked like, we could have moved things in a different place."). It follows that "[t]he arrangement [of the incentive report scorecards] is in no sense mechanical, but involved creativity on the part of Synygy. Key Publ'ns, Inc. v. Chinatown Today Publishing Enters., Inc., 945 F.2d 509, 514 (2d Cir. 1991) (finding that the decision regarding "which categories to include" in a business directory and "under what name" . . . "entailed the de minimis thought needed to withstand the originality requirement"). As the Court explained in Bucklew, 329 F.3d at 929-30, "[i]t is not as if everyone who writes programs of this sort uses Swiss font or displays an output range or uses a particular pattern of boldfacing." It follows that it is not as if everyone who prepares an incentive compensation report scorecard uses the same selection and arrangement of information. In his report, defendants' expert asserts that "[t]he choices regarding which types of content to include [in an IC report] are decisions driven by the client and its IC plan, not the IC administration vendor." Defs.' Ex. 8 (Buglione Report) at 70; see also Pl.'s Ex. 37 (Mulroney Dep.) at 31:1-4 ("The reports need to reflect the structure of [Novo's incentive compensation] plan so that there was an implication for how the reports would be laid out based on what the plan was."). Buglione testified, however, that

I don't recall any plan dictating what information should be displayed in an IC report. The assumption would be that if the plan, for example, is measuring NRx market share goal attainment at a national level, which is what earlier Novo Nordisk plans did,

then it would make sense that that information, those measurements and metrics, would appear on a plan document. But there was nothing specifically in the plan document that said this is the number that absolutely must appear on the IC goal report.

Pl.'s Ex. 25 (Buglione Dep.) at 84:23-85:8. Plaintiff thus contends that "Novo's IC plan documents do not dictate that a report is required at all, much less the content to be displayed in a report or how the report should be designed." Pl.'s Copyright Opp'n Mem. at 32. Indeed, asked whether there was "anything about the plan documentation that requires [an incentive compensation report scorecard] to be laid out in the fashion" of a report prepared by Synygy for Novo, Novo's designee Mulroney testified that "[t]here's nothing that specifies it except sort of business logic and reading sequencing that would be natural to people." Pl.'s Ex. 37 (Mulroney Dep.) at 168:9-16.

Indeed, any argument that the selection and arrangement of the information in the incentive compensation report scorecards is not sufficiently original to warrant copyright protection is undermined by evidence that ZS could create "enhanced" alternatives to the Synygy-prepared incentive compensation report scorecards, as is reflected by the following testimony from the Rule 30(b)(6) deposition of ZS partner Florent Moise.

Q. Let's talk about the scorecard report.



A. There were a number of enhancements that were suggested by ZS and accepted by Novo Nordisk.



Q. Okay. And there were enhancements to the reports that already existed?



A. I guess the report that existed is their report that existed. We had to, basically, do our own set of that. . . . Well, ZS had to create, basically, and customize some of our reports, such that we would make sure that they have the - basically, that they meet Novo Nordisk requirements.

Pl.'s Ex. 56 (Moise Dep.) at 124:12-125:12. See Snap-on Bus. Solutions Inc. v. O'Neil & Assocs., Inc.,708 F. Supp. 2d 669, 685-86 (N.D. Oh. 2010) (finding that the defendant's own evidence "belie[d] its argument that efficiency and function dictate[d] the . . . structure" of the plaintiff's copyrighted proprietary database where, for example, the defendant "believed it could provide a better database . . . precisely because it would alter the arrangement of the data").

Viewing the facts in the light most favorable to Synygy as the non-moving party, I find that it cannot be said as a matter of law that the incentive compensation report scorecards found in Synygy Reports No. 1 are not sufficiently innovative or informative to warrant a copyright. Because I find that a reasonable jury could find that Synygy's incentive compensation report scorecards are not uncopyrightable blank forms, I will deny defendants' motion for summary judgment to the extent that it rests on a copyright invalidity argument with respect to the incentive compensation report scorecards.

D. Copying

Because I find that material questions of fact remain with respect to whether Synygy holds a valid copyright in the Software Macros No. 1 and No. 2 and/or the incentive compensation report scorecards, I must consider whether there is a triable issue with respect to the second element of Synygy's claim for copyright infringement: "copying of constituent elements of the work that are original." Feist, 499 U.S. at 361. Plaintiff contends that "defendants have not raised any issues concerning infringement" and "there is unrebutted evidence of direct copying." Pl.'s Copyright Opp'n Mem. at 27 n.11. Synygy argues that "in a case such as this one where defendants have admitted to using copyrighted material, 'that alone would make the defendant[s]' liable for copyright infringement, absent the owner's authorization." Id., quoting Stenograph, L.L.C. v. Sims, No. 99-5354, 2000 U.S. Dist. LEXIS 9619, at *7 (E.D. Pa. July 12, 2000).

In the absence of direct evidence of copying, copying may be proved inferentially "by showing that the defendant had access to the copyrighted work and that the original and allegedly infringing works share substantial similarities." Kay Berry, Inc. v. Taylor Gifts, Inc., 421 F.3d 199, 207-08 (3d Cir.2005) (citations omitted); see also Peel & Co. v. The Rug Market, 238 F.3d 391, 398 (5th Cir.2001) ("[N]ot all copying is legally actionable. To support a claim for copyright infringement, the copy must bear a substantial similarity to the protected aspects of the original.").

The issue of access is not in dispute. As I have previously noted, ZS has stipulated that "in late 2005 and early 2006, ZS received from Defendant Novo Nordisk, Inc. ("Novo") electronic materials from Synygy's incentive compensation management services for Novo, including the macros contained in those materials," and that "ZS received such materials via CD and e-mail." Pl.'s Ex. 57. Accordingly, I must determine whether there is sufficient evidence of substantial similarity to permit plaintiff's claims with respect to Synygy Macros. No. 1 and 2 and the incentive compensation report scorecards to go to the jury. "The standard used to detect substantial similarity is 'whether an ordinary lay observer would detect a substantial similarity between the works.'" Am. Bd. of Internal Med, v. Von Muller, No. 10-2680, 2012 WL 2740852, at *4 (E.D. Pa. July 9, 2012), aff'd (Sept. 12, 2013). quoting Nat'l Conference of Bar Exam'rs v. Multistate Legal Studies. Inc., 413 F. Supp. 2d 485, 487 (E.D. Pa. 2005) (further citations omitted).

1. Synygy Macros No. 1 and No. 2

Defendants contend that "without any damages for copyright infringement relating to the macros and without a finding that they were ever used, there is no need for a trial, and summary judgment should therefore be entered on the copyright claim insofar as Macros I and Macros II are concerned." Defs.' Copyright Reply at 13-14. Defendants make this argument based on the deposition testimony of Synygy's damages expert, who explained, "I haven't attempted to calculate any revenue derived from use of the macros or the code to generate fees. It's my understanding [defendants] didn't use it." Defs.' Ex. 13 (Hampton Dep.) at 265:19-20. Whether Synygy suffered damages as a result of defendants' alleged infringement of Synygy's copyright in Synygy Macros No. 1 and No. 2 is not, however, dispositive of whether defendants can be found liable for infringement of Synygy Macros No. 1 and 2.¹⁰ And I find that Scott Hampton's testimony is not dispositive of whether or not defendants copied the macros.

10 ¹¹ Under the Copyright Act the owner of a registered copyright that has been infringed may elect at any time before final judgment is rendered to recover either actual damages and any additional profits of the infringer or statutory damages. See 17 U.S.C. § 504. In its second amended complaint, plaintiff asks me to "[i]ssue an order requiring ZS and Novo to account for all gains, profits and advantages derived from their acts of misappropriation . . ." and seeks an award for, inter alia, "loss of profits, damages for infringement" and "statutory damages in the amount of $150,000 per infringement based upon ZS's and Novo's acts of willful infringement, pursuant to the Copyright Act of 1976, 17 U.S.C. § 101 and 504(c), et seq. . . . ." Second Am. Compl. at p. 22, ¶¶ k, m, n. Because Synygy has asserted a claim for statutory damages, its failure to set forth evidence of actual damages with respect to Synygy Macros No. 1 and No. 2 is not fatal on summary judgment to Synygy's copyright claim with respect to the macros.

11 Indeed, Synygy's expert qualified his statement by explaining that "[m]y understanding is [the macros'] use was limited to copying it, holding it, and they didn't use it to provide services." Id. at 265:14-16. He explained that his damages

calculation is consistent with the fact pattern that there was use of the macros and the code in the sense that it was copied, that it was led, but I don't know that it was actually used to provide services. . . . I consider use holding something or copying it. And I think there was that type of use. But my understanding is it wasn't used to provide services. It didn't generate directly the accused revenue.

In his report, Synygy's expert Peter Lee compared the macro code contained in a Synygy incentive compensation report (SYN 0094710) and a ZS report (ZSA000000466) and found that the comparison "shows an exact duplication of the SYNYGY VBA code exists in the ZS report" and that "[c]omparing line-by-line VBA code in SYN0094710 and ZSA000000000466 shows that the VBA code in those report templates are 100% identical." Defs.' Ex. 4 (Lee Report) at 6; see also id. at 50-65. The code Lee reviewed in his report appears to be substantially similar (if not identical) to the code set forth in the unredacted copy of Synygy Macros No. 1 in plaintiff's Exhibit 87. Also, defendants' expert Cliff Ragsdale testified that a number of reports delivered by ZS to Novo contain macros which are identical to the macros copyrighted by Synygy. See Pl.'s Ex. 27 at 56:19-23 ("Q. And would you agree that the VBA macrocode in the Synygy workbook that is SYN-94710 appears almost identically in the workbook that is ZSA466? A. Yes."). Asked why ZS would copy Synygy's macro code, he speculated that a ZS employee:

had a file and someone probably was told to copy it not knowing what was in it to begin with in which case it probably wasn't a specific decision on their part to copy that piece of code; just like they probably didn't specifically decide to copy all the range names either. It just happens as part of the copying process.

Id. at 176:14-177:2.

On these facts, I find that genuine issues of material fact require denial of defendants' motion for summary judgment on plaintiff's copyright infringement claim with respect to Synygy Macros No. 1 and No. 2.

2. Incentive Compensation Report Scorecards

Likewise, I find that genuine issues of material fact remain with respect to whether defendants copied the incentive compensation report scorecards. In their memorandum in support of their motion for summary judgment, defendants nowhere contend that they did not copy the incentive compensation report scorecards. See Defs.' Copyright Mem. In its response to defendants' motion, Plaintiff contends that "[d]efendants have admitted to using Synygy's copyrighted reports, and at least tens of thousands of reports that ZS delivered to Novo contain digital 'fingerprints' proving that they were copied from Synygy's electronic files." Pl.'s Copyright Resp. at 37, citing Defs.' Ex. 4 (Lee Report) at 2-11.

Suggesting that Synygy's incentive compensation report scorecards were copied, in an email one ZS employee instructed another ZS employee working on mockups of reports for Novo to "[p]lease check the File>Properties>Summary Tab to ensure that we have no references to Synygy/any other company than ZS." Defs.' Ex. 4 (Lee Report) at 67 (copy of ZSA000242853). Synygy's expert explained in his report that Synygy's reports were "used as the foundation for the report design that was deployed by ZS to NOVO. . . . ZS proposed minor changes to the report notes and footnotes, some data visualization changes of the same dataset as the SYNYGY incentive reports, and no incentive data presentation strategy modifications." Defs.' Ex. 4 (Lee Report) at 8. Lee noted that "Document ZSA000241572 describes in detail the adjustments that were proposed by ZS for the SYNYGY designed [incentive compensation report scorecard] prior to deployment by ZS." Id. He concludes that the

list of the 6 proposed changes represent (at best) an adjustment to an existing report and is not a transformation or redesign. No design changes were made to the selection of the data items (especially the summary top sections of the report) and no design changes were made to the arrangement of data items. The bottom of the report included a modification of the graphical representation of a selected set of data but was not a modification of the data selection or calculation process.

Id. at 9. Lee's conclusions are in line with the testimony of ZS's 30(b)(6) designee Moise that:

Novo Nordisk wishes [sic] was to have as little disruption as possible for its sales force, and therefore -- . . . they wanted us to either match or enhance the actual, the reports that they were currently distributing. As an example, of course -- like company logo, et cetera, it has to be retained. . . . I think they wanted to have some continuity between the reports that they were using at that time and what ZS would be producing.

Pl.'s Ex. 56 (Moise Dep.) at 128:7-129:7. Similarly, Kathleen Mulroney, Novo Nordisk's 30(b)(6) witness, testified that when ZS took over from Synygy the job of preparing Novo's reports,

in terms of ultimate reports and what they looked like, we could have moved things in a different place. We didn't move a lot of things to lessen a disruption in the field and not that it's a big disruption to move something a few inches down but just to minimize the disruption in the questions that we would get.

Pl.'s Ex. 37 (Mulroney Dep.) at183:13-19.

Even if ZS made some "enhancements" to the incentive compensation report scorecards, "[v]ariants that result from tinkering with a copied form are derivative works from that form, and it is a copyright infringement to make or sell a derivative work without a license from the owner of the copyright on the work from which the derivative work is derived." Bucklew, 329 F.3d at 930; Pickett v. Prince, 207 F.3d 402,405-407 (7th Cir.2000); see also National Conference of Bar Examiners v. Multistate Legal Studies, Inc., 458 F.Supp.2d 252, 258 (E.D. Pa. 2006) ("less than wholesale reproduction can also provide a sufficient basis to conclude that there was copying"). On the record before me I find that there is sufficient evidence of copying to require that Synygy's copyright claim with respect to the incentive compensation report scorecards be submitted to a jury.

IV. State Law Claims

In defendants' fourth motion for summary judgment, they seek summary judgment on plaintiff's state law claims for unfair competition (Counts IV and V), breach of contract (Count VI), tortious and intentional interference (Counts VII, IX and XI), conversion (Count X) and unjust enrichment/quantum meruit (Count XII).

A. Copyright Preemption

Defendants first seek summary judgment with respect to Synygy's claims for unjust enrichment quantum/meruit, conversion, tortious and intentional interference, unfair competition and breach of contract,¹² arguing that these claims are preempted pursuant to the Copyright Act's express preemption provision found at 17 U.S.C. § 301. Specifically, the Copyright Act preempts:

12 Although plaintiff devotes a portion of its response to defendant's motion to an argument that its trade secret misappropriation causes of action are not preempted by the Copyright Act, see Pl.'s State Law Response at 25-29, defendants do not contend that Synygy's trade secret misappropriation causes of action are preempted by the Copyright Act. See Defs.' State Law Reply at 1 ("Defendants did not move to preempt Synygy's trade-secret claims [under the Copyright Act] because, in the Third Circuit, it is difficult to apply § 301 to trade-secret misappropriation.").

all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 in works of authorship that are fixed in a tangible medium of expression and come within the subject matter of copyright as specified by sections 102 and 103.

17 U.S.C. § 301. "[T]he preemption provision does not apply if the subject matter does not come within the subject matter of copyright . . . ." Dun & Bradstreet Software Servs., Inc. v. Grace Consulting, Inc., 307 F.3d 197, 216-17 (3d Cir. 2002) (citation and internal quotation omitted).

Synygy contends that "defendants misappropriated and disclosed . . . Synygy confidential information, which are [sic] outside of the subject matter of copyright law." Pl.'s State Law Response at 29. Specifically, Synygy asserts that its "state law causes of action based on defendants' wrongdoing with respect to the IC simulator, Excel Named Ranges, and background excel datasheets are not preempted since they are not the subject of copyright law." Id. But Synygy's state law claims set forth in its second amended complaint appear to encompass materials which fall within the subject matter of copyright law. See, e.g., Second Am. Compl. ¶ 132 (claiming Novo breached its contract by "reproducing, distributing and using copies of the Synygy Software Macros, the Synygy Reports, and other Confidential Information"); id. ¶ 127 (asserting a claim for unfair competition under New Jersey law for defendants' use of "Synygy's trade secrets, confidential business and technical information, and other goods and services"). As is further set forth above, Synygy's software macros and incentive compensation report scorecards clearly fall within the subject matter of copyright. Thus to the extent that plaintiff's state law claims rest on these materials, the claims may be subject to preemption where they are "equivalent in substance to a federal copyright claim." Gemel Precision Tool Co., Inc. v. Pharma Tool Corp., No. 54-5305, 1995 WL 71243, at *5 (E.D. Pa. Feb. 13, 1995).

Courts employ a "functional test" to determine whether a state law cause of action is preempted by the Copyright Act: "if a state cause of action requires an extra element beyond mere copying, preparation of derivative works, performance, distribution or display, then the state cause of action is qualitatively different from, and not subsumed within, a copyright infringement claim and federal law will not preempt the state action." Dun & Bradstreet, 307 F.3d at 217, citing Data Gen. Corp. v. Grumman Sys. Support Corp., 36 F.3d 1147, 1164 (1st Cir. 1994). "To determine whether a claim is qualitatively different, the Court looks at what the plaintiff seeks to protect, the theories in which the matter is thought to be protected and the rights sought to be enforced." Tegg Corp. v. Beckstrom Elec. Co., 650 F. Supp. 2d 413, 422 (W.D. Pa. 2008) (quotations and citations omitted). Defendants argue that Synygy's claims for unjust enrichment quantum/meruit, conversion, tortious and intentional interference, unfair competition and breach of contract are preempted because they "assert rights that are equivalent to rights protected under the Copyright Act: The state law claims, like the federal copyright claim, are rooted in the alleged unauthorized copying and distribution of the incentive compensation reports that Synygy deposited in the Copyright Office." Defs.' Copyright Mem. at 1-2. I will consider each claim in turn.

1. Unjust Enrichment/Quantum Meruit (Count XII)

Plaintiff's claim for unjust enrichment/quantum meruit does not state an extra element not included in a claim under the Copyright Act. Plaintiff alleges that "ZS has been unjustly enriched" in that it "has enjoyed the benefit of the skills, expertise, knowledge and intellectual property of Synygy, which enabled ZS to unlawfully gain an entry into the sales compensation management market without investing in the training of employees and/or research and development of intellectual property." Second Am. Compl. ¶¶ 165-66. "The foundation of [Synygy's] claim is that [defendants] ha[ve] exploited [its] intellectual property without compensating [Synygy] for the benefits derived from such use." Video Pipeline, Inc. v. Buena Vista Home Entm't. Inc., 210 F. Supp. 2d 552, 567 (D.N.J. 2002). Synygy's claim "necessarily involves [defendants'] acts in reproducing, distributing and displaying [Synygy's software macros and incentive compensation report scorecards], all of which are encompassed in rights protected under copyright law." Id.; see also Visual Commc'ns, Inc. v. Assurex Health, Inc., No. 14-3854, 2014 WL 4662474, at *9 (E.D. Pa. Sept. 18, 2014) ("Plaintiff's quantum meruit claim . .. does not contain an 'extra element' beyond a traditional copyright infringement claim, because the quantum meruit claim seemingly seeks compensation for Defendant having profited from the use of Plaintiff's drawing and thus seeks to protect the same rights as those protected by the Copyright Act."); CollegeSource, Inc. v. AcademyOne, Inc., No. 10-3542, 2012 WL 5269213, at * 13 (E.D. Pa. Oct. 25, 2012) (finding plaintiff's unjust enrichment claim was preempted under the Copyright Act and that "[t]he extra element of misrepresentation, or taking in an underhanded way, does not avoid preemption"). I will grant summary judgment in favor of defendants on plaintiff's unjust enrichment claim to the extent that it relates to Synygy's software macros and incentive compensation report scorecards.

2. Conversion (Count X)

In its second amended complaint, Synygy claims that "ZS intentionally, willfully and wantonly converted Synygy's intellectual property by unlawfully obtaining and utilizing Synygy's proprietary trade secrets and confidential information about the services provided to Synygy's clients."¹³ Second Am. Compl. ¶ 158. "Conversion is a tort by which the defendant deprives the plaintiff of his right to a chattel or interferes with the plaintiff's use or possession of a chattel without the plaintiff's consent and without lawful justification." Pittsburgh Constr. Co. v. Griffith, 834 A.2d 572, 581 (Pa. Super. Ct. 2003).

13 Plaintiff's second amended complaint does not specify whether its claim for conversion falls under the law of Pennsylvania or New Jersey. In its response to defendants' motion, plaintiff defends its conversion claim only under Pennsylvania law. See Pl.'s State Law Opp'n Mem. at 43-45 (setting forth the elements of a claim for conversion under Pennsylvania law). Accordingly, I will consider plaintiff's claim under the law of Pennsylvania.
To the extent that plaintiff's second amended complaint could be construed as bringing a claim for conversion under New Jersey law, I agree with defendant that the claim would fail insofar as it relates to plaintiff's intellectual property. See Defs.' State Law Mem. at 30; see also StrikeForce Techs., Inc. v. WhiteSky, Inc., No. 13-1895, 2013 WL 3508835, at *8 (D.N.J. July 11, 2013), quoting Video Pipeline, Inc. v. Buena Vista Home Entm't, Inc., 210 F. Supp. 2d 552, 568 (D.N.J. 2002) ("a cause of action for conversion relates to interference with tangible property and does not protect rights to intangible property" and "[s]oftware code, trade secrets, and other intellectual property have generally been recognized as intangible property, that is, property without physical embodiment"). In contrast, it has been held that "Pennsylvania law recognizes that trade secrets can be the object of conversion." Schmidt, Long & Assoc., Inc. v. Aetna U.S. Healthcare. Inc., No. 00-CV-3683, 2001 WL 856946, at *8 (E.D. Pa. July 26, 2001), citing Fluid Power Inc. v. Vickers. Inc., No. 92-0302, 1993 WL 23854, at *3 (E.D. Pa. Jan. 28, 1993); cf. Partners Coffee Co.. LLC v. Oceana Servs. & Prods. Co., No. 09-236, 2009 WL 4572911, at *7 (W.D. Pa. Dec. 4, 2009) ("permitting a conversion claim based on Defendants' alleged diversion of confidential data from Plaintiff's computer system . . . to proceed" following a motion to dismiss).

To the extent that Synygy's conversion claim relates to its software macros and incentive compensation report scorecards, I find that it is preempted under the Copyright Act. "Although copyright law does not protect possession, per se, implicit in the ownership rights conferred by § 106 is the power to control the use of the copyrighted materials." Gemel Precision Tool, 1995 WL 71243, at *6 (finding "the conversion claim is identical to [the plaintiff's] exclusive right to copy, to create derivative works from, and to distribute the copyrighted materials, as provided for by § 106"). When "plaintiff's conversion claim" arises "from copying and misuse of its work, it" is "functionally equivalent to a copyright claim." Tegg Corp., 650 F. Supp. 2d at 432. This is not a case where the conversion claim seeks the return of "tangible, physical property, the rights to which are distinctly different from those rights involved in" plaintiff's copyright claim. Video Pipeline, 210 F. Supp. 2d at 568-69 (finding conversion claim was not preempted to the extent that it sought the return of allegedly converted items). Here, through its conversion claim plaintiff seeks to recover for the unauthorized use of Synygy materials including its copyrighted software macros and incentive compensation report scorecards. Section 301 preempts such a claim. I will grant summary judgment in favor of defendants on plaintiff's conversion claim to the extent that it relates to Synygy's software macros and incentive compensation report scorecards.

3. Tortious and Intentional Interference (Counts VII, IX and XI) and Unfair Competition under New Jersey Common Law (Count V)

14 ¹⁴ Defendants' motion for summary judgment addresses plaintiff's Count V claim for unfair competition under New Jersey common law along with plaintiff's claim under the New Jersey Fair Trade Act. See Defs.' State Law Mem. at 20-22. The claim is, however, appropriately addressed with plaintiff's claims for tortious and intentional interference. "New Jersey courts have noted that, in essence, unfair competition is a business tort, generally consisting of the misappropriation of a business's property by another business." Sussex Commons Outlets. L.L.C. v. Chelsea Prop. Grp., Inc., No. A-3714-07T1, 2010 WL 3772543, at *9 (N.J. Super. Ct. App. Div. Sept. 23,2010) (citing cases). "'There is no distinct cause of action for unfair competition. It is a general rubric which subsumes various other causes of action' for unlawful interference with a current or prospective economic interest." Tipton v. U-Go, Inc., No. A-1543-12T3, 2014 WL 4231363, at *8 (N.J. Super. Ct. App. Div. Aug. 28, 2014), quoting C.R. Bard, Inc. v. Wordtronics Commc'ns, 235 N.J. Super. Ct. 168, 172 (Law Div.19 89). "New Jersey common law unfair competition includes, but covers a broader spectrum of behavior than, service mark infringement." Holiday Inns, Inc. v. Trump, 617 F. Supp. 1443, 1465 (D.N.J. 1985) (citations omitted).

Synygy claims that "ZS possessed and harbored an intent to harm Synygy by interfering with Synygy's contractual and prospectively contractual relationship with Novo." Second Am. Compl. ¶ 141. Synygy also claims that "ZS jointly and severally, possessed and harbored an intent to harm Synygy by interfering with Synygy's contractual and prospectively contractual relationship with Schering-Plough." Id. at ¶ 153. Further, Synygy claims that "ZS intentionally interfered with Synygy's business relations with its clients."Id. at ¶ 161. Defendants argue that "Synygy's three interference counts are no different" from its claim for copyright infringement. Defs.' State Law Mem. at 20. They assert that "the only extra element alleged is ZS' purported 'knowledge' of a Synygy-Novo 'contractual relationship' and an 'intent to harm Synygy by interfering' with that relationship." Id. (citation omitted). I agree with defendants that "[t]his does not suffice as an extra element establishing a qualitative difference . . . ." Id.

"[N]umerous courts have found that tortious interference is generally preempted by the Copyright Act." MCS Servs., Inc. v. Johnsen, No. 01-4430, 2002 WL 32348500, at *7 (E.D. Pa. Aug. 13, 2002); see also Tegg Corp., 650 F. Supp. 2d at 429 (citing cases). "[T]he act of marketing with intent to interfere with existing contractual relationships does not constitute an extra element necessary to protect the tortious interference claim from preemption." Tegg Corp., 650 F. Supp. 2d at 430-31. The "additional elements of awareness and intentional interference . . . do[ ] not establish qualitatively different conduct on the part of the infringing party, nor a fundamental nonequivalence between the state and federal rights implicated. In both cases, it is the act of unauthorized publication which causes the violation." Harper & Row v. Nation Enters., 723 F.2d 195 (2d Cir. 1983). "Plaintiff's ultimate claim[s are] based on its right to prevent unlawful interference with its right to distribute and reproduce its copyrighted [software macros and incentive compensation report scorecards] to current and future parties, and create for those parties derivative works based on its copyrighted [materials]." Tegg Corp., 650 F. Supp. 2d at 431. These claims are not qualitatively different from plaintiff's claim for copyright infringement and therefore are preempted. The same follows for plaintiff's claim for unfair competition under New Jersey common law to the extent that it "historically has been considered a subspecies of the class of torts known as tortious interference with business or contractual relations." Sussex Commons Outlets. L.L.C. v. Chelsea Prop. Grp., Inc., No. A-3714-07T1, 2010 WL 3772543, at *9 (N.J. Super. Ct. App. Div. Sept. 23, 2010) (citing cases). I will grant summary judgment in favor of defendants on plaintiff's tortious and intentional interference claims and its claim for unfair competition under New Jersey Common law to the extent that the claims relate to Synygy's software macros and incentive compensation report scorecards.

4. New Jersey Fair Trade Act (Count IV)

15 ¹⁵ Defendants also contend that summary judgment is warranted in their favor on Synygy's claims for unfair competition, including its claim under the New Jersey Fair Trade Act, because Synygy has not set forth evidence that "Novo was ever confused or misled about the source of its IC reports." Defs.' State Law Reply at 14. The Fair Trade Act is the state statutory equivalent of section 43(a)(1) of the Lanham Act. See FM 103.1, Inc. v. Universal Broad, of New York. Inc., 929 F. Supp. 187, 198 (D.N.J. 1996). As with a claim under the Lanham Act, plaintiff's claim under the Fair Trade Act is "broad enough to cover the use of trademarks which are likely to cause confusion, mistake, or deception of any kind, not merely of purchasers nor simply as to source of origin." Kos Pharm., Inc. v. Andrx Corp., 369 F.3d 700, 711 (3d Cir. 2004) (citation and internal quotation omitted). "[S]ummary judgment is appropriate if the Court is satisfied that the products or marks are so dissimilar that no question of fact is presented." Fresh Prepared Foods, Inc. v. Farm Ridge Foods LLC, No. 10-6310,2013 WL 4804816, at *11 (D.N.J. Sept. 9, 2013) (citation omitted). On the record before me, I find that material questions of fact remain with respect to whether Synygy has shown that defendants' use of . . . created a likelihood of confusion. I therefore decline to grant summary judgment in defendants' favor on this basis with respect to Synygy's claim for unfair competition under New Jersey common law.

N.J.S.A. 56:4-1 provides that "[n]o merchant, firm or corporation shall appropriate for his or their own use a name, brand, trade-mark, reputation or goodwill of any maker in whose product such merchant, firm or corporation deals." N.J.S.A. 56:4-1. Synygy claims that defendants "unlawfully appropriated for their own use [Synygy's] trade secrets and confidential business and technical information" and that they harmed Synygy when they unlawfully used the trade secrets and confidential information in their businesses and when Novo disclosed the trade secrets and confidential information to ZS and others." Second Am. Compl. at ¶ 119-120. Synygy's second amended complaint alleges that defendants' "conduct in 'passing off Synygy trade secrets, confidential business and technical information goods and services as their own has caused confusion between the goods and services of Synygy and ZS." Id. at ¶ 128. Synygy alleges that "ZS's and Novo's joint and several use in commerce of the Synygy trade secrets and confidential business and technical information . . . without Synygy's consent has and is likely to cause confusion, or to cause mistake, or to deceive as to the origin, sponsorship, or approval of their goods, services or commercial activities by another person." Id. at ¶ 125.

Unfair competition claims have been held to be preempted by the Copyright Act when they are premised on a "reverse passing off theory. Fun-Damental Too Ltd. v. Universal Music Group, Inc., No. 97-1595, 1997 WL 381608, at *4 (E.D. Pa. July 8, 1997): see also Schiffer Publ'g, Ltd. v. Chronicle Books, LLC, 350 F. Supp. 2d 613, 619-20 (E.D. Pa. 2004) (finding preemption barred an unfair competition claim under a reverse passing off theory). "Reverse passing off occurs when "[t]he producer misrepresents someone else's goods or services as his own." Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23, 27 n.1 (2003). Reverse passing off is "grounded in the alleged unauthorized copying and use of another's copyrighted expression." Fun-Damental Too, 1997 WL 381608, at *4-5. Where an unfair competition claim "rest[s] squarely on the unauthorized act of copying and distributing," an allegation that defendants' actions were "likely to cause mistake, confuse or deceive the general public" has been found insufficient "to pass the extra element test." Daley v. Firetree, Ltd., No. 04-2213, 2006 WL 148879, at *4 (M.D. Pa. Jan. 19, 2006).

Defendants argue that "Synygy's unfair-competition counts allege no more than a reverse passing-off theory, namely that ZS and Novo copied allegedly protected elements of Synygy's report designs and passed them off as their own." Defs.' State Law. Mem. at 21. Indeed, in paragraph 127 of Synygy's second amended complaint, Synygy asserts that defendants "engaged in unfair competition by utilizing Synygy's trade secrets, confidential business and technical information, and other goods and services and passing those trade secrets, goods and services off as their own." Second Am. Compl. ¶ 127 (emphasis added). In its response to defendants' motion for summary judgment Synygy has not provided any reason for me to find that its claims for unfair competition are anything other than claims for reverse passing off. "Any confusion [arising from defendants' conduct] is a result of the alleged unlawful copying and distributing, and does not make the unfair competition claim[s] qualitatively different from the copyright claim." Daley, 2006 WL 148879, at *5. To the extent that Synygy's unfair competition claims arise out of the alleged wrongful use of Synygy's software macros and incentive compensation report scorecards, they are equivalent to Synygy's copyright claim and are therefore preempted. To the extent that defendants' claims for unfair competition arise out of actions other than the claimed infringement of Synygy's copyrighted works, they are not preempted. See Pl.'s State Law Opp'n Mem. at 40 ("Synygy's unfair competition claims . . . [are also based on] the misappropriation and disclosure of Synygy's trade secrets . . . and other confidential information not subject to copyright.").

5. Breach of Contract (Count VI)

16 ¹⁶ In their motion for summary judgment on plaintiff's state law claims, defendants also contend that summary judgment is warranted in their favor on plaintiff's breach of contract claim because Synygy has no evidence of a contract breach. Defs.' State Law Mem. at 25. Defendants contend that Synygy's breach theory fails "because of an express exclusion built into section 8, which makes clear that the nondisclosure restrictions of that section do not apply to 'Proprietary Information' that is or becomes public knowledge.'" Id. at 26. They argue that the record is "unambiguous" that the relevant "Proprietary Information" "was all in fact publicly disclosed by Synygy during client pitches, at trade shows, and in a book published by the company's CEO." Id. Synygy counters that 'there is absolutely no evidence that Synygy ever publicly disclosed the customized deliverables that it designed and produced for Novo." Pl.'s State Law Opp'n Mem. at 37. I decline to grant summary judgment in defendants' favor on the basis of their public disclosure argument as I find that material questions of fact remain with respect to whether Novo's disclosures to ZS were in breach of Novo's obligations to Synygy under the terms of their agreement.
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Under Section 8 of the Synygy-Novo contract, Novo agreed not to "divulge, disclose, convey or permit the disclosure of any of the Proprietary Information of [Synygy], either verbally or in writing, to any person, corporation, or third party . . ." Defs.' Ex. 14 at SYN0000700. Synygy asserts that "under the terms of the Novo Contract, Novo was required to maintain all [working copies of the Synygy Software, Synygy Reports, and the Confidential Information contained therein] as confidential and not disclose [them] to anyone without Synygy's permission." Second Am. Compl. f 78. Synygy claims that Novo breached its contract with Synygy "by reproducing, distributing and using copies of the Synygy Software Macros, the Synygy Reports and other Confidential Information without the right or Synygy's permission." Second Am. Compl. at ¶ 132. Synygy contends that its breach of contract claim against Novo is not preempted under the Copyright Act because it has "extra elements" which make it qualitatively different from its copyright claim. Pl.'s State Law Opp'n Mem. at 30-32. Defendants argue that Synygy's breach of contract claim is preempted because "there is no qualitative difference between the conduct proscribed in § 8 and the conduct proscribed by the Copyright Act . . . ." Defs.' State Law Reply at 8.

While it is not a settled question, "the general rule is that matters involving breach of contract claims are not preempted because a breach of contract claim requires an extra element that renders the claim qualitatively different from a claim for copyright infringement: a promise by the defendant." MCS Servs., Inc., 2002 WL 32348500, at *5 (citations and internal quotations omitted): see also Am. Bd. of Internal Medicine v. Von Muller, No. 10-2680, 2012 WL 2740852, at *7 (E.D. Pa. July 9, 2012) ("Although not a bright-line rule, the vast majority of courts in this circuit and elsewhere that have addressed the issue of contracts and preemption under Section 301 of the Copyright Act have found that the rights protected by breach of contract claims are not the same as copyright rights.") (citations, internal quotations and alterations omitted); Mainardi v. Prudential Ins. Co. of Am., No. 08-3605, 2009 WL 229757, at *7 (E.D. Pa. Jan. 30, 2009) ("district courts within the circuit have agreed that an extra element exists in a breach of contract claim"). In CollegeSource Inc. v. AcademyOne, Inc., 2012 WL 5269213, at *9, the Court explained that the extra elements that distinguish a breach of contract claim from a claim under the Copyright Act include: "the existence of a contract or agreement," including proof of "offer, acceptance, and consideration to establish that a contract exists." Further, "[b]ecause contract is in personam and copyright is in rem, a judgment on the basis of contract law will impact a third party's rights differently." Id. But see Wrench LLC v. Taco Bell Corp., 256 F.3d 446, 457 (6th Cir 2001) ("If the promise amounts only to a promise to refrain from reproducing, performing, distributing or displaying the work, then the contract claim is preempted.").

Synygy's breach of contract claim arises out of Novo's alleged broken promise to abide by the terms and conditions of the pledge of honesty which she signed prior to taking the examination. While unquestionably similar, the claims are not identical.

Plaintiff claims that "Novo's breach of the contract is not limited to its promise to refrain from using, copying, distributing and creating derivate works from Synygy's copyrighted materials, but rather includes a breach of the confidentiality obligations under Section 8 of the Synygy-Novo Contract." Pl.'s State Law Opp'n Mem. at 31. As plaintiff contends, "[s]uch a promise of confidentiality and nondisclosure is qualitatively different from a promise not to infringe Synygy's copyrighted works," Id.at 31-32. "While unquestionably similar, the claims are not identical." Am. Bd. of Internal Med., 2012 WL 2740852, at *7. I will not grant summary judgment in defendants' favor on Synygy's breach of contract claim on the basis of copyright preemption.

B. PUTSA Preemption - Trade Secret Misappropriation

In its response to defendants' motion for summary judgment with respect to Synygy's state law claims, Synygy argues that its state law claims are not preempted under the Copyright Act because they "are based on defendants' misappropriation and disclosure of Synygy's trade secrets in addition to acts of copyright infringement." Pl.'s State Law Opp'n Mem. at 1; see also id. at 25-29 ("defendants' preemption theory ignores the fact that their wrongdoing is not limited to the mere infringement of Synygy's copyrighted reports and software macros"). However, as defendants contend in their reply brief, "there is an express preemption clause governing trade secret claims as well, found in the PUTSA, 12 Pa. Cons. Stat. Ann. §§ 5301-5308." Defs.' State Law Reply at 4. Section 5308 provides that "this chapter displaces conflicting tort, restitutionary and other law of this Commonwealth providing civil remedies for misappropriation of a trade secret." 12 Pa. Cons. Stat. Ann. § 5308(a). The PUTSA thus preempts state law tort claims "based on the same conduct that is said to constitute a misappropriation of trade secrets." Youtie v. Macy's Retail Holding, Inc., 653 F. Supp. 2d 612, 620 (E.D. Pa. 2009). Defendants thus contend that, to the extent that plaintiff's claims for unfair competition, tortious and intentional interference, conversion and unjust enrichment are not barred by copyright preemption, summary judgment is warranted in their favor for plaintiff's claims under Pennsylvania law on the basis of PUTSA preemption. Defs.' State Law Reply at 3-6.

However, given that disputed issues of material fact remain with respect to whether defendants misappropriated any Synygy trade secrets, as is further set forth above, I decline to grant summary judgment in favor of defendants on the basis of PUTSA preemption. See PNC Mortg. v. Superior Mortg, Corp., No. 09-5084, 2012 WL 628000, at *15 (E.D. Pa. Feb. 27, 20121: see also Bro-Tech Corp. v. Thermax, Inc., 651 F. Supp. 2d 378, 412 (E.D. Pa. 2009) (denying summary judgment on PUTSA claim and noting that "due to the displacing effect of [the PUTSA], if and when any Defendants are found at trial to have misappropriated [the plaintiff's] trade secret information, [the plaintiff's] other tort or restitutionary claims against them will be preempted to the extent such claims are predicated on misappropriation of trade secrets as opposed to confidential or proprietary information of other sorts"). "[I]f a jury determines that the information at issue in this case constitutes a trade secret under PUTSA, then many of Plaintiff's common law remedies will be preempted" insofar as they arise out of defendants' conduct with respect to any trade secrets belonging to Synygy. PNC Mortg., 2012 WL 628000, at *15, citing 12 Pa. Cons. Stat. § 5308.

An appropriate Order follows.

Id. at 264:11-265:5.