On February 20, 2025, the U.S. District Court for the Western District of Pennsylvania dismissed a trade secret misappropriation claim for failing to identify explicit language establishing an expectation of privacy to the protected information.

Plaintiffs in Vertical Bridge REIT LLC v. Everest Infrastructure Partners Inc., Case No. 23-1017 (W.D. Pa. 2024), own and operate telecommunications towers and lease space on those towers to telecommunications tenants.  These towers sit on leased property, and Plaintiffs contend that their ground-lease agreements with individual landlords are based on “[Plaintiffs’] proprietary financial model, and other similar financial information.”

In 2023, Plaintiffs filed suit claiming that Defendants misappropriated trade secrets protected by federal and state law by inducing landlords “to share [Plaintiffs’] valuable, proprietary, and confidential financial information in their ground leases” as part of an “illegitimate tower aggregation scheme” to “directly and wrongfully compete with [Plaintiffs].”

In May 2023, Judge W. Scott Hardy dismissed Plaintiffs’ trade secret claims without prejudice on the grounds that they “lacked sufficient detail to determine what information [Plaintiffs] sought to protect and whether they had been secretive enough with respect to such information to avail themselves of trade-secret protections.”

Seeking to cure these deficiencies, Plaintiffs filed a Second Amended Complaint on June 6, 2024, alleging that their trade-secret protected information “include[d] site-specific rent amounts, licensing fees, escalator amounts, and rent sharing from tower tenants, all of which is developed with the [] Plaintiffs’ proprietary financial model and is specific to a particular site.”  Plaintiffs further alleged that they had taken reasonable measures to protect the secrecy of this information, demonstrated in most instances by non-disclosure/confidentiality provisions in their leases.  However, the Court held that it would “not find a trade secret claim” where Plaintiffs “failed to include or add any explicit provision to leases reflecting an expectation of privacy.” This ruling raises questions about the extent to which a plaintiff must allege that it took reasonable measures to ensure the secrecy of their trade secrets.