Urban Outfitters has beaten trade secret misappropriation claims waged against it by Le Tote following a federal jury trial in Philadelphia. The favorable verdict for Urban Outfitters stems from a case that has pitted the two companies against one another over the latter’s alleged misappropriation of trade secrets in order to launch a competing fashion rental company. According to the complaint that Le Tote filed in a Pennsylvania federal court in June 2020, Urban Outfitters gained access to an array of valuable information – including “proprietary in-house tools” and “technological infrastructure and logistical functions” – under the guise of a potential acquisition of the fashion rental platform.
The deal never came to be, according to Le Tote, and instead, Urban launched Nuuly – a “copycat” rental service of its own to “compete directly with Le Tote” – using the secret intel that it had “stolen” during the parties’ M&A talks.
Specifically, Le Tote claimed that based on Urban’s representations “that it wished to pursue an acquisition” of Le Tote, it provided confidential and proprietary information to Urban after the Philadelphia-based retail group signed a non-disclosure agreement, in which it “agreed not to use Le Tote’s proprietary information for any purpose other than evaluating a transaction with Le Tote” for a period of two years. With that in mind, Le Tote has argued that Urban violated the Federal Defend Trade Secrets Act and the Pennsylvania Uniform Trade Secrets Act, among other things, when it made use of Le Tote’s “business, engineering and technical information, including plans, formulas, compilations, techniques, processes, procedures, and programs, [which] constitute trade secrets” in furtherance of the creation of its own fashion rental company, Nuuly.
The case is Le Tote, Inc. v. Urban Outfitters, Inc., 2:20-cv-03009 (E.D.Penn.).
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