What could be worse than a competitor misappropriating your trade secret? When a group of competitors conspire to misappropriate your trade secret! Especially in light of a recent decision from the Third Circuit, which held that agreeing to steal a trade secret is not automatically an antitrust violation, meaning it could be very expensive to litigate.
The antitrust laws prohibit certain types of agreements. Certain agreements are per se illegal, meaning if the defendants enter into that type of agreement, they are automatically guilty of violating the antitrust laws, regardless of any procompetitive benefits or justifications.
Agreeing to misappropriate a competitor’s trade secret might be an antitrust violation under the right circumstances. But as one company, Premier Comp Solutions, recently found out, it is not a per se violation in the Third Circuit. Premier Comp Solutions develops customized panel listings of healthcare providers to be utilized in workers’ compensation claims. Premier helps employers ensure that a healthcare provider panel is in compliance with the state workers’ compensation laws, is geographically useful to employees, and has the proper qualifications, licensing, and quality of care. Premier alleged that UPMC, one of its customers, misappropriated trade secrets including Premier’s panel listings and gave them to MCMC, one of Premier’s competitors. Premier filed suit (Premier Comp Solutions LLC v. UPMC, Case Number 2:15cv703) in the U.S. District Court for the Western District of Pennsylvania against UPMC and MCMC.
Premier tried to argue that UPMC and MCMC illegally agreed to misappropriate trade secrets from Premier, a per se antitrust violation. But a Philadelphia district court rejected this argument, holding that business torts do not create per se antitrust violations. The court did, however, seem to suggest that with the right proof, such torts could still be antitrust violations. But Premier didn’t have that here. The court granted summary judgment in favor of the defendants because Premier had not demonstrated that there were anticompetitive effects of the alleged trade secret misappropriation.
Bringing an antitrust case has multiple benefits, including automatic treble damages and attorney’s fees. But, as the Supreme Court has noted, antitrust cases can be exceptionally expensive to litigate. Per se cases are cheaper to litigate because they are easier to prove. As is apparent from this case, an agreement to steal trade secrets is not a per se violation. It is therefore important to carefully consider the evidence and potential litigation expenses before alleging an antitrust violation in a trade secrets case.