Preferred Returns Newsletter by the ABA’s Private Equity and Venture Capital Committee
Amit Singh, a shareholder in Stradling’s Corporate and Securities practice group, authored an article for Preferred Returns Newsletter, the ABA’s Private Equity and Venture Capital Committee’s publication, regarding the Delaware Supreme Court’s recent dismissal of a trade secrets case against a private equity fund. Alarm.com brought suit against ABS Capital alleging the firm has misused confidential information by investing in its competitor. The Delaware Supreme Court upheld the Chancery Court’s 2018 decision to dismiss the complaint finding that various agreements between the parties, including a non-disclosure agreement, “specifically considered ABS would invest in competitors and established an understanding that such an invest, by itself, would not give rise to a claim for misappropriation of trade secrets.” This ruling serves as an important lesson for companies, especially startups, who frequently turn to non-disclosure agreements to protect their trade secrets and important confidential information when seeking to attract investors. Read the full article below.