February 28, 2008

Trade Secrets Case Against UMG (NY)

A global leader in the arts management business, IMGA, filed suit in New York Supreme Court, New York County, against Universal Music Group, International Entertainment Consultancy Services Ltd., and a Universal employee arising from a scheme by defendants to "surreptitiously: (1) misappropriate IMGA's confidential and proprietary information; (2) conspire among themselves, and with others, to unlawfully compete with IMGA; (3) wrongfully steal clients from IMGA; and (4) assist and cause others to breach their fiduciary duties to IMGA."

As alleged, IMGA and IECS entered into a written consulting agreement in March 2007 wherein IECS agreed, among other things, to advise and assist IMGA "in relation to the development and implementation of IMGA Artist's activities, operations and opportunities." The agreement contained an exclusivity clause, a non-solicitation clause (12 month duration), a non-compete clause (same), and various definitions of IMGA's confidential and proprietary information, which IECS agreed to keep "in trust for the sole benefit of IMGA" and in the strictest confidence. Additionally, the agreement contained various remedies for breach of the consulting agreement, e.g., agree that IMGA will be irreparably harmed and entitled to injunctive relief. (Can parties agree to that?)

Thereafter, IMGA alleges that IECS "surreptitiously conspired with Universal and [the Universal employee] to steal IMGA's proprietary information, business opportunities, and clients, in particular, opportunities and clients in the music, touring, event management and promoting area. Each of defendants and their co-conspirators are doing so in order to form a new joint venture by and among them that will exploit opportunities that belong exclusively to IMGA, and to unfairly gain for themselves a competitive advantage."

Based on the above, Plaintiff asserted the following causes of action:

-Misappropriation of Trade Secrets (including IMGA's proprietary and confidential nformation)
-Breach of Fiduciary Duties – including duties of loyalty and confidentiality
-Breach of Contract, to wit: IECS agreed to perform services exclusively form IMGA; IECS agreed not to furnish any services to any company during the term of the agreement; IECS failed to keep all proprietary information in trust for the sole benefit of IMGA; IECS used and disclosed proprietary information in violation of the non-disclosure provisions, and breach of the non-solicitation and non-competition clauses.
-Tortious Interference with Contractual Relations (solely against Universal and its

IMG Artists, LLC v. Int'l Entertainment Consultancy Servs. Ltd., No. 08-600549 (Sup.Ct., N.Y. Co. complaint filed Feb. 25, 2008).

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