Buzz Marketing Firms in Trade Secrets Dispute

A trade secrets lawsuit filed by buzz marketing firm New Media Strategies (NMS) against BuzzMetrics was dismissed in a Virginia court last week, but NMS will pursue the claim in the District of Columbia.

By NMS’ account, BuzzMetrics — then known as Pulpfree — approached NMS in mid-2000 to discuss a possible sale of Pulpfree to NMS. In the ensuing discussions, each side shared trade secrets under a nondisclosure agreement.

Pulpfree allegedly pulled out of the process a month later and told NMS it had found new funding to develop its personal portal technology. NMS contends that Pulpfree took NMS’ online intelligence business plan, moved to New York, and changed its name to BuzzMetrics.

Pulpfree’s original business plan was to create an ad-based portal where users could aggregate their favorite sites on a single page. At some point, the company shifted its model to use its software to monitor online “buzz” about client brands.

“Our core technology was based on aggregation of content, and that’s still what our software does,” BuzzMetrics president and CEO Jonathan Carson told ClickZ News. “We’ve developed our business model over the last six years, and it continues to evolve.”

The two sides are giving conflicted reports on the reasons for the dismissal, and court documents for the case are not yet available. BuzzMetrics says the case was decided on its merits, while NMS says it’s a matter of jurisdiction.

“It’s a matter of ‘where,’ not ‘why,'” said Jack Wuerker, attorney for NMS. “BuzzMetrics’ claims that NMS’ case was decided on its merits are patently false. The judge made it abundantly clear that his decision was limited to jurisdiction, was not on the merits and hence without prejudice, and that the case could be pursued in the District of Columbia courts.”

In a statement, BuzzMetrics contends the judge dismissed the case on its merits following oral arguments last week. Under Virginia law, the judge’s official order in the case will not be filed until attorneys for both sides can agree on the wording, Wuerker said. If they are unable to do so on their own, there will be a hearing next week to do so.

“In our opinion, the lawsuit represents a mean-spirited effort to ride on the coattails of another’s success and to stifle legitimate competition,” said Carson. “The frivolous lawsuit was also accompanied by a calculated smear campaign to erode BuzzMetrics’ leadership and credibility in the market, and it failed.”

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