Background
Arkeyo built software for Metro Bank’s coin-counting machines. When the software became outdated, Metro hired Saggezza UK to develop a replacement. An Arkeyo touchscreen computer was delivered to the Chicago office of affiliated company Saggezza, Inc., but it contained only an executable version of the program, and the developers could not log into it.
Arkeyo sued Saggezza, Inc. for direct and contributory copyright infringement, trade-secret misappropriation, tortious interference, and conversion. The district court entered summary judgment for Saggezza, denied reconsideration and spoliation sanctions, and awarded fees under the Copyright Act and Defend Trade Secrets Act.
The Court’s Holding
The Seventh Circuit affirmed across the board. The copyright claims lacked evidence that anyone copied protected source code. Arkeyo’s expert identified no shared string of code, and superficial similarities such as a logo, an audible knocking feature, and a similar bug could not support an inference of copying where the programs used different Windows versions, animation methods, code lengths, and development approaches.
The trade-secret claim failed for two independent reasons. Arkeyo had left a full version of its software online for more than a year at an unprotected and readily guessable URL, defeating reasonable secrecy. Many claimed features were also visible to any user, while less visible concepts such as offsorting and batch-processing control described broad technical areas rather than concrete secrets.
The remaining business tort theories did not change the result. Legitimate competition does not become tortious interference merely because a rival offers a customer a newer product. The court also found no basis for reconsideration or spoliation sanctions and upheld the fee award, concluding that the district judge permissibly treated the copyright and trade-secret claims as objectively weak.
Key Takeaways
- A software copyright plaintiff still needs evidence of copying; product-level resemblance does not substitute for proof that protected code or expression was taken.
- Source code placed at an unprotected, reasonably discoverable web address may lose trade-secret status even if the owner did not advertise the URL.
- User-visible functions and broad descriptions of technical capabilities are generally not protectable trade secrets.
- Weak IP claims can expose a plaintiff to fee shifting under both the Copyright Act and the Defend Trade Secrets Act.
Why It Matters
The decision is a practical warning for software companies on both evidence and security. A claimant should identify the precise code or confidential information at issue and show how it was acquired and used. At the same time, companies must treat web deployment controls as part of trade-secret protection: obscurity is not a substitute for authentication, access limits, and documented confidentiality measures.
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