Evrythng Ltd. v. Avery Dennison Retail Info. Servs.

Full title: EVRYTHNG LIMITED, Plaintiff, v. AVERY DENNISON RETAIL INFORMATION…

Court: United States District Court, S.D. New York

Date published: Oct 1, 2021

20-cv-4411 (LJL) (S.D.N.Y. Oct. 1, 2021)

Opinion

20-cv-4411 (LJL)

10-01-2021

EVRYTHNG LIMITED, Plaintiff, v. AVERY DENNISON RETAIL INFORMATION SERVICES, LLC and AVERY DENNISON RFID COMPANY, Defendants.

LEWIS J. LIMAN, UNITED STATES DISTRICT JUDGE.

OPINION AND ORDER

LEWIS J. LIMAN, UNITED STATES DISTRICT JUDGE.

Plaintiff EVRYTHNG Limited (“EVRYTHNG”) moves for a preliminary injunction against Defendants Avery Dennison Retail Information Services, LLC (“Avery Dennison”) and Avery Dennison RFID Company (“RFID”). For the following reasons, the motion for a preliminary injunction is denied.

BACKGROUND

I. EVRYTHNG's Business & Technology

EVRYTHNG is a start-up software provider and the inventor, owner, and operator of products including the “EVRYTHNG Product Cloud.” Dkt. No. 45 ¶ 3. The EVRYTHNG Product Cloud is an online platform that assigns digital identities, known as “Active Digital Identities” or “ADIs” to physical products. Dkt. No. 49 ¶ 3. This “digital twin, ” which is activated at the point of manufacture, enables each individual product to be tracked, authenticated, and interacted with throughout its lifecycle. Id. The EVRYTHNG Product Cloud offers a “combination of supply chain visibility, product authentication capabilities, and customizable consumer product engagement.” Id.

Niall Murphy (“Murphy”), EVRYTHNG's Co-Founder and CEO, conceived of the idea for EVRYTHNG between 2008 and 2010. Dkt. No. 45 ¶ 3. His stated intention was to “allow manufacturers to operate their businesses more intelligently by providing them with previously unseen visibility into a specific product's journey through the supply chain, and consumers to have greater insight into, and interaction with, the products they buy.” Id. Murphy recruited two computer scientists and another business partner to develop EVRYTHNG. Id. From 2012 to 2013, the team invested approximately $2 million in formulating the core technology and in proof-of-concept projects with early customers. Id. ¶ 5. Between 2013 and 2014, EVRYTHNG raised and invested approximately $15 million in additional capital into research and development. Id. This investment included not only development of the software technology, but also investment into market research to develop a workable business and pricing model and to develop methodologies for linking ADIs to physical products through packaging and labelling processes. Id. ¶ 6. To date, EVRYTHNG has invested over $60 million into developing its technology, products, business model, solution methodologies and in building awareness of the applications of its technology. Id. ¶ 7.

II. EVRYTHNG's Relationship with Avery Dennison

In 2014, Murphy began identifying packaging and labelling companies as potential partners to provide the “physical trigger needed to connect products to the digital identities operated by EVRYTHNG's cloud-based platform.” Id. ¶ 8. One such company was Avery Dennison, a company whose business is in providing labeling systems, tags, and related software solutions. Id.; Dkt. No. 61 ¶ 4; Dkt. No. 59 at 2 (characterizing Avery Dennison as providing “end-to-end solutions for product tracking, supply chain monitoring, providing customer engagement experiences, protecting against counterfeiting, and promoting product sustainability”). RBIS, a subsidiary of Avery Dennison, is a global manufacturer of tags and labels, with a history of working with clients in the apparel and footwear industries. Murphy met with Avery Dennison executives, including its CEO and Chief Information Office (“CIO”), who expressed interest in EVRYTHNG's technology. Dkt. No. 45 ¶ 8.

On October 24, 2014, EVRYTHNG and RBIS entered into a non-disclosure agreement (the “NDA”) for the express purpose of exploring “business development” opportunities. Dkt. No. 45-1 § 3.

Section 1 of the NDA provided:

The Confidential Information disclosed under the terms of the Agreement is limited to:

Avery Dennison: Information and samples relating to Avery Dennison's products, components, compositions, designs, constructions, apparatus and methods, face stocks, adhesives, liners, films, release materials, carriers, pressure sensitive and non-pressure sensitive laminates, assemblies and constructions, intermediate constructions and assemblies, printing technologies, layout, form templates, as well as Avery's business processes, technology, and system requirements, quality specifications, testing parameters and methods, production facilities, equipment processes, layout, supplier and customer lists and names, pricing information, business or marketing plans and strategies, and sales plans, forecasts and volumes, distribution channels and capacity, product deployments.

EVRYTHNG, Ltd.: Information relating to EVRYTHNG, Ltd.'s products, business processes, technology, and system requirements, quality specifications, testing parameters and methods, production facilities, equipment processes, layout, supplier and customer lists and names, pricing information, business or marketing

plans and strategies, and sales plans, forecasts and volumes, distribution channels and capacity, product deployments.

Id. § 1.

Section 3 of the NDA provided:

Subject to the exceptions stated below, a Receiving Party of Confidential Information may not disclose such information or use the same except for the Purpose of this Agreement, which is: business development.

Id. § 3.

Section 7 of the NDA provided:

To the extent practical, Confidential Information shall be disclosed in documentary or tangible form marked “Proprietary”, “Confidential” or with a similar legend. All samples (“Sample(s)”) shall be considered Confidential Information and shall be governed by the terms of this Agreement, regardless of whether the Samples are marked. The content of this Agreement and the fact that the parties are engaging in discussions shall also be considered Confidential Information. In the case of disclosures in a non-documentary form made orally or by visual inspection, the Disclosing Party shall have the right, or if requested by the Receiving Party, the obligation, to confirm in writing the fact and general nature of each disclosure within thirty (30) days after it is made. The failure to mark the Confidential Information shall not waive the protection of the Confidential Information if the party to which such Confidential Information is being disclosed knows that such information is confidential or proprietary or would be reasonably expected to understand the confidential or proprietary nature of such information. Each Representative designated by a party for receiving and disclosing Confidential Information shall make all arrangements for his or her party and be informed of all communications relating to this Agreement. The Receiving Party of Confidential Information shall exercise the same degree of care, but no less than a reasonable degree of care, to prevent its disclosure to any third party, as it uses to protect its own confidential information of a like nature. In addition, the Receiving Party shall limit internal dissemination of Confidential Information within its own organization to individuals whose duties justify the need to know such information, and then only provided that there is a clear understanding by such individuals of

their obligation to maintain the confidential status of such information and to restrict its use solely to the Purpose specified herein.

Id. § 7.

The NDA expressly recognized that the two companies might compete with one another including on products similar to EVRYTHNG's technology. Section 20 of the NDA provided:

Disclosing Party understands that Receiving Party may currently or in the future be developing information internally, or receiving information from other parties, that may be similar to Disclosing Party's Confidential Information. Nothing in this Agreement will prohibit Receiving Party from developing products, or having products developed for it, that compete with Disclosing Party's products, provided that in doing so, Receiving Party does not use or disclose Disclosing Party's Confidential Information.

Id. § 20.

The NDA went into effect on October 24, 2014. It carried a five-year term except for its confidentiality obligations. Under Section 6 of the Agreement, “the Receiving Party's obligations of confidentiality and non-use relating to Trade Secrets disclosed hereunder and specifically identified in writing as a “Trade Secret” in advance of any disclosure, [did] not expire unless [the secrets fell] within the exceptions of Section 8.” Id. § 6. Section 8, in turn, limited the obligations of the “Receiving Party” of Confidential Information. Under Section 8, the Receiving Party was under no obligation with respect to information:

(a) Which is, at the time of disclosure, available to the general public; or

(b) Which becomes at a later date available to the general public through no fault of Receiving Party and then only after said later date; or

(c) Which Receiving Party can demonstrate was in its possession before receipt from Disclosing Party; or

(d) Which Receiving Party can demonstrate was independently developed by Receiving Party or on behalf of Receiving Party without reference to the Confidential Information; or

(e) Which is disclosed to Receiving Party without restriction on disclosure by a third party who has the lawful right to disclose such information.

Id. § 8.

The NDA designated Deon Stander to be the Representative of Avery Dennison to disclose and receive the Confidential Information and Niall Murphy to be the Representative of EVRYTHNG to disclose and receive the Confidential Information. Id. § 2. Stander and Murphy signed the NDA.

On October 15, 2019, the parties extended the NDA, modifying Section 6 to expire on XXXXX. PX49.

Several months after entering the NDA, in March 2015, EVRYTHNG and RBIS entered into a Services Authorization Form and Agreement (the “Services Agreement”). The Services Agreement recognized that EVRYTHNG had developed and owned “a software product and service named ‘EVRYTHNG Engine', a platform for managing online profiles about products and other physical objected called ‘active digital identities' (“ADI” and “ADIs”) and associated applications, software tools and information, ” Dkt. No. 45-2 ¶ 1(A), and that RBIS owned and operated certain customer applications which could benefit from ADIs and provided RBIS access to the “EVRYTHNG Engine, ” and “4 operator login accounts” in exchange for a monthly license fee. Id. at 1. The Services Agreement described the Project Plan as “setting up and running the EVRYTHNG Engine to support a Proof of Concept during the period of 31 March 2015 to 31 September 2015, ” Id. at 15, and it required RBIS to contribute to EVRYTHNG XXXXX per month in program support as well as additional sums for Developer Training and Solution Architecture. Id. at 2. The term of the Services Agreement was XXXXX which would renew automatically for subsequent XXXXX periods unless either party notified the other in writing of its intent not to renew at least XXXXX prior to the end of the XXXXX term or the then current Renewal Period, as applicable.

In keeping with the nature of the project, the Services Agreement limited the use to which RBIS could put the EVRYTHNG platform. Section 3.3 of the Services Agreement provided:

Restrictions. Customer [i.e. RBIS] will only use the Subscription Services [i.e., the ADI Platform created by EVRYTHNG] and ADI Platform through the application programming interfaces (‘APIs') and access methods prescribed by EVRYTHNG in its usage guidelines and documentation for the ADI Platform from time to time. Customer will not knowingly attempt to interfere with or disrupt the Subscription Services or attempt to gain access to any systems or networks that connect thereto (except as required to access and use the Subscription Services). Customer will not knowingly allow access to or use of the Subscription Services by anyone other than Authorized Users [i.e., Customer employees, Customer contractors, and Customer's end users]. Customer will not: (a) except to the extent permissible by any applicable law which is incapable of exclusion, attempt to, nor allow anyone else to, copy, modify, distribute, create derivative works from, decompile, disassemble, reverse engineer any portion of the ADI Platform; (b) rent, lease, distribute or provide access to the Subscription Services on a time-share or service bureau basis; or (c) transfer any of its rights hereunder.

Dkt. No. 45-2 § 3.3.

The Services Agreement contained a non-disclosure agreement. Section 8.3 of the Services Agreement provided:

During the Term and for a period of XXXXX years after expiration or termination of this Agreement, neither party will make the other's Confidential Information available to any third party or use the other's Confidential Information for any purposes other than exercising its rights and performing its obligations under this Agreement. Each party will take all reasonable steps to ensure that the other's Confidential Information is not disclosed or distributed by its employees or agents

in breach of the terms of this Agreement, but in no event will either party use less effort to protect the Confidential Information of the other party than it uses to protect its own Confidential Information of like importance and in no event than by applying a reasonable standard of care. Each party will ensure that any agents or subcontractors that are permitted to access any of the other's Confidential Information are legally bound to comply with the obligations set forth herein. Notwithstanding the foregoing, Confidential Information may be disclosed as required by any governmental agency, provided that before disclosing such information the disclosing party must provide the non-disclosing party with sufficient advance notice of the agency's request for the information to enable the non-disclosing party to exercise any rights it may have to challenge or limit the agency's authority to receive such Confidential Information. In any event a party responding to such request shall only disclose that portion of the Confidential Information which is necessary to comply with such order.

Id. § 8.3.

The Services Agreement contains a more limited definition of Confidential Information than the NDA. It defines “Confidential Information” as including: “any written, machine-reproducible and/or visual materials that are clearly labelled as proprietary, confidential, or with words of similar meaning, and all information that is orally or visually disclosed, if not so marked, if it is identified as proprietary or confidential at the time of its disclosure or in a writing provided within thirty (30) days after disclosure, and any information of any nature described in this Agreement as confidential.” Id. § 8.1. The Services Agreement also stated: “The failure to so mark such Confidential Information as provided herein shall not waive the protection of the Confidential Information if the party to which such information is being disclosed knows that such information is confidential or proprietary or would be reasonably expected to understand the confidential or proprietary nature of such information.” Id. Section 8.1 further describes certain information as “confidential, ” namely certain information related to the Subscription Services: “EVRYTHNG Confidential Information includes, without limitations, the Subscription Services and any software whether in source or executable code, documentation, non-public financial information, pricing, business plans, techniques, methods, process, and the results of any performance tests of the Subscription Services.” Id. It also contains a description of RBIS Confidential Information.

Excluded from the definition of Confidential Information is information that: “(a) is or becomes publicly known through no act or omission of the receiving party; (b) was in the receiving party's lawful possession prior to the disclosure; (c) is rightfully disclosed to the receiving party by a third party without restriction on disclosure; or (d) is independently developed by or on behalf of the receiving party, which independent development can be shown by written evidence.” Id. § 8.2.

Section 8.1 of the Services Agreement limits each party in its disclosures of the terms and conditions of the Services Agreement and Section 8.3 of the Services Agreement provides that during the term of the Services Agreement “and for a period of XXXXX years after expiration or termination of the Agreement, neither party will make the other's Confidential Information available to any third party or use the other's Confidential Information for any purpose other than exercising its rights and performing its obligations under this Agreement.” Id. §§ 8.1, 8.3.

Section 10.4 of the Services Agreement provided:

Rights and Obligations Upon Expiration or Termination. Upon expiration or termination of this Agreement, Customer's and Authorised Users' right to access and use the Subscription Services will immediately terminate, Customer and its Authorised Users will immediately cease all use of the Subscription Services, and each party will return and make no further use of any Confidential Information, materials, or other items (and all copies thereof) belonging to the other party. EVRYTHNG may destroy or otherwise dispose of any Customer Data in its possession unless EVRYTHNG receives, no later than ten (10) days after the effective date of the expiration or termination of this Agreement, a written request for the delivery to Customer of the then-most recent back-up of the Customer Data. EVRYTHNG will use all reasonable efforts to deliver the back-up to Customer within thirty (30) days of its receipt of such a written request. Customer will pay all reasonable expenses incurred by EVRYTHNG in returning Customer data to Customer. Also upon expiration or termination of this Agreement, EVRYTHNG will cease use of the Customer Marks . . .; provided, however, that (a) EVRYTHNG will have a reasonable time, not to exceed three (3) months to remove the Customer

Marks from marketing and promotional materials and to discontinue use of any marketing and promotional materials printed during the Term that include the Customer Marks, and (b) EVRYTHNG will not be required to remove any such printed marketing and promotional materials which have already been distributed to third parties.

Id. § 10.4.

The Term of the Services Agreement commenced on March 31, 2015. Id. at 2.

Under the initial Services Agreement, EVRYTHNG worked with Avery Dennison's IT group to create an internal system to store customer data. Dkt. No. 67 ¶ 4. One such project was unsuccessful, while another, smaller in scope, produced a functional system. Id.

In January 2016, the parties entered into a third agreement, the Cooperation Agreement, setting forth their joint proposition to market a unified product to the apparel and footwear industries. Pursuant to the Cooperation Agreement, EVRYTHNG would provide clients' products with ADIs and access to the EVRYTHNG Product Cloud, and RBIS would manufacture the clients' product labels and tags and enable them with ADIs. Certain provisions of the Cooperation Agreement are particularly important.

Section 1 of the Cooperation Agreement set forth the Background and Purpose of the Agreement. It provided:

Background & Purpose. RBIS and EVRYTHNG are parties to a Platform Agreement of 31st March 2015 and a Statement of Work incorporated therein of or about the date of this Agreement (together the “Operating Agreement”). RBIS and EVRYTHNG are working together to apply their respective product design and manufacture, access to market, software technologies and platforms to bring to market and operate smart labels & packaging products and services (“PRODUCT”) to be provided to apparel and footwear product brands and retailers (“CLIENTS”).

Dkt No. 45-3 § 1.

Under the Cooperation Agreement, RBIS contributed to the project labels and tags that it would manufacture and that could connect to the EVRYTHNG Product Cloud; EVRYTHNG contributed the use of its platform which would be provided to the parties' joint clients in exchange for a fee, a portion of which would be shared as an incentive with RBIS. Id. §§ 5, 6; Dkt. No. 45 ¶ 38. Section 5 of the Cooperation Agreement set forth each party's respective obligations to the other. It provided:

Scope of Partnership. RBIS and EVRYTHNG are cooperating to market, sell and operate PRODUCT propositions for CLIENTS making use of APDIs provided under the Operating Agreement:

a. RBIS will enable each label or tag provided to prospective CLIENTS with ADIs and will design, build, iterate and operate packaging value propositions enabled by PRODUCTS to provide interactive experiences and operational service capabilities for CLIENTS;

b. RBIS and EVRYTHNG will work together to promote the RBIS and EVRYTHNG value propositions to CLIENTS for the purposes of smart packaging applications, and each party will apply their sales, account management and business development resources to secure agreements with CLIENTS for smart packaging applications;

c. EVRYTHNG will provide use of the EVRYTHNG platform to CLIENTS, subject to such clients entering into platform subscription agreements with EVRYTHNG;

d. RBIS and EVRYTHNG will work together to integrate EVRYTHGN's software technology with RBIS designed products to create various demonstration propositions.

Dkt. No. 45-3 § 5.

Sections 6 and 7 describe the business arrangement between the parties and the “EVRYTHNG Incentive.” Section 6(a) recognizes that RBIS was simultaneously purchasing ADIs from EVRYTHNG pursuant to a separate agreement and states that “RBIS shall be responsible for the design, development and operation of any applications and user interfaces it deems necessary” to operate those ADIs. Section 6(b) sets forth that platform subscription and usage revenues for the use of the EVRYTHNG platform corresponding to the ADIs will be received by EVRYTHNG XXXXX Id. § 6.

Section 7 sets forth XXXXX Id. § 7.

Consistent with the NDA, the Cooperation Agreement recognized that each party might be competing with the other and imposed limited restrictions on their ability to do so. Section 10 of the Cooperation Agreement imposes, subject to exceptions, reciprocal obligations on each party not to solicit certain business from a third-party customer that was introduced to it by the other party:

Non-Competition/Non-Solicitation: During the Term and for twelve (12) months thereafter, neither party (the “Introduced Party”) shall call upon, solicit, divert or take away, or attempt to call upon, solicit, divert or take away any business that the other party (the “Introducing Party”) has with a certain operating group or division of a third party customer and which was introduced to the Introduced Party by the Introducing Party.

The restriction is subject to an important exception:

Notwithstanding the foregoing, in the event that either party, irrespective of whether being the Introducing Party or Introduced Party, is unable to address the third party customer's project requirements, the other party, subject to and following a period of ninety (90) days after notification from notice from such party is unable to provide the necessary requirements, to allow the first party to come into compliance with the project requirements of the third party customer, shall be entitled to introduce and propose to the third party customer alternative solutions and/or vendors to bring the project into compliance with the project requirements of the third party customer.

Id. § 10.

The only exclusivity requirements of the Cooperation Agreement are set forth in Section 11. That section imposed exclusivity requirements during the term of the Cooperation Agreement on EVRYTHNG but not on RBIS. It provided:

Exclusivity. During the Term of this Cooperation Agreement, EVRYTHNG shall not enter into any marketing, development or other agreement which would allow for the use of licensing of software or systems with any third party whose primary or secondary business is in the apparel or footwear field (“the Exclusive Field”). EVRYTHNG shall not license, transfer or otherwise disclose the software, Services

or similar products to any reseller or distributor for use in the Exclusive Field. For a period of twelve (12) months after the conclusion the Cooperation Agreement [sic] neither EVRYTHNG nor RBIS shall solicit business CLIENTS for competitive value propositions to the other party's business.

Id. § 11.

The Cooperation Agreement was entered into alongside a separate Statement of Work, signed February 2016 but effective January 31, 2016, which superseded the Terms and Conditions of the Services Agreement. PX16. The Statement of Work is also referred to, including in the Cooperation Agreement, as the Operating Agreement. The effect of the Statement of Work was for RBIS to provide additional funding to EVRYTHNG in connection with the Cooperation Agreement. The two agreements had identical terms- XXXXX from January 31, 2016 unless terminated earlier-and additional renewal periods of XXXXX, which would automatically go into effect unless either party notified the other in writing of its intent not to renew at least XXXXX to the end of the Initial Term or the Renewal Term, as applicable. Id. It also provided for XXXXX. The Statement of Work's description of “Client Use of Digital Identities” reflected “RBIS and EVRYTHNG are partnering to apply their respective product design and manufacture, access to market, software technologies and platforms to bring to market and operate smart labels and packaging products to be provided to apparel and footwear product brands, customers and retailers (‘Clients') as provided for through the Cooperation Agreement” and that “Authorised third party Clients shall be permitted to make use of the ADIs provided under this SOW . . . fees for which shall be paid by such Clients to EVRYTHING and revenues or which shall be shared with RBIS in accordance with the Cooperation Agreement.” PX16.

III. Janela

The product RBIS and EVRYTHNG created pursuant to the Cooperation Agreement and Statement of Work was called “Janela, ” also known as “Janela powered by EVRYTHNG.” The title was developed by RBIS. It combined the EVRYTHNG Product Cloud with labels and tags manufactured by RBIS. Janela was launched around April 2016. Dkt. No. 67 ¶ 5.

RBIS had a network of numerous existing contacts in the apparel and footwear industry, which it used to introduce customers to the Janela platform. Dkt. No. 69 ¶¶ 7, 9. Those relationships were confidential to Avery Dennison. Id. Generally, Avery Dennison used its internal network to introduce Avery Dennison customers to EVRYTHNG and the Janela powered by EVRYTHNG concept. Id. ¶ 9. The Avery Dennison Janela sales team would reach out to an Avery Dennison account manager for a specific brand, determining the proper contacts at that brand and setting up screening meetings with the brands. Then, Avery Dennison would introduce EVRYTHNG to the brands after the screening and try to get the Janela system to the brand. Id.

The two parties held weekly or biweekly “pipeline” meetings at which potential clients for the Janela system were discussed. Id. ¶ 10. Rob Pick (“Pick”), Akari Shono-Price (“Shono-Price”), Julie Vargas (“Vargas”) and Jonathan Aitken (“Aitken”) of Avery Dennison were present at some of these meetings. These meetings did not typically involve discussions of technical information regarding the EVRYTHNG system. Id. Because EVRYTHNG was a start-up company and did not have a large marketing team or resources, Avery Dennison supplied the initial customer targets for Janela from Avery Dennison's list of brand protection customers. Id. ¶ 6. Avery Dennison's Janela sales team worked with pre-existing Avery Dennison account managers to identify appropriate customer contacts, to introduce those contacts to the Janela concept, and then to introduce EVRYTHNG to the customers. Id.

Janela performed poorly. The only client who purchased a large-scale implementation of Janela was XXXXX, who became a client of the Janela platform in 2018. Dkt. No. 45 ¶ 39. The engagement went through two phases: first, a pilot project in 2018, and then a large-scale, multimillion dollar and multi-year agreement at the end of 2018, which involved the deployment of digital identities with the majority of Ralph Lauren's products globally. Id. No. other Janela clients purchased large-scale projects. Levi's engaged in a pilot project as a result of an introduction by RBIS. Dkt. No. 69 ¶ 36. XXXXX also purchased small pilot projects, but elected not to expand their purchase of Janela services.

Avery Dennison blamed the poor performance of Janela on EVRYTHNG's inability to retain employees, particularly in its sales team. There were three EVRYTHNG employees who were marketing EVRYTHNG's system in the fall of 2017. Each of them had left by late 2019. Dkt No. 69 ¶ 33. As early as 2017, Avery Dennison advised EVRYTHNG that it was concerned that “we were getting customers to scope and quote but were not closing any business.” Dkt. No. 67 ¶ 26; see Id. ¶ 27 (“One of the reasons the Avery Dennison-EVRYTHNG relationship had been unsuccessful was the EVRYTHNG had never-ending employee turnover.”). Avery Dennison also advised EVRYTHNG as early as 2017 that employee turnover was an issue. Dkt. No. 67-7 (“I heard from Julie that there is more attrition at EVT . . . leaving only 1 salesperson for global apparel/footwear . . . . Can you clarify how you intend to move forward?”). Over time, EVRYTHNG had staffed the partnership with RBIS with four employees; all of them left EVRYTHNG between 2017 and 2020. Id. Thus, RBIS had to start working with an entirely new team after each change in personnel, which was ineffective. Id. XXXXX expressed concerns about the employee turnover at EVRYTHNG. Dkt. No. 47 at 51. Mr. Turco, who testified at trial and was President and Managing Director, Americas of EVRYTHNG Inc. did not begin working at EVRYTHNG until late 2019. Id.; Dkt. No. 49 ¶ 1; Hr'g Tr. at 68. About a year into the Janela project, EVRYTHNG had basically complete turnover in its sales team. Dkt. No. 67 ¶ 27.

There were other issues that arose between the parties. In early 2020, EVRYTHNG launched a brand protection mobile application that competed with a separate Avery Dennison product that was outside of the EVRYTHNG-RBIS relationship. Avery Dennison complained to EVRYTHNG that EVRYTHNG had based its competing product on secret brand protection concepts it learned from Avery Dennison and asked EVRYTHNG not to market its competing product to apparel customers. EVRYTHNG disregarded the request. Dkt. No. 69 ¶ 34.

Avery Dennison also complained that EVRYTHNG missed meetings, was not always prepared or failed to deliver the proper materials, and was unable to close deals. Id. ¶¶ 35-36.

IV. Avery Dennison's Competing Platform

Disappointed with the performance of Janela and its lack of customer acceptance as well as by EVRYTHNG's operational performance including the large amount of turnover among its employees, Avery Dennison began considering in 2019 whether it should develop a platform of its own or with someone else to offer similar services to that provided by Janela. Avery Dennison had considered purchasing EVRYTHNG, but concluded instead that “the most capital efficient and . . . the least execution risk approach was to actually build [its] own digital venture within Avery Dennison.” Dkt. No. 52-5 at 33:3-6.

Ultimately, Avery Dennison's decided to develop a product called “Atma.” Atma was a comparable product to Janela. Like the EVRYTHNG Product Cloud, Atma is a cloud-based digital identity platform that offers capabilities relating to supply chain tracking, product authentication, consumer engagement, aggregating, storing, and managing real-time data from and about products, and “recommerce.” The two products thus compete with one another. See, e.g., Pick Dep. 43:20-22 (“Q: Is EVRYTHNG a competing solution to atma? A: Yes.”); Stander Dep. 123:2-4 (“We were positioning a digital identity platform as a comparable solution in the market.”). As the evidence at the hearing established, however, and the Court finds, Atma did not appropriate any of EVRYTHNG's proprietary information. Guinard Dep. at 54 (“Q: During your inspection of the atma.io system, did you identify anything that was confidential to Everythng [sic] that related to Everythng's thing [sic] functionality that was incorporated into atma? A: Not explicitly, no.”).

The project was led by an individual named Max Winograd (“Winograd”). Winograd was not a legacy RBIS employee and had no prior knowledge of Janela and no knowledge of its software. He was based in Europe and Avery Dennison based the development of Atma in Europe, far from any Avery Dennison employees who would have technical knowledge of Janela. Winograd recruited two software engineers, Mario Katusic and Michael Goller from Detego GmbH, to work on the development of Atma. Dkt No. 65 ¶¶ 3-4. Katusic and Goller went to school together at the Graz University of Technology in Graz, Austria, and were colleagues at Detego, where Katusic developed products based on global fashion retail market needs and worked in an environment deploying product increments to cloud-hosed software, known as a Software as a Service (SaaS) solution. Id. ¶ 3. Winograd asked the two to help him enhance Avery Dennison's existing systems and expertise in managing digital supply chains for brands all over the world, by aggregating many of the features already supplied by Avery Dennison into a single cloud platform and integrating additional features to enhance consumer engagement and provide transparency to consumers regarding the products they were using. Id. ¶ 4. The two were tasked with building a technical development team from scratch to be free from outside influence in terms of system design and were “asked to develop the system as if [it] were an independent start-up or division operating inside of Avery Dennison [and] without undue influence from past system development and previous design motivations.” Id. ¶¶ 5-6. “None of the engineers working on the design or implementation of the atma.io platform were legacy Avery Dennison employees.” Id. ¶ 6. The project leaders did not have access to the EVRYTHNG platform or technical information regarding the EVRYTHNG platform that was confidential or proprietary to EVRYTHNG. Id. ¶ 7. The objective for the project was to take Avery Dennison's existing capabilities and put them into “a more modern architecture, like the cloud platform.” Hr'g Tr. at 113. It was not to free ride off of EVRYTHNG's work.

In October 2019, Katusic and Goller opened an office in Graz, Austria for the purpose of building a team to develop Atma. Id. ¶ 5. In November 2019, they produced a Development Roadmap, laying out the features they intended to include in Atma. Id. ¶ 12. By December 2019, they had hired three additional employees in Graz, including two software developers. Id. ¶ 6. Between March 2020 and May 2020, Katusic and Goller expanded the Atma team, opening a new office in Zagreb, Croatia. Id. ¶ 22.

According to Katusic, that Atma team was “asked to develop the system as if we were an independent start-up or division operating inside of Avery Dennison.” Id. The Atma team completed its initial Release (Release 0.1) in May 2020. Id. ¶ 20. Following the Development Roadmap, Release 0.1 included modules related to “Product Management”, “Track + Trace, ” “Brand Protection, ” and a user interface “Portal.” Id. ¶ 12. Release 0.1 also included “Serialization, ” “Consumer Redirect, ” and “Real-Time Inventory” modules. Id. ¶ 18. Release 0.1 “was a blend of supply chain management features that Avery Dennison was already providing to brands all over the world . . ., anti-counterfeiting features also already offered by Avery Dennison . . ., and consumer facing features that would enhance customer interactions with brands.” Id. ¶ 24.

Between May 2020 and September 2020, additional functionality was added to Atma for Release 0.2. Id. ¶ 25. These features included a “Digital Care Label” feature, a “Third-party Application Hosting” feature, a “Factor Data” feature, a “Raw Material Tracking” feature, and several additional “Platform Support Services.” Id. Between September 2020 and March 2021, additional features were developed for Release 1.0. Id. ¶ 29. “For example, the ‘Track + Trace' module . . . was enhanced to include addition [sic] capabilities such as the ability to store date related to the condition of individual items (e.g., temperature), to store shipping/receiving information in the supply chain, to perform product management related to expiration dates, to calculate estimated carbon footprints associated with different items, and the creation of a sandbox partner development platform to facilitate additional feature development for third parties.” Id.

Atma launched in March 2021. Id. ¶ 29. The Atma project currently employs 31 people at offices in Graz and Zagreb. Id. ¶ 6.

Two individuals who worked on Janela ultimately joined the Atma team. Akari Shono-Price (“Shono-Price”) began working in a sales position, marketing Atma in October 2020. Shono-Price Dep. at 54-56. She had been recruited to Avery Dennison as a market development manager in 2018 and was tasked with selling Janela to U.S. and Asian customers. Id. at 21-22. By the time she transitioned to Atma, the Atma platform and pricing model had already been designed and implemented. There is no evidence that she had, or understood, any technical information regarding the EVRYTHNG platform or provided any technical information regarding the EVRYTHNG platform to the Atma development team. She joined Atma after hearing about the product and asking if she could be transferred to the team. Shono Price Dp. at 54.

Pick was the market development manager in charge of developing business for Janela in Europe. Pick attended meetings with EVRYTHNG and EVRYTHNG customers and had attended customer pipeline meetings. Pick stopped working on the Janela project in September 2019, when he moved into the role of RFID market development manager. Pick Dep. at 25. Pick joined Atma after its launch in March 2021. Id. at 39.

Neither Shono-Price nor Pick had any involvement in the development of Atma which, Shono-Price described, was done behind a “firewall.” Shono-Price Dep. at 51 (“Q: Do you know when Avery Dennison began developing Atma? A: No. I don't know, actually. It was all created and developed behind - - like, there was a firewall, right, between Janela powered by EVRYTHNG sales staff and whatever that was happening, right.”). Neither Shono-Price nor Pick had any technical background, nor is there any evidence before the Court that they had access to any proprietary information about the functionality of the Janela system.

During the initial stages of work, Avery Dennison did not notify EVRYTHNG that it was developing its own platform. Avery Dennison first informed EVRYTHNG about Atma in early 2020. Dkt. No. 69 ¶ 37. In March 2020, Stander told Murphy that Avery Dennison had decided that it needed to have core platform capabilities itself. Dkt. No. 45 ¶¶ 44-45.

In Spring and Summer of 2020, the parties had discussions about how to continue the Avery Dennison-EVRYTHNG collaboration. Dkt. No. 69 ¶ 37. Avery Dennison sought to sell both the Janela powered by EVRYTHNG system and the Atma system. Dkt. No. 69 ¶ 37. Murphy and Stander discussed possible renewal terms. Dkt. No. 45; Dkt No. 69 ¶ 37. Even though EVRYTHNG knew about Atma, it did not terminate the Cooperation Agreement or the Statement of Work and relieve itself of the exclusivity provisions. Nor did RBIS seek to terminate the agreements.

At a meeting in September 2020, Avery Dennison demonstrated Atma to EVRYTHNG and EVRYTHNG expressed disappointment that Avery Dennison would be selling the system. Dkt. No. ¶ 48.; Dkt. No. 69 ¶ 38. After that meeting, EVRYTHNG essentially walked away from the relationship. Dkt. No. 45 ¶ 48. It unilaterally ceased setting up the Janela pipeline biweekly meetings and it did not renew the monthly steering committee meetings between EVRYTHNG and RBIS. Dkt. No. 69 ¶¶ 39-40. After September 2020, it stopped scheduling pipeline meetings and stopped asking RBIS for meetings. EVRYTHNG also did not renew the monthly steering committee meetings between EVRYTHNG and RBIS. Id. ¶¶ 39-40. As a result, the two have not worked together to pursue new customers since that date. Dkt. No. 49 ¶ 15.

Instead, EVRYTHNG sought to use Avery Dennison's development of Atma and the claim that the development of Atma violated RBIS's agreements with EVRYTHNG to renegotiate the arrangement between the parties. In October 2020, Murphy wrote to Avery Dennison that it had breached the contracts between the parties by “building product capabilities to provide digital identity and associated product traceability and consumer engagement application services” and by “replicating and competing directly with products and services that have been provided to Avery Dennison by EVRYTHNG under the terms of the Agreement.” Dkt. No. 45 ¶ 49; Dkt. No. 45, Ex. H. Murphy demanded that that Avery Dennison “cease from engaging in conduct that breaches the Agreements, that it refrain from doing so in the future, and that EVRYTHNG's intellectual property that ha[d] been provided to Avery Dennison pursuant to the Agreements be protected and only used consistent with the terms of the Agreements.” Dkt. No. 45, Ex. H. Murphy additionally set forth several demands in exchange for an extension of the Agreements, including:

XXXXX

Id. In essence, EVRYTHNG asked Avery Dennison to accept that the Atma system was based on EVRYTHNG Confidential Information and to pay an additional licensing fee.

Stander responded to Murphy's letter, stating: “In our view Avery Dennison (“AD”) has not violated any of the provisions in the Agreements between AD and EVT.” Dkt. No. 45, Ex. I. Stander noted that: “We are attempting to address the particular points raised in your letter. However, many of the points are described generally and do not reference a particular provision of the Agreement. Please note that any failure on our part to address a specific issue or allegation does not represent a waiver of our right to respond nor is it an admission that the issue or allegation is true or correct.” Id. Stander additionally stated that, to the extent any of EVRYTHNG's Confidential Information was misused, “it was unintentional.” Id. at 4. Stander denied that Avery Dennison had made any statements on behalf of EVRYTHNG without EVRYTHNG's prior approval. Id. Stander also noted that EVRYTHNG had “misrepresented AD brand protection products while presenting at Under Armour” and that EVRYTHNG had “missed customer meetings (e.g., Burberry) and deadlines.” Id. Finally, Stander indicated that “AD does not believe any of its actions have violated the non-solicitation or exclusivity provisions.” Id. Stander concluded: “We believe that it is in both EVT's and Avery Dennison's interests to continue the partnership and support existing and new customers. We believe most of the elements you suggested as part of a go-forward partnership agreement can be acceptable, but require more specificity. We suggest that as a next step, the EVT and AD team begin defining these elements.” Id.

In January 2021, the companies discussed possible joint prospects in the course of a discussion regarding a new collaboration agreement. Avery Dennison suggested that they would not include Hugo Boss on such a list, because Avery Dennison was attempting to pitch Atma to Hugo Boss. Dkt. No. 49 ¶ 19.

The letters and meeting did not result in a new agreement. By letter dated March 5, 2021, Murphy reiterated to Stander his view that Avery Dennison's introduction and sale of the Atma platform breached the Cooperation Agreement, under which-according to Murphy-“Avery Dennison [was] restricted from providing such a proposition to customers engaged thereunder.” Dkt. No. 45-10. Murphy additionally stated that: “We are aware that Avery Dennison will be required to make use of certain EVRYTHNG intellectual properties and trade secrets for Atma to operate certain application capabilities.” Id. Murphy proposed that the Services Agreement and Cooperation Agreement be amended. Under his proposed amendments, Avery Dennison would be required XXXXX XXXXX Avery Dennison would also be required to XXXXX.

On April 9, 2021, EVRYTHNG sent RBIS a formal written notice pursuant to Section 10.2 of the Services Agreement claiming that RBIS's conduct was in material breach of the parties' agreements and demanding that RBIS cease its conduct. EVRYTHNG cited, with generalities, RBIS's use of EVRYTHNG's confidential and trade secret information to launch a competing product, solicitation of EVRYTHNG's customers, and palming off of EVRYTHNG's work as its own. Dkt. No. 45 ¶ 57. EVRYTHNG asserted that if RBIS did not cure within 30 days, the agreements would terminate. Id.

Stander responded by letter dated April 29, 2021. Dkt. No. 45-12. Stander denied that Avery Dennison had breached any of the Agreements. Id. According to Stander, Avery Dennison had not misused or misappropriated any of EVRYTHNG's Confidential Information. Furthermore, Murphy had not identified what information Avery Dennison was using that constituted a “trade secret, ” nor had Avery Dennison infringed upon any of EVRYTHNG's intellectual property. Id. Stander noted that Avery Dennison “continues to see value in its relationship with EVT and is willing to engage in dialogue to resolve the issues between the parties, ” and concluded that “[a]lthough AD has been forced to defend itself in light of EVT's threats and accusations, we remain hopeful that we can amicably resolve this matter.” Id.

Atma was officially launched in March 2021. Before it was officially launched, Avery Dennison secured agreements with three customers-XXXXX. Winograd Dep. 37:14-24, 39:5-17.

EVRYTHNG claims that the Services and Cooperation Agreements were terminated on May 14, 2021, 30 days after RBIS received EVRYTHNG's notice. RBIS denies that the Services and Cooperation Agreements were validly terminated and claims that EVRYTHNG had no grounds to terminate.

PROCEDURAL HISTORY

With Avery Dennison continuing to market Atma and refusing to pay EVRYTHNG an additional fee, EVRYTHNG initiated this action by complaint filed May 17, 2021. Dkt. No. 1. EVRYTHNG filed a proposed order to show cause with emergency relief on May 18, 2021. Dkt. No. 5. EVRYTHNG sought a temporary restraining order that would have, inter alia, enjoined Avery Dennison from operating and marketing the Atma platform and from using, accessing, disclosing, or continuing to possess any trade secret or confidential information of EVRYTHNG's. Dkt. No. 5 at 1-2.

The Court heard Plaintiff and Defendants regarding Plaintiff's Motion for a Temporary Restraining Order and Preliminary Injunction on the same day. The Court denied Plaintiff's motion for a Temporary Restraining Order and set a date for a hearing on the preliminary injunction. It also permitted expedited discovery on a limited basis. The parties agreed on limits of ten targeted document requests per side, ten interrogatories per side, and four depositions per side, limited to three hours each. Dkt. No. 21. No. party asked the Court for more or different discovery. EVRYTHNG filed its motion for a preliminary injunction on June 11, 2021. Defendants filed their brief in opposition on June 23, 2021, Dkt. No. 58, and Plaintiff replied on June 26, 2021. Dkt. No. 76. The Court heard the parties on June 29, 2021.

LEGAL STANDARD

“[A] preliminary injunction is an extraordinary and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997). “Preliminary injunctive relief is designed to preserve the status quo and prevent irreparable harm until the court has an opportunity to rule on the lawsuit's merits.” Williams v. Rosenblatt Sec., Inc., 136 F.Supp.3d 593, 616 n.11 (S.D.N.Y. 2015) (quotation marks omitted). In order to obtain a preliminary injunction pursuant to Federal Rule of Civil Procedure 65(a), the movant must show: (1) a likelihood of success on the merits; (2) a likelihood of irreparable injury in the absence of an injunction; (3) that the balance of equities tips in the plaintiff's favor; and (4) that the public interest would not be disserved by the issuance of an injunction.” Benihana, Inc. v. Benihana of Tokyo, LLC, 784 F.3d 887, 895 (2d Cir. 2015).

DISCUSSION

EVRYTHNG argues that Avery Dennison breached the NDA, the Services Agreement, and the Cooperation Agreement. EVRYTHNG further brings claims under the DTSA and for unfair competition under New York common law. The Court addresses EVRYTHNG's arguments in turn.

I. Breach of the Cooperation Agreement

Under New York law, a breach of contract claim requires (1) the existence of a contract; (2) plaintiff's performance of its obligations under the contract; (3) breach of the contract by the defendant; and (4) damages to the plaintiff caused by the defendant's breach. Intertek Testing Servs., N.A., Inc. v. Pennisi, 443 F.Supp.3d 303, 333 (E.D.N.Y. 2020).

EVRYTHNG argues that RBIS materially breached Sections 1, 5, 10, and 11 of the Cooperation Agreement. As noted previously, Section 1 sets forth the Background and Purpose of the Cooperation Agreement. It is largely prefatory. It states that “RBIS and EVRYTHNG are working together to apply their respective product designs and manufacture, access to market, software technologies and platforms to bring to market and operate smart labels and services . . . to be provided to apparel and footwear product brands and retailers (‘CLIENTS').” Dkt. No. 45- 3 § 1. This language is a recital of the facts, and accordingly does not place a binding obligation on either party. See Structured Cap. Sols., LLC v. Commerzbank AG, 177 F.Supp.3d 816, 826 (S.D.N.Y. 2016) (“[A] recital ‘cannot be used to modify or create substantive rights not found in the contract's operative clauses.'”) (quoting RSL Commc'ns, PLC v. Bildirici, 2010 WL 846551, at *4 (S.D.N.Y. Mar. 5, 2010)); Sengillo v. Valeo Elec. Sys., Inc., 536 F.Supp.2d 310, 312 (W.D.N.Y. 2008) (“It is well settled that, absent some ambiguity in the underlying contract, a recital clause does not create enforceable obligations on the party of the parties and therefore cannot serve as the basis for a breach of contract claim.”) (citing United States v. Hamdi, 432 F.3d 115, 123 (2d Cir. 2005) (Sotomayor, J.)); see also Advanced Water Techs., Inc. v. Amiad U.S.A., Inc., 457 F.Supp.3d 313, 320 (S.D.N.Y. 2020) (precatory words in a contract are not given mandatory effect) (citing cases).

Section 5, by contrast, identifies obligations of each of RBIS and EVRYTHNG. After stating that “RBIS and EVRYTHNG are cooperating to market, sell and operate PRODUCT propositions for CLIENTS making use of APDIs provided under the Operating Agreement, ” it imposes on RBIS the obligation to “enable each label or tag provided to prospective CLIENTS with ADIs” and to “design, build, iterate and operate packing value propositions enabled by PRODUCT to provide interactive experiences and operational service capabilities for CLIENTS” and imposes on each of RBIS and EVRYTHNG the obligation to “work together to promote the RBIS and EVRYTHNG value propositions to CLIENTS for purposes of smart packaging applications” and on each party to “apply their sales, account management and business development resources to secure agreements with CLIENTS for smart packaging applications.” Dkt. No. 45-3 § 5. It also required RBIS and EVRYTHNG to “work together” to integrate EVRYTHNG's software with RBIS's products to “create various demonstration propositions.” Id. § 5(a), (b), (d).

EVRYTHNG argues that RBIS breached Sections 1 and 5 of the Cooperation Agreement by: (1) developing and marketing Atma; (2) ceasing to work with EVRYTHNG to pursue new customers under the Janela brand; (3) phasing out Janela and EVRYTHNG from the Avery Dennison website in order to promote Atma; and (4) competing with EVRYTHNG for customers in the apparel and footwear industries and attempting to lure away existing customers of EVRYTHNG. The essence of EVRYTHNG's claim is that RBIS could not develop Atma because it competes with EVRYTHNG's product. EVRYTHNG also cites an occasion on which Avery Dennison dissuaded the Janela team from marketing to Canada Goose.

The Court interprets the Cooperation Agreement as a whole, attempting to give meaning to each and every term of the agreement and to give effect to the agreement's “general purpose.” See Beal Savs. Bank v. Sommer, 865 N.E.2d 1210, 1213 (N.Y. 2007) (“A reading of a contract should not render any portion meaningless. Further, every part will be interpreted with reference to the whole; and if possible it will be so interpreted as to give effect to its general purpose.”) (internal citations and quotation marks omitted); Rutgerswerke AG and Frendo S.p.A. v. Abex Corp., 2002 WL 1203836, at *7 (S.D.N.Y. June 4, 2002) (“[U]nder New York law . . . a court must interpret a contract so as to give effect to all of its clauses and to avoid an interpretation that leaves part of a contract meaningless.”); Restatement (Second) of Contracts § 203(a) (“[A]n interpretation which gives a reasonable, lawful, and effective meaning to all the terms [of an agreement] is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect.”).

Interpreting the Cooperation Agreement to give meaning to all of its terms, the Court concludes that it did not prohibit Avery Dennison from developing the competing Atma product or from marketing it to its customers. The notion that each of Avery Dennison (or RBIS) and EVRYTHNG might develop products to compete with one another was embedded in the relationship as early as the NDA. The Cooperation Agreement imposed clearly defined responsibilities on each of RBIS and EVRYTHNG. It did not restrict Avery Dennison or RBIS from independently developing a competing product.

The Cooperation Agreement required RBIS to enable labels or tags for prospective CLIENTS to use on the EVRYTHNG platform and it required EVRYTHNG to provide the use of the EVRYTHNG platform to CLIENTS subject to such clients entering into platform subscription agreements with EVRYTHING. It also required RBIS and EVRYTHNG to “work together to integrate EVRYTHNG's software technology with RBIS designed products to create various demonstration propositions, ” id. § 5, and required RBIS and EVRYTHNG to “work together to promote the RBIS and EVRYTHNG value propositions.” Id. It thus provided something for each party. It required RBIS to develop labels and tags and required EVRYTHNG to make its platform available. If RBIS introduced a CLIENT, EVRYTHNG was required to make its platform available; if EVRYTHNG introduced a CLIENT, RBIS was required to supply tags. It also required the two to work together-both to develop demonstration propositions and to promote RBIS and EVRYTHNG value propositions. It thus imposed reciprocal obligations. If EVRYTHNG refused to work with RBIS, RBIS had no obligation to promote the EVRYTHNG platform on its own.

The Cooperation Agreement did not prohibit either company from independently developing their own competing product. It also did not prohibit RBIS from marketing to customers that competing product if the customers did not express interest in the EVRYTHNG product. That much is clear from the language of Sections 10 and 11 of the Cooperation Agreement. Section 10, titled Non-Competition/Non-Solicitation, prohibits each party (both RBIS and EVRYTHNG) from soliciting, diverting or taking away business of a third-party client introduced to it by the other party. It is as conspicuous for what it does not prohibit as for what it does prohibit. It does not prohibit a party from soliciting its own client to do business with it or from selling products that compete with the other party's products to that client. In fact, it contemplates that each party may sell solutions other than Janela to its own clients-solutions that either (in the case of EVRYTHNG) do not use the RBIS tags or (in the case of RBIS) do not use the EVRYTHNG platform. That notion is stated expressly in the remainder of Section 10. The second sentence of Section 10 provides that “[n]otwithstanding” the restrictions of the first sentence, i.e., in circumstances where the first sentence might otherwise restrict a party from taking away business of a client introduced by the other party, the Introduced Party may solicit business that was introduced by the Introducing Party “in the event that either party . . . is unable to address the third party customer's project requirements.” Dkt. No. 45-3 § 10. In such a situation, the party “shall be entitled to introduce and propose to the third party customer alternative solutions and/or vendors to the bring [sic] the project into compliance with the project requirements of the third party customer.” Id.. Thus, Section 10 of the Cooperation Agreement explicitly contemplates that each party will develop alternative-or competitive-solutions to a third party's customer requirements other than Janela.

Section 11 of the Cooperation Agreement contains an exception to the general freedom that each party has under Section 10 to market to its own clients, but not an exception that helps EVRYTHING in this case. The section, entitled “Exclusivity, ” provides that “[d]uring the Term of the Cooperation Agreement, EVRYTHNG [but not RBIS] shall not enter into any marketing, developing or other agreement which would allow for the use of software or systems with any third party whose primary or secondary business is in the apparel or footwear field, ” i.e., both third parties introduced by RBIS and those introduced by EVRYTHNG and those not introduced at all. Dkt. No. 45-3 § 11. It goes on to say that “EVRYTHNG shall not license, transfer, or otherwise disclose the software, Services or similar products to any reseller or distributor for use in the Exclusive Field.” Id. It does not impose reciprocal restrictions on RBIS. The negative implication is clear. RBIS (and therefore Avery Dennison) may enter into an agreement that would allow for the use of its software or systems with a third party-both those who are in the apparel or footwear field and those who are not. Were it otherwise and were it the case that the Cooperation Agreement elsewhere prohibited each party from competing with the other, there would have been no reason for Section 11 at all. Its only purpose is to make clear that EVRYTHNG may not compete with RBIS but that RBIS may compete with EVRYTHNG.

EVRYTHNG gains no support from the last sentence of Section 11. That sentence provides that “[f]or a period of twelve (12) months after the conclusion the Cooperation Agreement [sic] neither EVRYTHNG nor RBIS shall solicit business CLIENTS for competitive value propositions to the other party's business.” The use of the modifier “business” before CLIENTS is advised. The sentence does not prohibit RBIS from soliciting CLIENTS for competitive value propositions after the termination of the Cooperation Agreement with CLIENTS defined-as the Cooperation Agreement defines them-as “apparel and footwear product brands and retailers.” Id. § 1. That interpretation would be nonsensical. It would prohibit RBIS from engaging in solicitations of its own clients after the conclusion of the Cooperation Agreement that it was permitted to engage in during the term of the Cooperation Agreement. Instead it means something else and more restricted.

As Avery Dennison argues, “business CLIENTS” is a subset of “CLIENTS.” “[B]usiness CLIENTS” means clients of the Janela product, i.e., to pick up the language of Section 10, CLIENTS with whom each of EVRYTHNG or RBIS has “any business.” It does not mean persons with whom EVRYTHNG has the prospect for business or, with respect to the restrictions on RBIS, persons with whom RBIS or Avery Dennison has a relationship but EVRYTHNG has no relationship and no current business. If it meant prospective clients with whom EVRYTHNG had no relationship, then Section 11 would impose greater restrictions on the parties after the termination of the contract than it imposed during their contractual relationship. It makes little sense for the agreement to permit competition during the term of the agreement, but then to restrict it after the agreement has been terminated. Furthermore, if “business CLIENTS” referred to any potential clients, then the modifier “business” would be surplusage. After all, the Cooperation Agreement elsewhere uses “potential CLIENTS” when the parties meant to refer to potential CLIENTS. Givati v. Air Techs., Inc., 906 N.Y.S.2d 196, 198 (2d Dep't 2013) (“[A] court should not read a contract so as to render any terms, phrase, or provision meaningless or superfluous.”); see also In re Leasing Consultants, Inc., 2 B.R. 165, 169 (Bankr. E.D.N.Y. 1980) (“It is axiomatic that a contract will not be construed so as to reject any words as surplusage if they reasonably can be given meaning.”). “Business” must restrict “CLIENTS, ” and, reading the contract as a whole, the parties' intent was most likely to prohibit competing for Janela's customers for a year after the termination of the Cooperation Agreement. See, e.g., Ins. Co. of N.Y. v. Cent. Mut. Ins. Co., 850 N.Y.S.2d 56, 58 (2008) (holding that a contract “should be ‘read as a whole, and every part will be interpreted with reference to the whole; and if possible it will be so interpreted as to give effect to its general purpose'”) (quoting Empire Props. Corp. v. Mfrs. Tr. Co., 43 N.E.2d 25 (N.Y. 1942)).

Finally, it is not necessary to read the contract as prohibiting development of competing products to give the agreement meaning and prevent it from being illusory. See S. Telecom Inc. v. ThreeSixty Brands Grp., LLC, 2021 WL 621235, at *7 (S.D.N.Y. Feb. 17, 2021) (courts should apply the duty of good faith and fair dealing when necessary to prevent a contract term from being illusory); Advanced Water Techs., 457 F.Supp.3d at 320 (applying implied term of good faith when necessary to prevent contract from being illusory). The Cooperation Agreement gave EVRYTHNG substantial benefits in exchange for EVRYTHNG's unilateral promise of exclusivity. It required RBIS to enable each label or tag provided to prospective CLIENTS with ADIs and to lend its support to the design of products that would interact with the EVRYTHNG platform. It also required RBIS to apply its sales, account management and business development resources to secure agreements with clients and, with the corresponding Statement of Work, required RBIS to make a substantial investment in EVRYTHNG. It provided RBIS a substantial financial incentive to work with EVRYTHNG-a percentage of the sales of Janela would be remitted to RBIS after being paid to EVRYTHNG. It also provided disincentives for RBIS to develop its own competing system-not only would it forego from the sales of that competing system the revenue it might have received from the sale of the EVRYTHNG system, but in order to lawfully develop its own competing system it would have to do so without the benefit of EVRYTHNG's confidential information and with EVRYTHNG having a head start. Finally, the Agreements permitted EVRYTHNG to exit its obligations to RBIS, including its obligation of exclusivity on relatively short notice-the agreements carry a term of two years. But, if the financial incentive were not sufficient for RBIS and if the cost of developing its own system was worth it, then there is nothing in the Cooperation Agreement or in the law of New York that EVRYTHNG has shown prevented Avery Dennison from independently developing its own system.

With the Cooperation Agreement so understood, EVRYTHNG has not shown at this early stage a likelihood of success on its claim that Avery Dennison breached the Cooperation Agreement. Contrary to Murphy's letters to Stander, the development and marketing of Atma in and of itself does not constitute a breach of the Cooperation Agreement. Avery Dennison had a right to develop and market Atma, so long as it developed it independently and not with EVRYTHNG's Confidential Information.

EVRYTHNG relies on several emails that were sent in 2020 and that were internal to RBIS to attempt to establish a likelihood of success on its claim that RBIS breached the Cooperation Agreement. In one email chain from January 2020, Greta Moser, Avery Dennison's Senior Product Line Manager, complains about “the lack of commitment and response from Evrythng since the beginning of the XXXXX initiative, ” and states that Avery Dennison has “decided to move this opportunity to be developed and deployed with the ATMA team.” Dkt. No. 52, Ex. K. In response, Jeremy Schenhof, Avery Dennison's Vice President of Strategy and New Business Development cautions that any sales of Atma need to avoid “disrupting the EVT relationship and associated opportunities before Atma is fully ready, ” and suggests deploying Atma only “outside of Apparel.” Id. In reply, Moser states that, while she was “not suggesting to move all apparel projects to ATMA from EVT, . . . XXXXX need[ed] to be an exception, ” because “[w]e have gone quite far in the selling process with the customer, we are putting the long standing relationship with XXXXX at risk if we don't delivery this solution.” Id. However, EVRYTHNG fails to identify any contact with XXXXX that would violate the agreements that came out of the internal correspondence. The evidence on this record is undisputed that, after EVRYTHNG postponed a meeting with Burberry that Avery Dennison had set up among it, XXXXX, and EVRYTHNG, and that postponement was not well-received, Avery Dennison attempted to connect with XXXXX without EVRYTHNG but was unable to reschedule a meeting due to the global pandemic. Dkt. No. 69 ¶ 23.

The second email chain is from later in time-July 2020-after Avery Dennison had told EVRYTHNG about Atma and after the parties had begun discussions about changing the nature of their relationship. The relevant portions begin with an email from Schenhof summarizing “next steps” discussed at an internal meeting the prior day, including XXXXX Id. In a separate email to a smaller internal group, XXXXX Dkt. No. 52-26. The email chain continues with correspondence regarding who introduced XXXXX (it was Avery Dennison) and the fact that XXXXX Id. Once again, there is no evidence of anything that came out of the internal discussion. As a result of Avery Dennison's efforts, XXXXX had committed to XXXXX, mentioned in the email chain. Dkt. No. 69 ¶ 19. However, there is no evidence that thereafter RBIS or Avery Dennison failed to honor their contractual commitments to EVRYTHNG.

These emails may provide fodder for potential discovery in the future. It is relevant whether RBIS violated any of its contractual commitments. But, at this stage, the internal musings of Avery Dennison employees without evidence of action, much less action that would breach a contract, is not sufficient to show a likelihood of success.

EVRYTHNG has not shown a likelihood of success on any of its other contract claims. It contends that Avery Dennison's failure to continue marketing Janela constituted a breach of the Cooperation Agreement. In early 2021, Avery Dennison created a document entitled XXXXX PX71. The document stated: XXXXX Id. On February 9, 2021, Winograd noted on the document that he had reviewed and approved the changes, and that XXXXX PX71.

The evidence at the hearing, however, established that “[a]fter the September 2020 meeting, EVRYTHNG walked away from the Avery Dennison-EVRYTHNG partnership.” Dkt. No. 69 ¶ 39. RBIS did not walk away from the relationship. Avery Dennison continued to market the Janela system through the summer of 2020, Dkt. No. 69 ¶ 37, and as late as April 2021, it was reiterating a desire to continue to work with EVRYTHNG. After September 2020, and EVRYTHNG's claim (which the Court has determined to be meritless) that the development of Atma itself was a breach of contract, EVRYTHNG did not renew the pipeline calls or the monthly “steering committee” meetings between the two companies. Id. ¶ 40.

In October 2020, Murphy demanded of Avery Dennison that it cease engaging in conduct that EVRYTHNG believed breached the agreement including “competing directly with products and services that have been provided to Avery Dennison by EVRYTHNG under the terms of the Agreement.” Dkt. No. 45 ¶ 49; id., Ex. H. It would make sense in that context for Avery Dennison not to mention EVRYTHNG on the Atma website going forward. Indeed, Winograd testified at his deposition in language which the Court credits: “When we were launching atma.io in March, we wanted to position Atma as the solution that we're launching, and I believe that if there were various references to other platforms in the Web site, individuals who are looking at that information for the first time may inadvertently assume that EVRYTHNG was involved in some way with Atma, but EVRYTHNG had nothing to do with Atma in terms of its technical development or anything at all.” Winograd Dep. at 90.

RBIS contractual obligation was to “work together” with EVRYTHNG to market Janela. If EVRYTHNG did not want to work with RBIS, RBIS was not obligated to work with EVRYTHING. It was not a breach of contract for Avery Dennison to phase out the Janela websites in early 2021.

EVRYTHNG also has claimed that RBIS breached its obligations by not pursuing XXXXX and recommending against marketing to XXXXX. The record shows that Avery Dennison did not want to pursue XXXXX for reasons unrelated to Atma. See Dkt. No. 69 ¶ 24 (“XXXXX was previously an Avery Dennison customer. However, the relationship with XXXXX was not a productive one from Avery Dennison's standpoint, and XXXXX would have been a small project in any event.”); Dkt. No. 69-5 (“They are not trustworthy, nor do they have quantity . . . or capacity for substantial growth to warrant even a halo reference. XXXXX.”). EVRYTHNG has failed to show a likelihood of success. There is no provision in the Cooperation Agreement that required RBIS to market to a client who, in its judgment, would not have been a good client, who would not have been a large client, and-based on prior experience-could not have been trusted to honor its obligations to EVRYTHNG and to RBIS.

EVRYTHNG claims that Avery Dennison breached Section 10 by soliciting for Atma customers whom EVRYTHNG introduced to Avery Dennison, including XXXXX. EVRYTHNG further argues that Avery Dennison has breached Section 11 by marketing Atma in competition with the EVRYTHNG Product Cloud. EVRYTHNG asks the Court to enforce Section 11 by enjoining Avery Dennison “from contacting any apparel or footwear brands or retailers for the purpose of competing with EVRYTHNG for 12 months from the entry of this Order.” Dkt. No. 41-1.

EVRYTHNG has not shown a likelihood of success on its argument that Avery Dennison breached Section 10 of the Cooperation Agreement in connection with its conduct with respect to XXXXX. That provision prevents each party from soliciting for business a client introduced to it by the other party. It does not prohibit a party from soliciting or doing business with its own clients. However, with the exception of only two opportunities, Avery Dennison introduced EVRYTHNG to every opportunity in the footwear and apparel industry. Dkt No. 69 ¶ 17. Those two exceptions were XXXXX. Id. Avery Dennison introduced EVRYTHNG to XXXXX.¹

1 EVRYTHNG asserts in a footnote that it introduced Adidas, Burberry, ECCO, H&M, Jockey, Patagonia, PVH, and Ralph Lauren to RBIS, but it provides no factual development for these allegations, which are contradicted by Defendant's evidence that the Court finds persuasive.

With respect to XXXXX, EVRYTHNG also has failed to show a likelihood of success on its claim that Avery Dennison attempted to poach it as a client in violation of Section 10. It is undisputed that XXXXX was the largest customer for Janela and continues to use the system. In support of its claim, EVRYTHNG points to an email from Michael Colarossi to Max Winograd in which he described a meeting with XXXXX and in which he wrote: XXXXX Dkt. No. 63-1. EVRYTHNG argues that this email shows that Avery Dennison was attempting to push Ralph Lauren to move to Atma in violation of Section 10 of the Cooperation Agreement.

Both parties claim that they introduced XXXXX to Janela. The evidence, however, establishes that RBIS made the introduction and therefore is the “introducing party.” Avery Dennison had a relationship with XXXXX prior to the formation its collaboration with EVRYTHNG, and Vargas averred that it was she who identified XXXXX as a possible target for Janela. Dkt. No. 67 ¶ 8. Vargas further averred that Kris Barton, Avery Dennison's RFID Market Development Director at the time, introduced XXXXX to Janela. She additionally averred that Frederik Ambrust from EVRYTHNG attempted to set up meetings with XXXXX without Avery Dennison, but that his approach “made no business sense since Avery Dennison had started the conversation about Janela and EVRYTHNG with XXXXX and this was an Avery Dennison relationship.” Murphy, on the other hand, acknowledged at his deposition that Avery Dennison and XXXXX had a preexisting relationship, and that “Avery Dennison was the established provider of labelling to XXXXX Murphy Dep. at 96, 98.

Murphy also stated generally that he was able to “bring to [the] awareness” of XXXXX Chief Financial Officer the Janela opportunity through a relationship he had with one of the members of the EVRYTHNG advisory board, id. at 96-97 (“Q: And at some point did XXXXX then start negotiations for additional products and services that were going to be jointly offered with Avery Dennison and Evrythng? A: They did. I was able to establish a relationship by virtue of a member of my advisory board with the chef [sic] financial officer of XXXXX and I was able to bring to her awareness the opportunity that what Evrythng and Avery Dennison were doing together could provide for XXXXX, and that led to a serious exploration of the opportunity by XXXXX and subsequently agreement for our mutual benefit.”), but that testimony falls short of establishing that it was EVRYTHNG that introduced RBIS to XXXXX rather than the other way around.

Avery Dennison had a long-standing relationship with XXXXX, and, as Murphy himself conceded, they were “satisfied customers.” Id. at 96. The documentary evidence, including an email between Kris Barton and XXXXX, Barton's counterpart at XXXXX, establishes that it was Avery Dennison that introduced EVRYTHNG to XXXXX. Dkt. No. 67-5 (RBIS XXXXX.”). It may be that EVRYTHNG had relationships that facilitated the relationship with XXXXX once the introduction was made, but the evidence shows that it was RBIS and Avery Dennison-and not EVRYTHNG-that made the introduction. The email strongly suggests that Avery Dennison was the Introducing Party for XXXXX.

Even if EVRYTHNG were the Introducing Party, Colarossi's email does not support a finding that Avery Dennison breached Section 10 of the Cooperation Agreement on its own. Colarossi is Avery Dennison's Vice-President of Product Line Management, Innovation and Sustainability. Dkt. No. 63 ¶ 3. Colarossi was not part of the Atma team, and he had no involvement in designing or building the Atma platform, or in selling or marketing Atma. Dkt. No. 63 ¶ 6. Colarossi has sworn that he wrote the email following a meeting with his innovation counterpart at XXXXX, with whom he had “quarterly innovation meetings to discuss new technology in the apparel market and to share projects on which our respective teams are working.” Id. ¶ 7. Colarossi swore that he did not reference Atma during this conversation. Id. ¶ 8. Colarossi swears that his email reflected a “poor word choice” because “there was no ‘push' to move XXXXX to atma.io. There was no follow up ‘push' to sell atma.io to XXXXX, nor am I aware of any ‘push' to sell atma.io to XXXXX before or after my quarterly meeting.” Id. ¶ 9. EVRYTHNG has introduced no evidence to call the veracity of Colarossi's statements into doubt.

Because EVRYTHNG has not shown that Avery Dennison has made any efforts to take business from Janela or from existing customers of EVRYTHNG, it has not shown a likelihood of success on the merits on the claim that Avery Dennison breached Section 10 of the Cooperation Agreement.

With respect to Section 11, the Court concludes in the first place that EVRYTHNG has not established a likelihood of success that the contract has validly been terminated. EVRYTHNG argues that the contract was terminated by RBIS's material breach on May 14, 2021. However, as the Court has held above, EVRYTHNG has not shown a likelihood of success on its argument that Avery Dennison's course of conduct in developing and marketing Atma constituted a breach of Sections 1, 5, or 10 of the Cooperation Agreement. Thus, the restrictions imposed by Section 11 are not applicable.

Moreover, even if EVRYTHNG had validly terminated the agreements, it has not established that Section 11 of the Cooperation Agreement would help it. As explained above, that provision prohibits each of RBIS and EVRYTHNG from soliciting business from a client with whom the other had business. It does not prohibit each company from continuing to do business with a company with whom it had business and the other party had no business at the time of contract termination. The Cooperation Agreement elsewhere refers to “potential CLIENTS.” It does not do so in Section 11.²

2 The Court thus need not reach the question whether, Section 11-as EVRYTHNG interprets it-would be unenforceable. Steelite Int'l U.S.A., Inc. v. McManus, 2021 WL 1648025, at *7 (S.D.N.Y. Apr. 27, 2021) (“A restrictive covenant ‘may not merely insulate a party from competition.' Instead, it must protect a legitimate business interest, such as avoiding unfair competition and protecting plaintiffs' rights in its trademarks or goodwill.”) (quoting Navajo Air, LLC v. Crye Precision, LLC, 318 F.Supp.3d 640, 650 (S.D.N.Y. 2018)).

II. Trade Secrets

EVRYTHNG argues that RBIS violated the DTSA, the NDA, and the Services Agreement by disclosing and misappropriating confidential information of EVRYTHNG. In order to show a likelihood of success on either the federal statutory claim or on the state-law contract claims, EVRYTHNG must show both (1) that it disclosed a trade secret or confidential information to RBIS and (2) that RBIS misappropriated that trade secret or confidential information or used it in a manner that violated a contractual provision. See Free Country Ltd v. Drennan, 235 F.Supp.3d 559, 565 (S.D.N.Y. 2016) (“Under New York law, a party must demonstrate: (1) that it possessed a trade secret, and (2) that the defendants used that trade secret in breach of an agreement, confidential relationship or duty.”); Syntel Sterling Best Shores Mauritius Ltd. v. Trizetto Grp., Inc., 2016 WL 5338550, at *6 (S.D.N.Y. Sept. 23, 2016) (stating that under the DTSA, a party must show “an unconsented disclosure or use of a trade secret by one who (i) used improper means to acquire the secret, or, (ii) at the time of disclosure, knew or had reason to know that the trade secret was acquired through improper means, under circumstances giving rise to a duty to maintain the secrecy of the trade secret, or derived from or through a person who owed such a duty”). Although the standards differ slightly under each of the DTSA, the NDA, and the Services Agreement, the flaw in EVRYTHNG's showing is identical-it has not shown a likelihood of success that RBIS misused any of EVRYTHNG's protected information.

The DTSA protects trade secrets. Under the DTSA, “[a]n owner of a trade secret that is misappropriated may bring a civil action . . . if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” 18 U.S.C. § 1836(b)(1). A trade secret is “all forms and types of financial, business, scientific, technical, economic or engineering information” where “the owner thereof has taken reasonable measures to keep such information secret” and “the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.” 18 U.S.C. § 1839(3); see also Softel, Inc. v. Dragon Med. & Sci. Commc'ns, Inc., 118 F.3d 955, 968 (2d Cir. 1997) (“[A] trade secret is any formula, pattern, device or compilation of information which is sued in one's business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.”). A trade secret “is not simply information as to single or ephemeral events in the conduct of the business; rather, it is a process or device for continuous use in the operation of the business.” Id. A claim for misappropriation under the DTSA requires that the plaintiff “possessed a trade secret that the defendant misappropriated.” Iacovacci v. Brevet Holdings, LLC, 437 F.Supp.3d 367, 380 (S.D.N.Y. 2020). “Trade secrets are a narrow category of confidential information; to survive a motion to dismiss, a party alleging that it owns a trade secret must put forth specific allegations as to the information owned and its value.” Elsevier Inc. v. Dr. Evidence, LLC, 2018 WL 557906, at *4 (S.D.N.Y. Jan. 23, 2018).

The NDA protects each side's confidential information. It defines EVRYTHNG's confidential information to include “[i]nformation relating to EVRYTHNG, Ltd.'s products, business processes, technology, and system requirements, quality specifications, testing parameters and methods, production facilities, equipment processes, layout, supplier and customer lists and names, pricing information, business or marketing plans and strategies, and sales plans, forecasts and volumes, distribution channels and capacity, product deployments, ” but only, if the information is not marked as confidential, if RBIS knew or reasonably would be expected to understand the information was confidential or proprietary. Dkt. No. 45-1 §§ 1, 7.

RBIS is prohibited under Section 3 of the NDA from using or disclosing EVRYTHNG's confidential information except for “business development” and under Section 20 from using or disclosing EVRYTHNG's Confidential Information to compete with EVRYTHNG.

However, under Section 8, RBIS has no obligation of confidentiality with respect to information:

(a) Which is, at the time of disclosure, available to the general public; or

(b) Which becomes at a later date available to the general public through no fault of Receiving Party and then only after said later date; or

(c) Which Receiving Party can demonstrate was in its possession before receipt from Disclosing Party; or

(d) Which Receiving Party can demonstrate was independently developed by Receiving Party or on behalf of Receiving Party without reference to the Confidential Information; or

(e) Which is disclosed to Receiving Party without restriction on disclosure by a third party who has the lawful right to disclose such information.

Id. § 8.

The Services Agreement contains a somewhat narrower description of Confidential Information. No. party argues that it protects information that is not also protected by the NDA. The restrictions it imposes on RBIS are similar to those under the NDA. Section 3.3 of the Services Agreement stated that RBIS would not “copy, modify, distribute, create derivative works from, decompile, disassemble, reverse engineer any portion of the [EVRYTHNG] Platform.” Dkt. No. 45-2 § 3.3. Section 8.3 prohibited RBIS from using confidential information “for any purposes other than exercising its rights and perform its obligations under this Agreement”; and Section 10.4 stated that, upon termination of the Services Agreement, RBIS would “make no further use of any Confidential Information, materials, or other items (and all copies thereof) belonging to [EVRYTHNG].”

EVRYTHNG has not shown that it provided trade secrets or confidential information to RBIS or, more particularly, that such trade secrets or information were misappropriated. In its initial submissions, EVRYTHNG claimed that RBIS misappropriated the following trade secrets or confidential information: (1) technical information regarding the architecture and functions of the EVRYTHNG Product Cloud and related products and services; (2) pricing information for EVRYTHNG's platform, services and products (which are not available publicly but are tailored to the customer based on a standard framework); (3) sales pipeline information; (4) customer lists; (5) apparel and footwear account targets; (6) commercial strategies; (7) competitor information; (8) product development plans; (9) integration materials; (10) case study demonstrations; (11) business roadmaps for EVRYTHNG.

These secrets and this information are defined at such a level of generality that they cannot give rise to trade secret protection. See Lawrence v. NYC Med. Practice, P.C., 2019 WL 4194576, at *5 (S.D.N.Y. Sept. 3, 2019) (“Listing general categories of information . . . does not adequately plead the existence of a trade secret.”); Elsevier, 2018 WL 557906, at *6 (“Alleging the existence of general categories of ‘confidential information,' without providing any details to ‘generally define the trade secrets at issue,' does not give rise to a plausible allegation of a trade secret's existence.”) (quoting Next Commc'ns, Inc. v. Viber Media, Inc., 2016 WL 1275659, at *4 (S.D.N.Y. Mar. 30, 2016)); Sit-Up Ltd. v. IAC/InterActiveCorp., 2008 WL 463884, at *11 (S.D.N.Y. Feb. 20, 2008) (A plaintiff's “burden includes describing the alleged trade secret with adequate specificity to inform the defendants what it is alleged to have misappropriated.”). They also cannot give rise to protection for confidential information. See Intrepid Fin. Partners, LLC v. Fernandez, 2020 WL 7774478, at *4 (S.D.N.Y. Dec. 30, 2020) (stating that “the general proposition that there is a broad range of confidential information that is valuable to [the plaintiff]” is insufficient).

After the pretrial conference in this case, EVRYTHNG supplied a list by bates number of the information that it claims was protected and was misappropriated. The list included descriptions of the EVRYTHNG system, general pricing information, and customer names.

Much, if not all, of the information that is contained in those documents or as to which EVRYTHNG claims trade secret or contractual protection was already public at the time of Avery Dennison's alleged misappropriation or EVRYTHNG did not take sufficient reasonable measures to protect. EVRYTHNG has not shown an entitlement to protection with respect to this information. See Waterville Inv., Inc. v. Homeland Sec. Network, Inc. (NV Corp.), 2010 WL 2695287 (E.D.N.Y. July 2, 2010) (“It is well settled that publicly available information cannot, as a matter of law, constitute a trade secret.”); Ashland Mgm't Inc. v. Janien, 624 N.E.2d 1007, 1013 (N.Y. 1993) (“[A] trade secret must first of all be secret.”).

For example, the evidence at the hearing and in the record demonstrates that EVRYTHNG itself published extensive information about the features of the EVRYTHNG Platform including detailed explanations of the platform's functionality, walkthroughs and tutorials on how to use the system, screenshots of components of the platform, descriptions of the product, applications, link checking, starter components, reusable widgets, supply chains solutions and consumer digital solutions, explanations of the information the platform could provide with respect to consumer engagement and the supply chain, and a description of the workings of the blockchain integration hub. Hr'g Tr. 10-23.

Avery Dennison and EVRYTHNG also displayed the EVRYTHNG product cloud system at multiple National Retail Federation (“TRF”) trade shows, including in 2016, 2017, and 2018. Dkt. No. 67 ¶¶ 17-20. Tens of thousands of participants attended these trade shows and the Avery Dennison booths where the EVRYTHNG platform was displayed were open to public attendees with no confidentiality restrictions. Representatives of EVRYTHNG and Avery Dennison viewed the EVRYTHNG system with members of the public and explained to them the functionality of the EVRYTHNG cloud product system, including the redirect from the product to unique experiences, example view of product information, track and trace information, and the platform dashboard. Id. ¶ 21. Information about the platform is available in the press and on YouTube. Id. ¶¶ 22-23. Its marketing materials-which were made available without restriction-also conveyed information about its high-level system architecture and user interface. Id. ¶ 13.

Not surprisingly, then, there is evidence of many other companies offering products with similar functionality to that of EVRYTHNG. See, e.g., Dkt. No. 73-6 at 12 (“Q: Do you know if there are any other relevant comparators in the market? A: Yes, there are. Q: Who are they? A: There are several. Some of those include companies like Eon Group, Click Tag, Scantrust, Kezzler, GoodsTag and many others.”). In essence, then, EVRYTHNG seeks to take Avery Dennison-and only Avery Dennison-out of a market populated by many others, and then only on the basis of information which it did not keep confidential itself. See, e.g., IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 584 (7th Cir. 2002) (“[A] trade secret claim based on readily observable material is a bust.”).

The same can be said for EVRYTHNG's customer information. To the extent that EVRYTHNG secured customers, those customers were listed publicly on the company's website. DX69.

EVRYTHNG has not demonstrated that Avery Dennison used or disclosed any of its confidential or trade secret information. The evidence at the hearing showed that Avery Dennison developed Atma independently of Janela. In discovery, EVRYTHNG had access to the Atma system. Its inspection of that system failed to yield any evidence that Avery Dennison used any part of Janela's source code or any confidential information in the Atma system.³The features of the system are all ones that are generally known and the evidence at the hearing demonstrates that the system was developed independently by a team in Europe none of whom had worked with EVRYTHNG or who borrowed from the EVRYTHNG platform.

3 EVRYTHNG complained that it had access to the Atma system for only four hours during discovery, Hr'g Tr. at 8, but there is no evidence that it would have discovered confidential information belonging to it even if it had longer with the system. Moreover, the Court did not limit EVRYTHNG's access. EVRYTHNG chose not to ask the Court for more time.

When pressed at the hearing to identify particular pieces of confidential information that Avery Dennison misused, the best EVRYTHNG did was to point out that the EVRYTHNG Product Cloud advertised that it employed “blockchain integration” and so too does Atma. Hr'g Tr. at 39. Its witness Guinard testified that both Atma and EVRYTHNG “allow[ed] authenticating supply chain events through blockchains” and that blockchain was “a feature that EVRYTHNG has pioneered and shared early on with Avery Dennison in the closed [sic] on numerous occasion [sic] [at their request to learn more about our blockchain strategy].” Dkt. No. 50 ¶ 21. However, EVRYTHNG has not presented any evidence of any specific component of its blockchain system that Avery Dennison misappropriated. The notion of using blockchain in connection with a cloud based digital identity system is not confidential; EVRYTHNG explained the basic operation of its blockchain integration hub on its website. There is no evidence that Avery Dennison misappropriated either EVRYTHNG's idea to use blockchain technology or any of its confidential information with respect to blockchain technology. Nor is there any evidence that the developers of Atma got the idea to use blockchain from EVRYTHNG.

EVRYTHNG failed at the hearing to demonstrate that anyone involved in the development of Atma even looked at the EVRYTHNG system or were told anything about it- other than that Atma should be independent of it. EVRYTHNG points out that Shono-Price and Pick were involved both with the Janela project and the Atma project. But EVRYTHNG has not presented any evidence that Shono-Price or Pick misappropriated any secret elements from EVRYTHNG that were used in Atma; in fact, the evidence shows that Shono-Price and Pick were both primarily salespeople with no relevant technical experience in computer programming or software development. Further evidence indicates that Shono-Price and Pick were not involved in the development of the Atma system, though they were involved in marketing it. Shono-Price testified at her deposition that there was a “firewall” between Janela sales staff and the Atma developers while the project was being developed. Shono-Price Dep. at 51. Pick testified that he did not join the Atma team until March 2021, when the new system launched. Pick Dep. at 39.

Nor has EVRYTHNG shown a likelihood of success on its argument that Avery Dennison misused its customer information. Avery Dennison presented undisputed evidence that it developed the initial strategy for which clients Janela would be marketed to. Hr'g Tr. 52-53. EVRYTHNG has not presented any evidence to show that Avery Dennison took any of the names of potential customers from EVRYTHNG or that EVRYTHNG even had a role in developing customer lists.

The record also does not support EVRYTHNG's allegation that that Avery Dennison used its pricing information for the Janela platform in violation of the Services Agreement. EVRYTHNG points to an internal slide deck on the pricing of Atma that in one slide contains what it describes as a “sanity check” comparing Atma's “Pilot pricing” with EVRYTHNG's Dkt. No. 52, Ex. P. But it does not demonstrate how or even if the information was used. It points to no deposition testimony or any other evidence that the EVRYTHNG pricing played any role in the Atma pricing, that Atma used any confidential EVRYTHNG information in making a bid for business with any client (or even that it had any information that might be useful in competing with EVRYTHNG), or that it disclosed any EVRYTHNG confidential information. The slide deck-which contains general information in any event-states on its face “[t]his has not been shared with anyone outside of atma, as of November 16.” Id.

EVRYTHNG also points to a pitch deck presented to XXXXX in October 2020, the same month when Murphy argued RBIS had breached its contracts. The pitch deck contains a slide comparing the EVRYTHNG platform to the Atma platform across a number of categories including “Fee Structure.” Id. Ex. UU. But EVRYTHNG has not identified any of its information that could enjoy trade secret or contract protection in the slide deck. The information about EVRYTHNG is general: it has a fee for the platform, for ADI, and for professional services, and does not employ a pay-per-use model. Id. There has been no showing that Avery Dennison used the deck to compete against EVRYTHING-as opposed to giving the customer the alternative of either model. Nor has there been a showing that the presentation caused (or could have caused) EVRYTHNG any injury.

The evidence at the hearing was that Atma's pricing model is bespoke. Dkt. No. 65 ¶ 31. There is no pricing list or one size fits all model.

Thus, Plaintiff's claim is based on speculation. See Strougo v. Barclays PLC, 194 F.Supp.3d 230, 233 (S.D.N.Y. 2016) (“[D]emonstrating likelihood of success on the merits ‘requires more than possibility of relief.'”) (quoting In re Elec. Books Antitrust Litig., 2014 WL 1641699, at *7 (S.D.N.Y. Apr. 24, 2014)).

III. Unfair Competition

“The essence of an unfair competition claim under New York law is that the defendant misappropriated the fruit of plaintiff's labors and expenditures by obtaining access to plaintiff's business idea either through fraud or deception, or an abuse of a fiduciary or confidential relationship.” Bytemark, Inc. v. Xerox Corp., 342 F.Supp.3d 496, 505 (S.D.N.Y. 2018) (quoting Telecom Int'l Am., Ltd. v. AT&T Corp., 280 F.3d 175, 197 (2d Cir. 2001)). New York law recognizes two theories of common law unfair competition: (1) palming off and (2) misappropriation. Bytemark, 342 F.Supp.3d at 505. Palming off refers to the “sale of the goods of one manufacturer as those of another.” Id.; see also Dastar Corp. v. Twentieth Cent. Fox Film Corp., 539 U.S. 23, 27 n.1. (2003) (“[Palming off] occurs when a producer misrepresents his own goods or services as someone else's.”). Misappropriation refers to “misappropriating the results of the skill, expenditures and labors of a competitor.” Bytemark, 342 F.Supp.3d at 505. EVRYTHNG claims that Avery Dennison has engaged in unfair competition by marketing the Atma platform using similar terminology as EVRYTHNG uses in describing its products. EVRYTHNG claims that it developed significant goodwill for these terms, “which EVRYTHNG has developed through years of labor and tens of millions of dollars in research and development.” Dkt. No. 45 ¶¶ 3-7.

EVRYTHNG has not shown a likelihood of success on its “palming off” or its “misappropriation” claim. EVRYTHNG alleges that Avery Dennison developed a competing product in an unfair manner; it does not allege, as required for a palming off claim, that Avery Dennison is marketing that product as EVRYTHNG's. See Carson Optical Inc. v. eBay Inc., 202 F.Supp.3d 247, 268 (E.D.N.Y. 2016) (holding that defendant was not palming off where “plaintiff [did] not allege that defendant is promoting defendant's products under plaintiff's name”). Selling a competing product is not “palming off.”

Nor does the alleged conduct constitute misappropriation. EVRYTHNG has not alleged that Avery Dennison misled anyone about the identity of its product; it merely alleges that Avery Dennison marketed a competitor. Nor has EVRYTHNG alleged that Avery Dennison obtained any information unfairly. It alleges that Avery Dennison received confidential information through contractual arrangements. To that extent, the unfair competition claim is duplicative of EVRYTHNG's contract and trade secrets claims and cannot go forward. See Reed Const. Data Inc. v. McGraw-Hill Cos., Inc., 745 F.Supp.2d 343, 353 (S.D.N.Y. 2010) (“A claim of misappropriation ‘must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract.'”) (quoting Productivity Software Int'l, Inc. v. Healthcare Techs., Inc., 1995 WL 437526, at *8 (S.D.N.Y. July 25, 1995)).

IV. Irreparable Injury

In light of the Court's conclusion that EVRYTHNG has not shown a likelihood of success, the Court need not reach its claim of irreparable injury. See Two Locks, Inc. v. Kellogg Sales Co., 68 F.Supp.3d 317, 333 (E.D.N.Y. 2014) (“The Court finds that the Plaintiff has failed to establish a likelihood of success, or a substantial question, as to the merits of its contractual claims. Therefore, the Court need not reach the Plaintiffs arguments with respect to the balance of equities or irreparable harm.”); Greenlight Cap., LP. v. Apple, Inc., 2013 WL 646547, at *13 (S.D.N.Y. Feb. 22, 2013) (“Although the Court concludes that [the plaintiff] would be similarly unable to meet his burden regarding the remaining factors relevant to the preliminary injunction analysis-irreparable harm, balance of equities, and public interest-the Court need not reach those questions given his failure to establish the first element, likelihood of success on the merits.”).

CONCLUSION

For the foregoing reasons, EVRYTHNG's motion for a preliminary injunction is DENIED. The Clerk of Court is respectfully directed to close Dkt. No. 41.

SO ORDERED.