Thank you for sharing!

Your article was successfully shared with the contacts you provided.
It’s a victory that may even have William Shatner singing on key. Priceline.com, whose ads feature the former Captain Kirk on the nightclub circuit, has successfully defended itself in a trade secrets suit brought by a San Francisco company. On Tuesday, U.S. District Judge Charles Legge gutted the high-profile case, granting summary judgment for Priceline as to claims that it built its business by stealing, and then patenting, Marketel International’s particular business method. Only claims that Priceline falsely advertises itself as the inventor of the technology in question remain intact. The 2-year-old suit alleged that Priceline founders stole the business method after Marketel sought investment from them more than a decade ago. Legge ruled that any non-disclosure agreements signed between the parties were null and void by the time Priceline was founded in 1998. Lawyers for Priceline said they were “thrilled” with the ruling. “The remaining claim for false advertising is a non-jury, non-damages issue,” said Sheryl Medeiros, of counsel at Skadden, Arps, Slate, Meagher & Flom. A lawyer for Marketel said the company can initiate a challenge with the U.S. Patent and Trademark Office. Whether it drops the rest of its case or pursues it to its end, Legge’s decision will likely be appealed to the Federal Circuit U.S. Court of Appeals, which handles patent disputes. “It will make for some interesting issues,” said Steven Shapiro, a partner at Mitchell, Silberberg & Knupp. The victory was huge for Connecticut-based Walker Digital, Priceline’s intellectual backbone. Founded by Jay Walker, the company patents business methods — a sometimes controversial practice — and then creates businesses around them. Priceline was the first, but Walker Digital holds 50 other such patents and more than 300 are pending. Industry watchers closely followed the suit because it challenged Priceline’s underlying patent, which allows customers to bid for travel-related products in a kind of reverse auction. Priceline customers submit a bid for items such as an airline ticket or rental car, and the bids may be accepted or rejected by a number of companies capable of providing the service. Marketel employed similar techniques in the early 1990s with an ill-fated startup called BookIt!, although the medium was fax machines and touch-tone telephones instead of the Internet. Many of the facts giving rise to the complaint are disputed, but Marketel’s vice president, William Perell, did meet with high school buddy Andre Jaeckle in an effort to secure funding for the company. Marketel claimed Jaeckle signed a non-disclosure agreement protecting the company’s intellectual property. Jaeckle knew Walker from college, and apparently put him in touch with Perell, although the extent of contact between Walker and Perell is also disputed. But Legge ruled that the non-disclosure agreements lasted only four years, rejecting Marketel’s argument that certain aspects of the agreement weren’t subject to the time agreements. Legge’s ruling may also have some impact on a suit filed by Priceline in a Connecticut federal court against Microsoft Corp. In that suit, Priceline alleges Microsoft borrowed its technology for its Expedia.com travel site. As part of its defense, Microsoft pointed to Marketel’s suit, questioning whether Priceline even owned the technology it claimed Microsoft stole. Microsoft also cross-sued Priceline, challenging the ownership of its patent. But Microsoft’s lead trial lawyer in the case said Legge’s ruling was insignificant to the fight between the nation’s leading software company and Priceline, calling the Marketel defense a “minor claim.” “I don’t think it’s going to have any impact on our case,” said Pennie & Edmonds partner Jonathan Marshall. “I think Priceline’s got bigger problems than Marketel these days,” he added. Indeed, they do. On Wednesday, Priceline’s stock dipped below $2, from a high earlier this year of more than $104. It has recently been hit with a flood of securities fraud cases. And recent SEC filings report that Priceline is having its legal fees in the Marketel and Microsoft suits reimbursed by Walker Digital, which is having problems of its own. Last month, Walker Digital fired 100 workers as part of a restructuring, prompting the Connecticut attorney general’s office to investigate possible employment law violations. Legge cancelled a scheduled trial date for Marketel International v. Priceline.com, 99-0161, and asked lawyers to come back to court in January to “reboot,” after deciding where the case will proceed from here.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.