2 minute read | April.11.2018
It’s a date! Or a dating app, at least. Texas courts are ablaze with competing allegations from online dating companies Match and Bumble that each has misappropriated the other’s trade secrets. Swipe right (or up) to learn more.
Match Group LLC, which owns the Tinder dating app, ignited the dispute on March 16, 2018 by suing Bumble Trading Inc. in federal district court in Texas for a host of intellectual property claims including trade secret misappropriation under the federal Defend Trade Secrets Act (DTSA) and the Texas Uniform Trade Secrets Act (TUTSA). Three Match employees, who worked on Tinder as Chief Creative, Vice President of Design, and Vice President of Marketing, left Match and later founded Bumble. Match alleges that these former employees improperly used Match’s trade secrets related to the development of an “undo” feature for Tinder, which they had obtained while working at Match, to implement a nearly identical “backtrack” feature for Bumble’s competing dating app.
Bumble responded by bringing its own swarm of claims against Match in Texas state court on March 28. Bumble alleges that Match’s lawsuit was brought in a bad faith attempt to lower Bumble’s valuation in the eyes of potential investors, clearing the way for Match to acquire Bumble at a discount. Bumble and Match had been in acquisition negotiations over the past year, and Bumble had already rejected two lowball offers from Match. According to Bumble, Match then represented in February 2018 that it needed additional proprietary information from Bumble to make a higher bid. Bumble complied, sharing propriety information that included trade secrets such as Bumble’s marketing strategy and financial and performance data. But Bumble asserts that it never received the promised offer; instead, three weeks later Match served its lawsuit. Bumble claims that Match’s conduct constitutes trade secret misappropriation under the Texas UTSA because Match obtained Bumble’s trade secrets under false pretenses with the intent to leverage them for its own financial benefit.
While it’s too soon to evaluate the merits of Match’s and Bumble’s respective misappropriation claims, trade secrets disputes in Texas often have unique twists. As we previously reported, TUTSA’s definition of trade secrets, revised in 2017, is extremely broad, including “all forms and types of information . . . whether tangible or intangible and whether or how stored.” We have also noted that the inevitable disclosure doctrine, impermissible under the DTSA and in most states, remains alive in Texas. And as we have discussed, under Texas law Bumble could obtain injunctive relief by showing that Match has possession of its trade secrets and is in a position to use them, without being required to show that Match is actually using them.
Will Match and Bumble “backtrack” their claims and hook up? Or will Tinder feed a trade secrets conflagration in the Texas courts? We’ll report back as the story develops.