Court Recommends That SambaSafety’s DTSA Claim Against InformData Proceed

Overview

The plaintiff, SambaSafety, alleges its driver compliance software solutions, including tools that aggregate state motor vehicle record data into single-driver reports and its proprietary continuous monitoring system, contain protectable trade secrets such as source code, object code, executables, database schema, and data tables. The complaint traces the technology’s origin to SambaSafety’s 2014 acquisition of Softech International, Inc. from founder Efrain Logreira. SambaSafety contends that the defendants were positioned to go to market with their competing products faster than independent development would allow due to the alleged misappropriation. Specifically, SambaSafety alleges that Logreira retained the original software after selling Softech, which he then used to found Sentinel in 2018 to accelerate competing offerings. InformData Holdings, LLC acquired Sentinel in 2024 and rebranded it as InformData Risk Solutions, which competed directly with SambaSafety allegedly using SambaSafety’s proprietary software retained by Logreira. SambaSafety also alleges Logreira recruited former Softech personnel now at SambaSafety.

Case Information

Safety Holdings Inc. v. Sentinel Information Systems LLC, et al., 1:24-cv-01224 (D. Del.)

Plaintiff: Safety Holdings, Inc. d/b/a SambaSafety

Defendants: Sentinel Information Systems LLC d/b/a InformData Risk Solutions; InformData Holdings, LLC; InformData LLC; 305 DevCo, Inc.; Efrain Logreira

Judges: Sherry R. Fallon (US Magistrate Judge); Richard G. Andrews (US District Judge)

Motion to Dismiss and Outcome

InformData moved to dismiss the DTSA claim, arguing, inter alia, that misappropriation was inadequately pleaded. US Magistrate Judge Sherry R. Fallon recommended that the motion to dismiss be denied.

• Improper Acquisition: InformData argued that the complaint only alleges wrongful acquisition of SambaSafety’s proprietary software by Logreira. The court, however, determined that the complaint plausibly alleged that InformData acquired the trade secrets knowing or having reason to know they were obtained by improper means, including allegations that Logreira had sold the technology to SambaSafety via Softech yet retained the original software and later used it in developing products for InformData.

• Improper Use: InformData further argued that the complaint does not allege specific facts regarding InformData’s improper use of SambaSafety’s trade secrets. The court concluded that the complaint plausibly alleged InformData used SambaSafety’s trade secrets to develop and market competing driver compliance solutions and to accelerate product development, which qualifies as “use” under DTSA. In reaching this conclusion, the court noted that “use of a trade secret encompasses all the ways one can take advantage of trade secret information to obtain an economic benefit, competitive advantage, or other commercial value, or to accomplish a similar exploitative purpose, such as assist[ing] or accelerat[ing] research or development.” The court applied an even more expansive definition of use as including “marketing goods that embody the trade secret [and] employing the trade secret in manufacturing or production[.]”

Why It Matters

This court’s expansive application of what constitutes the “use” of a trade secret under DTSA enables plaintiffs to pursue DTSA claims not only against an alleged misappropriator, but also third parties who indirectly benefited from the misappropriation or even marketed products or services that “embody” the misappropriated trade secret.