SkyBell Technologies v. Alarm.com: Reverse Engineering Prohibitions and the Statute of Limitations Discovery Rule in Trade Secrets Litigation

SkyBell Technologies, Inc. brought claims against Alarm.com, Inc. under the Defend Trade Secrets Act (DTSA) and the Virginia Uniform Trade Secrets Act (VUTSA) for alleged misappropriation of trade secrets related to video doorbell technology.

SkyBell, founded in 2013, developed proprietary technology for connected video doorbells, including backend platform software enabling secure communication between doorbells, home security systems, and smartphones. In November 2015, the parties entered into a Development and Integration Agreement (DIA) under which SkyBell manufactured video doorbells for Alarm.com and granted Alarm.com a term-limited license to access SkyBell’s trade secrets for purposes of integrating the doorbells with Alarm.com’s home security platform. The DIA required Alarm.com to maintain the confidentiality of SkyBell’s trade secrets and prohibited both parties from reverse engineering the other’s software or creating derivative works of it. SkyBell unilaterally terminated the DIA in October 2022, effective November 2022.

SkyBell alleged that, after the DIA’s termination, Alarm.com released competing doorbells that were “blatant knockoffs” of SkyBell’s products, incorporating SkyBell’s proprietary technology. SkyBell further alleged that Alarm.com had been poaching SkyBell employees for years based on their knowledge and use of SkyBell’s trade secrets. 

Alarm.com moved to dismiss, arguing that SkyBell’s claims were barred by the three-year statute of limitations applicable under both the DTSA and the VUTSA. Both statutes require that a claim be brought within three years after the alleged misappropriation “is discovered or by the exercise of reasonable diligence should have been discovered.” Alarm.com contended that the information underlying SkyBell’s claims was available to SkyBell well before the July 3, 2022, time-bar date — specifically, that SkyBell knew it had entrusted its trade secrets to a company that lacked native doorbell engineering capability, that Alarm.com had been hiring SkyBell’s employees, and that Alarm.com had launched its own competing doorbells. Alarm.com argued that if SkyBell had investigated these facts, it would have discovered the alleged similarities in source code, protocols, and other technologies that formed the basis of the Complaint.

SkyBell countered that Alarm.com’s doorbell sales during the DIA could not have triggered a duty to investigate because the DIA expressly permitted Alarm.com to use SkyBell’s trade secrets in connection with Alarm.com’s products for the duration of the agreement, which did not terminate until November 2022. On this theory, any misappropriation did not begin until after the DIA expired, making the Complaint timely.

Case Information

SkyBell Technologies, Inc. v. Alarm.com, Inc., No. 1:25-cv-01105 (RDA/WBP) (E.D. Va. 2026)

Plaintiff: SkyBell Technologies, Inc.

Defendant: Alarm.com, Inc.

Judge: Hon. Rossie D. Alston Jr.

Analysis and Outcome

The court began by noting the general rule that a statute of limitations defense is an affirmative defense that is “more properly reserved for consideration on a motion for summary judgment,” and that dismissal on this basis is appropriate only in the “relatively rare circumstances where facts sufficient to rule on an affirmative defense are alleged in the complaint.” Applying this framework, the court denied Alarm.com’s motion to dismiss.

Critically, the court held that even if the DIA did not give Alarm.com a license to use SkyBell’s trade secrets in its own products, SkyBell could not reasonably have been expected to investigate further because SkyBell was itself contractually bound under the DIA not to “decompile, disassemble, or otherwise reverse engineer [Alarm.com’s] software or attempt to discover any source code or underlying ideas or algorithms of [Alarm.com’s] software.” 

The court emphasized that Alarm.com did not dispute that the kind of investigation it argued SkyBell should have conducted would have required SkyBell to breach this contractual provision. Nor did Alarm.com cite any authority supporting the proposition that “reasonable diligence” requires a would-be plaintiff to breach its own contractual obligations.

The court also rejected the argument that employee poaching should have put SkyBell on notice. The allegations in the Complaint were too minimal to establish notice: it was unclear when the poaching began, who was involved, what roles they held, or whether there was reason to suspect they had taken trade secrets. Moreover, SkyBell alleged that it had required departing employees to agree to protect its trade secrets and to return any confidential information during the offboarding process. Viewing these facts in the light most favorable to SkyBell, the court found that SkyBell had gone “to great lengths to protect its trade secrets” and that, without the benefit of hindsight, the court could not conclude that these allegations established that SkyBell was on notice. 

Key Takeaway

This decision offers a notable addition to the statute of limitations reasonable diligence jurisprudence under the DTSA and VUTSA. Plaintiffs confronted with disputes regarding when they should have discovered trade secret misappropriation sooner should consider whether defendant’s own behavior, to include contractual restrictions, would have prevented them from conducting the very investigation that the defendant argues should have occurred. A reverse engineering prohibition in the parties’ own agreement, combined with affirmative reassurances from the defendant, may together suffice — at least at the motion to dismiss stage.