Outlogic v NybSys Initial Complaint

COMPLAINT-JURY TRIAL DEMANDED 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Alexei Klestoff (SBN 224016) ZWILLGEN LAW LLP 369 Pine Street, Suite 506 San Francisco, CA 94104 Telephone: (415) 590-2335 Facsimile: (415) 636-5965 alexei@zwillgen.com Sheri Pan (SBN 316136) ZWILLGEN PLLC 183 Madison Avenue, Suite 1504 New York, NY 10016 Telephone: (646) 362-5590 sheri@zwillgen.com Nicholas Jackson (pro hac vice application forthcoming) ZWILLGEN PLLC 1900 M Street NW, Suite 250 Washington, DC 20036 Telephone: (202) 296-3585 nick@zwillgen.com Attorneys for Plaintiff OUTLOGIC, LLC UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OUTLOGIC, LLC Plaintiff, vs. NYBSYS, INC. Defendant. Case Number: COMPLAINT JURY TRIAL DEMANDED Case 5:21-cv-09592-VKD Document 1 Filed 12/11/21 Page 1 of 12

1 COMPLAINT-JURY TRIAL DEMANDED 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Plaintiff OUTLOGIC, LLC (“Plaintiff”), brings this action and alleges as follows upon personal knowledge as to itself and its own acts and experiences, and as to all other matters, upon information and belief pursuant to the investigation of Plaintiff and its counsel. NATURE OF THE ACTION 1. Plaintiff Outlogic, LLC (“Outlogic” or “Plaintiff”) is a provider of aggregated geolocation information and insights, which it licenses to a range of businesses for their internal use, including for public health, civic technology, market research and other purposes. Outlogic is the successor in interest to X-Mode Social, Inc. (“X-Mode”). Outlogic (and X-Mode before it) invests substantial resources in developing and protecting its proprietary data (the “X-Mode Data”) against improper use or dissemination, and derives great value from the fact that such data is not generally available and can only be obtained through a paid, restrictive license. 2. X-Mode and Nybsys, Inc. (“Nybsys”) were parties to a contract dated April 27, 2020, pursuant to which X-Mode licensed the X-Mode Data to Nybsys, subject to detailed confidentiality and non-disclosure obligations. Nybsys has breached that agreement and misappropriated X-Mode’s trade secrets by sublicensing the X-Mode Data in stark violation of the parties’ agreement and applicable law, resulting in damage to X-Mode. The unlawfully sublicensed data was distributed to third parties including competitors, leading to enormous loss of revenue and business opportunities to X-Mode, as data that X-Mode expended significant resources developing was disseminated throughout the data ecosystem. Nybsys further breached that agreement by refusing to pay a substantial portion of the fees it owed to X-Mode for the license period during which it was receiving the X-Mode Data (specifically for the months February and March 2021), totaling at least $72,000 plus interest. PARTIES 3. Outlogic, LLC is a Virginia limited liability company. Its principal place of business is Reston, Virginia. Outlogic is a successor-in-interest to X-Mode Social, Inc., with X-Mode having assigned to Outlogic substantially all of its assets (including without limitation all claims, causes of action, intellectual property rights, and remedies against infringements thereof) in or around May 2021. Case 5:21-cv-09592-VKD Document 1 Filed 12/11/21 Page 2 of 12

2 COMPLAINT-JURY TRIAL DEMANDED 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4. X-Mode Social, Inc. is a Delaware corporation having its principal place of business in Reston, Virginia. X-Mode is no longer an operational entity for purposes of the activities alleged herein. However, because the events herein occurred with respect to X-Mode (as Outlogic’s predecessor-in-interest), for ease of reference the complaint uses “X-Mode” to refer to Plaintiff in both its current and prior form. 5. Nybsys, Inc. is a California corporation. Its principal place of business is San Jose, California. Its website lists its San Jose address at 2674 North 1st Street #220, San Jose, CA 95134. JURISDICTION AND VENUE 6. This Court has subject matter jurisdiction over the federal claims under 28 U.S.C. §§ 1331 and 1338(a) and (b). This Court has supplemental jurisdiction over the state law claims pursuant to 28 U.S.C. § 1367. 7. This Court has personal jurisdiction over Nybsys because Nybsys is incorporated in the state of California, and has its principal place of business in San Jose, California. 8. Venue is proper in this District under 28 U.S.C. § 1391(b) because Defendant resides in this District, and also because a substantial part of the events giving rise to Plaintiff’s claims occurred in this District. INTRADISTRICT ASSIGNMENT 9. Assignment to the San Jose Division is proper under Northern District of California Civil Local Rule 3-2. Under Civil Local Rule 3-2(c) and the Court’s Assignment Plan (General Order No. 44), intellectual property actions may be assigned to any division in the District Court for the Northern District of California. Assignment to the San Jose Division is also proper under Civil Local Rule 3-2(e) because a substantial part of the events or omissions which give rise to the claims asserted herein occurred in Santa Clara County and Defendant Nybsys’s principal place of business is located in Santa Clara County, California. FACTUAL BACKGROUND a. X-Mode’s Proprietary Data 10. During all times in question, X-Mode’s primary business model was to license its proprietary X-Mode Data to help commercial and non-commercial organizations perform research Case 5:21-cv-09592-VKD Document 1 Filed 12/11/21 Page 3 of 12