May 26, 2022
DALLAS — May 26, 2022 —On May 24, 2022, the District Court dismissed all claims asserted by DatabaseUSA against Data Axle. After almost 5 years in litigation, during which DatabaseUSA attempted to locate evidence and legal authorities to support its claims, DatabaseUSA has failed to present any evidence to support its allegations that Data Axle received, used, or disclosed the trade secrets of DatabaseUSA. The District Court declared that DatabaseUSA’s trade secret claim is “a non-starter.” As further failure of proof, though DatabaseUSA claimed it was damaged in the amount of $36.425 million, the District Court held that there was no evidence to support any claimed damages or evidence from which any loss could even be inferred. There is “a complete absence of evidence that DatabaseUSA was damaged . . .” concluded the District Court. In short, the District Court in effect fully exonerated Data Axle.
A former employee of DatabaseUSA (Van Gilder) contacted Data Axle and advised that he could substantiate the misconduct of DatabaseUSA and Vin Gupta, and had documents that may help prove such misconduct. Counsel for Data Axle prevented Van Gilder from communication with Data Axle in that regard, and instead Counsel received and analyzed the information apart from Data Axle. This careful process was disclosed in court filings. Notwithstanding, DatabaseUSA then sued Data Axle, its Counsel and Van Gilder for allegedly using and disclosing that information.
The District Court found that Data Axle’s “counsel, was aware of the risks associated with providing that information to his client. Receiving those documents as possible evidence of DatabaseUSA’s misconduct, but keeping them away from [Data Axle], is not only plausible—it would have made perfect sense.”
Recall that in August 2018, a jury unanimously found DatabaseUSA and its founder Vinod Gupta liable on all seven counts, including infringement of Data Axle’s database copyright and trademarks, unfair competition, false advertising and breach of various contracts. The trial court concluded that Gupta and DatabaseUSA acted “in bad faith, intentionally and with a desire to suppress the truth, destroyed evidence” and willfully and deliberately violated federal laws. The trial court entered judgments against DatabaseUSA for $11.2 million and Gupta for $10 million, and ordered both to pay interest and Infogroup’s attorney fees and costs, and permanently enjoined them from using Data Axle’s tradenames, making false advertising statements and participating in future unfair competitive practices. The 8th Circuit found that the trial court and jury correctly found Gupta and DatabaseUSA liable and upheld the judgments in all respects. Unable to pay the Judgment, in 2019 DatabaseUSA filed for Chapter 11 bankruptcy protection in Nevada, where Data Axle is seeking to hold Gupta, his family office Everest Group, LLC and other conspirators liable for the Judgment.
“We are pleased that the Court summarily dismissed all of DatabaseUSA’s claims without the need for a trial, finding that ‘[t]here is nothing that undermines [the Data Axle] witnesses’ credibility . . . .’ Data Axle remains hopeful that the Judgment against DatabaseUSA, now in excess of $12.2 M, will be satisfied in the Bankruptcy proceeding” said Greg Scaglione, lead trial counsel for Data Axle, who heads the National Litigation Practice at Koley Jessen.
“Our team continues to work tirelessly to build databases of the highest quality and accuracy,” said Data Axle Chairman and CEO Michael Iaccarino. “We will continue to pursue collection of our judgment against DatabaseUSA and its conspirators through the bankruptcy court. We are
confident that we will yet again prevail.”
All questions regarding the outcome or status of the case should be referred to Data Axle’s lead counsel, Greg Scaglione at Koley Jessen.
About Data Axle
Data Axle is a leading provider of data, data-driven marketing and real-time business intelligence solutions for enterprise, small business, nonprofit and political organizations. The company’s solutions and award-winning Axle Agency enable clients to acquire and retain customers and enhance their user experiences through proprietary business and consumer data, artificial intelligence/machine learning models, innovative software applications and expert professional services. Data Axle’s cloud-based platform delivers data and data updates in real-time via APIs, CRM integrations, SaaS and managed services. Data Axle has 45+ years of experience helping organizations exceed their goals. For more information, visit www.data-axle.com.