For James Pooley, who is an international trade secret expert and lawyer with experience in major lawsuits, it is “highly unusual” for a trade secret case to file a complaint with the name of the defendant redacted. In fact, as he stresses, he cannot remember seeing such instance, although he adds that in some state court practices it is common to name “doe” defendants when one does not know the defendant’s names yet.

Beyond the desire for damages, trade secret court cases are typically used as a means to create maximum discomfort for defendants, including challenging their trustworthiness and public image, and thus exerting pressure on them to settle.

However, given the contents of the complaint, Pooley says it is easy to understand why Nasdaq sought to redact the defendant’s identity and why the court would have been willing to agree. “That is because Nasdaq wouldn’t want the filing of the complaint to act as an advertisement for the defendant’s website, which is a platform for misappropriation of the Nasdaq data,” he tells IAM.

Yet Pooley does not expect an easy path for Nasdaq considering the specificity of the industry and type of information at issue. “It is always something of a challenge to run a business that relies on licensed distribution of data to multiple customers. In order to make that business model work, the company has to be able to amortise the investment in gathering and curating the data, so that it can be ‘re-sold’ to multiple customers at a fraction of the cost of developing it from scratch,” he says.

To do that, the business has to rely on restrictive covenants in licence agreements. If someone acquires the data at the subscription price and redistributes it to its own paying customers it can easily make a profit – even if its resell rates are lower. But doing that undercuts the originator and makes its business model, which is licensing to multiple customers, unsustainable, emphasises Pooley.

According to him, for this reason, Nasdaq’s lawsuit is a “very good example” of a trade secret that is a valuable compilation of data which has to be closely controlled in the process of sharing it. “That’s why a lawsuit like this makes a lot of sense: Nasdaq can’t run its business if it allows someone to take its licensed feed and re-distribute it in violation of the licence,” says Pooley.