STS: 'They stole our ideas.'
Delaware-based company Ticket Innovations, doing business as Season Ticket Solutions (STS), has filed a multimillion-dollar lawsuit against Ticketmaster, citing breach of a non-disclosure agreement and misappropriation of trade secrets.
The suit, filed Jan. 13 in Los Angeles County Superior Court, alleges that Ticketmaster used confidential information, gathered in 2001 when it was conducting due diligence for a proposed $12.5 million purchase of TST, to create competing products shortly thereafter. The suit also alleges breach of a non-disclosure agreement and missappropriation of trade secrets.
STS says it invested millions of dollars and three years in developing its STS Exchange and STS Group software for sports teams, venues and others to distribute, manage and market season tickets online.
The suit says that after notifying TST that the purchase would not take place, Ticketmaster announced its TeamExchange and GroupManager services, which the suit says were nearly identical to STS Exchange and STS Group.
"They told us they were going to buy us, then they stole our ideas," says STS co-founder Tagg Romney.
"It wasn't patented, but they had signed a non-disclosure agreement saying they wouldn't use anything they learned," he adds. "They copied our product, put a different skin on it and called it their own."
STS also contends that Ticketmaster interfered in its relationship with the National Hockey League, as well as with other professional sports leagues and teams, which expressed interest in licensing STS software but ceased negotiations at Ticketmaster's request.
"Essentially, they took our clients, and we were left with nothing," says Romney. "When they copied our product they were able to use their market clout to steal our customers."
The suit seeks actual damages not less than $12.5 million, monetary damages "in an amount by which Ticketmaster was unjustly enriched" and royalties. Romney says he will seek punitive damages exceeding $100 million at trial.
Ticketmaster has been on the receiving end of lawsuits before. Most recently, the ticketing arm of jam band String Cheese Incident sued the company, claiming it had monopolized the industry by using its market power to prevent competition.
According to that suit, Ticketmaster tried to block SCI from selling directly to fans, claiming that the practice violated Ticketmaster's exclusive contracts with venues and promoters. The suit was settled out of court last year.
Ticketmaster representatives could not be reached at deadline, but the company typically does not comment on pending lawsuits.