Competitive intelligence, marketing, and confidentiality: The Reed - McGraw-Hill Lawsuit

A story of competitive intelligence with marketing intent has come to earth with the filing of a lawsuit by Reed Construction Data against McGraw-Hill Construction Dodge.

The suit charges that Dodge has unlawfully accessed confidential and trade secret information from RCD since 2002 by using a series of fake companies to pose as RCD customers.

The lawsuit, filed in the U.S. District Court for the Southern District of New York, seeks an unspecified amount in lost profits and punitive damages, trial by jury, and injunctive relief as a result of Dodge’s misuse of RCD’s proprietary construction project information, Reed announced in a news release.

The complaint charges that Dodge hired consultants to subscribe to RCD’s confidential data under the cover of fake names and companies. Dodge then allegedly manipulated the information to create misleading comparisons between Dodge’s and RCD’s products and services in an effort to mislead the marketplace.

The complaint cites eleven counts of misconduct by Dodge, including fraud, misappropriation of trade secrets, misappropriation of confidential information, unfair competition, tortious interference with prospective economic advantage, violation of New York’s general business law, violation of the RICO Act, RICO conspiracy, monopolization, attempted monopolization and unjust enrichment.

“McGraw-Hill Dodge has used our information to deceive and confuse the market about RCD and the data we offer,” said Iain Melville, CEO, Reed Construction Data. “This was an attempt by Dodge to force RCD out of business and obtain a monopoly over the construction data industry.”

The story is described in greater detail in the actual court filing, which can be downloaded from Reed's site here.

Business to Business Magazine reported this response from a McGraw-Hill spokesperson:

“We intend to vigorously defend ourselves against Reed Construction's legal claims. We take these allegations very seriously and are committed to ensuring that all employees comply with our Code of Business Ethics.”

The two competitors have been battling within the construction information marketplace for years. The Reed lawsuit alleges that McGraw-Hill used data obtained from unauthorized users hired by McGraw-Hill to adjust its services and adapt its marketing programs to make it look like it was delivering a more useful service. Reed's contract language includes specific provisions regarding non-disclosure of confidential information.