February 27, 2024, has brought some surprising news: The digital music distributor TuneCore is suing another distribution company, CD Baby, over allegedly stolen trade secrets. Following the lawsuit announcement, the federal court has “temporarily enjoined” the defendant distributor from “knowingly disseminating and/or using any of TuneCore’s confidential information.”
Two digital music distributors at war
So, what actually happened? Tunecore filed a lawsuit back in late November 2023, naming as defendants CD Baby and its recently-recruited employee, Faryal Khan-Thompson. According to the LinkedIn profile, Khan-Thompson served as TuneCore’s VP of international from 2020 until 2023. In June 2023, she moved on to CD Baby, becoming its SVP of marketing and community.
According to TuneCore’s filed complaint, after leaving TuneCore and joining CD Baby, Khan-Thompson has “repeatedly hacked into TuneCore’s secured cloud server to access and download confidential documents and information.” Additionally, her contract at TuneCore was terminated due to her particular outside activities that “constituted a material breach of TuneCore policies.”
TuneCore claims that during her last days at the company, Kgan-Thompson created “a second set of credentials” using her personal email address to access “Tunecore’s secured cloud network.” She allegedly viewed and/or downloaded over 50 “confidential and proprietary documents in at least 103 separate instances,” including the company’s 2023-2024 “Strategy Road Map” and list of the most promising TuneCore clients for 11 different global regions. This act was in breach of her pre-employment “proprietary information agreement,” as well as the terms of her separation agreement.
CD Baby itself is being sued for unfair competition, tortious interference with the contract, and accessing TuneCore’s network and using its confidential information.
As Digital Music News has informed, a near-term resolution of the conflict between the two parties seems somewhat unlikely. In the meantime, until May 1, CD Baby is barred from “knowingly disseminating and/or using any of TuneCore’s confidential information” from its network. Furthermore, Khan-Thomspon is prohibited from accessing, altering, or deleting her Google Workspace user account, and contacting anyone listed in the confidential materials. Reportedly, the “forensic examination of electronic accounts and devices” has already begun, hopefully providing valuable evidence soon.
