Yahoo lawsuit alleges employee stole trade secrets after receiving Trade Desk job offer

A civil lawsuit alleges a former Yahoo employee stole valuable intellectual property when he downloaded approximately 570,000 pages of proprietary source code, ad placement algorithms, internal strategy documents and more after obtaining a job posting from The Trade Desk, a direct competitor to Yahoo’s advertising technology. arm.

A civil lawsuit says Yahoo Ad Tech, along with Oath Holdings — a financial subsidiary of Yahoo Inc — is suing Qian Sang, who was previously a principal researcher at the company, for $5 million plus punitive damages. The lawsuit was filed in a circuit court in Fairfax, Va., on April 29.

Yahoo claims Sang stole proprietary information about Yahoo AdLearn, the technological backbone of the organization’s demand-side platform (DSP) – a digital marketplace for real-time ad buying.

“Within minutes of receiving a job offer from a direct industry competitor, Sang downloaded over 500,000 files onto personal devices, including data consisting of source code, backend advertising architecture, algorithms that control ad placement and associated revenue tracking on the Yahoo Demand Side Platform … and strategy behind Yahoo’s backend advertising technology,” the plaintiffs allege in the filing. sophisticated Yahoo commercials in hand, Sang then joined The Trade Desk, Inc…a digital advertising platform and competitor to Yahoo, as a data scientist.”

AdLearn works by providing real-time data inputs to machine learning (ML) algorithms, which process the information to intelligently place ads in real time based on a customer’s predefined factors. Yahoo claims that AdLearn stands out from competing technologies and is uniquely positioned to deliver results to advertisers who use it; the company claims that “by continuously calculating campaign-level bid adjustments,” the solution “maximizes a customer’s return on investment,” which in turn builds customer loyalty.

According to the filing, the technology was developed by research and engineering employees of Yahoo Ad Tech. While the research team performs data mining and develops ML capabilities, the engineering team is primarily responsible for developing the code to implement AdLearn’s algorithms.

At the time of his resignation in February, the suit says Sang was the top leader of one of four unique research teams tasked with developing elements of AdLearn. Specifically, he directed the Budget Expenditure Pace Control System – the system responsible for constantly adjusting the price and frequency of bids to meet a customer’s preset parameters in the DSP. Yahoo alleges that, in his role, Sang “regularly” worked with colleagues on the engineering side, manipulating source code and determining how to implement it.

Sang, who holds a doctorate in electrical and computer engineering from the University of Virginia, was employed by the company for nearly six years. Initially, he joined AOL in 2015 as a Principal Investigator, just a month before AOL was acquired by Verizon Communications and subsequently renamed Oath Inc. Since then, through a number of mergers and acquisitions, Verizon Communications and Oath Inc became Yahoo. Sang was officially employed by Oath Holding Companies from 2018 until his recent resignation.

In February, The Trade Desk, a major ad tech player currently valued at $24.7 billion, officially extended a job offer to Sang, which included a raise in salary, a cash signing bonus to six figures and nearly $1 million in stock that would vest on time, per suit. Yahoo says that around 45 minutes after receiving the letter on February 11 – still four days before he submitted his resignation to Yahoo – Sang downloaded around 570,000 files from his company laptop to two storage devices. external personnel without the authorization of his employer.

Sang was said to have had the devices until Yahoo issued a cease and desist order a few weeks later, after which he returned them to the company for forensic analysis. The analysis revealed the wealth of information uploaded, which included what the filing describes as “the vast majority (if not proprietary content) of the source code reflecting the algorithms for controlling the pace of budget expenditures”, as well as other AdLearn codes and files titled “auction search”. which were pulled from the Yahoo Github repositories. The company also alleges that Sang stole sensitive and confidential information, including Yahoo’s competitive analysis on The Trade Desk as well as specific strategic plans.

“Blood’s hijacking deprived Yahoo of sole dominion and control of its trade secrets,” the filing said. “The files uploaded by Sang constitute a serious misappropriation of intellectual property that would provide any DSP competitor with a competitive advantage in the online advertising space,” it continues, suggesting that Yahoo believes Sang intended to leak the secrets of company to their new employer. .

The lawsuit explains that Yahoo’s forensic analysis also revealed that Sang had communicated – although it is not clear – via WeChat as early as September 2020 about the use of a Western Digital cloud system for data backup purposes. files. According to his LinkedIn profile, Sang worked for Western Digital, a hardware and software company based in San Jose, Calif., before being initially employed by AOL in 2018.

Yahoo brought three separate charges against Sang: violation of the Virginia Uniform Trade Secrets Act; breach of fiduciary duty; and conversion or theft of company intellectual property.

Yahoo is represented by McGuireWoods, a reputable law firm that has represented parties ranging from Boeing – in the federal investigation into issues with its 737 MAX jet – to the parents of Otto Warmbier, the American student who died in 2017 after his imprisonment. in North Korea.

Yahoo and its representatives at McGuireWoods declined requests for comment. The Trade Desk and Sang did not respond to requests for comment.

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