Delaware Court Dismisses Most of Diamond Fortress Trade-Secret Case Over Touchless Biometric App

Court Slaps Diamond Fortress: Delaware Ruling Redraws Blockchain Trade-Secret Lines

Delaware’s Superior Court just threw out most of a trade-secret suit brought by Diamond Fortress Technologies and its founder Charles Hatcher II, holding that their fingerprint-scanning app, “Touchless Biometric Solution,” was not a protectable secret. The decision tightens the screws on anyone hoping to claim crypto or biometric IP without ironclad proof that the tech stayed genuinely confidential.

The fight started when Diamond Fortress accused a former partner of swiping its contactless fingerprint algorithms and feeding them to competitors. The defense countered that the same methods had already been pitched on white papers, conference decks, and open-source repositories long before any confidentiality agreement. The judges agreed: once the core logic was publicly disclosed, no later NDA could reclassify it as a trade secret under Delaware law.

In a crisp 32-page opinion, the court granted summary judgment to the defendants on the trade-secret counts and tossed the related breach-of-contract claims that hinged on the same information. Hatcher and Diamond Fortress keep only a narrow, still-untested claim for misappropriation of a separate customer list—an issue now headed for trial later this year. Everything else collapses.

The ruling makes clear that Delaware courts will not stretch trade-secret doctrine to shelter blockchain code or biometric processes that have already seeped into the public domain. Plaintiffs must now show exactly what stayed secret, when, and how; vague assertions about “proprietary algorithms” will not cut it.

For crypto markets, the decision is another data point that judges dislike fuzzy IP claims tied to decentralized tech. If code snippets or white-paper math circulate on GitHub or academic sites, calling it a trade secret later becomes an uphill climb—raising litigation risk for DeFi teams that rely on published research yet still want exclusivity. Expect sharper separation between open-source modules and proprietary wrappers, and tighter NDAs that explicitly list what must remain under wraps.

Bottom line: publish and you lose the shield—Delaware just made that rule explicit.