Thursday, December 18, 2008

Traverse Internet Law Federal Court Report: November 2008 Trade Secret Violation Lawsuits

The facts are unproven allegations of the Plaintiff and all commentary is based upon the allegations, the truthfulness and accuracy of which are likely in dispute.

FILED: 11/24/2008

This is unfortunately a very common problem. The employee or contractor responsible for managing a company's website leaves with a copy of a website, active passwords, or a "backend" entry into systems, and then sells the application and data or begins competing against their former employer. In today’s world it is easy to establish a competing business overnight. Businesses need to take care when releasing an employee from employment that this type of situation does not occur. Employment contracts that spell out ownership of intellectual property and rights and obligations upon termination of employment are becoming more common, and for good reason.

The Plaintiff is a company that sells used automobile parts online. The Defendant and others compete with the Plaintiff. Defendant Christman is alleged to have taken the entire web system, including backend database and its data, from the Plaintiff when he left their employ and, together with the other Defendants, stole the content and relaunched it as a competing website.

The lawsuit includes counts for copyright infringement, trade secret misappropriation, computer theft, tortious misappropriation, false designation of origin, and unfair and deceptive trade practices. The prayer for relief includes preliminary and permanent injunctive relief and an award of actual damages, "enhanced" or punitive damages, attorneys' fees and costs. Traverse Internet Law Cross-Reference Number 1248.