Tuesday, January 26, 2010

Traverse Internet Law Federal Court Report: December 2009 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: 12/22/2009

If you are ever interviewing a former or existing employee of a competitor make sure that there is no contract in place prohibiting the employee from working for your company and have that employee sign an agreement and acknowledgement that he is not bringing any trade secret information, customer lists, or any other type of proprietary information with him.

OpticsPlanet is one of the largest online retailers of sports optics, microscopes, telescopes, and the like. The Defendant is alleged to have hired away a number of employees who had “trade secret” information. The employees have, or are now, working for the Defendant and, according to the Plaintiff, misappropriating and stealing trade secrets, customers, inventory, and the like.

The Plaintiff’s lawsuit includes claims for federal trademark infringement, false designation of origin, trademark dilution, copyright infringement, violation of the Illinois Deceptive Trade Practices Act, violation of the Illinois Consumer Fraud and Deceptive Business Practices Act, common law trademark infringement, cybersquatting, violations of the Illinois Trade Secrets Act, intentional interference with business relationships, negligent interference with business relationships, intentional interference with prospective economic advantage, negligent interference with prospective economic advantage, trespass to chattels, breach of contract, conspiracy, and accounting. The Plaintiff requests permanent injunctive relief and that Defendants destroy and refrain from using any of Plaintiff’s copyrighted works, trademarks, and similar derivatives and transfer any infringing domain names to the Plaintiff. Plaintiff further requests indemnification from any third party claims, statutory damages, a disgorgement of profits, exemplary damages, actual damages of nothing less than $250,000, treble damages, punitive damages, costs and attorneys’ fees, pre and post-judgment interest, and any further relief the Court deems equitable. Traverse Internet Law Cross-Reference Number 1395.

FILED: 12/08/2009

The misappropriation of trade secrets, in one form or another, is often the motivation for unauthorized access, hacking, or theft in the business environment. This is nothing new. Stealing business plans and trade secrets of US companies has been a standard business practice for summer clerks and interns from other countries. This case is a reminder that protecting your trade secrets as a business is a critical function and contracts with employees and contractors can go a long way in establishing legal protections against misappropriation.

Joymax is a company existing under the laws of South Korea primarily involved with the development of computer games. The Defendant, and others associated with him, appear to be residents of the country of Poland. Plaintiff alleges that the Defendants stole their source code and launched a duplicate online game website. Joymax also alleges that it has invested over $10 million in the development, marketing, and distribution of its online game and that the source code is a trade secret.

Plaintiff has sued for copyright infringement, false advertising, trademark infringement, and theft of trade secrets. The Plaintiff has requested preliminary and permanent injunctive relief, damages according to proof, an order for the reassignment of Defendant’s domain name to Plaintiff, costs of suit, and attorneys’ fees. TraverseInternet Law Cross-Reference Number 1394.