Dozier Internet Law on Trade Secrets

Dozier Internet Law Federal Court Report: January 2012 - Trade Secret Violation Lawsuits

2012-01-19T09:08:00.000-08:00

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.

SEMO ENVIRONMENTAL SERVICES, LLC, ET AL. v. RIDDLE ENVIRONMENTAL SERVICES, LLC, ET AL.
EASTERN DISTRICT OF MISSOURI (CAPE GIRARDEAU)
1:11-CV-00226-SNLJ
FILED: 12/22/2011

When a relationship ends you must be careful to go through and “clean up” your use of property and assets of your ex-partner.

The Plaintiffs are involved in the business of cleaning up spills of hazardous materials. The Defendants were former independent contractors providing consulting and sales services to the Plaintiffs. The Plaintiffs allege that the Defendants made false representations to a domain name registrar and obtained ownership and control of two important domain names used by the Plaintiffs in their business. The Plaintiffs claim the information used to effectuate this transfer was protected by trade secrets laws.

The lawsuit alleges false designations of origin, cyber-piracy, trademark infringement, unfair competition, misappropriation of trade secrets, and breach of fiduciary duty. The Plaintiffs’ prayer for relief requests the entry of a temporary restraining order to prevent misrepresentation of the Plaintiffs and their business, an award of statutory and punitive damages, destruction of confidential documents, costs of suit and such other relief as the Court deems equitable and just. Dozier Internet Law Cross Reference Number 1540.

Dozier Internet Law Federal Court Report: November 2011 - Trade Secret Violation Lawsuits

2011-11-15T11:47:00.001-08:00

Dozier Internet Law Disclaimer

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.

WEBIMAX, LLC v. DANIEL JOHNSON
MIDDLE DISTRICT OF FLORIDA (JACKSONVILLE)
3:11-CV-00993
FILED: 10/4/2011

Once your secrets are out in public they lose their “trade secret” status. When this type of situation is potentially developing you need to aggressively and proactively manage the issue and let the former employee know that any missteps will result in immediate litigation.

WebiMax is in the business of providing web design and online marketing services, reputation management services, and search engine optimization services. Defendant Daniel Johnson is a former employee allegedly publishing trade secrets obtained during his employment. The Plaintiff also alleges that Johnson published “proprietary” property of WebiMax contrary to an employment contract.

The lawsuit alleges copyright infringement, defamation, tortious interference with Plaintiff’s business relationships with its clients and prospective business relationships, and breach of contract. The Plaintiff’s prayer for relief demands judgment for injunctive relief, compensatory damages, punitive damages, interest, attorneys’ fees, costs of suit and such other relief as the Court deems equitable and just. Dozier Internet Law Cross Reference Number 1533.

Dozier Internet Law Federal Court Report: October 2011 - Trade Secret Violation Lawsuits

2011-10-31T07:48:00.000-07:00

Dozier Internet Law Disclaimer

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.

NATIONAL FOOTBALL SCOUTING, INC. v. ROB RANG, ET AL.
WESTERN DISTRICT OF WASHINGTON (TACOMA)
3:11-CV-05762
FILED: 09/21/2011

It is common to see confidential, proprietary or trade secret information disseminated by third parties contrary to the law. Make sure that if you are distributing any third party information you have the absolute right to do so.

National Football Scouting is an organization owned by nineteen different national football league clubs. The company produces scouting reports prospect of NFL players. The Defendants are alleged to have obtained the scouting reports and published portions on the Internet.

The lawsuit alleges misappropriation of trade secrets and copyright infringement. The Plaintiff’s prayer for relief includes disgorgement of all profits earned by Defendants from their willful infringement of copyrights and actual damages or statutory damages of up to $150,000 for each copyright infringement and such other relief as the Court deems just and proper. Dozier Internet Law Cross Reference Number 1524.

Dozier Internet Law Federal Court Report: August 2011 - Trade Secret Violation Lawsuits

2011-08-04T12:04:00.000-07:00

Dozier Internet Law Disclaimer

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.

STARFIRE SYSTEMS, INC. v. EXTREME ENVIRONMENT MATERIALS SOLUTIONS, LLC, ET AL.
NORTHERN DISTRICT OF NEW YORK (SYRACUSE)
1:11-CV-00888
FILED: 7/28/2011

Whenever an executive leaves to go to work for a competitor there always exists the possibility of certain information “traveling” with him. These are hotly contested matters, often involving immediate injunctive relief and evidentiary hearings that can lead to a Plaintiff’s loss of trade secrets or the new employer’s loss of a new executive.

Starfire is engaged in the business of developing, manufacturing and selling specialty materials and performance chemicals. Its present chief executive officer is alleged to have gone to work for, or on behalf of, a competitor and is alleged to have misappropriated the trade secrets and confidential information of his former employer.

The lawsuit alleges trademark infringement, unfair competition, cyberpiracy, breach of contract, and misappropriation of trade secrets. The Plaintiff requests the court award preliminary and permanent injunctive relief, transfer of the infringing domain names, an accounting of profits, compensatory damages, exemplary damages, statutory damages, treble damages, and all costs and expenses incurred in the action. Dozier Internet Law Cross Reference Number 1509.

Dozier Internet Law Federal Court Report: July 2011 - Trade Secret Violation Lawsuits

2011-07-06T09:28:00.000-07:00

Dozier Internet Law Disclaimer

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.

STABLETRACKER.COM, INC. v. ROBERT SEITZ and MY SUPPORT SERVICES GROUP, LLC
SOUTHERN DISTRICT OF FLORIDA (MIAMI)
1:11-CV-22322
FILED: 6/27/2011

Make sure you have confidentiality, non-compete, and other contractual protections in your contracts with technology developers. It doesn’t look like such contract terms existed in this relationship.

StableTracker is a Florida corporation that has been developing software for the trotting-horse industry. Defendant Seitz is a contractor working on the software. The parties got into a disagreement and the Defendants have indicated their intent to market and license the software allegedly developed for the Plaintiff to third parties.

Defendants are accused of misappropriation of trade secrets, unjust enrichment, breach of fiduciary duty, civil theft, conversion, copyright infringement, deceptive and unfair trade practices, common law unfair competition, and tortious interference with a business relationship. Plaintiff requests that the Defendants’ trademark is cancelled due to lack of bona fide intent to use trademark and trademark fraud and requests that the court award actual damages, consequential damages, punitive damages, pre-judgment and post-judgment interest, and such further relief the Court deems proper. Dozier Internet Law Federal Court Report Cross-Reference Number 1505.

Dozier Internet Law Federal Court Report: June 2011 - Trade Secret Violation Lawsuits

2011-06-13T12:03:00.000-07:00

Dozier Internet Law Disclaimer

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.

DYNAVOX SYSTEMS LLC v. EFFECTIVE UI, INC., ET AL.
DISTRICT OF COLORADO (DENVER)
1:11-CV-01259
FILED: 5/11/2011

If you are a contractor, when can you talk about projects you’ve been working on? This is going to be defined in your contract with your customer. Make sure before any of your sales people discuss or disclose the details of your company’s experience you have reviewed the pertinent contracts and cleared your sales or business people to discuss the work.

Dynavox is the world’s leading provider of communication and education products for individuals with significant speech, language, and learning disabilities. The Defendant was engaged as a contractor to develop a highly confidential and proprietary software application and the contractor announced the existence of the development project and the eventual release of the application which included false and misleading information.

Dynavox alleges trademark infringement, false description, trade secret misappropriation, and breach of contract and requests extensive injunctive relief along with actual damages, an accounting and disgorgement of profits, destruction of infringing materials, and attorneys’ fees and costs. Dozier Internet Law Cross-Reference Number 1498.

CORE SYSTEMS INTERNATIONAL, L.L.C. v. CORETECH INTERNATIONAL, INC. and MO EL BANNA
EASTERN DISTRICT OF MICHIGAN (DETROIT)
2:11-CV-12129
FILED: 5/13/2011

The question of what constitutes a trade secret can be quite perplexing. When an employee leaves a business and goes to work for a competitor what information can that employee use in their new position? It is not unusual to see lawsuits aimed at the new employer and a former employee so make sure that you vet the information base and avoid using a former employer’s trade secrets.

Core Systems in engaged in the business of designing, manufacturing, selling and servicing core cutting machines. The individual Defendant was affiliated with the Plaintiff and allegedly acquired certain trade secrets that he subsequently used to design, manufacture, and service competing products.

Claims in the lawsuit include false designation of origin, misappropriation of trade secrets, common law unfair competition, unjust enrichment, violation of the Anticybersquatting Consumer Protection Act, and non-entitlement to trademark registrations. Relief requested includes preliminary and permanent injunctive relief, statutory damages, treble damages, punitive and exemplary damages, costs, and attorneys’ fees. Dozier Internet Law Cross-Reference Number 1499.

Dozier Internet Law Federal Court Report: May 2011 - Trade Secret Violation Lawsuits

2011-05-05T12:00:00.000-07:00

Dozier Internet Law Disclaimer

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.

NORD-LOCK, INC. and NORD-LOCK INTERNATIONAL AB v. HEICO FASTENERS, INC., ET AL.
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
1:11-CV-02725
FILED: 4/25/2011

Customer lists are always going to be considered trade secrets if properly protected. There are contracts that must be reviewed when hiring an employee of a competitor and a “hiring letter” that includes promises from the new employee not to disclose any trade secrets is essential. Sometimes the contract the employees had with their previous employer is confidential in nature, which creates a high risk situation. Hiring employees of competitors is a risky proposition and these types of lawsuits often follow, even when the claims of trade secret misappropriation are merely speculation by the former employer.

Nord-Lock is in the business of selling bolt securing systems. The individual Defendants, Gordon and Raab, are allegedly former employees of the Plaintiff that were hired by the Defendant. Plaintiff alleges that these individuals were hired specifically to provide customer contact and identification information to the Defendant.

The Defendants are accused of trademark infringement, common law trademark infringement, false designation of origin, unfair competition, false endorsement, counterfeiting, trademark dilution, violation of Illinois Deceptive Trade Practices Act, common law unfair competition, violation of Illinois Trade Secret Act, tortious interference with economic advantage, and breach of common law duty of loyalty. The prayer for relief requests preliminary and permanent injunctive relief, actual damages, exemplary damages, punitive damages, an accounting and disgorgement of profits, costs, and attorneys’ fee. Dozier Internet Law Cross-Reference Number 1491.

Dozier Internet Law Federal Court Report: April 2011 - Trade Secret Violation Lawsuits

2011-04-21T09:36:00.000-07:00

Dozier Internet Law Disclaimer

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.

FIRST NATIONAL BULLION, LLC v. LUNA CONSULTING CORPORATION and RICK SANTOS
SOUTHERN DISTRICT OF CALIFORNIA (SAN DIEGO)
3:11-CV-00574
FILED: 03/23/2011

This case seems to involve a lead generation company that allegedly misappropriated extensive information of the Plaintiff. The lesson in this case is a reiteration of the old concept “need to know”. When dealing with a contractor never provide more information than is absolutely essential for that contractor to do its job. If you have to provide valuable information to a contractor seriously consider doing the job in-house.

The Plaintiff is an independent previous metals broker. The Defendant is a leads generation and sales support company which provided services to the Plaintiff. The Plaintiff alleges that Luna acquired extensive trade secrets and confidential and proprietary information relating to its customers and accounts and then launched a competing website using that information to generate a business for itself and competitors of the Plaintiff.

First National Bullion, LLC alleges breach of contract, misappropriation of trade secrets, copyright infringement, intentional interference with prospective economic advantage, and unfair competition. The prayer for relief requests actual damages plus interest, exemplary damages, statutory damages, injunctive relief, attorneys’ fees and costs, and other relief that may be warranted. Dozier Internet Law Cross-Reference Number 1482.

Dozier Internet Law Federal Court Report: March 2011 - Trade Secret Violation Lawsuits

2011-03-29T08:20:00.000-07:00

Dozier Internet Law Disclaimer

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.

NACCO MATERIALS HANDLING GROUP, INC. d/b/a YALE MATERIALS HANDLING CORPORATION v. THE LILLY COMPANY
EASTERN DISTRICT OF NORTH CAROLINA
4:11-CV-00028
FILED: 2/22/11

The Plaintiff claims that its dealer resource website is one of the principal means by which it communicates proprietary and trade secret information to its community of dealers across the country. It apparently contains information related to availability of products, parts and services as well as dealer pricing. This type of information is typically trade secret information with significant value. If you get access to competitor dealer pricing information, no matter how you obtained it, this will likely be considered trade secret information and protected by the law. All because you obtained possession of such trade secret information does not mean you are entitled to use it.

The Plaintiff manufactures and sells lift trucks. It maintains a dealer resource site restricted to authorized users. Lilly allegedly obtained unauthorized access to the secure dealer resource site. The Defendant is a direct competitor of the Plaintiff. The unauthorized access allegedly provided detailed specifications and trade secrets.

Plaintiff alleges violation of the Computer Fraud and Abuse Act, computer trespass, misappropriation of trade secrets, tortious interference with contract and business relations, tortious interference with prospective economic advantage, violation of the North Carolina Unfair and Deceptive Trade Practices Act, and copyright infringement. The lawsuit requests injunctive relief, destruction of infringing materials, punitive damages, actual damages, treble damages, prejudgment interest, attorneys’ fees and costs and other such relief the Court deems just and proper. Dozier Internet Law Cross-Reference Number 1479.

Dozier Internet Law Federal Court Report: February 2011 - Trade Secret Violation Lawsuits

2011-02-22T11:13:00.000-08:00

Dozier Internet Law Disclaimer

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.

VILLAZZO, LLC v. SERENDIPITY VILLA LIMITED, ET AL.
SOUTHERN DISTRICT OF FLORIDA (MIAMI)
1:11-CV-20201
FILED: 1/19/2011

Consultants have a tendency to acquire information and then use it to sell to other businesses in the industry. Make sure that you have specific non-compete or exclusionary provisions in your web development and consulting contracts to avoid this type of problem from arising.

Plaintiff Villazzo offers luxury homes and hospitality services to high net worth individuals in exclusive locations throughout the world. Defendant Morali was contracted as a consultant to Villazzo and acquired certain confidential and proprietary information in the furtherance of his duties and responsibilities. Defendant Morali was providing consulting service to a competitor of Villazzo without Villazzo’s knowledge and is alleged to have an acquired extensive client lists and related information and provided that for the competitor.

Counts in the lawsuit include copyright infringement, unfair competition, violation of the Florida Deceptive and Unfair Trade Practices Act, tortious interference with business relationships, and misappropriation of trade secrets. Plaintiff requests that the Court enter preliminary and permanent injunctive relief along with an accounting of Defendant’s profits, actual damages, payment of royalties to Plaintiff by Defendant for misappropriation of the Plaintiff’s intellectual property and trade secrets, statutory damages, costs and attorneys’ fees. Dozier Internet Law Cross-Reference Number 1469.

Dozier Internet Law Federal Court Report: December, 2010 - Trade Secret Violation Lawsuits

2011-02-09T07:50:00.000-08:00

Dozier Internet Law Disclaimer

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.

ART OF LIVING FOUNDATION v. DOES 1-10
NORTHERN DISTRICT OF CALIFORNIA (OAKLAND)
4:10-CV-05022
FILED: 11/9/2010

Using trade secret information of a previous employer is a growing problem because most employees do not understand what information is, or is not, trade secret information. It is not absolutely necessary that the information have the words “trade secret” written on the documentation. And there are ongoing debates between attorneys as to what is a trade secret. Be very careful with information that you acquire that could be seen as being of a confidential nature. And if you have an employee who leaves with confidential information it is worthwhile to have your attorney evaluate the nature of the information if it is important to you.

The Plaintiff is an international and humanitarian organization based in Bangalore, India. Former student-teachers have published alleged trade secret information on the web including training guides, continuation manuals, and teacher notes that are allegedly trade secret information of the Plaintiff.

Plaintiff alleges copyright infringement, vicarious copyright infringement, contributory copyright infringement, misappropriation of trade secrets, defamation, and trade libel. Plaintiff requests preliminary and permanent injunctive relief, actual damages, treble damages, compensatory damages, costs and attorneys’ fees. Dozier Internet Law Cross-Reference Number 1458.

Dozier Internet Law Federal Court Report: November, 2010 - Trade Secret Violation Lawsuits

2011-02-02T09:24:00.000-08:00

Dozier Internet Law Disclaimer

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.

ECARLIST, LLC v. MY DEALER BIZ LLC, ET AL.
NORTHERN DISTRICT OF TEXAS (DALLAS)
3:10-CV-02045
FILED: 10/8/2010

Trade secrets are another type of intellectual property that can be misappropriated. As a business owner you would be well advised to identify your trade secrets within your business and protect them vigorously because shielding your trade secrets from competitors may be the only way to protect your strategic advantage in the marketplace.

Plaintiff provides Internet-related service such as inventory management, vehicle inventory listing management, digital paperwork, vehicle pricing analytics, and website design to automobile dealerships. Defendants are competitors. Defendants are alleged to have gained access to Plaintiff’s trade secrets including its software layouts and methodology used to create its applications and, using those trade secrets, developed a “knock-off” of Plaintiff’s software to sell to the automotive industry.

Defendants are charged with trade secret misappropriation, violation of Texas Penal Code Chapter 33:02, trade dress infringement, business disparagement, unfair competition, and conspiracy. Plaintiff requests that the Court enter in a judgment granting maximum statutory damages, actual damages, exemplary damages, and reasonable attorneys’ fees and costs. Dozier Internet Law Cross-Reference Number 1448.

Dozier Internet Law Federal Court Report: August 2010 Trade Secret Violation Lawsuits

2011-01-18T10:55:00.000-08:00

Dozier Internet Law Disclaimer

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.

DIRECT-MARKETING AND VERTRIEBS AG v. ERIC HERBST and FFI CORPORATE LLC
DISTRICT OF CONNETICUT (NEW HAVEN)
3:10-CV-01386
FILED: 8/31/10

When you end a business relationship don’t think that because you have acquired information about your former business partner you have the right to release that information into the public domain. Pricing and customers lists are classic examples of traditional trade secrets, and many state trade secret laws allow for the award of damages and the recovery of attorneys’ fees.

Plaintiff is a manufacturer and marketer of household and bathroom items. The corporate Defendant was previously an exclusive distributor of the Plaintiff’s Everloc® products and Defendant Herbst is the CEO of FFI Corporate, LLC. Herbst is alleged to have launched a website that includes links to confidential and proprietary pricing lists. Herbst also is threatening the release of the Plaintiff’s confidential mailing list of Everloc® customers he had obtained pursuant to his distributorship relationship.

Plaintiff is alleging violation of the Connecticut Uniform Trade Secrets Act, trademark misuse, false advertising, cybersquatting, unfair trade practices, illegal recording of private telephonic communications, defamation, and breach of contract. The prayer for relief includes requests for preliminary and permanent injunctive relief along with actual, compensatory, consequential, and punitive damages, double damages, and costs and attorneys’ fees. Dozier Internet Law Cross-Reference Number 1444.

Dozier Internet Law Federal Court Report: July 2010 Trade Secret Violation Lawsuits

2010-08-20T08:53:00.000-07:00

Dozier Internet Law Disclaimer

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.

BRITANIC VENTURES 1 LP, ET AL. v. MICHAEL STUART, ET AL.
SOUTHERN DISTRICT OF TEXAS (HOUSTON)
4:10-CV-02604
FILED: 7/22/2010

Trade secrets can very well be the data and information that is gathered in the log files by a website. Access to analytics programs clearly would implicate trade secret issues and the value of the analytics is just becoming recognized and appreciated. As you establish strategic relationships and web partnerships, including hosting and development situations, be very aware of the value of the data and the potential implications if it is misused.

Britanic Ventures is the developer of high-end oceanfront living located in Mexico in the form of a condominium development. Defendants are alleged to have worked together to misappropriate Plaintiffs’ data, confidential and proprietary information, and trade secrets for their own commercial advantage because one of the Defendants was in charge of the Plaintiffs’ website and accessed the information without authorization.

Plaintiffs allege distributing false copyright management information in violation of the Digital Millennium Copyright Act, breach of contract, conversion, misappropriation of trade secrets, harmful access by a computer, tortious interference with existing contracts, tortious interference with prospective relations, breach of fiduciary duty, breach of duty of loyalty, breach of duty of confidentiality, fraud by non-disclosure, conspiracy, violation of the Computer Fraud and Abuse Act, violation of the Lanham Act, violation of the Texas Anti-Dilution Statute, common law unfair competition, violation of the Texas Theft Liability Act, violation of Texas Pen. Code § 33.02, infliction of bodily injury, and offensive physical contact. Relief requested includes declaratory judgments on behalf of the Plaintiff, a temporary restraining order, temporary injunctive relief, preliminary and permanent injunctive relief, actual and consequential damages, statutory damages in an amount of $250,000 for each violation, exemplary damages, attorneys’ fees and costs, and a request for accounting. Dozier Internet Law Cross-Reference Number 1440.

Dozier Internet Law Federal Court Report: June 2010 Trade Secret Violation Lawsuits

2010-08-10T08:10:00.000-07:00

Dozier Internet Law Disclaimer
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.

FREE FOR ALL, INC. and BURT CROWLEY BENEFIT SOLUTIONS, LLC v. MATTHEW FOWKES, ET AL.
DISTRICT OF NEW JERSEY (CAMDEN)
1:10-CV-02927
FILED: 6/10/2010

So many understandings and agreements in business arise in an oral setting in which a formal written memorandum of understanding is absent. This is understandable to some extent given the speed at which deals occur in the online world. However, businesses need to develop a feeling as to what liabilities and downside risks could attach when there are “misunderstandings” as to an oral deal, and seriously consider formalizing agreements in the appropriate circumstances.

The Plaintiffs are in the business of marketing a national pharmacy discount program. The Defendants and Plaintiffs entered into a business understanding and the Plaintiffs now claim that the Defendants began competing against them directly and misappropriated trade secret information.

The Plaintiffs allege trademark infringement, breach of contract, breach of the covenant of good faith and fair dealing, breach of agreement to form a joint venture, oppression of minority member’s interest, common law unfair competition, and breach of fiduciary duty. The lawsuit requests injunctive relief, declaratory relief, and the imposition of a constructive trust. Damages include compensatory damages, treble damages, attorneys’ fees, and any other such relief the Court deems equitable. Dozier Internet Law Cross-Reference Number 1433.

Dozier Internet Law Federal Court Report: May 2010 Trade Secret Violation Lawsuits

2010-06-28T08:50:00.000-07:00

Dozier Internet Law Disclaimer
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.

3BA INTERNATIONAL LLC v. KEVIN LUBAHN, ET AL.
WESTERN DISTRICT OF WASHINGTON (SEATTLE)
2:10-CV-00829
FILED: 5/18/2010

Websites are property, very similar to an automobile or other personal property. If you are involved with a dispute over the ownership of a website don’t just assume that possession is nine-tenths of the law. Seizing a website in which the ownership is in dispute may help from a business perspective to leverage you into a better position, but it really has little impact on legal rights and ownership of the website.

3BA International is a professional basketball league that was formed in 2007. The individual Defendants were involved with the basketball league in one way or another and are alleged to have conspired to steal and misappropriate confidential and proprietary trade secret information. Defendant LuBahn is alleged to have transferred the basketball league’s website to a new manager, changed all the passwords, and took over the administration of the site.

Plaintiff alleges breach of common law confidentiality obligations, misappropriation of trade secrets, breach of fiduciary duty/common law duty of loyalty, tortious interference with business relationships, libel and slander, violation of the Lanham Act, conversion, misrepresentation and fraud, violation of the Computer Fraud and Abuse Act, violation of the Stored Communications Act, and violation of the Influenced and Corrupt Organizations Act. Prayer for relief includes requests for injunctive relief along with actual damages, consequential damages, an award of attorneys’ fees and costs, and such other and further relief the court deems just and proper. Dozier Internet Law Cross-Reference Number 1429.

Dozier Internet Law Federal Court Report: April 2010 Trade Secret Violation Lawsuits

2010-05-19T08:20:00.000-07:00

Dozier Internet Law Disclaimer

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.

DIRECT LINE CORPORATION v. MICHAEL L. CARRINGTON AND JOHN DOE(S)
MIDDLE DISTRICT OF TENNESSEE (NASHVILLE)
3:10-CV-00423
FILED: 4/28/2010

The Plaintiff in this case alleges that its executive was responsible for backing up critical confidential and proprietary information and was the sole party responsible for maintaining such intellectual property. Although the dispute came to a head after the Defendants’ alleged termination for cause, the problem actually arose far earlier when an employee was apparently given the sole and exclusive responsibility, seemingly without oversight and controls, to act as the sole responsible party for maintaining what is alleged to be very significant intellectual property of the corporation. Every business should have a program in place to ensure that all information, and particularly valuable intellectual property, is backed-up and the integrity of the back-up process and data must be confirmed by a separate employee. Think of your intellectual property as your bank account - allowing the same party to write checks and reconcile bank accounts is a dangerous practice.

Direct Line Corporation, the Plaintiff, is a corporation that provides high density storage filing systems and maintains extensive websites for its dealers. The Defendant was allegedly hired as a marketing representative and project manager and became Executive Vice President with principle responsibilities for marketing and intellectual technology. Carrington was allegedly terminated for cause in January, 2010. Plaintiff alleges that Carrington is refusing to return electronic files containing extensive trade secrets of the Plaintiff absent the payment of additional compensation.

Causes of action listed in the complaint include trademark infringement, unfair competition, theft and misappropriation of trade secrets, breach of fiduciary duty, breach of duty of loyalty, breach of duty of trust, breach of duty against self-dealing, tortious interference with a business relationship, conversion, and unjust enrichment. Plaintiff requests that the Court issue extensive injunctive relief along with an accounting and disgorgement of profits, the return of all passwords, electronic files and other confidential information belonging to the Plaintiff, forensic examination of relevant hardware, pre-judgment and post-judgment interest, and exemplary and exceptional damages that the Court deems appropriate. Dozier Internet Law Cross-Reference Number 1417.

ANY TEST FRANCHISING, INC. v. LAB TEST DEPOT, LLC
SOUTHERN DISTRICT OF FLORIDA (MIAMI)
1:10-CV-21337
FILED: 4/26/2010

This case obviously involves both trade secret misappropriation issues and copyright infringement. It’s unfortunately common for web developers to “borrow” content from websites, and most often this just results in the service of a Digital Millennium Copyright Act takedown notice or a cease and desist demand letter that results in the content being removed from the web. However, when there is more than simple copying, and there are competitive aspects to the infringement, it is much more likely that a businesses’ first notice might come by service of a federal lawsuit. It’s a good time to check the contract with your web developers and make sure that when you order customized creative works you aren’t getting cut and paste copies of websites already existing on the web.

Any Test Franchising, Inc. owns and sells the franchise rights to an array of laboratory tests distributed through retail locations. Lab Test Depot, LLC, the Defendant in this case, has allegedly copied much of the content from the Plaintiff’s website. The principals of the Defendant allegedly attended a “discovery day” put on by the Plaintiff and signed an extensive non-disclosure agreement but the Defendant did not enter into a franchise agreement with the Plaintiff.

Defendant is accused of misappropriation of trade secrets and confidential and proprietary business information, federal trademark infringement, federal unfair competition, federal trademark dilution, federal copyright infringement, trademark infringement under Florida common law, and unfair competition under Florida common law. The Prayer for Relief includes requests for temporary, interlocutory, and permanent injunctive relief, general and compensatory damages, actual damages, incidental, special, consequential, and exemplary damages, damages for the unjust enrichment caused by Defendant’s misappropriation and infringement, attorneys’ fees and costs, and such other relief the Court deems just and proper. Dozier Internet Law Cross-Reference Number 1418.

Dozier Internet Law Federal Court Report: February 2010 Trade Secret Violation Lawsuits

2010-03-19T07:15:00.000-07:00

Dozier Internet Law Disclaimer

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.

CAPTIVE CONCEPTS, LLC v. ARTHUR J. WILLIAMS, ET AL.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:10-CV-01230
FILED: 2/18/2010

The misappropriation of trade secrets because “Plaintiff’s website is confidential and proprietary information owned by Plaintiff” likely won’t be successful. The reason for bringing a trade secret claim is because many states enhance damages, enable the recovery of attorneys’ fees, and/or have a far lower threshold for obtaining injunctive relief. HTML that is readily available through the “view source” function of a browser can certainly be protected by copyright, but not protected as a trade secret. Always consider the remedies available, what you can recover and how quickly you might be able to attack a problem, in deciding upon how you are going to proceed. Decisions made early in a dispute can often define the course of the litigation, the expense involved in pursuing the case, and of course the outcome.

The Plaintiff and Defendants apparently had some type of relationship in which they collaborated in offering printed materials and artwork online. Defendants are alleged to have copied the Plaintiff’s website and launched it surreptitiously in order to compete against the Plaintiff.

Claims for relief include copyright infringement, misappropriation of trade secrets, unfair competition, and tortious interference with prospective business advantage. Plaintiff requests injunctive relief, an accounting of profits, compensatory damages, consequential damages, exemplary damages, cost of suit, attorney’s fees and other legal costs. Dozier Internet Law Cross-Reference Number 1407.

Dozier Internet Law Federal Court Report: January 2010 Trade Secret Violation Lawsuits

2010-03-16T08:33:00.000-07:00

Dozier Internet Law Disclaimer

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.

J.C. BROMAC CORPORATION v. CALIFORNIA SUNRIDERS, ET AL.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:10-CV-00630
FILED: 1/28/2010

Big businesses enter into confidentiality and non-disclosure agreements all the time and comfort can be taken in the fact that these businesses have deep pockets, a brand to protect, and hopefully an understanding of business ethics. More often than not, doing business on the web means that you are not dealing with big businesses, the risk of loss of trade secrets is far greater, the “deep” pockets far shallower, the brands that could be tarnished by his conduct almost non-existent, and a code of ethics a mere figment of the imagination. Don’t take big business policies and practices relating to the protection of intellectual property and trade secrets and try to implement those in the Internet arena when small businesses are involved. When you are doing deals with other companies, recognize that there is often a minimal amount of leverage available to assure compliance with promises made.

The Plaintiff is engaged in the business of renting Harley Davidson motorcycles and providing guided and self-guided tours to tourists worldwide. The Defendants are former employees/managers for the Plaintiff. They are alleged to have left the employment of the Plaintiff and launched a competing business despite the existence of a confidentiality and non-disclosure agreement.

The lawsuit alleges misappropriation of trade secrets and aiding and abetting the misappropriation of trade secrets, unfair competition, breach of contract, breach of duty and loyalty, breach of the covenant of good faith and fair dealing, intentional interference with and conspiracy to interfere with prospective economic advantage, negligent interference with prospective economic advantage, violation of Computer Fraud and Abuse Act, violation of the California Penal code 502, and unjust enrichment/imposition of constructive trust. Plaintiff requests declaratory relief against all Defendants and an accounting of profits, as well as general, special, and punitive damages and attorneys’ fees and costs. Dozier Internet Law Cross-Reference Number 1393.

TES FRANCHISING, LLC, ET AL. v. ERIC J. DOMBACH, ET AL.
EASTERN DISTRICT OF PENNSYLVANIA (ALLENTOWN)
5:10-CV-00017
FILED: 1/04/2010

Non-disclosure agreements are vastly overrated in their importance, at least in the Internet industry. If you are going to disclose trade secrets to a third party and rely upon a non-disclosure agreement to protect those secrets first consider what they party who is signing the agreement has to lose if there is a breach. Once trade secrets are disclosed into the public arena the fact that you might have a valid legal claim against someone who signed a non-disclosure agreement isn’t much consolation. If you are going to hand over your trade secrets, make sure you are dealing with a party who is highly motivated to comply with the contract, no matter how your prospective business relationship pans out.

This is a class action lawsuit and the Plaintiffs are various franchisees providing business coaching to entities wishing to purchase franchises. The Defendants are alleged to have breached a non-disclosure agreement and misappropriated trade secrets by launching a competing website.

The lawsuit alleges breach of non-disclosure agreement, breach of confidentiality agreement, and breach of duty of loyalty. The claim for relief includes a request for an award of actual and compensatory damages in an amount well in excess of $150,000, an accounting of revenues and profits, damages sufficient to deprive Defendants business of any benefit of enrichment from their wrongful conduct, damages in the amount paid to Dombach during his engagement with Plaintiffs which is in excess of $251,000, preliminary and permanent injunctive relief, punitive damages, reasonable attorneys’ fees and costs. Dozier Internet Law Cross-Reference Number 1394.

Dozier Internet Law Federal Court Report: December 2009 Trade Secret Violation Lawsuits

2010-01-26T09:43:00.000-08:00

Dozier Internet Law Disclaimer

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.

OPTICSPLANET, INC. v. OPTICSCALE, INC., ET AL.
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
1:09-CV-07934
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. Dozier Internet Law Cross-Reference Number 1395.

JOYMAX CO., LTD. v. GRZEGORZ GRYCUK, ET AL.
CENTRAL DISTRICT OF CALIFORNIA (SANTA ANA)
8:09-CV-01432
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. Dozier Internet Law Cross-Reference Number 1394.

Dozier Internet Law Federal Court Report: November 2009 Trade Secret Violation Lawsuits

2009-12-30T06:19:00.000-08:00

Dozier Internet Law Disclaimer

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.

BAY VIEW DENTAL LAB, INC. v. EDDIE VON SCHLICHTING AND INTER-CHROME DENTAL LAB, LLC
EASTERN DISTRICT OF VIRGINIA (NORFOLK)
2:09-CV-00589
FILED: 11/30/2009

It is not an unusual situation to have an employee launch a competing business and walk out the door with confidential or proprietary information. “Dual employment” by an individual working for two competing businesses at the same time is obviously a major problem for that individual. And also for your business if this is happening to you. I am often surprised by the number of businesses, from Fortune 500 to small mom-and-pop affiliate marketing shops, that allow “moonlighting” in the affiliate marketing industry. It is difficult to imagine conflicts of interest not arising, and yet this practice continues. Consider prohibiting “moonlighting” totally or limit the practice so that it does not create conflicts or breaches of fiduciary duties.

The Plaintiff is a well known dental laboratory. Defendant Von Schlichting was employed by the dental lab for over six years. Plaintiff alleges that the employee began a competing business on July 10, 2009 and did not disclose the new business and continued working for the Plaintiff until December 4, 2009. During his employment the Plaintiff alleges that the Defendant deliberately retained confidential information and company records without its knowledge or consent and is using those in his new business.

The lawsuit alleges unfair competition in violation of the Lanham Act, breach of fiduciary duties, conversion of customer list and information, misappropriation of trade secrets, conversion of business name and images, and tortious interference with business relationships and expectancies. The claim for relief includes a request for the entry of an injunction prohibiting Defendant’s further interference with Plaintiff’s customers and a monetary award of compensatory damages in the amount of $150,000, punitive damages in the amount of $250,000, pre-judgment and post-judgment interest, and costs and expenses. Dozier Internet Law Cross-Reference Number 1383.

Dozier Internet Law Federal Court Report: October 2009 Trade Secret Violation Lawsuits

2009-11-25T12:12:00.000-08:00

Dozier Internet Law Disclaimer

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.

BRIGHT IMPERIAL LIMITED v. WEB ENTERTAINMENT GROUP INC., ET AL.
CENTRAL DISTRICT OF CALIFORNIA (LOS ANGELES)
2:09-CV-07840
FILED: 10/27/2009

A “Confidential Memorandum” is just like a business plan. Any time you put such a document out expect that it could become a matter of public record splattered all across the web in a matter of minutes. Consider in advance what effect, if any, that the disclosure will have on your existing business and be very careful.

The Plaintiff is a Honk Kong limited liability company that owns an adult “tube” website. The RedTube Website is the 67th most trafficked website in the world as of October 21, 2009. In early 2008 the Plaintiff considered selling the website and prepared a “Confidential Memorandum” containing extensive trade secret and proprietary and confidential information. The Defendants are alleged to have disclosed the Confidential Memorandum into the public arena and disrupted existing and potential advertising revenue.

The lawsuit includes counts for unfair competition and false designation of origin, trademark dilution, common law trademark infringement and unfair competition, violation of the Anti-Cybersquatting Consumer Protection Act, breach of contract, misappropriation of trade secrets, intentional interference with contractual relations, intentional interference with prospective economic advantage, and violation of California Civil Code 1709 and 1752. Plaintiff requests the entry of preliminary and permanent injunction against Defendants, transfer of any infringing domains to Plaintiff, return of any and all copies of the “Confidential Memorandum”, compensatory damages, disgorgement of profits, enhanced damages, exemplary damages, punitive damages, attorneys’ fees, costs, and interest, and other just and proper relief. Dozier Internet Law Cross-Reference Number 1371.

Dozier Internet Law Federal Court Report: September 2009 Trade Secret Violation Lawsuits

2009-10-15T07:49:00.000-07:00

Dozier Internet Law Disclaimer

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.

SLIM GOODBODY CORPORATION AND JOHN BURSTEIN v. STAY FIT PRODUCTIONS, LLC, ET AL.
SOUTHERN DISTRICT OF NEW YORK (FOLEY SQUARE)
1:09-CV-08030
FILED: 9/18/2009

Whether you are a licensor or licensee, it is critical that the contract (license agreement) identify with specificity information that is of a “trade secret” nature. It is also important that the contract specifically set forth how trade secret information will be handled when the contract ends.

The Plaintiff is a leader in delivering health and nutrition related information to children. Defendants are alleged to have entered into a licensing agreement so it could use copyright and trademark protected intellectual property of Slim Goodbody Corporation and also gain access to certain confidential business information including a customer database. The Plaintiff alleges that the Defendants obtained possession of their trade secrets, allowed the license agreement to lapse, and then continued to use the customer database, pricing information, marketing techniques, and other tactics that were trade secrets of the Plaintiff.

The lawsuit includes counts for trademark infringement, false designation of origin and false advertising, unfair competition, misappropriation of trade secrets, conversion, replevin (right to the recovery of the intellectual property), unjust enrichment, breach of contract, and tortious interference with contract. Plaintiff requests the entry of preliminary and permanent injunction against Defendants, an accounting of profits, actual damages, treble damages, punitive damages, attorneys’ fees, costs, and interest, and other just and proper relief. Dozier Internet Law Cross-Reference Number 1357.

Dozier Internet Law Federal Court Report: August 2009 Trade Secret Violation Lawsuits

2009-09-30T06:55:00.000-07:00

Dozier Internet Law Disclaimer

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.

DIAMOND ROSE SHEARS, LLC v. HATTORI HANZO SHEARS, LLC, ET AL.
DISTRICT OF COLORADO (DENVER)
1:09-CV-02035
FILED: 8/26/2009

We are seeing more and more distributors deciding that they can take out the “middleman” and sell directly to the consumer. This is the “disintermediation” model that drove the success of the web in the late 1990’s. However, if you have a contract that prohibits such competition, or you have acquired trade secret information that you use to launch a competing website, or you owe a potential fiduciary duty of good faith and fair dealing to an existing business relationship, launching a competing product or service is inviting litigation and can get you in hot water.

Plaintiff is a company that sells scissors and shears. Two of the Defendants were distributors of the Plaintiff and a third is a company with whom Defendants began distributing products allegedly in violation of a distributor agreement with Diamond Rose Shears. Diamond Rose alleges that the Defendants have utilized its proprietary business information, including its training manual and advertising methods, to solicit the existing and potential customers of Diamond Rose for the purpose of diverting those customers to a newly formed business, Hattori Hanzo Shears, LLC, which is in direct competition with the Plaintiff. This type of information is typically considered to be trade secrets.

The lawsuit includes counts for federal copyright infringement, unfair competition, breach of contract, and unjust enrichment. Plaintiff requests the entry of preliminary and permanent injunction against Defendants, an accounting of profits, actual damages including additional profits of Defendants, reasonable attorneys’ fees and costs, and other just and proper relief. Dozier Internet Law Cross-Reference Number 1352.

Dozier Internet Law Federal Court Report: July 2009 Trade Secret Violation Lawsuits

2009-08-17T07:25:00.000-07:00

Dozier Internet Law Disclaimer

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.

U-HAUL INTERNATIONAL, INC. AND U-HAUL CO. OF ILLINOIS, INC. v. TKG STORAGEMART PARTNERS, LP, ET AL.
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
FILED: 7/20/2009

You should really be policing the web by setting up Google Alerts and other early warning system devices to identify if anyone is using your trademark name to draw traffic and divert it to competitors. At Dozier Internet Law we have seen a similar practice many times and Google Bomb, the book Mr. Dozier authored, details a number of alert functions available for free on the web.

U-Haul International is a long established company in the do-it-yourself moving and storage industry. The Defendants own and operate a website that allows consumers to search for self storage locations. The Defendants are alleged to list numerous U-Haul storage locations and then direct those interested to alternative competing businesses. The trade secret violations relate to a claim that the Defendants were former dealers with U-Haul and are misappropriating trade secret information acquired during that relationship.

The lawsuit includes counts for federal trademark infringement, false designation of origin, false advertising, federal trademark dilution, common law unfair competition, breach of contract, and violation of the Consumer Fraud and Deceptive Business Practices Act. Plaintiff requests the entry of a declaratory judgment against Defendant, preliminary and permanent injunction, compensatory damages, statutory damages, punitive damages, treble damages, reasonable attorneys’ fees and costs, and other just and proper relief. Dozier Internet Law Cross-Reference Number 1338.

MIRROR REFLECTIONS v. GOOD MILLWORD AND TYLER ALLRED
NORTHERN DISTRICT OF UTAH
1:09-CV-00097
FILED: 7/06/2009

Who owns the intellectual property developed by Independent contractors? That is an issue that is governed by the contract between the parties. Unless your web developer has agreed to assign the ownership of its work to you or agreed to provide you with an exclusive, non-cancellable license it is very difficult to prevent your developer from competing against you or licensing the intellectual property to third parties. In this instance, the Plaintiff claims that the Defendant used its “trade secrets” and this opens up the possibility of preventing a web developer or consultant from using the intellectual property, programming and creative content it developed against the client. However, the better approach is to negotiate and work out in writing, as part of the original contract, the ownership of the work delivered by a developer or consultant so that this type of issue will rarely arise.

The Plaintiff hired the Defendant to create a website and perform other web development services. Plaintiff now alleges that the Defendant misappropriated the work it performed for the Plaintiff and is competing against it.

The Defendant has been sued for breach of express contract, breach of fiduciary duty, copyright infringement, and misappropriation of confidential and proprietary trade secret information. The Plaintiff has requested preliminary and permanent injunctive relief, an accounting of gains and profits, an award of compensatory damages, an award of punitive damages, an award of treble damages, attorneys’ fees, costs, and other relief. Dozier Internet Law Cross-Reference Number 1339.

CIRCESTEEM, INC. v. PAUL MILLER AND PRO CLOWN PRODUCTIONS, INC.
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
1:09-CV-03763
FILED: 6/23/2009

Make sure that you have written contracts setting forth the specific rights and obligations of key executives in your business. Also, make sure that when you start having a problem with an executive who has control of the registrations of your domains names you change those registrations to avoid a cataclysmic interruption in your business if the domain name server is pointed away from your website.

CircEsteem is a not-for-profit corporation in Illinois that runs a variety of youth circus programs. Defendant Miller is a former Ringling Brothers clown who formed ProClown Productions, Inc. Defendant Miller served as the Chief Executive Officer of the Plaintiff and had a falling out. An extensive battle seems to have developed over control of various assets of the Plaintiff’s organization as Defendant Miller stopped serving as the Chief Executive Officer of the Plaintiff. There is pretty extensive misconduct alleged in this lawsuit.

The lawsuit claims trademark infringement, unfair competition, cyberpiracy under the Anticybersquatting Consumer Protection Act, conversion, breach of fiduciary duty and duty of loyalty, and misappropriation of trade secrets. The Plaintiff requests an order requiring Defendant to return, assign, and transfer all of CircEsteem’s assets including CircEsteem’s registered trademark, domain names, websites, email addresses, and phone numbers, statutory damages in the amount of $500,000, an award of attorneys' fees and costs, and the entry of a preliminary and permanent injunction against the Defendant. Dozier Internet Law Cross-Reference Number 1340.

Dozier Internet Law Federal Court Report: June 2009 Trade Secret Violation Lawsuits

2009-07-06T12:07:00.000-07:00

Dozier Internet Law Disclaimer

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.

PROJECT VOTE/VOTING FOR AMERICA, INC. v. ASHAWNITA MONCRIEF AND JOHN DOE
DISTRICT OF COLUMBIA (WASHINGTON, DC)
1:09-CV-01109
FILED: 6/17/2009

This lawsuit brings up the issue of “exit debriefing”. When you have an employee leave your business it is important to make sure that not only is that employee not leaving with hard documents or electronic records but also critically essential that any electronic access be terminated. Of course we do not know if these allegations are true, but it is a reminder that there must be due care taken when an employee leaves your employ.

The Plaintiff, Project Vote/Voting for America, Inc., is a nonprofit organization organized and existing under the laws of Louisiana with Washington, DC offices. It is a national organization dedicated to promoting social welfare through public education in the area of civil participation through voting and promoting voter registration for qualified U.S. citizens. The Defendant is an individual who was employed as a development assistant by the Plaintiff in its Washington, DC office for three years. The Defendant is alleged to have sharply criticized the Plaintiff for its executive director’s ties to the high profile “ACORN” organization. The allegations are that the Defendant has been publishing information and documentation that is of a trade secret nature.

The lawsuit claims trademark infringement, trademark dilution, false designation of origin, misappropriation of trade secrets, tortious interference with prospective economic advantage, trespass to chattels, civil conspiracy, conversion, negligent misrepresentation, fraud, and breach of contract. The prayer for relief requests an award for compensatory damages, exemplary damages of at least $5,000,000.00, triple damages, attorneys’ fees, and the entry of preliminary and permanent injunctive relief. Dozier Internet Law Cross-Reference Number 1331.

Dozier Internet Law Federal Court Report: May 2009 Trade Secret Violation Lawsuits

2009-06-12T11:08:00.000-07:00

There are no Dozier Internet Law comments for May, 2009 lawsuits on Trade Secret Violations.

Google Bomb, the book about online attacks and defamation, is coming September 1.

Dozier Internet Law Federal Court Report: April 2009 Trade Secret Violation Lawsuits

2009-05-26T12:16:00.000-07:00

Dozier Internet Law Disclaimer

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.

KALEIDOSCOPE IMAGING, INC. v. DESIGNPROJECT, ET AL.
NORTHERN DISTRICT OF ILLINOIS (CHICAGO)
1:09-CV-02421
FILED: 4/21/2009

This case raises the age old issue of what information you can take with you when you leave employment. As a general rule, leaving with any documentation is often risky and can invite a lawsuit, particularly if you are going to work for a competitor.

Kaleidoscope Imaging is a service company that appears to operate as somewhat of an ad agency using state of the art digital technology. The Defendants are former employees of Kaleidoscope and left to begin their own competing business. Both businesses appear to specialize in “product design”. The Plaintiff claims that the Defendants accessed Kaleidoscope’s protected computer system and copied confidential and proprietary information, trade secrets, and other valuable property without authorization.

The lawsuit alleges violations of the Computer Fraud and Abuse Act, trademark infringement, breach of fiduciary duties, unjust enrichment, conversion, trespass to channel, misappropriation of trade secrets, tortious interference with expectancy, tortious interference with contract, breach of contract, fraud, and civil conspiracy. The claim for relief includes a request for the entry of temporary and permanent injunctions prohibiting the use of the information and a monetary award of compensatory damages, punitive damages, costs and attorneys fees. Dozier Internet Law Cross-Reference Number 1311.

Dozier Internet Law Federal Court Report: March 2009 Trade Secret Violations Lawsuits

2009-04-17T11:43:00.000-07:00

Dozier Internet Law Disclaimer

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.

SUMMA ENTERTAINMENT NETWORK, LLC AND DONALD F. SINEX v. DONALD DUPERAULT
DISTRICT OF NEVADA (LAS VEGAS)
2:09-CV-00512
FILED: 3/17/2009

The lesson from this case, if the allegations are true, is simply that every business should know with whom you are dealing. We see these types of situations often, and in almost every instance the web developer that abandons the project and goes on a mission of destruction has absolutely nothing to lose from a financial standpoint. Do your due diligence and only do business with those that have a strong track record and strong financials.

The Plaintiff was formed in 2007 and provides DVD and high definition download services to retail, mobile, and home markets. The Defendant is alleged to have been an independent contractor and outside technology consultant for the Plaintiff and walked out the door, according to the lawsuit, with copies of all files and documents relating to the technology work he had contracted to perform. In addition, the Defendant is alleged to have unlawfully accessed the Plaintiff’s computer database and transferred five domain names to his own personal account. To make matters worse, the Defendant is alleged to have falsely posted on the websites a notice that the Plaintiff’s website had been removed due to lack of payment. These allegedly false statements replaced a photograph the Defendant had previously put up at those domain names of human feces.

The Defendant has been sued for misappropriation of trade secrets, conversion, defamation, breach of contract, breach of implied covenant of good faith and fair dealing, intentional interference with contractual relationships, intentional interference with prospective economic advantage, and copyright infringement. Extensive preliminary and permanent injunctive relief is requested, as well as an award of compensatory damages, punitive damages, costs, reasonable attorneys’ fees, and other relief. Dozier Internet Law Cross-Reference Number 1305.

Dozier Internet Law Federal Court Report: February 2009 Trade Secret Violations Lawsuits

2009-03-20T13:42:00.000-07:00

Dozier Internet Law Disclaimer

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.

ENVIROGLAS PRODUCTS INC, ET AL. v. ENVIROGLAS LLC AND TIMOTHY WHALEY
NORTHERN DISTRICT OF TEXAS (DALLAS)
3:09-CV-00265
FILED: 2/10/2009

With all of the layoffs going on right now in our economy it is particularly important that your business protect its intellectual property and take appropriate precautions to manage the process of ending employment.

EnviroGLAS Products, Inc. is a Texas corporation. The Defendant, EnviroGLAS, LLC, is also a Texas corporation started by the former president of the Plaintiff, Timothy Whaley. The lawsuit alleges that Whaley, after leaving his position at EnviroGLASS, continued to access his old email accounts without authorization, use domain names of his former employer, and has flooded the Internet with his former employer’s name, trademark, website, email addresses, domain names, and related patents to further the Defendant’s interest.

The claims for relief in the lawsuit include breach of fiduciary duty against Whaley, fraud against Whaley, conversion as to all Defendants, tortious interference with existing relationships, tortious interference with prospective relations, Theft Liability Act violations, Computer Fraud and Abuse Act violations, misappropriation of trade secrets, false representation, unfair competition, injury to business reputation, trademark infringement, Quantum Meruit, violations of the Anti-Cybersquatting Consumer Protection Act, and an award of compensatory, statutory, punitive damages as well as attorneys’ fees and costs. Dozier Internet Law Cross-Reference Number 1289.

Dozier Internet Law Federal Court Report: January 2009 Trade Secret Violation Lawsuits

2009-02-12T11:31:00.000-08:00

There are no Dozier Internet Law comments for January, 2009 lawsuits on Trade Secret Violations.

Dozier Internet Law Federal Court Report: December 2008 Trade Secret Violation Lawsuits

2009-01-09T12:41:00.000-08:00

Dozier Internet Law Disclaimer

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.

SOROUSH DESIGNER RUGS & CARPET COLLECTION, INC. v. YELENA RODINA
EASTERN DISTRICT OF VIGINIA (ALEXANDRIA)
1:08-CV-01248
FILED: 12/3/2008

It is easier today than ever before for an employee to leave an employer’s business and set up a competing enterprise overnight. A prudent business should have key employees, and those with access to trade secrets and confidential information, sign confidentiality agreements, assignments of intellectual property, and possibly non-compete agreements.

The Plaintiff is a high-end designer of rugs and carpets. The Defendant is alleged to have been an independent contractor hired to assist in the development of rug designs and after 10 years of employment left her job with the Plaintiff and joined a direct competitor. Defendant then launched a website and is featuring 43 of Plaintiff’s copyrighted designs which she had agreed were trade secrets and were based on highly confidential information.

The lawsuit claims copyright infringement, breach of contract, violation of the Virginia Trade Secrets Act, and violation of the Federal Computer Fraud and Abuse Act. Plaintiff is requesting an award of statutory fees of up to $150,000.00 for copyright infringement, actual damages, consequential damages, and extensive injunctive relief. Dozier Internet Law Cross-Reference Number 1261.

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

2008-12-18T11:42:00.000-08:00

Dozier Internet Law Disclaimer

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.

CHEAPTRUCKPARTS.COM, LLC v. GODFATHER VANS, INC., ET AL
NORTHERN DISTRICT OF GEORGIA (ATLANTA)
1:08-CV-03602
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. Dozier Internet Law Cross-Reference Number 1248.

Dozier Internet Law Federal Court Report: October 2008 Trade Secret Violation Lawsuits

2008-11-21T08:53:00.000-08:00

There are no Dozier Internet Law comments for October, 2008 lawsuits on Trade Secret Violations.

Dozier Internet Law Federal Court Report: September 2008 Trade Secret Violation Lawsuits

2008-10-21T11:56:00.000-07:00

Dozier Internet Law Disclaimer

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.

AGDATA, L.P. v. RAJ GUPTA a/k/a RAAJ GUPTA a/k/a RAJAN GUPTA d/b/a GREEN DATA SOLUTIONS
WESTERN DISTRICT OF NORTH CAROLINA (CHARLOTTE)
FILED: 9/11/2008
3:08-CV-00419

This appears to be a rather involved and extensive employment dispute, but the Trade Secrets Act in North Carolina might very well be the best weapon available. These types of statutes make it very easy to obtain injunctions that are much broader than typically ordered, and trade secret statutes often provide for the recovery of attorney's fees and triple damages. Courts are finding that trade secrets are part of the source code and other coding of applications.

Plaintiff Agdata, L.P. is a Delaware limited partnership operating in North Carolina in the business of providing computer data management services to the health care industry. The Defendant was an employee of Plaintiff’s business. Defendant is no longer an employee but has launched a business competing directly against the Plaintiff and allegedly using Plaintiff's copyrighted "ClaimsREDI" software.

Plaintiff has sued Defendant Gupta for a copyright infringement, breach of contract of an asset purchase agreement, breach of contract of a second employment agreement, violation of the North Carolina Trade Secrets Act, and unfair and deceptive trade practices. Plaintiff requested extensive relief relating to a preliminary injunction, actual damages, lost profits, statutory damages, punitive damages, attorney's fees, and the tripling of all damages. The request for injunctive relief also includes a request that "any online service provider" be immediately ordered to take down a website that is hosting Plaintiff's property. Dozier Internet Law Cross-Reference Number 1225.

Dozier Internet Law Federal Court Report: August 2008 Trade Secret Violation Lawsuits

2008-09-26T12:47:00.000-07:00

There are no Dozier Internet Law comments for August, 2008 lawsuits on Trade Secret Violations.

Dozier Internet Law Federal Court Report: Trade Secret Violation Lawsuits

2008-09-25T09:58:00.000-07:00

Dozier Internet Law and John W. Dozier Jr., Esq. have now moved the online version of the Dozier Internet Law Federal Court Report to the blogging environment. We'll continue to maintain the historical case filings and comments issued prior to September 1, 2008 on the main Dozier Internet Law website. This blog focuses exclusively on trade secret violation lawsuits. Enjoy...and stay informed!