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.


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. Traverse Internet Law Cross-Reference Number 1248.

Tuesday, October 21, 2008

Traverse Internet Law Federal Court Report: September 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.


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. Traverse Internet Law Cross-Reference Number 1225.