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

Traverse 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.

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. Traverse 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. Traverse 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. Traverse Internet Law Cross-Reference Number 1340.