Traverse Internet Law Federal Court Report: June 2012 - 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.


DIABLO MEDIA, LLC v. H2H IINTERACTIVE, INC., ET AL.
DISTRICT OF COLORADO
1:12-CV-01246-WJM
FILED: 05/11/2012

Once again, you can have the best contracts in the world but if an employee is set on stealing from you there is not much you can do except resort to the legal process, either criminal or civil, depending upon the problem. 

Diablo claims that the Defendants misappropriated a broad amount of data and information including not only contact information of its private business partners but also success rates, conversion data, campaign return on investment data, and other business and financial information associated with each of the affiliates.

Plaintiff alleges false advertising, trade libel, misappropriation of trade secrets, and breach of contract.  The prayer for relief requests that the Court enter a judgment against Defendants for compensatory damages for false advertising and trade libel, compensatory damages for breach of contract, and treble and exemplary damages for oppression, fraud, and malice.  Prayer for relief also requests an award of all attorneys’ fees and costs for action.  Traverse Internet Law Cross Reference Number 1568.

Traverse Internet Law Federal Court Report: May 2012 - 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.


DELTA MEDIA GROUP, INC. v. CHARTWELL REALTY, LLC, ET AL.
NORTHERN DISTRICT OF OHIO
5:12-CV-00885-JRA
FILED: 4/12/2012

The “trade secret” violation arises from the Plaintiff’s claim that the Defendants knew of the ownership of the property by the Plaintiff and improperly acquired that information by accessing computer software.  Of course, to the extent the information was publicly viewable and available it is doubtful that this information would constitute a “trade secret”.

The Plaintiff is engaged in the business of providing a subscription service to design websites in the real estate professional industry.  Defendants are competitors.  The Defendants are alleged to have willfully made unauthorized copies of the .html code from one of Plaintiff’s sites and is using the infringing material for another website.

The lawsuit alleges copyright infringement, unfair competition, breach of contract, unfair deceptive trade practices, and trade secret violation. Delta requests injunctive relief to prevent further infringement, the payment of the Defendants' profits, any damages sustained by Delta, the costs of the action, statutory and punitive damages, injunctive relief, and reasonable attorney’s fees.  Traverse Internet Law Cross Reference Number 1563

Traverse Internet Law Federal Court Report: January 2012 - 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.

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. Traverse Internet Law Cross Reference Number 1540.

Traverse Internet Law Federal Court Report: November 2011 - 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.

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. Traverse Internet Law Cross Reference Number 1533.

Traverse Internet Law Federal Court Report: October 2011 - 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.


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. Traverse Internet Law Cross Reference Number 1524.

Traverse Internet Law Federal Court Report: August 2011 - 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.

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. Traverse Internet Law Cross Reference Number 1509.

Traverse Internet Law Federal Court Report: July 2011 - 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.


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. Traverse Internet Law Federal Court Report Cross-Reference Number 1505.

Traverse Internet Law Federal Court Report: June 2011 - 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.

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. Traverse 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. Traverse Internet Law Cross-Reference Number 1499.

Traverse Internet Law Federal Court Report: May 2011 - 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.

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. Traverse Internet Law Cross-Reference Number 1491.

Traverse Internet Law Federal Court Report: April 2011 - 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.


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. Traverse Internet Law Cross-Reference Number 1482.

Traverse Internet Law Federal Court Report: March 2011 - 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.

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. Traverse Internet Law Cross-Reference Number 1479.

TraverseInternet Law Federal Court Report: February 2011 - 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.

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. Traverse Internet Law Cross-Reference Number 1469.

Traverse Internet Law Federal Court Report: December, 2010 - 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.


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. Traverse Internet Law Cross-Reference Number 1458.

Traverse Internet Law Federal Court Report: November, 2010 - 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.


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. Traverse Internet Law Cross-Reference Number 1448.

Traverse Internet Law Federal Court Report: August 2010 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.


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. Traverse Internet Law Cross-Reference Number 1444.

Traverse Internet Law Federal Court Report: July 2010 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.


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. Traverse Internet Law Cross-Reference Number 1440.

Traverse Internet Law Federal Court Report: June 2010 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.


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. Traverse Internet Law Cross-Reference Number 1433.

Traverse Internet Law Federal Court Report: May 2010 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.


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. Traverse Internet Law Cross-Reference Number 1429.

Traverse Internet Law Federal Court Report: April 2010 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.


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. Traverse 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. Traverse Internet Law Cross-Reference Number 1418.

Traverse Internet Law Federal Court Report: February 2010 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.


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. Traverse Internet Law Cross-Reference Number 1407.