Trade Secrets

December 11, 2013

Project Management Academy Sues Former Instructor for Misappropriation of Trade Secrets

Indianapolis, Indiana – eCity Market, Inc. d/b/a Project Management Academy (“PMA”) of Lafayette, Indiana has sued Vaughn Scott Burch (“Burch”) and Graywood Consulting Group, Inc. d/b/a Graywood Training Solutions of Leesburg, Virginia (collectively, “Graywood”) alleging infringement of its Project Management Professional examination and certification training. This suit was initially filed in Delaware County Circuit Court No. 4 but was removed to the Southern District of Indiana.

PMA offers preparation courses for the Project Management Institute’s Project Management Professional (“PMP”) examination and certification process. PMA states that Burch was one of its most-trusted PMP course instructors in the Washington, D.C. area and that, in connection with that position, PMA provided him with access to its proprietary manner of conducting its PMP-examination preparation courses. Moreover, PMA claims that it commissioned Burch and Graywood, Burch’s company, to draft and prepare as a “work for hire” certain training modules that would be for PMA’s exclusive use.

PMA alleges that Burch and Graywood are now teaching PMP courses that are in direct competition with PMA. It also contends that Defendants have stolen PMA’s confidential, proprietary and copyrighted materials to further their own course offerings. PMA further indicates that Defendants are violating the non-competition covenants by reproducing PMA’s copyrighted materials and are passing them off as their own. Finally, PMA contends that Defendants are attempting to engage in unfair competition with PMA by publishing student testimonials as if they were from Defendants’ students when, PMA states, the testimonials were actually given by the students of PMA.

An intellectual property lawyer for PMA filed a complaint alleging the following:

• Count I – Breach of Contract
• Count II – Breach of Duty of Loyalty
• Count III – Misappropriation of Trade Secrets
• Count IV – Theft/Conversion
• Count V – Tortious Interference with Prospective Business Relationship and Advantage
• Count VI – Lanham Act Violations
• Count VII – Unfair Competition

PMA asks for preliminary and permanent injunctions; an order requiring the return of all PMA materials; judgment in favor of PMA on the seven counts listed; damages, including treble and punitive damages; attorney’s fees and costs; and interest.

Practice Tip: There has also been a growing trend, perhaps fueled in part by states’ difficulties in paying increasing unemployment benefits, to limit via legislation the enforceability of non-compete agreements. Indiana considers non-compete agreements to be in restraint of trade and, thus, construes them narrowly. Among the states that have considered such limitations are Maryland, New Jersey, Minnesota, Massachusetts and Virginia. However, even in those cases where a non-compete agreement is found to be unenforceable, such a finding will not prevent a party from suing to protect its other rights, such as the intellectual property rights granted under copyright law.

November 18, 2013

Preliminary Injunction Improper for Overly Broad Non-Compete Agreement

By Overhauser Law Offices, LLC

Indianapolis, Indiana – Indiana Court of Appeals Judges Elaine Brown, Edward Najam and Paul Mathias reversed a trial court’s entry of preliminary injunction, holding that the non-compete agreement at issue was overly broad and, thus, unreasonable as a matter of law.

Glacier Group (“Glacier”) provides employee recruiting and placement services in the field of information technology. It primarily places salespeople, pre-sales engineers, systems engineers and people in leadership positions such as directors, vice presidents, chief financial officers and chief executive officers. Daniel Buffkin began working as a sales recruiter for Glacier in August 2008. Buffkin’s work with Glacier was subject to an “Independent Contractor Agreement” (the “Agreement”).

In June 2011, Glacier terminated the Agreement with Buffkin. In November 2012, it sued Buffkin alleging that he was in breach of the non-competition portion of the Agreement and requesting damages and injunctive relief.

In March 2013, the trial court determined that “during the almost three (3) year business relationship between [Glacier] and [Buffkin], [Buffkin] came into contact with a vast number of prospects and candidates, as well as clients of [Glacier], including their names and at the very least, their e-mail addresses, together with the requirements of [Glacier’s] customers for prospects and candidates to fill employment positions” and that “[t]his therefore created a legitimate protectable business interest by [Glacier].”

The trial court also stated that “[Buffkin] has admitted to directly competing against [Glacier] after being terminated from working for [Glacier]” and that Buffkin had been either unable or unwilling to supply a list of “where and when [Buffkin] has obtained the contacts he has made that he has used to make placements in the field in which [Glacier] works and operates.”

The trial court concluded that Glacier had a reasonable likelihood of success on the merits of its case and granted a preliminary injunction prohibiting Buffkin from competing with Glacier in employee placement in the areas of “data storage, cloud, virtualization, big data, managed hosting, managed services, data communication, and telecommunication.”

From this ruling, Buffkin brought an interlocutory appeal to the Indiana Court of Appeals. He argued that the non-compete clause of the Agreement was unreasonable and therefore unenforceable. He first asserted that the non-compete clause was overly broad because it did not have any restrictions regarding which industry it covered. He contended that, as written, the Agreement purported to prohibit him from doing executive recruiting in any industry. He also argued that the Agreement did not protect a legitimate interest of Glacier and that the restrictions on geographic scope were overly broad. Buffkin asked the Court of Appeals to hold that the trial court had abused its discretion in granting the preliminary injunction.

Glacier countered that it had provided Buffkin with insider knowledge and that Buffkin could not have had the success that he had after leaving Glacier without having used the proprietary information which he had acquired during his time with Glacier. It maintained that it had a protectable interest as a result of Buffkin’s purported use of insider knowledge acquired at Glacier and that Buffkin’s use of that information to Glacier’s detriment should be enjoined.

The appellate court first considered whether Glacier had an interest to be protected. It held that, while Buffkin may have acquired training, knowledge and skills while working at Glacier, such general skills would not be sufficient to rise to the level of a protectable interest unless their use would result in irreparable injury to Glacier. No such irreparable injury was proven. Glacier also failed to prove that, during his time with the company, Buffkin had access to proprietary information which gave him an improper advantage at Glacier’s expense. The court concluded that the interest to be protected by the non-competition provision of the Agreement, if any, was minimal.

The reasonableness of the restrictions was then addressed. Two provisions in particular were at issue: the geographic restriction and the activities restricted. The Agreement had attempted to restrict Buffkin from performing recruiting or placement services for employers “with offices in the continental United States.” The court held that Glacier had not met its burden of proof to demonstrate that it had a legitimate interest to be protected by such a broad restriction and held the geographic restriction to be unreasonable.

The court next held that the broadly worded text restricting Buffkin from being “connected in any way with any business that competes” with Glacier, and which made no distinction between past, current, or potential future customers of Glacier was excessive and, thus, unenforceable. It held that the trial court’s ruling had been clearly erroneous and that it had abused its discretion by granting the preliminary injunction.

Practice Tip #1: The Indiana Supreme Court has held that, to be enforceable, a non-compete agreement must be reasonable and that “[u]nlike reasonableness in many other contexts, the reasonableness of a noncompetition agreement is a question of law.” Such agreements in employment contracts are strongly disfavored under Indiana law as restraints of trade. They are scrutinized more closely than most other types of contracts and are strictly construed against the employer. Identifying a party to the contract as an independent contractor rather than as an employee does not change the analysis.

Practice Tip #2: A preliminary injunction should not be granted except in rare instances in which the law and facts are clearly within the moving party’s favor. To obtain a preliminary injunction, the moving party has the burden of showing by a preponderance of the evidence the following: (1) a reasonable likelihood of success at trial; (2) the remedies at law are inadequate; (3) the threatened injury to the movant outweighs the potential harm to the nonmoving party from the granting of an injunction; and (4) the public interest would not be disserved by granting the requested injunction. If the party seeking the preliminary injunction fails to prove any of these requirements, the trial court’s grant of an injunction will be considered an abuse of discretion.

July 31, 2013

Riders Choice Sues Golden West Saddle Blankets for Declaratory Relief

By Overhauser Law Offices, LLC

Terre Haute, Indiana — Copyright lawyers for Riders Choice, LLC d/b/a Show and Tell Saddle Blankets (“Riders Choice”) and Loni Rhodes (“Rhodes”; collectively,”Plaintiffs”) of Center Point, Indiana sued for declaratory relief over allegations of copyright infringement made by Lori Heckaman (“Heckaman”) d/b/a Golden West Saddle Blankets (“Golden West” or “Defendant”) of Gainesville, Texas.

Riders Choice, sometimes operating as “Show and Tell Saddle Blankets,” makes and sells products related to horseback riding, including hand-woven saddle blankets with colorful geometric designs. Rhodes owns Riders Choice. Heckaman, doing business as Golden West Saddle Blankets, also makes and sells products related to horseback riding, including blankets with colorful geometric designs.

Intellectual property counsel for Heckaman sent two cease-and-desist letters to Rhodes and Riders Choice, the first on June 14, 2013 and the second on July 2, 2013. The first cease-and-desist letter asserted that the designs on Heckaman’s blankets were copyrighted and alleged against Rhodes and Riders Choice claims for copyright infringement based on Rhodes’s and/or Riders Choice’s manufacture, marketing and sale of its own blankets. The second cease-and-desist letter made similar allegations. Claims were also made against Rhodes and Riders Choice for business interference, unfair competition and misappropriation of trade secrets based on Rhodes’s and/or Riders Choice’s marketing of Riders Choice’s blankets and alleged copying of Golden West’s weaving and design methods.

Both cease-and-desist letters threatened Rhodes and/or Riders Choice with imminent litigation if Rhodes and/or Riders Choice did not comply with Defendant’s demands, the first by writing “we will have no choice but to advise our client to protect her interests by instituting a suit in a court of competent jurisdiction,” and the second by writing that although “Golden West prefers to resolve this matter without the necessity of court intervention, all necessary action will be taken if a voluntary agreement cannot be reached.” Both cease-and-desist letters demanded that Rhodes and/or Riders Choice stop marketing, selling and producing its blankets. Further, a July 3, 2013 e-mail threatened Rhodes and Riders Choice with imminent litigation by writing that if Rhodes and/or Riders Choice did not “refrain from promoting, marketing, producing, and selling saddle blankets,” Heckaman would have “no choice but to seek available remedies.”

In response, copyright lawyers for Riders Choice filed a complaint under the Declaratory Judgment Act. In the complaint, Plaintiffs assert that blankets with similar designs are widely produced and sold by third parties, that they did not believe that Heckaman had registered any of her designs with the U.S. copyright office, that the blankets Riders Choice sells are original works designed by Rhodes and that every blanket Riders Choice sells is unique in that no two blankets are sold with an identical pattern. They further asserted that Rhodes learned these methods from books and other publicly available materials unaffiliated with Heckaman and that Rhodes had never copied Defendant’s designs.

In the complaint, Plaintiffs ask for judgments of:

· Count I — No Copyright Infringement

· Count II — No Business Interference

· Count III — No Unfair Competition

· Count IV — No Misappropriation of Trade Secrets

Plaintiffs request that the court: (a) declare that Rhodes’s and Riders Choice’s blankets did not in the past and do not now infringe any of Defendant’s valid copyrights; (b) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in business interference against Defendant based on the sale, marketing or production of blankets; (c) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in unfair competition against Defendant based on the sale, marketing or production of blankets; (d) declare that Rhodes and Riders Choice did not commit in the past and are not now engaged in the misappropriation of trade secrets from Defendant based on the sale, marketing or production of blankets; (e) award to Plaintiffs their costs and attorneys’ fees.

Practice Tip:

As with a patentee who believes that his or her patent is being infringed, holders of copyrighted materials often will send a “cease-and-desist letter” — a letter demanding that the purported infringer cease infringing. To aid in convincing the accused infringer to meet its demands, the holder of the intellectual property may be tempted to use language such as plans of “instituting a suit” and seeking “court intervention,” as Defendant did here.

As this case demonstrates, this strategy may backfire. By using such language, the Defendant can create an “actual controversy” for purposes of the Declaratory Judgment Act. Thus, the party alleging infringement (the natural plaintiff in an infringement suit) may instead find itself being sued by the alleged infringer (the natural defendant), often in a jurisdiction that would not have been the first choice of the owner of the intellectual property.

One approach that may have yielded better results for Golden West might have been to approach the accused infringer with an offer to license the purportedly protected intellectual property. With carefully crafted language, such a proposal might have served to put Riders Choice on notice of Golden West’s belief that infringement was occurring without going so far as to create an “actual controversy” sufficient to support a lawsuit under the Declaratory Judgment Act.

May 3, 2013

District Court Dismisses Two Counts in Konecranes’ Suit Against Industrial Crane Service

By Overhauser Law Offices, LLC

Indianapolis, Ind. — The Southern District of Indiana has dismissed two of four claims by Konecranes, Inc. of Pascagoula, Miss. against Industrial Crane Service, Inc. of Pascagoula, Miss. and Brian Scott Davis of Marion County, Ind.

Plaintiff Konecranes, Inc. (“Konecranes”) provides lifting equipment and services to various clientele including manufacturing and process industries, shipyards, ports and terminals. To serve its customers, Konecranes enters into agreements with subcontractors to assist it in the performance of the maintenance agreements it has entered into.

Industrial Crane Service, Inc. (“ICS”) has served as a subcontractor for Konecranes, although ICS and Konecranes also compete for customers to enter into maintenance agreements with them directly.

Brian Scott Davis (“Davis”) was employed at Konecranes as a Service Manager. During that employment, he and Konecranes entered into a noncompetition and confidentiality agreement, which contained provisions to keep certain Konecranes information confidential. Davis and ICS both worked for Konecranes on various maintenance and service contracts with Nucor Sheet Metal Group (“Nucor”) and Steel Dynamics Incorporated (“SDI”).

In May 2012, Davis resigned from Konecranes and began working for ICS. Since Davis began working for ICS, Nucor has cancelled purchase orders with Konecranes and SDI did not renew an existing purchase order with Konecranes. Instead, both have contracted with ICS to perform the work. Konecranes also alleged that Davis and ICS have been actively soliciting other customers to change their crane maintenance provider from Konecranes to ICS.

In response to the activities of Davis and ICS, Konecranes sued for injunctive relief and damages, asserting claims for: (1) breach of contract, (2) breach of fiduciary duty and/or duty of loyalty, (3) tortious interference with contractual relationships and (4) unfair competition. Davis and ICS moved to dismiss the claims for tortious interference with contractual relationships and unfair competition.

The court granted the motion on both counts. On the claim of tortious interference with contractual relationships, the court found that the plaintiff had “pled itself out of court” by admitting in its pleadings that an element of its claim was not present. Under Indiana law, the elements of a claim for tortious interference with a contract are: (1) the existence of a valid and enforceable contract; (2) defendant’s knowledge of the existence of the contract; (3) defendant’s intentional inducement of breach of the contract; (4) the absence of justification; and (5) damages resulting from defendant’s wrongful inducement of the breach.

While Konecranes did allege the element of “absence of justification” in its complaint, it also alleged that Davis and ICS had induced Nucor, SDI and others to break their contracts with Konecranes, or not renew them, so that ICS could gain their business. The court held that this amounted to an acknowledgement that the actions of Davis and ICS were motivated at least in part by a legitimate business interest — their own desire to secure new customers. The court held that this constituted justification under Indiana law. Having admitted in its pleadings that it lacked an element of this claim, Konecranes was barred from pursuing it.

On the claim of unfair competition, the court cited the Indiana Uniform Trade Secret Act, Ind. Code § 24-2-3-1(b) and (c) (the “IUTSA”) which “‘abolishes…causes of action for theft or misuse of confidential, proprietary, or otherwise secret information falling short of trade secret status….” It held that, under the facts of the case, Konecranes’ unfair competition claim was preempted by the IUTSA and not cognizable under Indiana law.

Practice Tip: As the court notes, while the claim under unfair competition failed, Konecranes may still pursue claims for misappropriation of information or ideas that are protected by contract. This is a good reminder to those whose practice of law includes shielding sensitive information from disclosure: if you want it protected, get it in writing.

April 25, 2013

American Professional Nursing Resources Sues Medical Staffing Worldwide for Various Unfair Trade Practices

By Overhauser Law Offices, LLC

Indianapolis, Ind. — Trademark lawyers for American Professional Nursing Resources, LLC (“APNR”) and Doyle Silvers (“Silvers”) of La Fontaine, Ind. sued Medical Staffing Worldwide, LLC (“MSW”) of Marion, Ind. et al. for use of APNR’s trademark and trade secrets; for breach of contract and fiduciary duty; for tortious interference with contracts and for violation of § 43(a) of the Lanham Act.

In March 2004, Silvers formed APNR, a global recruitment company that assists domestic employers in recruiting foreign medical professionals by providing domestic screening, training tools and foreign processing facilities. APNR and Silvers recruited Larry Myers (“Myers”), Tom Reto (“Reto”), Jon Marler (“Marler”), Dan Hasslinger (“Hasslinger”) and James Greg Bowers (“Bowers”) to develop APNR into a fully operational business. Benny Spensieri (“Spensieri”), who signed a Non-Disclosure Agreement (“NDA”), was also recruited. Myers, Reto, Marler, Hasslinger, Bowers and Spensieri agreed to maintain the secrecy of APNR’s confidential, proprietary and trade-secret information.

Silvers provided Myers, Reto, Marler, Hasslinger, Bowers and Spensieri with confidential, proprietary and trade-secret information of APNR including its business plan, business model, financial information, and methods and techniques for global recruitment, immigration, screening and training of foreign medical professionals.

In the summer of 2012, Myers, Reto, Marler, Hasslinger, and Bowers reserved the business name “Medical Staffing Worldwide, LLC.” Using that name, they formed a company that allegedly had the same business plan, business model and financial projections as APNR and that used identical methods and techniques for global recruitment, immigration, screening, and training of foreign medical professionals as APNR. MSW also began using APNR’s trademark, “The Future of Medical Staffing,” which APNR had used since 2005.

APNR and Silvers filed suit alleging breach of contract, breach of fiduciary duty, misappropriation of trade secrets, tortious interference with contracts and violation of § 43(a) of the Lanham Act. They ask for actual, consequential and punitive damages; attorneys’ fees; costs; and pre-judgment and post-judgment interest.

Practice Tip: Indiana considers non-compete agreements to be in restraint of trade and, thus, construes them narrowly. In other states, there has also been a growing trend, fueled in no small part by states’ difficulties in paying increasing unemployment benefits, to limit via legislation the enforceability of non-compete agreements. Among the states that have considered such limitations are Maryland, New Jersey, Minnesota, Massachusetts and Virginia.

March 8, 2013

Continuation of At-Will Employment Held to be Adequate Consideration for Noncompetition Agreement

By Overhauser Law Offices, LLC

Indianapolis, IN – The Indiana Court of Appeals has reversed the decision of the Marion Superior Court to deny injunctive relief to Clark Sales & Service, Inc. (“Clark”) of Indianapolis, Indiana in its suit against John D. Smith (“Smith”) and Ferguson Enterprises, Inc. (“Ferguson”) of Newport News, Virginia.

In 1998, Smith began working for Clark, a company that sells and services appliances in the builder-distributor market in Indiana. In 2004, after one of its high-level managers left Clark for a competitive position at another company, Clark had Smith and various other employees sign a written employment agreement containing both a confidentiality clause and a noncompetition agreement.

Smith resigned his position at Clark on April 13, 2012 but, before doing so, he took copies of Clark’s sales records from 2010 and 2011, including customer and builder contact information, the price of materials sold and Clark’s costs and profit margins. On April 18, 2012, he accepted an offer of employment with Ferguson, a nearby competitor. In his new position, he solicited business from various Clark customers.

Attorneys for plaintiff Clark sued to enforce the confidentiality and noncompetition provisions of the agreement entered into with Smith. The trial court granted Clark’s non-disclosure request and ordered the confidential documents to be returned but it denied Clark’s request for an injunction to enforce the noncompetition portion of the employment agreement. The trial court noted that there had been no incentive for Smith to agree to the noncompetition provision in the form of, for example, the commencement of a new job or a pay raise. It held that, as a result, the noncompetition agreement failed for lack of consideration.

Clark filed an interlocutory appeal. In a memorandum decision, the Indiana Court of Appeals found that the trial court had abused its discretion by denying the injunction and reversed the decision. The appellate court held that Indiana law, as enunciated by the Indiana Supreme Court, was that an employer’s promise to continue an employee’s at-will employment was sufficient consideration to support the employee executing a new employment contract with a noncompetition agreement. No raise or other additional incentive was required.

The appellate court remanded the matter to the trial court for further proceedings regarding the reasonableness of the noncompetition agreement.

Practice Tip: Covenants not to compete are in restraint of trade and are not favored by the law. If a court applying Indiana law finds that portions of a noncompetition agreement are unreasonable, it may not modify the restrictions to make them reasonable. Doing so would subject the parties to an agreement they had not made. The court may, however, employ the “blue pencil” rule to “cross out” portions deemed unreasonable while leaving any separable and reasonable portions intact.

August 1, 2012

Attorneys’ Fees Awarded to Defendant in Trade Secrets Case

By Overhauser Law Offices, LLC

Indianapolis IN. Lawyers representing the defendant, Loparex, LLC were awarded their attorneys’ fees in a trade secret infringement case filed against it by MPI Release, LLC. Loparex had previously filed a trade secret case in Illinois against one defendant, Mr. Kerber. However, when Loparex sought a temporary restraining order in the case, the Illinois judge told Loparex that “I don’t think you have identified protectable trade secrets.This is a very broad list of claimed secrets, supposedly, that I think largely are under the umbrella of skill that he has developed having worked in this industry for such a long time.” Shortly after that hearing, Loparex dismissed the Illinois suit and then filed a new suit in Indiana, which added defendant, MPI Release and another person as a defendant.

When Loparex sought a preliminary injunction in the Indiana case, the Court commented stating, “You brought this lawsuit and have the burden of proof, and you have a particularized burden here with a request for a preliminary injunction to show that specific trade secrets were misappropriated.” Following this comment, Loparex withdrew its motion citing its inability to establish “actual misappropriation”, despite “substantial discovery.” The Court later granted a summary judgment in favor of the defendants, and the defendant MPI sought to recover its attorneys’ fees.

The Court found that MPI was entitled to recover its attorneys’ fees under the Illinois Uniform Trade Secrets Act because the claim had been made “in bad faith.” In addition, the defendants separately sought attorneys’ fees under 28 USC § 1927, which allows an award of attorneys’ fees against an attorney “who so multiplies the proceedings in any case unreasonably and vexatiously.” The Court found the case suitable for an award of attorneys’ fees under 28 USC § 1927. Significantly, the Court held one of Loparex’s attorneys personally liable for MPI’s attorneys’ fees, stating, “He could and should have intervened when MPI sought a take-no-prisoners litigation strategy. As an enabler of the client’s unreasonable litigation desires, he becomes personally liable for them too.” Accordingly, Loparex’s attorney was found liable for MPI defendant’s attorneys’ fees, $475,332.70.

Practice Tip:

This ruling is significant because it is rare for a Court to award sanctions under 28 USC § 1927. It appears the Court found it significant that plaintiff asserted the claims even though it had dismissed the same claim filed previously in an Illinois court. Loparex also sought to avoid sanctions under 28 USC § 1927 by arguing that the defense counsel had alleged unclean hands, namely “unreasonably aggressive litigation from the other side.” The Court did not consider that argument, rejecting “and if you can do it, I can do it too” attitude towards litigation misconduct. The Court instead stated that the plaintiff, Loparex, or its attorney, Mr. Pautsch, should have filed a § 1927 motion against defense counsel when it established unreasonable behavior on defense counsel’s part.

January 23, 2012

Angie’s List Sues Click and Improve over Theft of Computer Files, Breach of Contract: Case Removed to Federal Court

By Overhauser Law Offices, LLC

Indianapolis, IN – A trade secret and breach of contract lawsuit filed in Marion County Superior Court has been removed to the Southern District of Indiana. In December, intellectual property attorneys for Angie’s List of Indianapolis, Indiana filed a suit in Marion County Superior Court alleging Click and Improve, Inc. d/b/a, ClickAndImprove.com, Avi Zikry and Jesse Friedman of New York State breached a membership agreement by misappropriating trade secrets and committing computer fraud and abuse.

Angie’s List provides consumer reviews of different service providers. Click and Improve is a competitor website started in 2011. Zikry and Friedman are Click and Improve’s principles. The complaint alleges Zikry and Friedman became a member of Angie’s List in 2011 and signed a membership agreement that limited the ways that members could use the information on Angie’s List. The complaint alleges Zikry and Friedman essentially stole reviews and other information on Angie’s List and published the information on their competing website. The complaint states over 24,000 proprietary files were stolen. The complaint makes claims of breach of contract, tortuous interference with contract, misappropriation of trade secrets, computer fraud and abuse, computer trespass, conversion, fraud and theft. Angie’s List seeks an injunction, damages, treble damages, costs and attorney fees.

Practice Tip: Any case filed in state court that makes a federal claim can be removed to federal court upon request. Most intellectual property cases involve a federal claim under the federal patent, trademark or copyright laws. Here, however, the plaintiff made a federal claim under the Computer Fraud and Abuse Act, 18 U.S.C. § 1030.
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January 13, 2012

Northern District Denies Motion To Amend Protective Order In Patent Infringement Case Over Mobile Banking Vehicle

By Overhauser Law Offices, LLC

Fort Wayne, IN – The Northern District of Indiana has denied a Motion to Amend a Stipulated Protective Order in a patent infringement case. Romary Associates Inc. of Fort Wayne, Indiana had filed a patent infringement lawsuit in the Northern District of Indiana alleging that KIBBI LLC d/b/a Renegade Custom Coaches and Trailers, McKibbin Enterprises, Inc. and KIBBI, Inc. all of Bristol, Indiana infringed patent no. 7,475,809, MOBILE BANKING VEHICLE, which has been issued by the US Patent Office. The invention is essentially a bank branch that can be.

The parties entered a Stipulated Protective Order in February 2011. Romary had moved to have the stipulated protective order amended to have certain “strategic” information designated “Highly Confidential – Outside Attorneys’ Eyes Only.” The original protective order allows the other party’s attorneys as well as officers and employees to view confidential information. Romary now argued that KIBBI is seeking market analysis and strategic planning documents in discovery and that such document should be subject to heightened protection. Romary argued this type of disclosure was not foreseeable.

The court, in summary, held that these types of disclosures should have been foreseeable to Romary when the original protective order was entered. Therefore, the court failed to find “good cause to amend the protective order.

Practice Tip: This case raises issues of how litigation can cause trade secret protection to be impaired if a protective order is not carefully drafted. Protective orders, which can designate certain trade secrets “attorneys’ eyes only,” are intended to prevent the disclosure of trade secrets and other intellectual property.
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December 29, 2011

Eight Circuit Affirms Judgment for Rolls Royce over Trade Secrets

By Overhauser Law Offices, LLC

St. Louis, MO – The Eighth Circuit Court of Appeals has affirmed a lower court’s summary judgment in favor of Rolls Royce Corporation of Indianapolis and a jury’s award of $350,000. Intellectual property attorneys for Avidair Helicopter Supply, Inc. of Lee Summit, Missouri had filed a lawsuit seeking a declaration that it had not violated Indiana’s Trade Secret laws relating to trade secrets of the Rolls Royce Corporation of Indianapolis, Indiana. The case was originally filed in the Southern District of Indiana in 2006 but was transferred to the Missouri Western District Court in 2007.

The Court of Appeals affirmed the district court’s judgment. One issue that the Court of Appeals looked at was the definition of a trade secret. The Uniform Trade Secret Act provides that a trade secret is: “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

Practice Tip: This case makes a claim under Indiana’s Trade Secrets Act, which allows a plaintiff to seek an injunction and damages when someone has misappropriated a trade secret. Indiana’s trade secret law is based upon the Uniform Trade Secret Act.
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