District of Massachusetts IP Blog

Former Environmental Executive Sued

BGI, Inc. (Waltham, MA) sued its former president for misappropriation of trade secrets, breach of fiduciary duty, and other counts related to the president’s alleged taking BGI’s secrets to his own company. 

BGI, Inc. v. Merrifield, 12-10658-RWZ (D. Mass. Apr. 12, 2012)

Coin-Grading System Palmed

An individual (and registered patent attorney) living Norfolk County, MA has sued Professional Coin Grading Service (Santa Ana, CA) and others for a variety of counts including Lanham Act violations, conversion, trade secret misappropriation, and breach of contract related to the defendants’ purported co-opting of the plaintiff’s (patent pending) AURA System for coin safeguarding, labeling, and monitoring.  The footnote filled complaint alleges that he pitched his system to the defendants under a confidentiality agreement but that they turned around and used it for themselves without compensation. 

Blake v. Professional Coin Grading Service, 11-11531-WGY (D. Mass. Aug. 31, 2011)

ARMS Case Sent Back to Judge Saris

The various ARMS cases have been mentioned several times in this blog.  One of them went up to the Federal Circuit, which just issued its decision.  In it the Federal Circuit affirmed Judge Saris’ invalidation of ARMS’ Reissue Patent No. 39,465 (directed to a firearm handguard) for failing to meet the written description requirement, but it also vacated a million dollar jury verdict because of a potential jury taint issue.  The appeals court’s logic was as follows: 

NDA Breach Claims Stay in Stent Suit

OrbusNeich Medical and Boston Scientific Corp. are engaged in a patent and trade secret / NDA dispute over intravascular stents that has bounced around from the Eastern District of Virginia to two different judges in D. Mass.  BSC has moved to dismiss the non-patent claims several times.  Some were dropped by Orbus when it pared down its case in its Third Amended Complaint, others remained.  BSC had moved once to dismiss claims stemming from BSC’s alleged breach of an NDA as untimely under the statute of limitations.  That motion was denied by Judge Tauro.  The case was then moved to Judge Stearns where BSC tried again, this time with a motion for summary judgment.  Judge Stearns also denied the motion citing factual questions surrounding application of the discovery rule, fraudulent concealment, and a possible fiduciary relationship. 

OrbusNeich Medical Co. v. Boston Scientific Corp., 09-10962-RGS (D. Mass. Mar. 21, 2011)

Defendant Enjoined From Using Competitor’s Customer Lists

Cheaters never prosper.  Particularly when caught red-handed and hauled into federal court. 

In this decision by Judge Casper (her first noted by this blog), Topcon Medical, an optical device company, was enjoined from using plaintiff Optos’ customer list, surreptitiously supplied by a former Optos employee who was hired, then fired (post-lawsuit) by Topcon.  Optos accused the employee of breach of his employment agreement and accused both the employee and Topcon of trade secret misappropriation.  Optos had been clued in to the shenanigans by a former Topcon employee who leaked several damning emails.  (Oops.) 

The defendants moved to dismiss for lack of personal jurisdiction, but that motion was denied.  Most of the requested injunction was granted but the court refused to enjoin Topcon from contacting all the Optos customers on the list in question because some were customers of other Topcon products which did not compete with Optos’ products. 

Optos v. Topcon Medical Sys., Inc., 10-12016-DJC (D. Mass. Mar. 7, 2011)

One A.R.M.S. Case Hits Final Judgment

As noted in previous posts (here and here) local weapons maker A.R.M.S. had succeeded at trial on a trade secret claim against a former employee and his new company, but had met defeat on summary judgment on its patent infringement claim.  Judge Saris has now entered final judgment on the above claims (including a $1.8M judgment against the defendant) and a counterclaim for patent infringement has been dismissed for lack of prosecution.  No doubt that $1.8M verdict against it had some impact on Defendant’s failure to proceed on the counterclaim. 

Atlantic Research Marketing Systems, Inc. v. Troy Industries, Inc., 07-11576-PBS (D. Mass. Sep. 2, 2010)

Successful Trade Secret Plaintiff Awarded Fees, But Not Enhanced Damages, Under 93A

In 2007 Atlantic Research Marketing Systems, Inc. (West Bridgewater, MA) sued Troy Industries, Inc. (West Springfield, MA) and its founder (a former A.R.M.S. employee) for misappropriation of trade secrets, breach of fiduciary duty, and deceptive trade practices in violation of 93A.  A jury awarded A.R.M.S. $1.8M at trial for all but the 93A count, which Judge Saris reserved for later proceedings.  Judge Saris just entered her decision, which can be found here.

The opinion summarizes the facts of the case, the salient points of which are:  Troy worked at A.R.M.S. for a year or so before leaving following a disagreement with the owner.  Very shortly thereafter Troy began marketing a similar product to one A.R.M.S. had in secret development while Troy was an employee.  Troy was found to have engaged in misappropriation of trade secrets but there was no evidence that he had become an A.R.M.S. employee under false pretenses, that he intended any particular harm to A.R.M.S. through his actions, etc.

 

In her ruling Judge Saris found that Troy had engaged in deceptive trade practices but did not engage in overtly egregious behavior that was sufficiently “knowing and willful” to trigger the punitive remedy of enhanced damages.  Because the plaintiff’s actual damages under 93A were covered in the jury’s award, the additional recovery was limited to an award of reasonable attorneys’ fees, expenses and costs, including expert fees. 

Atlantic Research Marketing Systems, Inc. v. Troy Industries, Inc., 07-11576-PBS (D. Mass. May 11, 2010)

Statute of Limitations Defense Fails to Defeat Claims From Breach of 2000 Contract

In a case that was transferred from the E.D. Va., OrbusNeich Medical (“Orbus”) alleges Boston Scientific Corp. (“BSC”) infringes two patents relating to luminal stents and also asserts various non-patent claims including misappropriation of trade secrets.  In particular, Orbus claims that BSC breached a 2000 confidential disclosure agreement by filing its own patent applications for Orbus technology, though the complaint did not clearly identify which specific patent applications were improper.

 

BSC moved to dismiss the non-patent claims for various grounds, including a statute of limitations defense.  Orbus moved to strike a number of documents relied on in BSC’s motion arguing that the court was only permitted to decide the motion to dismiss on materials that were expressly incorporated in the complaint. 

 

Judge Tauro granted-in-part the motion to strike, finding that at least one of the documents (a BSC patent application published in 2002) was a close enough match to an incorporated patent application to merit consideration by the court and another document (a 2002 BSC annual report publicly filed with the SEC) warranted consideration under judicial notice as a public record.

 

Judge Tauro declined to dismiss claims under the statute of limitations.  Relying on Massachusetts law (pursuant to the conflict of laws provisions of the CDA) the court found that it could not charge Orbus with knowledge of either the published patent application or the annual report because Orbus had no duty to review them because no facts existed provoking Orbus to investigate.

 

Orbus’ claim for fraud was dismissed for failure to plead the claim with sufficient particularity required by Rule 9(b).  Orbus’ claim for unjust enrichment was dismissed as being precluded by the CDA. 

 

http://pacer.mad.uscourts.gov/dc/cgi-bin/recentops.pl?filename=tauro/pdf/orbusneich%20v%20boston%20scientific%20mtd%20memo.pdf

 

OrbusNeich Medical Co., Ltd., BVI, v. Boston Scientific Corp., 09-10962-JLT (D. Mass. Mar. 18, 2010)

Injunction on Trade Secrets Allowed in Part

CheckFree Corp. sued its former vice-president and his new employer, Charles River Systems, for misappropriating CheckFree’s customer list.  At the preliminary injunction hearing Judge Stearns ordered that any copies of the list be returned and that Charles River preserve any evidence that might show any misuse of the information on the list.

 

A recent order refused to go further and denied the injunction to the extent it would have forbade the defendants from transmitting any information contained in the list for any purposes or restrained them from doing business with or initiating contact with the entities on the list.  The court found those requests overbroad and unworkable.  Judge Stearns was also concerned about the overlap in CheckFree’s customer list and Charles River’s pre-existing customer and prospect lists.  He also was dissuaded by the overly aggressive (and somewhat prolix) briefing of the plaintiff’s attorneys.

 

http://pacer.mad.uscourts.gov/dc/cgi-bin/recentops.pl?filename=stearns/pdf/checkfree.pdf

 

CheckFree Corp. v. Charles River Systems, Inc., et. al., 10-10350-RGS (D. Mass. Mar. 17, 2010)

Trade Secret Case Filed by Dutch Company Stays in Boston

DSM Research (Netherlands) sued Verenium Corp. (MA) for unauthorized use of confidential information and trade secrets.  Verenium moved to transfer the case to the S.D. Cal.  Judge Gorton denied the motion.

Verenium is the successor to a San Diego, CA company that entered into a material transfer agreement with DSM to develop a microbial strain for use in biofuels.  DSM alleges that the predecessor company developed the strain without a proper licensing deal in place. 

The Court declined to transfer, despite the location of many witnesses and documents in California, because (1) Verenium is headquartered in MA, (2) California is twice as far from Holland as MA, and (3) the strong presumption in favor of plaintiff’s choice of forum.

DSM Research, B.V. v. Verenium Corp., 09-10045-NMG (D. Mass., Feb. 19, 2010)

http://pacer.mad.uscourts.gov/dc/cgi-bin/recentops.pl?filename=gorton/pdf/dsm%20transfer.pdf