Saturday, March 12, 2016

Former storage tank company manager in Kansas did not take trade secrets; speculation not "hard evidence"

Haight, once International Sales Manager of Tank Connection, a manufacturer of large storage tanks, was charged with trade secret theft. He made an unqualified denial, and there was no "hard evidence of wrongdoing." Haight prevailed.

From the post at Seyfarth Shaw by Paul E. Freehling :

Tank Connection’s expert witnesses determined that, shortly before Haight’s resignation, he accessed the company’s server and transferred to the company’s laptop and flash drives, and to his own flash drives, a lot of confidential information. The company contended that “harvesting” of that data circumstantially supported the claim that he had used proprietary information improperly and/or had disclosed it to his new employer. However, Chief Judge Marten ruled that without any hard evidence of wrongdoing, and in the face of Haight’s unqualified denial of culpability, Tank Connection’s speculation of improper conduct was insufficient to create KUTSA liability.

Tank Connection alleged that its damages from Haight’s “misappropriation” aggregated $1,238,000: $1.2 million that the company had expended for creating, developing and updating the computer programs, plus $38,000 it had paid to the experts. Chief Judge Marten rejected the $1.2 million claim because the company did not show any loss of data, damage to its computers or programs, unfair competition, or unjust enrichment. Further, the statutory alternative of assessing “a reasonable royalty” was inapplicable due to the absence of proof that Haight disclosed or used confidential information.



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