The lawsuit was filed five years ago and it took about a day for the jury to make its decision: the evidence didn’t show one of the Middle East’s most prominent banks, Emirates NBD, committed fraud and stole technology from an Irvine firm, InfoSpan, that sued it for half a billion dollars in damages after a partnership between the two collapsed.
InfoSpan claimed in a federal court lawsuit that Dubai based Emirates NBD ended a partnership to develop and implement a mobile payment system because it didn’t want to share revenue and stole InfoSpan’s technology to launch its own service, according to the Los Angeles Times. The company sought $540 million in damages.
Emirates denied it stole or ever used InfoSpan’s technology. It claimed it cancelled the partnership because InfoSpan couldn’t do what it promised to do: produce a working product. The bank also alleged InfoSpan misled it into thinking it was an established company, not one with little to no track record.
A start up company may be in need of funding and see an investor as a savior for the company. But companies need to protect themselves and be wary of investors as much as they may need their money. A company needs to guard itself against the possibility of an investor stealing intellectual property and using it for its own purposes.
Data analytics company Palantir Technologies has filed a lawsuit against one of its earliest investors, Marc Abramowitz, accusing him of stealing intellectual property (new business ideas) then trying to patent them under his own name, according to Law.com. Abramowitz, invested in 2005 and had an office at the company’s Palo Alto headquarters.
The complaint, filed in Santa Clara County Superior Court, alleges he used his position to steal Palantir’s plans for applying the use of massive amounts of data in new ways for new types of customers. The situation resulted in the company’s other major investors changing Palantir’s Investor Rights’ Agreement to prevent Abramowitz from getting access to additional confidential information.
A recent federal court decision from Connecticut has laid down some potentially new rules when it comes to trademarks and internet marketing. The lawsuit pits two competing companies and a dispute as to whether marketing practices of one company were meant to illegally steal away potential customers of the other.
The products being sold are fruit. Plaintiff Edible Arrangements, LLC, is a seller of artfully designed fresh fruits that are sculpted in the shapes of flowers and arranged to resemble floral arrangements. Defendant Provide Commerce, Inc., is a direct competitor which sells a variety of products including flowers, chocolates, fresh fruit, gift baskets and personalized gifts under brands such as “ProFlowers” and “Shari’s Berries” which offers a variety of items through its online store.
Judge Vanessa L. Bryant’s decision on defendant’s motion for summary judgement covered trademark infringement in the world of internet keyword advertising. She denied Provide’s request for partial summary judgment against trademark owner Edible Arrangements, which sued it for trademark infringement.
A stagnant company, one that’s not looking to improve on its products or come up with new ones, may not have a bright future. There may be pressure to come up with the next successful products as well as pressure to cut costs and improve profits. That may result in legal problems if a company illegally uses someone else’s concept without their approval or paying them. A recent Bloomberg article spelled out this problem of intellectual property theft in the toy industry.
Ellie Shapiro came up with a toy in 2012. They were little animal figurines with snow globes in their bellies which she called Wishables. She worked as a freelance toy inventor but prior to that she spent ten years as an executive at Mattel Inc. and Walt Disney Co. Shapiro pitched her toy ideas to toymakers including Hasbro, Inc.
She signed a confidentiality agreement, met with Hasbro executives in Santa Monica in 2013 and showed off her prototypes, sample packaging and feed back from focus group testing. Executives liked the presentation, asked for samples but later told her they were passing on the idea.
In the fall of 2014 she walked into a Target store and saw a new Hasbro toy, an animal figurine that was also a snow globe. “At first, I was in shock and in disbelief,” Shapiro told Bloomberg. “Then I felt completely sick.” She later sued Hasbro for stealing her idea in federal court in the Central District of California. The company responded by saying snow globes have been used in toys for years and a similar design was developed in-house in 2012, prior to her submission.
Shapiro sued an Australian toy maker previously and settled the case in 2014. In the past she felt Hasbro stole a previous idea, threatened to sue them but ultimately did not. Freelancers like Shapiro face the double threats of having their ideas stolen and not making any money or suing (which can be expensive) and getting a litigious reputation risking being avoided by toy companies and not making any money. Some inventors see theft as the cost of doing business, hoping eventually a company may agree to pay for an idea.
Trade secrets are the life blood of a business. They can be marketing plans, customer lists or product designs. Because they have value sometimes they are stolen often by an ex-employee or business associate. This theft can be seen as treachery, the business equivalent of a stab in the back. No matter how high emotions are running if a lawsuit has been filed or is being considered, the reality is the vast majority of cases settle.
Since that’s the case whether you’re a plaintiff or defendant in a trade secret theft case you should think about your interests, your goals and how they may be reached through a settlement. These cases can be very expensive in time, energy and money. If a settlement can be achieved fairly quickly with reasonable terms it may be your best option over a long litigation slog and rolling the dice at a trial.
What would be reasonable terms? They should be based on what could be attained without a settlement. Be realistic. Trying to hammer away at the other party to get terms that would be unlikely through litigation will probably be a waste of time and just antagonize the parties even more. On the other hand, setting your sights too low makes the process not worth it.
What do you need to settle? What would you like to settle? You must decide before starting negotiations.
Out of fear or anger you may seek litigation to try to get injunctive relief or a seizure of your trade secrets. But without enough facts an attempt at injunctive relief will probably fail. Another way to seek what you want is through negotiations.
You will have to contact the suspected bad actor, or their attorney, to see if there is interest in negotiation or mediation. This should be in writing, in a business-like fashion, without hostility which may end discussions before they start. You should include some details as to when and where and what information should be exchanged in advance.
Allegations a growing national pizza chain improperly hired an IT executive away from one of the nation’s leading “fast casual” restaurants is the basis of a recent lawsuit filed in federal court in St. Louis. At issue to the potential loss of intellectual property, specifically technology such as digital ordering kiosks, according to the St. Louis Business Journal.
Panera Bread Co., based in the St. Louis area, states it filed a lawsuit in July against a former IT executive and his new employer, Papa John’s International Inc., in order to protect its technology trade secrets. Panera claims Papa John’s knowingly interfered with an employee contract to gain trade secrets involving its technology. The plaintiff seeks injunctive relief, damages, attorneys’ fees and a jury trial.
Michael Nettles is the former Panera employee at the center of the legal storm. He’s a named defendant in the suit who was Panera’s vice president of architecture for the company’s information technology department from 2012 to July 1, 2016. Panera states he had “privileged access” to its tech based initiatives and was involved in every aspect of their development.
The lawsuit claims Nettles knows of Panera’s high-level discussions about using technology, developing an intimate knowledge of Panera’s strategic technology plan. Panera stated it has invested more than $42 million in its digital and tech strategies including enabling customers to order via their smartphones or in-store kiosks.
Nettles allegedly signed a non-compete agreement with a list of competitors (including Papa John’s) where he couldn’t work for a period of time. Papa John’s is accused of knowing about the agreement but still pursuing Nettles.
It’s hard to imagine life before the Post-It Note. Thanks to the just sticky enough pieces of paper reminders and lists can be put in all the right places to remind us of what needs to be done. One man who claims he’s the original inventor is suing 3M, Post-It Notes’ maker, for allegedly failing to live up to a settlement agreement of a prior lawsuit he filed claiming the company wrongfully claimed it’s the rightful inventor.
Alan Amron holds 40 U.S. patents, according to the Associated Press (AP), but what gets most of his attentio is the invention for which he’s not getting credit, the Post-it Note. Amron states he invented an earlier version, the Press-on Memo, in 1973 a year before 3M developed their product. Amron settled a prior lawsuit against 3M but he’s back in federal court in Fort Lauderdale, Florida, claiming 3M breached its previous, confidential agreement not to take credit for the invention.
He’s seeking $400 million in damages and an admission that Amron invented the product. “Every single day that they keep claiming they invented it damages my reputation and defames me,” he claims.
3M claims Post-it Notes were invented by their employees Arthur Fry and Spencer Silver. Silver supposedly came up with the adhesive and Fry had the idea of using it for small, yellow squares of paper. The company states neither Amron nor his Press-On Memos had anything to do with the development of their product. 3M told AP they’re within their rights in the prior settlement to claim credit for creating the Post-it Note.
“Lucky 13” wasn’t so lucky for pop star Taylor Swift who found herself being sued by Blue Sphere, a seller of clothing of the same name based in Orange County. The lawsuit was filed in May 2014, according to the Hollywood Reporter, and settled in November. The terms of the settlement agreement are confidential. Blue Sphere accused Taylor of infringing on its “Lucky 13” trademarks which it has held since 1991, reports Rolling Stone. The trial was expected to start in January.
Her website describes the 25 year old Swift (whose birthdate is December 13) as,
- A seven time Grammy award winner and the only musician to have three albums sell over a million copies in their first week of sales,
- The first musician since the Beatles (and the only female) to have albums six or more weeks ranked as the number one seller with three consecutive studio albums,
- One of Time magazine’s 100 Most Influential People in the World, and
- One of eight people narrowed down to be the magazine’s 2014 Person of the Year (she lost out to those battling the then Ebola outbreak).
All businesses have some kind of intellectual property (IP) that helps them stand out from the crowd and be successful. Anything of value is worth protecting, including IP. There are many ways a restaurant’s IP rights can be protected.
Trade secrets are those things a restaurant owner can’t, or doesn’t want to, file for trademark or patent protection. This can include customer lists, marketing and sales plans, processes, recipes and many other items. These things must actually be kept secret. Having employees and vendors sign non-disclosure agreements should help.
Recipes are intellectual property. They can be a trade secret like the formula for Coke. Can they be patented? Patents can be granted for any “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” according to federal patent law. A list of ingredients can be a composition of matter and/or manufacture and how the product is produced can be a process.