October 16, 2002 |

Injunction, Trade Secret

Our clients were software engineers who created the key software technology for a company and then left to form their own company in related, but noncompetitive areas. The former employer filed suit based on alleged infringement of trade secrets, breach of fiduciary duty and other claims. We contended that substantial portions of the software in dispute had been created by our clients before their employment with the plaintiff and other portions of the software were obtained from publicly available internet sites (open source). We defeated a request for Preliminary Injunction. The Court issued an opinion indicating that the former employer had failed to demonstrate the existence of any trade secrets and indicating that the plaintiff had failed to provide any evidence of misappropriation. Unlike many cases, the plaintiff did not discontinue the litigation after losing the Preliminary Injunction. We continued to represent the clients through many unusual battles including our opposition to plaintiff’s request to seal portions of the file (which alleged that the plaintiff, a software security company, was using pirated software). Those allegations were eventually made public in Fortune magazine (June 23, 2003 – Two Faces of Foundstone).