Justia Intellectual Property Opinion Summaries

The plaintiff, a manufacturer of resinous flooring systems, sued a former employee, the defendant, for breaching a noncompete agreement, violating the Connecticut Uniform Trade Secrets Act (CUTSA), and breaching a common-law duty of confidentiality. The defendant, who had signed a noncompete agreement as a condition of continued employment, later established his own floor coating business and used the plaintiff’s proprietary information to develop competing products. The plaintiff alleged that the defendant also assisted competitors in developing their products.In a separate but related case, the trial court found the noncompete agreement unenforceable due to lack of consideration and ruled that the common-law duty of confidentiality claim was preempted by CUTSA. The court also determined that a payment made to the defendant after his resignation was severance pay, not compensation for reaffirming the noncompete agreement. Based on these findings, the trial court in the present case granted summary judgment for the defendant, applying collateral estoppel to preclude further consideration of the issues.The Connecticut Supreme Court reviewed the case and concluded that the trial court had incorrectly determined the noncompete agreement was unenforceable for lack of consideration. The Supreme Court reversed the trial court’s judgment on the breach of the noncompete agreement claim and remanded the case for further proceedings to determine whether the agreement was supported by adequate consideration. The court upheld the trial court’s findings that the severance payment was not consideration for reaffirming the noncompete agreement and that the common-law duty of confidentiality claim was preempted by CUTSA. These rulings were binding in the present case. The judgment was reversed in part and affirmed in part, with further proceedings required to determine the enforceability and potential breach of the noncompete agreement. View "Dur-A-Flex, Inc. v. Dy" on Justia Law

The plaintiff, a developer and manufacturer of resinous flooring systems, sued several individual and corporate defendants for misappropriation of trade secrets, among other claims. The key individual defendant, S, was a former employee who developed a product called Poly-Crete for the plaintiff. After resigning, S started his own business and developed similar products, allegedly using the plaintiff’s trade secrets. The plaintiff claimed that S and other defendants, including companies that tested and used S’s products, misappropriated its trade secrets.The trial court conducted a bench trial in three phases. In the first phase, the court found that the plaintiff’s formulas for Poly-Crete and other products were trade secrets but ruled that the noncompete agreement S signed was unenforceable due to lack of consideration. The court also found that the plaintiff’s common-law confidentiality claim was preempted by the Connecticut Uniform Trade Secrets Act (CUTSA).In the second phase, the court found that S and some defendants misappropriated the plaintiff’s trade secrets to create products like ProKrete and ProSpartic. However, it ruled that other defendants, including Indue, Krone, ECI, and Merrifield, did not misappropriate the trade secrets as they did not know or have reason to know about the misappropriation. The court also granted attorney’s fees to Krone and ECI, finding the plaintiff’s claims against them were made in bad faith.In the third phase, the court ordered the defendants who misappropriated the trade secrets to disgorge profits and enjoined them from using the trade secrets. The court also sanctioned the plaintiff for attempted spoliation of evidence by its president, F, who tried to remove incriminating photos from the company’s Facebook page during the trial.The Connecticut Supreme Court affirmed the trial court’s rulings on most issues but reversed the judgment regarding the enforceability of the noncompete agreement and the standard for determining misappropriation. The case was remanded for further proceedings on these issues. View "Dur-A-Flex, Inc. v. Dy" on Justia Law