Trade secret misappropriation cases turn on details. Accordingly, it is always interesting to see the particular details which tilt a court’s decision one way or the other.
In Lincoln Chemical Corp. and Dole v. Dubois Chemicals, Inc. and Galaxy Associates, Inc., Judge Miller of the Northern District of Indiana was faced with a motion for a preliminary injunction in a case involving, among other things, an alleged misappropriation of trade secrets by a former employee, Edward Dole. According to Judge Miller’s decision, when Dole switched employers, he “retained on his personal computer considerable proprietary information” of his former employer. Dole stated that he “retained it simply because [his former employer] never asked for its return or destruction,” and this raised an issue of whether Dole’s continued possession of this information was sufficient to support a misappropriation claim.
On this question, Judge Miller noted that Dole’s employment agreement contained a clause requiring him “to turn over all confidential information (including trade secrets) to his employer when his employment ended.” Because he did not do so, irrespective of whether the former employer ever specifically asked for the information’s return or destruction, Judge Miller held that Dole “misappropriated the information because he possesses it through improper means.”
Judge Miller’s ruling on this issue illustrates that when drafting an employment agreement or assessing the viability of a misappropriation claim, contractual clauses requiring the return of all company property and confidential information at termination should be given serious consideration.