Court Orders Software Expert to Review and Report Back in Misappropriation of Trade Secrets
In the business law and commercial litigation case of Sandvik, Inc. v. Mecca C & S, Inc., PICS Case No. 14-0854 (C.P. Lackawanna County, May 21, 2014) the Honorable Terrence R. Nealon appointed an expert to investigate competing claims and report back to both parties for further review where the manufacturer sued its former employee for alleged misappropriations of trade secrets, based on its review of the ex-employee’s business website.
Plaintiff asserted that defendant employee sold design software that improperly incorporated the manufacturer’s proprietary information in contravention of his employment agreement and Pennsylvania trade secrets law. The former employee contended that he developed superior spring technology software utilizing publicly available engineering concepts and his own ingenuity. The defendant employee appealed the special trial master’s discovery ruling requiring him to provide the manufacturer access to his spring technology software, arguing that the grant of such discovery will enable the manufacturer to discover and possibly replicate his own proprietary information and confidential formulas reflected in the software.
Plaintiff Sandvik, Inc. maintained a business unit, Sandvik Materials Technology, which designed and manufactured spring products, including custom-engineered power springs. From 1995 to 2009, defendant William Mecca was employed by Sandvik as a process engineer, senior production facilitator, manufacturing engineering manager and Spring China operations manager. In 2009, Mecca formed defendant Mecca C & S, Inc., which was engaged in the business of selling custom-engineered spring technology software.
Sandvik filed a complaint against Mecca asserting causes of action for breach of the nondisclosure provisions of his employment contracts, misappropriation of trade secrets and confidential business information under the Pennsylvania Uniform Trade Secrets Act and unjust enrichment. In connection with those claims, Sandvik sought information regarding Mecca’s development and sales of the spring software at issue and demanded production of Mecca’s spring design software, including its design development.
After Mecca objected to the software discovery on the ground that it sought his own trade secrets and confidential information, Sandvik presented a motion to compel discovery to the special trial master, while Mecca submitted a motion for a protective order prohibiting any such discovery. The special master denied Mecca’s motion for a protective order and granted Sandvik’s discovery motion subject to a confidentiality stipulation. Mecca appealed the special master’s discovery ruling.
The circular reasoning surrounding the parties’ discovery dispute could be summarized as follows: Sandvik contended that Mecca misappropriated Sandvik’s trade secrets by including its confidential information in Mecca’s spring technology software, and sought access to that software in order to prove its claims. Mecca argued that Sandvik’s requested discovery would improperly enable Sandvik to obtain Mecca’s trade secrets and proprietary information.
To resolve this circular reasoning, the court appointed a spring technology software expert to review the parties’ respective spring technology software, to determine whether the defendant employee’s software impermissibly integrated the manufacturer’s trade secrets as alleged, and pursuant to the protocol set forth, to prepare a report of the expert’s findings. After the expert provided that report to the defense, the former employee could either furnish it to the manufacturer or file his objection to its production to the manufacturer. If the latter, the expert’s report would be submitted for an in camera review by the court to determine the discoverability of the report and the software at issue.
Reference: Digest of Recent Opinions, Pennsylvania Law Weekly, 37 PLW 544, (June 10, 2014)
Filed under: Business Law; Business/Commercial Litigation: Misappropriation of Trade Secrets; Confidential Business Information
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