People nowadays want to be updated in a lot of things. For example, a technology enthusiast wants to get updated all the time so that he or she can get the latest gadgets available on the market. By doing so, that person will not be left behind in today's current technological trends.
Now let us take this understanding and put into a business owner's point of view. Getting up-to-date tools for their marketing campaign allows them to acquire a high competitive standing in a more stress-free manner. As such, when contacting prospects through their marketing campaign, it needs a lot fresh leads to allow it to be completed with the greatest of results. These leads will direct the campaign in a straighter path as they will allow businesses to acquire an even greater chance of closing a deal with them.
Getting an updated business database is the best way to improve a b2b marketing campaign. Once the business gets a hand of this great tool for their marketing campaign, a lot of advantages can be attained upon doing so. Let us take a look at some of the major benefits of acquiring this database from a reliable source.
* Obtain a huge number of fresh leads, even on the first try
Many b2b marketing campaigns seem to be more of a trial and error adventure at its early stages because the business may either be using an outdated list or they are still building one. Purchasing the database from a credible provider entitles numerous fresh leads for the campaign. These leads are those possible clients that have not signed any kind of deal with other companies within the same industry as the one who has purchased the database. Hence, the acquisition of transactions from these leads is deemed as an even greater possibility with the aid of an updated database.
* Obtain a good number of praises from prospects instead of their complaints
Contacting other companies randomly is surely not the way to go for the business. Doing so can tarnish the name of ones business. The main reason is because randomly contacting people will generate a great deal of annoyance for the prospect.
Acquiring a business database from a reliable source means that the targeted market has been hit with near perfect precision. This allows the lead to feel that they play an important role in the business' eventful growth.
* Relieves the campaign of a number of possible errors
As stated earlier, businesses may treat their campaign as a trial and error basis during its early stages. During this period, a lot of possible mistakes can occur which hinders the campaign in quickly attaining new opportunities. With a reliable database, business owners will be relieved of a ton of errors for their marketing campaign. Hence, the acquisition of transactions from leads and prospects will be a lot quicker.
* Allow the marketing campaign to be more cost effective than before
Purchasing the business database might not come cheap. However, if purchased from a reliable source, it entitles the campaign to become more cost effective than one without a database. As the database is being lead along a straight path during its course, the probability of attaining a fruitful outcome from it will be very high. As such, the money that was spent in purchasing the database will come back in a the form of a huge increase on the business' rate of income.
Thursday, December 22, 2011
Sunday, December 18, 2011
Expedited Discovery requires “Unusual Circumstances”
A recent opinion out of the Eastern District of Virginia states that “unusual circumstances” must be shown to grant a party expedited discovery. And the court adopted two prongs of the prior test for granting a preliminary injunction to determine when sufficient unusual circumstances exist: a strong showing on the merits and a showing that irreparable harm is likely.
A software development company, ForceX, Inc., sued its former vice president for allegedly forming a competing company that violated a noncompete agreement. ForceX’s complaint alleged (1) beach of duty of loyalty and fiduciary duty, (2) breach of contract, (3) violation of the Virginia uniform trade secrets act, and (4) intentional interference with contract. ForceX filed a Motion for Expedited Discovery seeking discovery in the form of requests for production of documents and a deposition to determine the extent of competitive activities. Plaintiff argued for two standards of review: one for an expedited deposition and another for expedited document requests, but the court found that “all requests for expedited discovery should be governed by the same standard....”
“Courts have found that immediate discovery ‘should be granted when some unusual circumstances or conditions exist that would likely prejudice the party if he were required to wait the normal time.’” Opinion at 5-6, quoting Fimab-Finanziaria Maglificio Biellese Fratelli Fila, S.p.A. v. Helio Import/Export, Inc., 601 F. Supp. 1, 3 (S.D. Fla. 1983).
It is not clear when these “unusual circumstances” exist. The court looked to a history of cases for guidance. Before 2008, the first two prongs of the Blackwelder test for a preliminary injunction—(1) the likelihood of irreparable harm to the plaintiff if the preliminary injunction is denied and (2) the likelihood of harm to the defendant if the preliminary injunction is granted—were weighed against the third prong—the likelihood that the plaintiff will succeed on the merits—to determine whether “unusual circumstances” existed. Opinion at 6. This test was a sliding scale so that as the plaintiff’s showing of a likelihood of irreparable harm grew weaker, their showing of success on the merits would need to be stronger to gain a preliminary injunction.
But after the Supreme Court decision in Winter v. Natural Resources Defenses Council, Inc., 555 U.S. 7 (2008), the Fourth Circuit determined that the Blackwelder test was replaced with the Winter test but did not say which portions of the Winter test a court should use when deciding a motion for expedited discovery. As a result, courts have considered two different standards in evaluating expedited discovery motions: (1) a modified preliminary injunction factors test and (2) a reasonableness or good cause test. The court in this instance rejected the reasonableness test, saying it is most logical to treat the motion for expedited discovery under a standard similar to the preliminary injunction standard.
Finding no clear answer as to when “unusual circumstances” exist, the court in the instant case used a variation of Blackwelder and considered two elements that were emphasized by the Fourth Circuit and the Supreme Court: a strong showing of the merits and a showing that irreparable harm to plaintiff is “likely” and not simply “possible.”
The court ultimately found that the ForceX was not entitled for expedited discovery. Plaintiff did not show it was likely to suffer irreparable harm in the absence of the expedited discovery. Despite Plaintiff’s argument that expedited discovery was necessary to find out about defendants’ products and potential customers in order to prevent loss of customers and business before it occurred through improper means, the court held that a potential loss of customers causing a decrease in revenue is not an unusual type of harm.
In many business litigation cases, lost profits can be a critical component of damages. Damaged companies may also be required to take steps that would mitigate their damages. But it can be difficult to take mitigating steps before discovering information about which clients were impacted by the defendant’s tortious conduct. This factor, however, must be balanced to protect a potentially innocent company from being bombarded by litigation pressure. So plaintiff companies in fast action cases, such as those involving business conspiracies, tortious inference and trade secrets, must be prepared in some courts to explain why their particular case is unusual in needing expedited discovery.
Tuesday, December 13, 2011
Get a Boost in Your Network Consulting Business with Telemarketing
You can put an end to poor business performance if you use IT telemarketing. It’s one of the effective ways to get more number of IT consulting leads that are needed by IT firms to boost their business operations. Also, technology telemarketing has proven itself to be very useful in improving the sales capacity of IT firms and in gathering sufficient number of network consulting services leads as well as IT management consulting leads. These leads can then be used to find new markets and increase the market presence of the company that used them. No doubt, telemarketing has provided some level of solution that can be appreciated by businesses in the IT industry.
Telemarketing as a lead generation tool has long been known by businesses. Professional telemarketers with efficient training and skills are able to deliver leads that are otherwise impossible to get with the use of other marketing methods. It's a good tool in gathering network architecture leads and IT management services leads. Aside from these, it produces network consulting leads at lower costs. Also, the leads are generated faster that gives customers more time to reach more prospects. And lastly, nothing beats a ringing phone in terms of getting the attention of people.
So what do you think of this strategy? Are you ready to give this a try? Make up your mind because this is an opportunity that you shouldn't miss. Make a wise investment now.
Telemarketing as a lead generation tool has long been known by businesses. Professional telemarketers with efficient training and skills are able to deliver leads that are otherwise impossible to get with the use of other marketing methods. It's a good tool in gathering network architecture leads and IT management services leads. Aside from these, it produces network consulting leads at lower costs. Also, the leads are generated faster that gives customers more time to reach more prospects. And lastly, nothing beats a ringing phone in terms of getting the attention of people.
So what do you think of this strategy? Are you ready to give this a try? Make up your mind because this is an opportunity that you shouldn't miss. Make a wise investment now.
Monday, December 12, 2011
Sunday, December 11, 2011
Wednesday, December 7, 2011
Why Appointment Setting Services are Beneficial for Generating New Businesses
Direct meeting with potential customers is often more fruitful for business organizations. The results include more rapid development and improved business returns. But realistically speaking, it’s not always possible personally meet with clients and prospects. This is where telemarketing contact centers come in handy via their appointment setting services. These telemarketing companies are largely in charge for promoting and advertising their client’s solutions (goods and services). Overtime, they have perfected the skills of setting business appointments.
Essence of Appointment Setting Services
Appointment setting service is a type of marketing and promotions tactic. In almost each instance, this marketing style has been very efficient in enhancing businesses. Nonetheless, it’s a complex process and no firm could take the entire responsibility of it on their own. Naturally, it’s not realistic for businesses to spend their valuable time in setting up these appointments daily. In order to prevent these inconveniences, companies can hand over their entire appointment setting functions to any reputable and competent call center. After these contact centers receive the information and specifications from their client, use their capable resources and expertise to call and set business appointments. But take note that not all of these organizations are reliable, so it’s always important to choose the right telemarketing firm which has the likelihood of delivering good appointment setting service.
Advantages of Appointment Setting Services in Generating New Opportunities
Each business organization can yield many new business opportunities with the aid of these services. This effective marketing medium has become so popular to the consumers that they’re willing to spend a sizeable portion of their promotions and advertising funds on that. There are several firms which outsource their entire services to other telemarketing leads agencies. Doing this facilitate them in saving costs and make them focus on their core competencies.
Essence of Appointment Setting Services
Appointment setting service is a type of marketing and promotions tactic. In almost each instance, this marketing style has been very efficient in enhancing businesses. Nonetheless, it’s a complex process and no firm could take the entire responsibility of it on their own. Naturally, it’s not realistic for businesses to spend their valuable time in setting up these appointments daily. In order to prevent these inconveniences, companies can hand over their entire appointment setting functions to any reputable and competent call center. After these contact centers receive the information and specifications from their client, use their capable resources and expertise to call and set business appointments. But take note that not all of these organizations are reliable, so it’s always important to choose the right telemarketing firm which has the likelihood of delivering good appointment setting service.
Advantages of Appointment Setting Services in Generating New Opportunities
Each business organization can yield many new business opportunities with the aid of these services. This effective marketing medium has become so popular to the consumers that they’re willing to spend a sizeable portion of their promotions and advertising funds on that. There are several firms which outsource their entire services to other telemarketing leads agencies. Doing this facilitate them in saving costs and make them focus on their core competencies.
Wednesday, November 30, 2011
What Appointment Setting is About
It is a fact that appointment setting is very important. Whether you may agree or not, the truth is that any business can’t survive minus appointment setting process. Appointment setting is about identifying the prospects and setting business meeting where sales and marketing representatives and the prospects can discuss business matters personally.
You could look for several firms providing appointment setting services. You have to provide them a prospects list and they’ll set business appointments with them for your sales and marketing staff. However, the reality of the procedure is a far cry from what is usually believed and prior to hiring a consultant. First, you have to ask, “Does this course of action lead to improved and enhanced sales productivity?”
More often, many has considered appointment setting to be a myth since plenty of telemarketing companies will merely begin to call your prospects sans even having real familiarity and understanding of whatever your firm is providing and why the prospect is interested in setting appointments. It occurs on a lot of instances that prospects be in agreement for your sales representatives to meet, but then most of the meetings don’t end up in fruitful results. And some prospects might not even remember an appointment has been set in the first place. Any unqualified appointments like that can really add to the cost.
In order to maximize appointment setting attempts, if at all possible, you must contract a call center to whom you not merely delegate the appointment setting programs, but one who can give the solutions. A company like that can pack client forecasts and then establish major appointments—and not simply halfhearted or lackluster meetings. And aside from that, also be certain that their professional sales and marketing representatives could serve the solutions you require to increase sales leads, etc.
You could look for several firms providing appointment setting services. You have to provide them a prospects list and they’ll set business appointments with them for your sales and marketing staff. However, the reality of the procedure is a far cry from what is usually believed and prior to hiring a consultant. First, you have to ask, “Does this course of action lead to improved and enhanced sales productivity?”
More often, many has considered appointment setting to be a myth since plenty of telemarketing companies will merely begin to call your prospects sans even having real familiarity and understanding of whatever your firm is providing and why the prospect is interested in setting appointments. It occurs on a lot of instances that prospects be in agreement for your sales representatives to meet, but then most of the meetings don’t end up in fruitful results. And some prospects might not even remember an appointment has been set in the first place. Any unqualified appointments like that can really add to the cost.
In order to maximize appointment setting attempts, if at all possible, you must contract a call center to whom you not merely delegate the appointment setting programs, but one who can give the solutions. A company like that can pack client forecasts and then establish major appointments—and not simply halfhearted or lackluster meetings. And aside from that, also be certain that their professional sales and marketing representatives could serve the solutions you require to increase sales leads, etc.
Thursday, November 17, 2011
Copyright Infringement: Repeat Willful Violations Result in Permanent Injunction and High Damages
In a recent opinion, Seoul Broadcasting System Intl. v. Ro, an Alexandria U.S. district court granted Plaintiffs a permanent injunction and ordered steep damages against the defendants who were repeat copyright infringers and willfully ignored cease and desist letters, signifying a focus on deterrence to protect copyrights of businesses.
Plaintiffs Seoul Broadcasting Corporation, Mun Hwa Broadcasting Corporation, and KBS America, Inc., profit from the sale and licensing of DVDs and videotapes of their proprietary programming and distribute Korean-language television programming in the United States.
Plaintiff accused Defendants, Daewood Video, Inc. and owner Young Min Ro., Korean Korner, Inc., Sun Yop Yoo, of illegally distributing television programming. All Defendants are or were previously in the business of renting or selling videos and had past licensing agreements with Plaintiffs which had expired or were not renewed.
The current opinion is a result of a bench trial held on the issue of damages and other relief. The court previously granted summary judgment of copyright infringement in favor of Plaintiffs.
In copyright actions, courts traditionally grant permanent injunctions if liability is established and there is a continuing threat to the copyright. Opinion at 14, quoting Dea Han Video Prod., Inc. v. Chun, et al., No. 89-1470-A, 1990 WL 265976 at *1311 (E.D. Va. June 18, 1990). The court decided to issue a permanent injunction in this case because the Daewood defendants, with assistance from Korean Korner and Yoo, infringed Plaintiffs’ copyrights continuously over a period of more than a year. And Defendants, save one, all had a history of unlawful copying and selling Korean video programming. Moreover, the ease of making the copies made it more likely Defendants would infringe in the future if a permanent injunction was not entered.
The court considered in depth the damages award. Statutory damages in copyright infringement cases, according to 17 U.S.C. § 504, are significantly higher if the court finds the infringement was done willfully. The damages imposed may be up to $150,000 per act of infringement. Opinion at 16.
“Willfulness may be inferred where there is evidence that infringements continued after warnings or cease and desist letters from the plaintiff.” Opinion at 16, citing Masterfile Corp. v. Dev. Partners, Inc., No. 1:10cv134, 2010 U.S. Dist. LEXIS 100857, 14-15 (E.D. Va. Aug. 16, 2010). All Plaintiffs had sent cease and desist letters to Young Min Ro, owner of Daewood Video.
The court awarded monetary damages, with a significantly higher damages award against Daewood Video, Inc. and owner Young Min Ro due to previous copyright infringement violations and because the court found that they acted willfully by refusing to follow the cease and desist letters. Daewood and Ro, jointly and severally, were ordered to pay $555,000.00. Defendant Yoo, the one defendant without a history of copyright infringement, was ordered to pay a considerably less amount of $16,951. These disparate amounts and steep fines for Daewood and Ro suggest the court’s unyielding desire to deter repeat violators from ignoring laws set up to protect businesses.
A question is whether courts will use refusal to follow cease and desist letters as a justification for high damages awards in suits other than those involving copyright issues.
Plaintiffs Seoul Broadcasting Corporation, Mun Hwa Broadcasting Corporation, and KBS America, Inc., profit from the sale and licensing of DVDs and videotapes of their proprietary programming and distribute Korean-language television programming in the United States.
Plaintiff accused Defendants, Daewood Video, Inc. and owner Young Min Ro., Korean Korner, Inc., Sun Yop Yoo, of illegally distributing television programming. All Defendants are or were previously in the business of renting or selling videos and had past licensing agreements with Plaintiffs which had expired or were not renewed.
The current opinion is a result of a bench trial held on the issue of damages and other relief. The court previously granted summary judgment of copyright infringement in favor of Plaintiffs.
In copyright actions, courts traditionally grant permanent injunctions if liability is established and there is a continuing threat to the copyright. Opinion at 14, quoting Dea Han Video Prod., Inc. v. Chun, et al., No. 89-1470-A, 1990 WL 265976 at *1311 (E.D. Va. June 18, 1990). The court decided to issue a permanent injunction in this case because the Daewood defendants, with assistance from Korean Korner and Yoo, infringed Plaintiffs’ copyrights continuously over a period of more than a year. And Defendants, save one, all had a history of unlawful copying and selling Korean video programming. Moreover, the ease of making the copies made it more likely Defendants would infringe in the future if a permanent injunction was not entered.
The court considered in depth the damages award. Statutory damages in copyright infringement cases, according to 17 U.S.C. § 504, are significantly higher if the court finds the infringement was done willfully. The damages imposed may be up to $150,000 per act of infringement. Opinion at 16.
“Willfulness may be inferred where there is evidence that infringements continued after warnings or cease and desist letters from the plaintiff.” Opinion at 16, citing Masterfile Corp. v. Dev. Partners, Inc., No. 1:10cv134, 2010 U.S. Dist. LEXIS 100857, 14-15 (E.D. Va. Aug. 16, 2010). All Plaintiffs had sent cease and desist letters to Young Min Ro, owner of Daewood Video.
The court awarded monetary damages, with a significantly higher damages award against Daewood Video, Inc. and owner Young Min Ro due to previous copyright infringement violations and because the court found that they acted willfully by refusing to follow the cease and desist letters. Daewood and Ro, jointly and severally, were ordered to pay $555,000.00. Defendant Yoo, the one defendant without a history of copyright infringement, was ordered to pay a considerably less amount of $16,951. These disparate amounts and steep fines for Daewood and Ro suggest the court’s unyielding desire to deter repeat violators from ignoring laws set up to protect businesses.
A question is whether courts will use refusal to follow cease and desist letters as a justification for high damages awards in suits other than those involving copyright issues.
Tuesday, June 21, 2011
Spiteful Motives, Lacking Improper Conduct, do not Support Tortious Interference Claim
In a recent opinion, the Supreme Court of Virginia held that actions motivated solely by ill will or personal spite, that don’t include improper conduct, do not support a claim for tortious interference with an at-will contract. The court provided a helpful definition of when conduct is considered improper and decided that it is not enough if the actions were merely spiteful. Click here for the opinion.
The facts of the case involve a Virginia law firm, Dunn, McCormack & Macpherson (“Dunn”), who had an at-will contract with the Fairfax County Redevelopment and Housing Authority (the “Authority”). Dunn had served as legal counsel for the Authority for around thirty years until the Authority terminated the contract in September 2005.
Dunn sued Gerald Connolly (“Connolly”), Chairman of the Fairfax County Board of Supervisors, alleging that Connolly tortiously interfered with Dunn’s contract with the Authority by persuading Authority to break the contract. Dunn claimed that Connolly’s actions were motived solely by his personal spite, ill will and malice, because he didn’t get along with a partner at Dunn.
The circuit court entered an order dismissing the action for Dunn’s failure to provide facts showing Connolly used illegal means or improper methods when he communicated with the Authority. This court reviewed the circuit court’s ruling de novo and came to the same conclusion.
The elements to support a cause of action for tortious interference with contract rights are: (1) the existence of a valid contractual relationship or business expectancy, (2) knowledge of the relationship or expdctancy on the part of the interferer, (3) intentional interference inducing or causing a breach or termination of the relationship or expectancy, and (4) resultant damage to the party whose relationship or expectancy has been disrupted. Additionally, when a contract is at-will, an element is added: the defendant must have employed improper methods. Op. at 6, citing Duggin v. Adams, 234 Va. 221, 226-27, 360 S.E.2d 832, 836 (1987).
The court explained that interference is improper if it is illegal, independently tortious, or violates an established standard of trade or profession. The court quoted the Duggin case, stating:
Methods of interference considered improper are those means that are illegal or independently tortious, such as violations of statutes, regulations, or recognized common-law rules. Improper methods may include violence, threats or intimidation, bribery, unfounded litigation, fraud, misrepresentation or deceit, defamation, duress, undue influence, misuse of inside or confidential information, or breach of a fiduciary relationship. . . .
Methods also may be improper because they violate and established standard of a trade or profession, or involve unethical conduct. Sharp dealing, overreaching, or unfair competition may also constitute improper methods.
234 Va. at 227-28, 360 S.E.2d at 836-37.
Dunn’s argument that Connolly improperly interfered with its terminable at-will contract with the Authority because his actions were motived solely by Connolly’s personal spite, ill will and malice was found to be insufficient. The court found that Dunn failed to appreciate the limited nature of what constitutes “improper” interference. The court stated that it “will not extend the scope of the tort to include actions solely motivated by spite, ill will and malice.” Op. at 7. Because there were no facts alleged that showed improper interference, there was no merit to Dunn’s claim and the action was dismissed.
Thursday, May 12, 2011
District of Columbia Limits Applicability of Computer Fraud and Abuse Act
In a case of first impression, a federal district court in the District of Columbia has joined those courts that restrict the applicability of the federal Computer Fraud and Abuse Act. Previously, we have written about the growing number of cases that have adopted a broad reading of this Act in a way that permits a claim to be made where an employee has accessed an employer's computer and removed proprietary data after deciding to accept a new job. See posts dated March 27, 2009 and September 7, 2010.
The CFAA protects companies from the misappropriation of proprietary information by someone who does not have authorized access to the computer or who has been authorized to access the computer, but who exceeds that authorization. The cases attempt to define the limits of authorized access.
A number of courts following the 7th Circuit's opinion in Int'l Airport Ctrs., LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006) have held that an employee who has been given access to his employer's computer network, loses that right of access as a matter of law when he has decided to accept a new job and downloads proprietary information from the network to use in his new position. Courts adopting this logic posit that such conduct violates the employee's duty of loyalty owed to his employer because, once he has made the decision to leave and has accepted the new position, the employee's interests become adverse to the interests of his current employer. Those courts find that accessing the computer, and copying proprietary information under such circumstances, exceed the authorization that the current employer has provided and violate the CFAA.
Not so in the District of Columbia according to a recent opinion by Magistrate Judge John Facciola in Lewis-Burke Associates, Ltd. v. Widder, 725 F. Supp.2d 187 (D.D.C. 2010), click here. There, the court relied upon the analysis of the 9th Circuit in LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009), which held that, once an employer has authorized an employee to access the company computer, even if for limited purposes, that access is still authorized even if the employee violates those limitations. Id. at 1133. According to Brekka, whether an employee has authorization to access a computer is dependent upon whether the employer has terminated that authorization.
In the District of Columbia case, before he left his job, Widder copied proprietary and confidential electronic files onto a thumb drive that he took with him to his new employer. Some of the copying took place on his last day of work. The court found the Citrin standard to be unworkable and confusing. Instead, it held that Widder did not exceed his authorized access to the system even if he accessed and copied documents he was not entitled to see. Accordingly, the court dismissed the CFAA claim.
Based upon this decision, the CFAA is not an available remedy or a means of creating federal question subject matter jurisdiction in the District of Columbia for the theft of proprietary electronic information, except where the employer has terminated the employee's access rights before the theft occurs.
The CFAA protects companies from the misappropriation of proprietary information by someone who does not have authorized access to the computer or who has been authorized to access the computer, but who exceeds that authorization. The cases attempt to define the limits of authorized access.
A number of courts following the 7th Circuit's opinion in Int'l Airport Ctrs., LLC v. Citrin, 440 F.3d 418 (7th Cir. 2006) have held that an employee who has been given access to his employer's computer network, loses that right of access as a matter of law when he has decided to accept a new job and downloads proprietary information from the network to use in his new position. Courts adopting this logic posit that such conduct violates the employee's duty of loyalty owed to his employer because, once he has made the decision to leave and has accepted the new position, the employee's interests become adverse to the interests of his current employer. Those courts find that accessing the computer, and copying proprietary information under such circumstances, exceed the authorization that the current employer has provided and violate the CFAA.
Not so in the District of Columbia according to a recent opinion by Magistrate Judge John Facciola in Lewis-Burke Associates, Ltd. v. Widder, 725 F. Supp.2d 187 (D.D.C. 2010), click here. There, the court relied upon the analysis of the 9th Circuit in LVRC Holdings LLC v. Brekka, 581 F.3d 1127 (9th Cir. 2009), which held that, once an employer has authorized an employee to access the company computer, even if for limited purposes, that access is still authorized even if the employee violates those limitations. Id. at 1133. According to Brekka, whether an employee has authorization to access a computer is dependent upon whether the employer has terminated that authorization.
In the District of Columbia case, before he left his job, Widder copied proprietary and confidential electronic files onto a thumb drive that he took with him to his new employer. Some of the copying took place on his last day of work. The court found the Citrin standard to be unworkable and confusing. Instead, it held that Widder did not exceed his authorized access to the system even if he accessed and copied documents he was not entitled to see. Accordingly, the court dismissed the CFAA claim.
Based upon this decision, the CFAA is not an available remedy or a means of creating federal question subject matter jurisdiction in the District of Columbia for the theft of proprietary electronic information, except where the employer has terminated the employee's access rights before the theft occurs.
Monday, April 25, 2011
Publicly Available Software Code Can Be a Trade Secret if Compilation is Not Generally Known
A recent Fourth Circuit opinion analyzed when a software compilation can qualify for protection as a trade secret. The plaintiff company claimed that although its software used publicly-available mathematical formulas, the combination and implementation of these formulas contained in the source code for the software constitutes a trade secret. The Fourth Circuit agreed, holding that a trade secret may be composed of publicly-available information if the method by which that information is compiled is not generally known. Processes that are publicly known can become trade secrets when combined into a source code and the manner and sequence of the processes is unique and unknown to the public. The case is Decision Insights, Inc. v. Sentia Group, Inc., 2011 U.S. App. LEXIS 5151 (4th Cir. Va. March 15, 2011), and can be foundThe case can be found here.
The case arose when Decision Insights, Inc. (“Decision Insights”) filed a complaint against Sentia Group, Inc. (“Sentia”) and individual former employees alleging that Sentia’s development of a competing software application was based on materials obtained from the Sentia’s misappropriation of Decision Insight’s trade secrets. The question considered by the district court was whether Decision Insight’s software application, as a total compilation, could qualify as a trade secret under Virginia law.
Sentia had hired a former consultant for Decision Insights who worked to develop software for Sentia that would compete with Decision Insights’ software. According to Decision Insights, the software developed by Sentia is almost identical to its own. Decision Insights asserted that all the parameters, variables, and sequencing associated with the programs must have been the same as Decision Insights’ software to obtain such identical software.
The criteria for establishing the existence of a trade secret under Va. Code § 59.1-336 includes whether or not the compilation has independent economic value, is generally known or readily ascertainable by proper means, and is subject to reasonable efforts to maintain secrecy.
On appeal, the court considered whether Decision Insights adduced enough evidence at trial for a jury to reach the conclusion that Decision Insights’ software, as a compilation, is not generally known or ascertainable by proper means. At trial, Decision Insights had introduced two experts who testified that part of the source code was unknown to the public and the sequence of the processes was unique and not publicly available. One expert identified 13 proprietary processes in the source code, and stated that “[t]he collection of these processes as a whole and the sequence of these processes also serve as a proprietary aspect of [Decision Insights’ software].” Opinion at 14.
The court held that due to the evidence offered by the two experts, the trial court erred in concluding that Decision Insights had not satisfied its evidentiary burden to show that its software compilation was not generally known or readily ascertainable by proper means. The court noted that a trade secret may be composed of publicly-available information if the method by which that information is compiled is not generally known. The court cited Servo Corp. of America. v. General Electric Co., which held that a trade secret “might consist of several discrete elements, any one of which could have been discovered by study of material available to the public.” 393 F.2d 551, 554 (4th Cir. 1968). The court also found that numerous variables that were part of the Decision Insights software code were not in public literature or known outside the company.
The court remanded and directed the district court to consider other criteria specified by the Virginia Trade Secret Misappropriation Act, including whether Decision Insights’ software code has independent economic value and whether Decision Insights engaged in reasonable efforts to maintain the secrecy of the software code. See Va. Code. Section 59.1-336.
In the past, parties have claimed that a company’s products or process are not trade secrets unless kept strictly and wholly confidential. This case is important because it allows some components of trade secret information to be publicly known in certain circumstances while maintaining their trade secret status so long as other important information, such as the way those public pieces of software code are put together, remains confidential. The question of whether information was adequately kept confidential frequently arises in unfair business practices cases and this opinion helps clarify the issue.
The case arose when Decision Insights, Inc. (“Decision Insights”) filed a complaint against Sentia Group, Inc. (“Sentia”) and individual former employees alleging that Sentia’s development of a competing software application was based on materials obtained from the Sentia’s misappropriation of Decision Insight’s trade secrets. The question considered by the district court was whether Decision Insight’s software application, as a total compilation, could qualify as a trade secret under Virginia law.
Sentia had hired a former consultant for Decision Insights who worked to develop software for Sentia that would compete with Decision Insights’ software. According to Decision Insights, the software developed by Sentia is almost identical to its own. Decision Insights asserted that all the parameters, variables, and sequencing associated with the programs must have been the same as Decision Insights’ software to obtain such identical software.
The criteria for establishing the existence of a trade secret under Va. Code § 59.1-336 includes whether or not the compilation has independent economic value, is generally known or readily ascertainable by proper means, and is subject to reasonable efforts to maintain secrecy.
On appeal, the court considered whether Decision Insights adduced enough evidence at trial for a jury to reach the conclusion that Decision Insights’ software, as a compilation, is not generally known or ascertainable by proper means. At trial, Decision Insights had introduced two experts who testified that part of the source code was unknown to the public and the sequence of the processes was unique and not publicly available. One expert identified 13 proprietary processes in the source code, and stated that “[t]he collection of these processes as a whole and the sequence of these processes also serve as a proprietary aspect of [Decision Insights’ software].” Opinion at 14.
The court held that due to the evidence offered by the two experts, the trial court erred in concluding that Decision Insights had not satisfied its evidentiary burden to show that its software compilation was not generally known or readily ascertainable by proper means. The court noted that a trade secret may be composed of publicly-available information if the method by which that information is compiled is not generally known. The court cited Servo Corp. of America. v. General Electric Co., which held that a trade secret “might consist of several discrete elements, any one of which could have been discovered by study of material available to the public.” 393 F.2d 551, 554 (4th Cir. 1968). The court also found that numerous variables that were part of the Decision Insights software code were not in public literature or known outside the company.
The court remanded and directed the district court to consider other criteria specified by the Virginia Trade Secret Misappropriation Act, including whether Decision Insights’ software code has independent economic value and whether Decision Insights engaged in reasonable efforts to maintain the secrecy of the software code. See Va. Code. Section 59.1-336.
In the past, parties have claimed that a company’s products or process are not trade secrets unless kept strictly and wholly confidential. This case is important because it allows some components of trade secret information to be publicly known in certain circumstances while maintaining their trade secret status so long as other important information, such as the way those public pieces of software code are put together, remains confidential. The question of whether information was adequately kept confidential frequently arises in unfair business practices cases and this opinion helps clarify the issue.
Friday, February 25, 2011
Press Releases Can Cause Waiver of Work Product
Statements made in a press release, if based on attorney work product information, may waive work product as to the subject matter of the statements. In E.I. DuPont de Nemours and Company v. Kolon Industries, Inc. (E.D. Va. July 30, 2010), click here, the court found that the plaintiff, E.I DuPont de Nemours and Company ("DuPont") waived information that was otherwise non-discoverable work product because DuPont relied upon that information to support a statement in its press release.
The case involves allegations by DuPont that the defendant Kolon Industries, Inc. ("Kolon") misappropriated DuPont’s secret processes and technologies for manufacturing Kevlar. In addition to the civil litigation filed by DuPont, the F.B.I. had previously conducted a criminal investigation of a Kolon employee. During that criminal investigation, DuPont's general counsel office had worked closely with government officials. In a previous opinion, the Court held that work product was not waived by Dupont's sharing of documents with law enforcement agencies that were investigating the alleged misconduct. E.I. DuPont de Nemours and Company v. Kolon Industries, Inc., (E.D. Va. Apr. 13, 2010).
However, DuPont's issuance of the press release was another story. The controversial statement read: "FBI investigation has revealed that, in August 2008, three Kolon managers flew to Richmond, the location of our global Kevlar technology and business headquarters, expressly for the purpose of obtaining confidential DuPont process technology." DuPont was distributing the press release to DuPont’s customers, presumably in an attempt to gain a competitive advantage. Press releases are, of course, a common tactic used by companies to protect and bolster public opinion and brand name.
Kolon sought discovery of work product information, contending that DuPont had waived its work product relating to the subject matter of the statement because the information relating to manager’s intent could have only be based on protected information. DuPont responded that the press release was based solely on publicly available information.
The court found that the press release statement relied on more than just public information. The court based its finding, in part, on its conclusion that the in-house counsel who drafted the statement had reviewed multiple rources of information relating to the meeting, and in drafting the statement in question, he could not possibly have "segregated the various categories of [publicly available and protected] information." Therefore, the press release was not based solely on public information. Rather, the statement about Kolon's purpose in attending the meeting was most likely based at least partly on privileged information that the in-house counsel had been exposed to throughout the course of his work with the government investigation.
The court also addressed the scope of the waived subject matter. Kolon sought production of "all communications in DuPont's possession relating to the Government's investigation of [Kolon's employee] and Kolon." The Court, however, more narrowly defined the scope of the waived subject matter to be those documents that "provide the factual basis for the statement in the press release that, in arranging for and attending . . . the meeting, Kolon had the purpose stated in the press release."
The Court also limited the waiver to fact work product and refused Kolon's request for opinion work product to be produced, finding that opinion work product is only discoverable in extreme circumstances. And the court found that an issuance of a press release is a common, not an extraordinary, circumstance in business.
This case serves as another warning to companies in litigation to carefully monitor the process of drafting press releases and what statements to include in them because press releases can lead to sanctions, waiver of work product and privileged information, and increase litigation costs. At the same time, companies in litigation often feel compelled to try to shape the public's perception of the litigation and the companies themselves. This is particularly true in cases involving unfair business practices or competition when the survival of a company's business model can be at stake. But, in doing so, they need to carefully weigh the risks of what they are saying publicly.
The case involves allegations by DuPont that the defendant Kolon Industries, Inc. ("Kolon") misappropriated DuPont’s secret processes and technologies for manufacturing Kevlar. In addition to the civil litigation filed by DuPont, the F.B.I. had previously conducted a criminal investigation of a Kolon employee. During that criminal investigation, DuPont's general counsel office had worked closely with government officials. In a previous opinion, the Court held that work product was not waived by Dupont's sharing of documents with law enforcement agencies that were investigating the alleged misconduct. E.I. DuPont de Nemours and Company v. Kolon Industries, Inc., (E.D. Va. Apr. 13, 2010).
However, DuPont's issuance of the press release was another story. The controversial statement read: "FBI investigation has revealed that, in August 2008, three Kolon managers flew to Richmond, the location of our global Kevlar technology and business headquarters, expressly for the purpose of obtaining confidential DuPont process technology." DuPont was distributing the press release to DuPont’s customers, presumably in an attempt to gain a competitive advantage. Press releases are, of course, a common tactic used by companies to protect and bolster public opinion and brand name.
Kolon sought discovery of work product information, contending that DuPont had waived its work product relating to the subject matter of the statement because the information relating to manager’s intent could have only be based on protected information. DuPont responded that the press release was based solely on publicly available information.
The court found that the press release statement relied on more than just public information. The court based its finding, in part, on its conclusion that the in-house counsel who drafted the statement had reviewed multiple rources of information relating to the meeting, and in drafting the statement in question, he could not possibly have "segregated the various categories of [publicly available and protected] information." Therefore, the press release was not based solely on public information. Rather, the statement about Kolon's purpose in attending the meeting was most likely based at least partly on privileged information that the in-house counsel had been exposed to throughout the course of his work with the government investigation.
The court also addressed the scope of the waived subject matter. Kolon sought production of "all communications in DuPont's possession relating to the Government's investigation of [Kolon's employee] and Kolon." The Court, however, more narrowly defined the scope of the waived subject matter to be those documents that "provide the factual basis for the statement in the press release that, in arranging for and attending . . . the meeting, Kolon had the purpose stated in the press release."
The Court also limited the waiver to fact work product and refused Kolon's request for opinion work product to be produced, finding that opinion work product is only discoverable in extreme circumstances. And the court found that an issuance of a press release is a common, not an extraordinary, circumstance in business.
This case serves as another warning to companies in litigation to carefully monitor the process of drafting press releases and what statements to include in them because press releases can lead to sanctions, waiver of work product and privileged information, and increase litigation costs. At the same time, companies in litigation often feel compelled to try to shape the public's perception of the litigation and the companies themselves. This is particularly true in cases involving unfair business practices or competition when the survival of a company's business model can be at stake. But, in doing so, they need to carefully weigh the risks of what they are saying publicly.
Subscribe to:
Posts (Atom)
