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ENCOURAGING 3RD PARTY TO USE TRADE SECRETS DID NOT VIOLATE CUTSA

The Connecticut Law Tribune Vol 13, No. 53 (2007) A plaintiff that did not allege that the defendant itself disclosed or used trade secrets, only that the defendant encouraged, aided or abetted a third-party to use trade secrets, failed to allege a violation of CUTSA, the Connecticut Uniform Trade Secrets Act, C.G.S. §35-51(b). Plaintiff Control Module designs and markets products that track time and attendance, access and inventory. Timothy Morello, the plaintiff's vice president of product engineering, was responsible for developing a 'stand alone terminal' at the request of a potential customer, defendant Data Management. The 'stand alone terminal' was designed to track worker time and attendance, using software developed by Data Management. The plaintiff designed and demonstrated stand alone terminals in December 2003 and February 2004, but Data Management did not purchase them. Instead, Data Management's president allegedly offered Timothy Morello a job as chief technology officer in March 2004. Afterward, Data Management's president allegedly met with Morello and informed him, 'if you build it, I will buy it.' Morello and a senior design engineer who worked for the plaintiff formed a business called Xipher Technologies LLC in September 2004. Defendant Data Management purchased Xipher's data collection machines, which allegedly compete with the plaintiff's products. The plaintiff sued and alleged that Data Management violated the Connecticut Uniform Trade Secrets Act. The court granted the defendants' motion to strike the CUTSA count. The plaintiff's complaint did not allege that Data Management itself obtained and disclosed trade secrets, only that it encouraged, aided and abetted the use of trade secrets by a third party, Xipher. Encouraging, aiding and abetting are not included in the definition of 'misappropriation' in CUTSA. Control Module Inc. v. Data Management Inc.U.S. District Court (Doc. No. 3:07CV00475)Thompson, J. ? Dec. 10, 2007 ? 10 pages.Full text available at www.ctlawtribune.com

Full post as published by The Trade Secrets Vault on January 13, 2008 (boomark / email).