Intellectual Property Law

Florida’s Herald Tribune is reporting that Alpha Mining Systems, a manufacturer of industrial mining tires, has won a $19.7 million verdict against former employee Sam Vance. You can find the story here.

According to the story, “in early 2005, Vance began working for China-based competitor Guizhou Tire Co. while still employed with Alpha. He would take Guizhou tire orders on his wife’s cell phone and through his personal e-mail account to avoid detection.”

He also handed over pricing and profit margin information and customer lists to Guizhou, which paid him a commission on every tire sold, records show.”

Beginning in August 2005, Vance went to work for Dubai, United Arab Emirates-based Al Dobowi Group, an upstart mining company.”

Vance gave Dobowi all of Alpha’s trade secrets, from pricing information to its customer list to the design blueprints for Alpha’s specialty tires, court records say.”

The damage to Alpha was extensive as court records show that “Del-Nat Tire Corp. and American Tire Corp. were buying a combined average of $1.9 million per month from Alpha until April 2005, when they stopped buying anything.”

From April 1, 2005, to Jan. 15, 2008, Alpha lost more than $10 million from Del-Nat alone, the court found.”

It’s a theme on this blog that I will keep repeating: the biggest threat to your trade secrets are your own employees. A comprehensive trade secrets protection plan is imperative for any company that depends on trade secrets for a competitive advantage. You must begin thinking about this critically before your company has its own Sam Vance and unlike Alpha, because you didn’t protect your trade secrets adequately, you are prevented from recovering any damages due to the misappropriation.

The $19.7 million award is one of the largest trade secret judgments in Florida history.  But, how likely is it that Alpha will recover?  Since, Vance didn’t show up to any court appearance, he’s probably living the high life somewhere outside the U.S.  Hopefully, they’ll be able to find him and make him pay the piper for his misdeeds.