With the advancement of technology and the rise in Internet usage amongst individual companies, businesses, and organizations, they are faced with new challenges in protecting their brand, trademark, and image from competitors (Clark, 2007). This has caused many businesses to take action in the protection of intellection property rights or IPR. For the week three assignment, the members of team A choose to discuss the case in which Premier Technologies wins intellectual property lawsuit. This paper would highlight details of the case.
Doug Sayer, the owner of Premier Technologies, claimed that two of his former employees stole private information for trade secret infringement and future sabotage. The former men were members of top management at Premier Technologies. Orr and Schutte, the two men, downloaded the organizations insider information to external hard drivers, and shortly after that, left the organization to work for the competitor.
According to Legal information Institute, “Trade Secret is defined as the information, including a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value or potential, from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use.” The issue is that Orr and Schutte had an intentional plan to use the operations of Premier Technologies against them to make the organization fall into the red and sale for a price less than what the business is worth.
In Bannock County, Idaho’s Sixth Judicial District in December 2011 ruled in favor of Premier Technologies in the lawsuit Premier Technologies v. Chadd Orr, Jeff Schutte and Petersen, Inc. Doug Sayer, also Premier Technology’s president and chief operating officer, argued that Chadd Orr and Jeff Schutte was conspiring with Peterson. This made Orr and Schutte breach their fiduciary duties that they owed to Premier Technology while they were high level managers at Premier Technologies. The jury unanimously voted in favor of Premier Technologies and agreed that both Orr and Schutte violated the Idaho Trade Secret Act, and that they both had a fiduciary relationship with Premier. The jury also ruled in favor of Premier, implicating Petersen Inc. had, in fact, conspired with Orr and Schutte in breaching of their fiduciary responsibility to Premier Technologies. The ruling awarded a little over two million dollars to Premier Technologies. A $905,250 judgment was set against Schutte, while a $603,500 judgment against Orr was set for breaching their fiduciary duties. Punitive damages were awarded as such $172,000 against Schutte and $120,000 against Orr.
The analysis of the case appears to be quite simple in nature. The court’s decision ultimately stems from Orr and Schutte’s fiduciary responsibilities that they owed to Premier during their employment with the company. The copy of protected data was not in itself the infraction, but when that information was subsequently provided to a direct competitor, an illegal activity had taken place and the two men were liable for their actions. The state laws of Idaho clearly protected Premier, and any business entity, from this form of intellectual property theft. It also awards that company money to satisfy the damages that were caused by these actions, and because of the intentional nature of the act, punitive damages were made possible as well.
As there are often no formal means to protect the trade secrets that a company might have in their processes, litigation is sometimes the best option and, in this case, it certainly provided Premier with the chance to recoup their losses. As a future employee hiring procedure, it might be pertinent for Sayer to include an employee clause that gives up their right to work for a direct competitor in the future, as some highly competitive organizations do (Idaho State Journal).
Through many trials and errors, laws have come to pass to protect each business from employees who wish to harm them. Orr and Schutte not only jeopardized Premier Technology’s operation, but they also jeopardized their integrity. Once they decided to work with a competitor, they stole valuable information from the Plaintiff in order to make the business fail. Their actions turned into a lawsuit that determined they breached their contract with Premier Technologies. Due to this infringement, both parties and competitor were liable for all damages incurred to Premier Technologies. For Premier Technologies to prevent this from happening again, they should determine if a clause is needed to prevent employees from working with the competitor.
Clark, D. (2007). EBusiness and Intellectual Property. IBB Solicitors. Retrieved from http://www.ibblaw.co.uk/downloads/brochures/2010-05-27-15-05-41-ebusiness_and_intellectual_property.pdf
Legal Information Institute, August 2010, Trade Secret. Cornell University law school.http://www.law.cornell.edu/wex/trade_secret