Patrick Reilly and Kimberly Spotts-Kimmel Obtain Preliminary Injunction in Favor of an International High Tech Company
ARS is in the business of cryostats, including designing, developing, creating, and manufacturing cryogenic systems and applications. The company sells its ARS’ cryogenic systems to ARS customers domestically and overseas. It is a highly scientific and specialized industry, which has serious barriers to the entry of new business and it generally takes approximately 10-15 years for a new company to build a library of drawings and solutions to supply custom cryostats to customers. During their employment with ARS, 4 former employees conspired to create a competing company, utilizing ARS’ drawings, customer list, vendor list, price list and other proprietary information. Their productivity was noticeably deficient during this period, and projects that they were supposed to be working on for the benefit of ARS were not getting done, leading to the termination of employment of 2 of the employees, the sales manager and an engineer. Within 1 month after their termination, the two employees had moved into a location in the same building previously occupied by ARS, and it was learned that they had begun negotiating the lease approximately 6 months prior to their termination, and had applied for loans to fund their new business. Two other employees left ARS to join the new venture, and they immediately began targeting ARS customers utilizing information obtained during their employment with ARS. We filed a detailed complaint with the court asking for a preliminary injunction precluding them from directly or indirectly, contacting any of ARS existing or prosepective customers and suppliers/vendors and using ARS Confidential Information, intellectual property and proprietary information, ARS property, including software, hardware, books and other materials. We also asked the court to direct that they pay over to ARS any profits earned from ARS customers.
Following the hearing, the Judge granted our request for a preliminary injunction, and the new company is now precluded from directly or indirectly contacting any of ARS’s existing or prospective customers and suppliers/vendors and using ARS confidential information, intellectual property and proprietary information, ARS property, including software, hardware, books, and other materials, and any property belonging to others that was entrusted to ARS that may be in Defendants’ possession. The Judge also directed that the Defendants account for all income and profits diverted from ARS to Defendants as a result of their conduct, as alleged in the Complaint, and that Defendants immediately return to ARS all ARS confidential information, intellectual property, proprietary information, ARS property, including software, hardware, books and other materials, and any property belonging to others that was entrusted to ARS that may be in Defendants’ possession. We are currently in the process of developing discovery to find out the extent of their unlawful conduct, and will be proceeding further for money damages and a permanent injunction. Additionally, the court, at our request, entered an order directing the former employees to give us a copy of their computer hard drives so that we could locate any ARS materials on their computers which they denied having. Our forensic computer expert is in the process of examining those hard drives, and has found some very interesting information to date.