Successfully defended trade secret misappropriation and copyright infringement claims brought against former employees in a lawsuit involving bone density and body composition analysis technology

In a trade secret misappropriation lawsuit brought by Company A, a manufacturer of analytical devices for bone density and body composition, against its former employees and Company B founded by the former employees, Lee & Ko’s IP Practice Group successfully defended Company B and the former employees and obtained a court decision in favor of the defendants on all claims. 

Before this civil lawsuit, Company A had filed a criminal complaint against Company B and the former employees for trade secret misappropriation. During the criminal investigation, Company B’s product source code was found to contain portions that are similar to Company A’s product source code, which led to an indictment of Company B and the former employees. Company A then filed a preliminary injunction action against the defendants, seeking prohibition of trade secret misappropriation. As the defendant’s legal counsel, Lee & Ko conducted a thorough analysis of the two companies’ products, and showed that there were overall differences between the two products, from basic working principles to specific algorithms, and that the similar portions of the two products’ source codes were already disclosed in the public domain. Lee & Ko also showed that Company A failed to protect its source codes as a trade secret. As a result, Lee & Ko obtained an acquittal for Company B and the former employees in the criminal action and a court decision dismissing the preliminary injunction request in the civil lawsuit.

After this double loss, Company A additionally claimed copyright infringement of its computer software in the civil lawsuit. In response, Lee & Ko persuasively explained to the court that the source codes at issue were in fact taken from the public domain (such as dissertations) and that Company B did not use Company A’s technology in its product. The court agreed, and found in favor of the defendants on all claims, dismissing every claim raised by Company A in the complaint.

While this case started in unfavorable circumstances, with similarity found between the two companies’ source codes and the defendants having been criminally indicted, Lee & Ko’s IP Practice Group was able to reverse the tides and obtain a triple win, in the criminal case, the preliminary injunction case and finally the copyright infringement case, which nicely illustrates the prowess and expertise of Lee & Ko’s IP Practice Group.