Departing Engineer, Open-Source Code, and Customer Lists
Aster Analytics develops inventory software. Engineer Ravi Menon signed a confidentiality and invention-assignment agreement. Without approval, Ravi copied 'ChartKit,' an open-source library licensed under GPLv3, into Aster's proprietary dashboard module and removed copyright notices. He also emailed a customer prospect list and a 40-page algorithm design document to his personal account. Six months after Ravi left for competitor BluePeak, Aster sent a demand letter. BluePeak has launched a dashboard with a similar look and hired two of Ravi's former colleagues. Aster registered the dashboard's source code with the U.S. Copyright Office after the launch. Ravi claims the customer list was memorized, the algorithm was general know-how, and the GPL required him to keep the code open. Aster seeks an injunction and damages.
1. Did Ravi misappropriate Aster's trade secrets, or did he take only general skill and knowledge?
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Trade secret protection requires secrecy, reasonable measures, and independent economic value. The customer prospect list can qualify if it was compiled, not readily ascertainable, and kept confidential. Emailing it to a personal account is a classic misappropriation if Aster used confidentiality agreements and access controls. The 40-page algorithm design document is stronger than the algorithm idea itself: confidential design documents can be protected even if general algorithms are not. Ravi's claim that the list was memorized is weak if he sent the actual list; memory is not a defense to misappropriation of a confidential relationship. General know-how and skill are not protected, and many states reject inevitable disclosure. Aster must show Ravi used or disclosed the information at BluePeak, not merely that he knew it. Forensic evidence, email metadata, and BluePeak's product features will matter. Aster also needs to show it took reasonable steps to protect the information.
2. What are the consequences of Ravi's use of ChartKit under GPLv3?
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GPLv3 is a copyleft license. If Ravi modified ChartKit and incorporated it into Aster's proprietary dashboard so that the combined work is a derivative of ChartKit, distributing that combined work requires licensing the whole under GPLv3 and providing source code. Removing copyright notices violates the license and may terminate rights. Internal use without distribution may not trigger source-disclosure obligations, but selling the software to customers is distribution. Aster should audit whether ChartKit was linked, modified, or merely used as a separate tool. If the code is integrated, Aster may need to remove it, replace it, or open-source the affected module. The license issue is separate from trade secret liability, but it can increase damages and force a product redesign. The safest step is a software composition analysis and legal review before any further release.
3. What provisional relief and damages should Aster seek, and how does the timing of copyright registration affect the claim?
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Aster should seek a temporary restraining order and preliminary injunction to stop BluePeak's use of the trade secrets and any infringing code, supported by forensic evidence and a preservation letter. For trade secrets, Aster can seek actual damages, unjust enrichment, and in some states exemplary damages and attorney fees. For copyright, registration is a prerequisite to suit for U.S. works, but registration after infringement limits statutory damages and attorney fees to infringement occurring after registration, unless registration is within three months of first publication. Because Aster registered after BluePeak's launch, it can still sue for infringement and seek an injunction and actual damages, but statutory damages may be unavailable for pre-registration conduct. Aster should also consider breach of contract claims against Ravi and, if evidence supports it, claims against BluePeak for tortious interference or aiding misappropriation.