Dyno Air v. Steady Systems, Inc. Case Study - Law Assignment Help

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Dyno Air v. Steady Systems, Inc.
Dyno Air is a Georgia company founded by Air Force veteran Fred Flintstone, who is the company’s president. Pebbles Flintstone, a Georgia resident, is Fred Flintstone’s daughter and the founder of Steady Systems, Inc., (“SS”), incorporated in Georgia in March of 2018. Dyno Air alleges that Pebbles Flintstone and SS have been unlawfully marketing Dyno Air’s patented products and using its trade secrets to solicit business. In 2002, Fred Flintstone hired Pebbles Flintstone as an employee in Dyno Air’s sales department. When Pebbles was hired, she was a 21-year-old high school graduate; she had no advanced education, industry-specific training, or managerial training or experience. According to the complaint, Fred Flintstone endeavored to give Pebbles the training and experience necessary to eventually take over Dyno Air. Pebbles was employed by Dyno Air for the next 16 years, during which time she received raises and promotions as she gained experience and developed necessary skills. Dyno Air paid for Pebbles to obtain an American Conference of Governmental Industrial Hygienists Certification from the University of North Carolina. The company also allegedly paid for her to be trained in writing programmable logic controller software for Dyno Air’ proprietary and patented equipment described below. Pebbles was promoted to General Manager in 2016.

Dyno Air makes “large-scale industrial air-handling systems, including air cleaning and purifying equipment (i.e., filtration systems); pneumatic conveyance systems (i.e., systems that use pressurized air to convey material); vacuum systems; and, of particular relevance here, environmental test chamber systems.” The company sells its environmental test chamber systems to the US military and other commercial customers under the company’s “Wind Soft” trademark. These systems allow users to simulate conditions of blowing sand, dust, dirt, and other particulates that can be encountered in sandy environments.” Around 2009, Fred and Pebbles Flintstone—working in their capacity as Dyno Air employees and using Dyno Air’ equipment—conceived and developed the Wind Soft™ environmental testing system. Dyno Air filed provisional patent application on December 2, 2009, and nonprovisional patent application on December 1, 2010. Fred and Pebbles Flintstone later assigned to Dyno Air their respective right, title, and interest in the Applications, as well as any related patent applications (including divisional applications) or patents. On May 27, 2014, the Applications issued as US Patent titled “Dust and Sand Testing System.”

According to the patent, the system “is designed for environmental tests that expose test pieces to particulate matter, typically either sand or dust, entrained in an airflow.” The Patent describes exactly how, and by what mechanisms, air and particulate matter are circulated through the system.

On April 15, 2014, Dyno Air filed another patent application. It was issued on June 13, 2017, “Dust and Sand Test System.” Fred and Pebbles’s assignment as it relates to the Patent was recorded on June 5, 2018. Both patents describes the system using substantially the same language as the first Patent.

Dyno Air alleges that Pebbles have misappropriated its technical and nontechnical trade secrets. According to Dyno Air, its technical trade secrets include certain proprietary technologies related to its ventilation systems and test chambers. Its nontechnical trade secrets include: (a) its financial, business and marketing information and strategies; (b) the names and particular needs of its customers; (c) the names and particular capabilities of its suppliers; (d) its future product development and refinement plans; (e) the prices it obtains or has obtained and the prices at which it sells or has sold products; (f) information that is provided to Dyno Air on the condition or understanding that it be kept confidential, such as information concerning the Systems strategies, preferences, and needs of its customers; [and] (g) its own business methods, manner of operation, strategic direction, priorities, and/or plans. Dyno Air alleges that these trade secrets are “not generally known to the public and would not be ascertainable without the expenditure of substantial time, effort, and resources.” Moreover, the company alleges that the information is “extremely valuable to [it] and would be similarly valuable to its competitors.” Dyno Air does not share its confidential or proprietary information (including its trade secrets) with the public or anyone outside the company. And it purportedly takes various steps to protect that information, including “having new employees sign, when they are hired, standard confidentiality and noncompete agreements; limiting employee access to information on a need-to-know basis; limiting employee access to company computer systems and email on a need-to-use basis; issuing each employee to whom access was granted with unique, password-protected credentials to access the company’s computer systems; and charging its management, including Pebbles, with responsibility for enforcing those policies and protecting Dyno Air’ Trade Secret Information.” Significantly, however, Pebbles is not bound by a confidentiality agreement.

Pebbles ended his employment with Dyno Air in March of 2018. In the time leading up to his departure, tension had apparently developed Documents concerning the System. On his last day, Pebbles arrived at the Dyno Air office uncharacteristically early. When Fred asked Pebbles why he was there so early, Pebbles informed him that he was leaving the company. Pebbles then purportedly told Fred: “I’m not going to do anything illegal, but I’m going to take business from you.” Dyno Air alleges that, before leaving the company, Pebbles stored Dyno Air’ technical trade secrets—critical programmable logic controller and human machine interface software files—on a laptop computer. These proprietary software files are used to control operation of a Wind Soft™ system for a major military project. Dyno Air avers that Pebbles took the laptop containing the software files with him when he left the company. Pebbles has allegedly failed to return the laptop, despite multiple requests from Dyno Air.
After Pebbles left the company, Dyno Air’s military customer—whose software files were taken by Pebbles—experienced complications that required the original software to be restored on its system. Dyno Air was unable to restore the software because Pebbles had taken the original version with him. The client instead contacted Pebbles directly; Pebbles restored the original software on the client’s system. Dyno Air has confirmed that the software used in the restoration was in fact Dyno Air’s proprietary software. Dyno Air, with assistance from forensic computer expert revealed that, on several occasions, Pebbles copied Dyno Air’s highly sensitive files onto noncompany external storage drives. More specifically, it was uncovered that Pebbles copied his work emails, financial accounting records, internal business files, customer information, sales and marketing information, engineering-related information, manufacturing related information, and other miscellaneous work data. The expert also discovered that Pebbles had been using his work computer to form SS while he was still employed at Dyno Air. SS has been attempting to sell components of Dyno Air’s patented systems and Pebbles has been using Dyno Air’s trade secrets to divert business from Dyno Air to SS. Dyno Air claims, that Pebbles has been using its trade secrets to siphon business away from one of its South Korean customers. While serving as Dyno Air’s General Manager, Pebbles had gained extensive knowledge of confidential business, financial, and customer information concerning the company’s business development in South Korea. Pebbles was responsible for contract negotiations between Dyno Air and customers in South Korea, and he travelled there to meet with those customers the year before he left the company. Dyno Air alleges that in May 2019, Pebbles and a former Dyno Air employee now working for SS traveled to South Korea to meet with Dyno Air’ customers. Pebbles and his associate allegedly spent several weeks in a region of South Korea where one of Dyno Air’ key prospective customers is located. Dyno Air asserts that Pebbles has also held herself out as the owner of Dyno Air’s patents for its Wind Soft™ systems. While at Dyno Air, Pebbles was the primary contact for the US Navy, which was and remains one of Dyno Air’s customers with respect to the Wind Soft™ systems. After Pebbles’ departure, a Navy employee contacted Dyno Air and informed them that Pebbles had represented that she owns the patents, possesses the Wind Soft™ drawings and schematics, and has the exclusive right to sell patented Wind Soft™ systems.

Specific Instructions
You are on the Dyno Air Team.

Answer the following questions: 
 
1. What government agency(s) has/have jurisdiction over this case?

2. Provide any relevant statutes regarding this case as it deals with Trade Secrets. Properly cite the statutory law. Secondly, prepare Dyno Air’s position on the theft of its trade secrets, using the law and relevant facts.

RULE - Relevant Law
Analysis - This is where you present your response in writing.  It should have relevant case/ statutory law to support your position.
Conclusion - Clearly state how the Court should find based upon your Analysis.

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