A recent decision from the First Circuit in Astro-Med,Inc. v. Nihon Kohden America, Inc., No. 08-2334-25, applying Rhode Island lawhighlights that the "acquisition" of trade secrets (not just"use") can constitute misappropriation and subject the acquirer toliability for actual loss and unjust enrichment under the Uniform Trade SecretsAct (UTSA). The First Circuit cited the plain text of the UTSA to reach thisconclusion. It also reasoned that plaintiff's direct competitor hiredplaintiff's employee "to obtain access to his intimate knowledge ofAstro-Med's business." From there, according to the court, "it is alogical inference that a competitor who hires away a rival's valued employeewith access to inside information has done so in order to use that insideinformation to compete with the rival, and it is an equally logical inferencethat once [the employee] became [the competitor's employee], he sought tojustify its hiring decision by revealing and using the information [thecompetitor] had bargained for." In the case, defendants were liable forfor actual loss and unjust enrichment caused by the misappropriation.

Astro-Med, Inc. v. Nihon.pdf (170.20 kb)

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Categories: Product Liability

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