L-3 Communications Corp. v. Reveal Imaging Technologies, Inc.

18 Mass. L. Rptr. 512
CourtMassachusetts Superior Court
DecidedDecember 2, 2004
DocketNo. 035810BLS
StatusPublished
Cited by1 cases

This text of 18 Mass. L. Rptr. 512 (L-3 Communications Corp. v. Reveal Imaging Technologies, Inc.) is published on Counsel Stack Legal Research, covering Massachusetts Superior Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
L-3 Communications Corp. v. Reveal Imaging Technologies, Inc., 18 Mass. L. Rptr. 512 (Mass. Ct. App. 2004).

Opinion

van Gestel, J.

This matter is before the Court on a variety of motions, the most significant of which are, in their order of filing: the Reveal Parties’ Motion for Protective Order (Paper #23); the Reveal Parties’ Motion for Partial Summaiy Judgment on Plaintiffs’ Contract-Based Claims (Paper #26); L-3 Delaware’s Motion Under Mass.R.Civ.P. 56(f) (Paper #41); L-3 Delaware’s Motion to Require Escrow of Defendants’ Patent Applications (Paper #74); L-3 Delaware’s Motion for Partial Summaiy Judgment on Ownership of Patent Applications (Paper #75); the Reveal Parties’ Motion for Partial Summaiy Judgment on the Ownership of Patent Applications and Trade Secret Misappropriations (Paper #145); another L-3 Delaware Motion for Partial Summaiy Judgment on the Ownership of Patent Applications (Paper #159); and the usual array of motions to impound papers and motions to strike affidavits.3

There are three basic clusters of motions. First are motions relating to the employment of the individual defendants and any agreements containing restrictive covenants that they may have had in their various employment relationships. Second are patent-related motions. And third are trade secret and confidential information-related motions. The Court will deal with the background and the discussion of these various motions in the same clusters.

The sole remaining plaintiff, L-3 Communications Securiiy and Detection Systems Corporation Delaware, will hereafter be called “L-3 Delaware.” Except where greater specificity is required, the defendants collectively will be called the “Reveal Parties.”

BACKGROUND

The original complaint, filed on December 2, 2003, contained 12 counts, charging the defendants with: breach of contract (disclosure of trade secrets); breach of contract (duty of loyalty); (breach by Ellenbogen of obligation not to hire L-3 employees); breach of contract, assignment of inventions and copyrights; breach of non-competition covenant by Sanders; inducing breach of contract; common-law misappropriation of trade secrets; misappropriation of trade secrets, G.L.c. 93, Sec. 42; trade secret conversion, G.L.c. 93, Sec. 42A; breach of common-law duty of loyalty; common-law unfair competition; and violation of G.L.c. 93A, Sec. 11.

An amended complaint was filed, with permission of the Court, on May 19, 2004. This amended complaint differs from the original in the following respects: only one of the three original plaintiffs remains, L-3 Communications Security and Detection [513]*513Systems Corporation Delaware; the fifth count added Ellenbogen, Bijjani and Lee to Sanders in breach of non-competition covenants; a new count was added for breach of a common-law duty to assign; and a count was added for declaratory judgment.

Facts relating to the motions based on the employment of the individual defendants and any agreements that they may have had in their employment relationships.

The Reveal Parties’ Superior Court Rule 9A(b)(5) statement of claimed undisputed facts on the employment-related issues includes 56 paragraphs covering most of 17 pages. L-3 Delaware admits some parts, or all, of 36 of the Reveal Parties’ statement; “does not deny” some parts, or all, of another 7; and denies the rest. L-3 Delaware also adds another 46 of its own alleged undisputed facts. It is from this somewhat ungainly mass that this Court will attempt to set forth those undisputed facts that apply to the Reveal Parties’ partial summary judgment motion on employment issues.

The original lead plaintiff, L-3 Communications Corporation, is a Delaware corporation, based in New York City. Sixty-five percent of its work is defense-related, and its annual sales exceed $2.5 billion. In 1996 it entered into the explosive detection system (“EDS”) field after receiving a grant from the Federal Aviation Administration (“FAA”).

The other two original plaintiffs are wholly owned subsidiaries of L-3 Communications Corporation: one is a California corporation, based in Cypress, California; and the other, and now the sole plaintiff, L-3 Delaware, is a Delaware corporation based in Woburn, Massachusetts.

The defendant Reveal Imaging Technologies, Inc. (“Reveal”) is a Delaware corporation with a place of business in Bedford, Massachusetts.

The remaining defendants — Ellenbogen, Bijjani, Buckley, Lee, Sanders and Scheinman — are all currently employed by Reveal.

Hologic, Inc. (“Hologic”), anon-party to this action, is a company that researches and develops products that apply dual x-ray technology in the medical diagnostic field. In January 1990, Lee began working for Hologic. In connection with his employment, Lee signed a Hologic Employee Intellectual Property Rights Agreement and Non-Competition Agreement (the “Hologic Agreement”). The non-competition part of the Hologic Agreement provides:

Noncompetition. During the first two (2) years after I cease to be employed by Company, I will not, directly or indirectly, either by myself or in conjunction with others be engaged in or interested in, or affiliated with, or organize . . . any business then currently competitive with Company . . .

The Hologic Agreement defines “Company” as Hologic and, “to the extent applicable, any other business entity that is either controlled by, controls, or under common control with” Hologic. Hologic’s benefits under the agreement “inure to the benefit of the Company and its successors and assigns.”

In January 1991, Lee resigned from Hologic and began working for a separate company called Vivid Technologies, Inc. (“Vivid”). Vivid was always a separate company from Hologic. Hologic is a publicly traded company on the New York Stock Exchange, under the symbol HOLX. Hologic is not related to or owned by Vivid, PerkinElmer, Inc. or L-3 Delaware, or any entity related to these companies.

Vivid, as a corporation, has gone through two name changes as the ownership of its stock has changed. The first change occurred in 2000 when Vivid’s stock was acquired by, and it became a wholly-owned subsidiary of, PerkinElmer, Inc. It was then called PerkinElmer Detection Systems, Inc. (“PKI Delaware”). The second, was at the time of the acquisition of PKI Delaware’s stock from PerkinElmer, Inc. by L-3 Communications Corporation. PKI Delaware then became L-3 Communications Security and Detection Systems Corporation Delaware, here called L-3 Delaware.

Lee was employed by Vivid in January of 1991; Ellenbogen and Sanders, in October of 1994; Bijjani, in April of 1997; and Buckley, in January of 1998. Each of Ellenbogen, Bijjani and Sanders signed Vivid Employee Intellectual Property Rights Agreements and Non-Competition Ageements (the “Vivid Agreements”). Among other things, the Vivid Agreements provided for two-year, post-employment restrictive covenants.

On October 4, 1999, Vivid signed an agreement with PerkinElmer, Inc. for its acquisition and announced to its employees that the transaction would formally close on January 14, 2000. At that time Vivid would become a wholly owned subsidiary of PerkinElmer, Inc.

In conjunction with the anticipated acquisition by PerkinElmer, Inc. of all of the stock of Vivid, PerkinElmer, Inc. offered incentive agreements to certain employees, including Ellenbogen. These agreements were memorialized in KCIP Agreements with the particular employees involved.

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Bluebook (online)
18 Mass. L. Rptr. 512, Counsel Stack Legal Research, https://law.counselstack.com/opinion/l-3-communications-corp-v-reveal-imaging-technologies-inc-masssuperct-2004.