Picker International Corp. v. Imaging Equipment Services, Inc.

931 F. Supp. 18, 1995 U.S. Dist. LEXIS 11622
CourtDistrict Court, D. Massachusetts
DecidedJuly 5, 1995
DocketCiv. A. 87-2828-MLW, 87-2597-MLW
StatusPublished
Cited by15 cases

This text of 931 F. Supp. 18 (Picker International Corp. v. Imaging Equipment Services, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Picker International Corp. v. Imaging Equipment Services, Inc., 931 F. Supp. 18, 1995 U.S. Dist. LEXIS 11622 (D. Mass. 1995).

Opinion

*22 MEMORANDUM AND ORDER

WOLF, District Judge.

I. SUMMARY

Plaintiff Picker International Corporation (“Picker”) designs, manufactures, sells, and services medical diagnostic equipment including the computed tomography scanners (“CT Scanners”) involved in this case. Defendant Imaging Equipment Services, Inc. (“Imaging”) is an independent servicing organization (“ISO”) which competes with Picker to service Picker produced CT Scanners. Defendant Thomas J. Quinn is the founder and President of Imaging.

Picker initiated this action in 1987, in the United States District Court for the Western District of Pennsylvania, alleging that Imaging and Quinn had misappropriated Picker’s trade secrets and violated its copyrights in the course of competing to service Picker Synerview CT Scanners. Picker initially sought both damages and injunctive relief.

Later in 1987, Picker filed suit in this court against Imaging and Bruce Leavitt, a former Picker employee who had been hired by Imaging, for Leavitt’s alleged breach of his agreements not to compete with Picker or misappropriate Picker’s confidential business information. Once again, Picker originally sought both damages and injunctive relief.

On February 13, 1989, the parties agreed to a Partial Final Injunction restraining Imaging from using the voluminous Picker documents and software Leavitt had brought to Imaging after terminating his employment with Picker.

The case filed in Pennsylvania was transferred to this court. Imaging responded to Picker’s actions by filing counterclaims alleging that Picker had violated federal anti-trust laws and various state laws in an illegal effort to monopolize the market for the servicing of its CT Scanners. The progress of these cases was twice stalled by Imaging’s filing for bankruptcy and the automatic stay of litigation those filings generated. In 1994, Picker obtained relief from the automatic stay by waiving its claims for damages and agreeing to seek only injunctive relief in this case.

In August 1984, the court granted Picker’s motion for summary judgment on defendants’ counterclaims. Picker International, Inc. v. Leavitt, 865 F.Supp. 951 (D.Mass.1994). Soon after Leavitt settled with Picker, admitting that he had misappropriated Picker’s confidential business information and agreeing to injunctive relief.

A non-jury trial, lasting several weeks, was conducted in September and October 1994. The court took the case under advisement. Imaging and Quinn submitted two motions to re-open the trial. After a hearing on June 5, 1995, those motions were denied.

After carefully considering the evidence, including the credibility of the witness, the court finds that Quinn and Imaging have for more than a decade engaged in a relentless and extensive campaign to misappropriate Picker’s legally protected intellectual property. The court also finds that defendants’ misconduct continued through trial in the form of testimony fabricated by Quinn.

Accordingly, the court is issuing an Order which, among other things, requires that Quinn and Imaging return to Picker or destroy the Picker trade secrets, copyrighted materials, and confidential information they misappropriated, and enjoins the defendants from violating in the future Picker’s rights to control the dissemination and use of its legally protected intellectual property. In view of the pervasive and enduring misconduct of defendants, and of the nature of the relief ordered, the court is appointing James A. Ring, a former Special Agent of the Federal Bureau of Investigation, to serve as a Monitor to supervise and ensure compliance with the court’s Order.

The reasons for these decisions are set forth in detail in this Memorandum.

II. THE GENERALLY APPLICABLE LAW

The following Findings of Fact and Conclusions of Law may be best understood in the context of the generally applicable law. While Picker relies on several legal theories, the essence of its allegations is that Imaging and its President, Quinn, systematically misappropriated and misused Picker’s trade se *23 crets relating to the servicing of Picker CT Scanners. The parties have stipulated that the law of Massachusetts may be applied in analyzing this claim.

There are six factors which are usually considered in determining whether information constitutes a trade secret:

1. The extent to which the information is known outside the plaintiffs business;
2. The extent to which it is known by employees and others involved in the plaintiffs business;
3. The extent of measures taken by the plaintiff to guard the secrecy of the information;
4. The value of the information to the plaintiff and to its competitors;
5. The amount of effort or money expended by the plaintiff in developing the information; and
6. The ease or difficulty with which the information could be properly acquired or duplicated by others.

See Restatement of Torts § 757, comment b (1939); USM Corporation v. Marson Fastener Corporation, 379 Mass. 90, 98-99, n. 9, 393 N.E.2d 895, 900, n. 9 (1979); Data General Corporation v. Grumman Systems Support Corporation, 825 F.Supp. 340, 357 (D.Mass.1993), aff 'd, 36 F.3d 1147, 1165 (1st Cir.1994).

At the heart of this case is the third factor — the question whether Picker took adequate measures to protect what it now characterizes as its trade secrets. It is axiomatic that: “One who possesses a trade secret and wishes to protect it must act to preserve its secrecy.” USM Corporation, 379 Mass, at 97, 393 N.E.2d at 899-900. It is not necessary, however, that an “‘impenetrable fortress’ ” be erected to retain legal protection for a trade secret. Id. (quoting E.I. duPont de Nemours & Co. v. Christopher, 431 F.2d 1012, 1017 (5th Cir.1970), cert. denied, 400 U.S. 1024, 91 S.Ct. 581, 27 L.Ed.2d 637 (1971)). Rather, reasonable security precautions are required. Id.

In determining whether reasonable security precautions have been taken:

“Relevant factors to be considered include (1) the existence or absence of an express agreement restricting disclosure, (2) the nature and extent of security precautions taken by the possessor to prevent acquisition of the information by unauthorized third parties, (3) the circumstances under which the information was disclosed ...

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931 F. Supp. 18, 1995 U.S. Dist. LEXIS 11622, Counsel Stack Legal Research, https://law.counselstack.com/opinion/picker-international-corp-v-imaging-equipment-services-inc-mad-1995.