Inside HID's $45 Million Legal Win Against Competitor Vector Flow
It is atypical for corporate litigation go to trial, but HID has won a very sizeable judgement against competitor Vector Flow, founded by former HID employees.
HID touted this win, assuring the public, "We do not pursue legal action simply for the sake of being litigious," contrasting to IPVM's recent report Fear Of HID Lawsuits Intimidate The Industry.
So, is this a case of HID being wronged and justice being delivered, or is it one where HID is intimidating competitors?
We reviewed over 100 legal filings from the litigation to better understand the cases made by both sides and the factors that impacted the verdict.
We conclude with an examination of legal issues that remain to be resolved, the possibility of appeal, and the existential threat this may pose to Vector Flow.
Executive *******
**************, **** ******** *** ***** ***** secret ****************, *** **** *** ******** available ** ***** *******, ** *** not **** *** "******* ***" **** clearly ****** ****** **** *** ******** source ****; ******, ******** ********* ******** was ********* **************. *******, ******* ******** that ***** ******* ******** ******** *** publicly ******** (**** ******** **** ***, but *** ******* ******** ** ***** any ***** ********).
***** ***** ****** **************** ** ******** as ********* ***** ********* ********* *** work *** ** ***** ***********, ****** with **** **********. **** ****** ******** questions ** **** **-********* *** *** cannot **. ***** * ****** ********* exists ***** *** ******** ****** ****, this **** ****** ******** ***** ****** using ****** ********* *** ******* ** a ***** *******.
*******, *** **** ** *** **** was ********* **** ** *** ***** for *** ***** ****** **** ********. Given *** ********* ********** ********, ** believe * **** ***** ** **** amenable **** * ***** ** **** a *********. ****** **** *** ******** the ***** ******* ** **** ** appeal, *** **** **** ***** ** public ********** ** **** **** **** do **** *** *** *** ******* to *** ******* *** *******.
**********
*** *** ******* $** ******* ***** receiving * ********* ******* *** ****** infringement *** ***** ****** **************** ************* ******* ***** **-*** **********.
****************** ****** (*** $** *******) *** the "***" ******-**-**** ** ****. *** "********" of ****** ****, ********* (**** ****) *** **-******* (******* (***) ****), ***** **** *** ** ** Engineering *** *&* (********** (****) ******) **** *********** ****** ******* ** Quantum ******, ******* ** *** "***" patent, *** ******** *** ***** ****** to ******* ****** (***) *** ******** multi-million ****** ******* ********* ** *** court *********.
**** ** ***'* ********* **** **** Vector **** / *** ***** ********** had ****** ** ***'* ***** ****** information, ********* *** ****** ****. **** used **** ** ******** ******* **** HID, ******* ****** *************, *********, *** willingly, ********* ** ***** *********. *** argued **** ****** ****'* ******* ******** features **** ***** *** **** **** developed ****** *** ********* ********* ******* using ***'* ****** ****.
**** ******** **** ****** ** ***'* favor ** *********** ** ** ** relatively ***** ******** ** *** **** of ****** **** *** ****** ***** as * ******* ** *** **-*** employees ******* ** ***** ** ** to ***********. ** ******* **** ** an *********** **** *** ****** **** if **** ** *** ****** *** win ** ******.
*** *** ****** **** **** ******* further ********* ** * ***-*** ***** trial ** ***** **** ** ***** of *** **** ***** **** ****** of ******** *** ****** ** ********* duty ******.
Unanimous ******* ******* **-*** ********** / ****** ****
********* **** *********** *********** **** *** *** **-*** ********** guilty ** ***** ****** **************** *** patent ************ *** ******'***':
Full ********* ** *** $** ******* *******
******* ******* **** ***** ** $** *******. *** trade ****** ****************, *** *** ******* $38.9 *******. ****** **** **** **** to *** $**.* *******. ********* **** Jain *** **-******* *** **** *** ordered ** *** $*.* *******, *** the ** ** *********** *** *&*, Shailendra ******, ** ******* ** *** $4 ******* ** ***** *****:
************, *** *** ******* ** ********** $6.1 ******* **** ****** **** *** to **** ******* ******* *** ************ on ***'*"*** ******":
HID **. ****** **** ********** **********
******** ****** ******* ****** ****** ******** **** *** ********* *********** ******** ****, ******** *** **-*** executives ** ***** *** ***** ******* (which **** **** ******* **) ******** from ***** ****** ******* ******* ****** to ***** * ****** ********** ** HID ****** ****** ****. ***** ***** secrets ******** ***'* **** ********* ******** and ****** ****.
HID *********
*****, ** ****** **** ** *** main ********* *** ********* ****** *** case. ******** **** *** ****** **** arguments, ******* ***********, *********** **** ***, and ****** **-*** *********.
"Source **** ********** *******"
****** **** *** ******* ** **** after *** ****** **-******** **** ***, with *** ** ** ***********, ******, joining ** ****. *** ****** **** aspects ** *** ****** **** **** "unlawfully *******" **** *** *** **** the ** ** ***********, ******, *** coordinating **** **** *** / ** Ghai ** ****** **** ** ******* their *******, ** ***** ** ********** *********:
Creating * ********
********* ** ********** *********, ***** *** ********* **** ********** their ********** **** *** *** ******* working ** *** **********, ****** **** created * "****** ********" ** "******* and **********" ** ***'* ***** *******:
Could *** **** **** ********* ****** ********* *********
*** ************* ******** ***** *** **** **** developed ** ****** ****'* ********* ********* without ***** ***'* ****** ****:
Vector **** ******** "****** *******," ****** ** **** ****** ** ***-*******
*** ******* ******** ********* *** "****** *******" to ***** *** ********** ********* ** Quantum ****** *** ***, *** ***** contribution ** ** *** ** ****** competition:
*** ******** **** ***** ** ****** ** show *** ********** **** ******** ***** Non-competes *** ***-************ **********:
Features ** ********
********* ** *** ********,*** ************'* **** **** ********* ** ****** Flow's *********, ********* "*******", "*********", "*****", and "********", ***, ***** *** ****** these ******** *** "**** ** ****, unlikely ********, *****":
"*******" ******* ** **** ** ****:
"*********" ** ** ******** ******** *** a *** *******:
"********" ** * "***** ***********, ****** to ** ****** ** ***** **** scratch ** *****":
*** ***** "********** ********," ** ***** in ***** *********:
********** ********:
Misappropriation ** ***'* ***** ******* *** ************ ***********
*** ********** ******** ** **** ********* ** Vector ******* ** ******** *******. **** build **** ************* *********** ** ***, and ******** ** ***** *********** *** duties ******** **** * ********* ** competing **** ***. **** ****** * few ********, **** *** ****** *****:
Ghai's *********** ** **** ******** *******, ***** ** *** *********
** ********** *********, *** **** *** **** *** access ** ************ *********** ******* ** the **** ******** ******* **** ********* "shortly ****** ** **** ***":
Risk ********* ******* *** ********, ********* ********* ** *******, ***********, *********
************ ******** ** *** ******** **** ****** Flow ***** *** **** ********* ******* in *** "***** ****** ** ****" between **** *** *******'* (******* **-*** employee *** ******** ******** ** **** case) ********* **** *** *** ** is "*********** ***********, ********-********* *** ****-*********."
The **** *********** ****** ******* ***** ***** ** ***
*** ********* **** *********** (**** *** *******) needed "******* *****" ** *******, *******, and ****** *** ******* ****** ** was "************ *******" ** ***** **** with *********:
Strong ********* ****** **** **** ***'* ************ ***********
*** ******* "***** ****** ** ****" ** took ****** **** ** ****** *** risk ********* ******* "******* * ****** inference." **** **** ***'* ************ *********** as * ***** ***, ** ******** compete ******* ***:
Breach ** ********* ******
*** ********* ***** ********** *** ********* ****** of ****, *******, *** **** *****, and **** "**********" *********** ***** ******* from *** ** ****** ****:
Bench ***** ** ****** ** ******** *** ********* **** ****** ********* *** ***** ****
*** **** **** ***** ********* ***** HID's ****** ************ *** **************** ** trade ******* ******.
*** *** ***** ********* ** ******* the ***** ****** ** ***** ** a **** ** ** * *****, with *** ******* *** *** ****** and ****** **** *** ******.
*** ******* ** *** ******* ********* to *** ** ************, ***** ******** **** ******* ** a ***** **** **** * ***** to * ***** ** **** *** legal ******:
****** **** ****** ** ************ *** ****** ********* ******* *** and ******* *** *** ***-*********** **********, in ***** *** ****** *** ***** to * **** *****:
*** ************ * **** ***** *** *** intellectual ******** ******, *** * ***** trial *** *** ****** ** ******** and ********* **** ******(*** ****** ****** ****** **** ******* to *** ****** *** ***-*********** **********, in ***** *** ****** *** ***** to * **** *****). *** ***-*** bench ***** *********** *** ***** **-**, ****. ** *** ***** ***** **** HID ** **** *****, ****** **** would ****** **** ** *** *** additional *******.
Technical ******** ********
**** ********* ******** **** ** ******* HID's *********** ** ****** **** ***** is ******** ** ******.
***'* ********* ****** ** ***** *** the ******** ********* **. **** *****, who ******** ****** ****'* ****** **** and ******** ** **** ***'*. *** expert ****** ** *** ********* ** the ****** (***** ** ******* *** federal ** *****, ***** ****** ******* are ***** ************), *** ****** ***** reference ** ***** ******* ** *** content ** *** ****** ** ******** (also ******* ** ***** **** *****, since *** *********** ** ********** ************ and *********** ************ *********). *** ********, in ***** ***** ********* ****** *********:
***:
*** ******** ********* *** ***-******** *********** does *** **** ******** *********** ***** what ********* ******** ************ **** ****** Flow *************** ***'* ***** *******.
Passing ********* ** ***** *******, *************
**** ** ***'* ********-********* ******** ** circumstantial, ********* **** *** ******* **** out ** ***'******** ************* **** ****** **** **** **** stolen ****** ****. **** **** *** necessarily **** **** **** ***** ******** doesn't *****, ****** - *** ******** examined ***** *** ********* ****** *** had ****** ** *********, *** **** relevant ******** *** *** ******* ** redacted **** ***** *******.
*** **** **** ** ******* ******** in ****** ******** ****** ****'* ******** **** *** **** ***** ** a ***** ******* ** * ****. There, *** **** **** ****** ****'* motion ******** ***** ******** ***** ***'* case, ******** ** "****** ***** ******* and ********** **** ** ******* * copycat *******," "** ******* ****** **** culture ******* ********** *** ****’* ******* customer," "******** ********** **** ****** ****’* products ******* ** *** **** *** as ***’* *******," *** ******** ** Vector **** "** ***** *** ****** code ** ************* ********":
** *** **** *** ******* **** this **** **** **** ********, ** found ** ******* ********-********* ********** ** the ******* ******* ** *************, ** solid ********* ******** ************* **** ****** Flow's ******** "******* ** *** **** way ** ***'* *******" ** **** "Vector **** ********* ** ***** *** source **** ** ************* ********." ** mentioned, **** ** *** ******** **** appears ** ***** ******* ** ********.
Vector **** **** ****** **** *** *** ***************
******, *** ** ****** ****'* **** arguments ** **** ***'* **** ** circumstantial, *** **** ***** ** *** conclusive ******** ************* **** ****** **** did ***** ***'* ****** ****. ****** Flow's************* ************ **** "*** *** *** **********... any *************** *** ***** ******* ** the ****** ****** **** *** ****** Flow's **** *********," *** **** "** date, *** *** *** ********** **** a ****** *** ***** ****** **** purportedly ** ********* ** ****** ****'* user *********":
** *** ***************** *********, ****** **** **** **** **** "HID *** *** ********** * ****** line ** *** ****** ****, ** any ***** *** ***** ****** ***********, that ** ********* ** ********* ** any ** *** ****** ****..." ******* HID "****** ***** **** *** ***** reviewing ****** ****'* ****** ****":
No ********* **** ****** ****, ****** **** ****
******* **** ** ***'* ******** **** Vector **** ************* ******* ******** ** its ****** ****, ****** **** **** in **************** ************* ***'* *********** *** "*********" *** that "***** ** ** ***** ** HID's ********** **** **** **** *** removed **** ********** ** ** ******* to ******* ********":
******* ** *** ****, *** *** requested **** *** ***** ***** *** full ****** ** ****** ****'* **** environment, ******* **** ****** **** *** intentionally ****** ** ******* *** ******** information. ******** ******** ***'* *******, *********** **** *** *** *** shown "**** ***** *** * ******** need *** *** **********."
Damage *********** ********* ****** ********, ******* ** *&* *****
***'* ****** ******* *** ***** ** expert ********* ***** ** ******* **************. ********* ** ********* **** ******, ************** ********* ~$*** ******* ** total *******, ****** **** ****** ******** damages *** ****** ** ******** *** breach ** ********* **** ****** **** were *** ********** ** *** **** and **** ** ******* ** *** judge ** * ******** ***** ** March **** (** ********* *****). *** jury ******* *** $** ******* ** damages.
**** **** **. *****'* ****** ******, Schoettelkotte's ****** ** ************ *** *** publicly *********. ****** ******* ** *** detail **************'* ******** ************* ** *******, meaning *** ****** **** ************** ********** for *** ************ ******** ****** **. the ****** ** ********* **** *** contract ******. *** ******* *********** *** the ** ****** *** ***** ** "HID *** ******* ******'* *&* *****," but *** ********* ***** ***** ***** are ********:
***** ** ****** ****'* ****, **** believes **** **'* ******** **** *** company **** **** **** $**-$** ******* in ******* *** ****. ********* ** Vector ****'* **********, *** $** ******* judgement ***** *** **** *** ** business.
*** ********* ***** **** ** *********** ruinous *** *** ********** ********** (*** Vector **** ********** **** ** *** in *** **** ****). ** **** do *** **** *** ********* ********* needed ** *** *** *******, **** may **** ** **** *** **********. Companies ** ***** ********* ********** **** personal ********* ********* *** ******* ***** in ***** ********* *****. **** *** found ** *********** ********** ******* ** not *** ********** *** ** ********* from ****** ****.
Specificity + *** *** ********* ******** ** ***** ****** ****************
********* ********* ***** ********* *** ***** competitors, *** ** ************ ***** ** litigation.
**** ********* ******* ***** ****** **************** is **** ** ******** **** ** replicates *********** ******** **** ***** ***** role **** **, ********* ** ***** ****** *** ********* ****** (*****):
************ ******** *********** **** ** *** generally *****, *** ***** ** ***** who ****** ************ ****** **, *** has **** ******* ** ********** ******* to **** ** ******.
** ***** ** **** **********, * key ******** ** *** "******[*]" *** information **. ** **'* ****** ***** in *** ********, **** ** ******'* be * ***** ******. *** ** someone ***** **** ******* *** *********** only **** ******* ** * ******** company, *** ** *** ***** ********** laid *** ** ***** *****, ** is * ***** ******.
*** **** *** **** ** ******** replicate * ***** ****** ** ************** it. ********* *. ******, * **** ** ***** * pharmaceutical ******* **** * ****** ******** for ***** ****** **************** ***** ** left *** * **********, *** ***** Circuit **** **** ************** ****** *********** ** ********* *** development ** * ******* *** ******* as ****************.
********* **** ** ********, *** ***** considered * ***** ******, ** ****** code. **, *** ****** **** *** the ****** *** ********* ** **** misappropriated ***'* ********, **** ***** **** needed ** **** **** - *** not *********** ********** - ***'* **** to ******* ***** ***. ** *****, expert ********* ********* *********** ******** ** HID *** ****** ****'* ****** **** is ****** ** ********, ** ***** is *** **** ******** ********* ******** on **** ********.
Civil ***** ******* ** ************* ** ******** ********
** *** **, ***** ******** (********* intellectual ******** ****) *** ******* ** the "************* ** ********" ********, ***** requires *** ********* ** ******** *** jury **** ***** ** * >**% chance **** *** ***** ** ****. This ********* **** *** ****** "****** a ********** *****" ******** **** ** criminal *****. *** ****** **** ** demonstrate **** ***** *** * >**% chance **** ****** **** *************** ***** secrets *** ********* ***'* ******.
** **** ********, ************** ******** *** be ********** ** ****** * ********* verdict (******, ** *****, ***'* *** have ********* **** ******* ******** ** trial **** ** ******** ** ****** filings). **** *** ** ************ **** with ****** ** ****** ********* *****.
********
** ***** *** ** ***** ** towards ******* ****** ** ******** ******** during *** ****. ** * ********, HID ****:
** ****** *** ** ***** ********, but ** ***** ** ***** *** official *********:
************ *************:
**** ****, *** ******** * ****** favorable ******* ** ** ************ ******** (IP) *********** ****** ***** ******* *** company ****** ****, ***.
** **** *******, * **** *********** agreed **** ****** **** ********* *** maliciously *************** *** ***** ******* *** willfully ********* *** ******** ******** ****** Management (****) ******. ** *** ******** to *** **** *** **** *******.
** ***, ** *** ********* ** protecting *** **. ** ** *** pursue ***** ****** ****** *** *** sake ** ***** *********. *******, ** strategically ****** ** ***** ** *** infringement ********** ******* *** *********, *** employees, *** *** ********. **** ******** is *********** ** *** ******** ** the ****** **** ****. [******** *****]
****** ****'* ******* *** *** ******* to * ******* *** *******.
***** ******* *** ******* *** *** opposing **** ** *** ** **********. It ***** ** ******* ** ********** what *** *** ****** ***** *** allegedly ******** ** ****.
**** * ***** **********, ******* *** publicly ***** ***** ***** ******* *** kept ******.
** ***** *****, *** ****** ******** and *** ***** ******* *************** ***'* be *** *** *** **** ** the ******** ** *** *** *** contrary ** *** *******.
*** **** **** **** ** *** evidence ** *** ***** ******* *** are ****** ** ******** *** *********** as *** ******* ** *** ***** Secret **** ** ********** ********** *** litigation ** ******** *** ******.
**** ** ******* ***** ****** ** publicly *****, *** *********'* **** ******** is ** ******** ***** ** **** the ********* ** *** ****** ** order ** ******** *** **** ******* of * ***** ******.
****** ****, ** ******* **** **** the ***** *** *** **** *** the ******* *** ****** ******** ** conclude **************** ** **** **** *****.
***** ****, *** ****** ********** ***** is *** *** **** ******* **** is ********* ******* ***** *** ******** law. *** *********** ** ********* **** does *** ***** ** ***** *** which ***** ********** * ******** ******** in *** ******* ** ***** *********** that **** *** ********* ******* ** go ******* ******* *** ****** *******. Sad ******* ** *** ******** ***** system.