Business Torts and Intellectual Property

Business Torts and Intellectual Property

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Business Torts and Intellectual Property

Intellectual property refers to the ideas and things one produce with his or her mind. Intellectual property includes anything that that is of ownership, patented or protected by a trademark. There are four types of intellectual property such as copyright, patents, trademarks, and trade secrets. With this in mind, it is imperative to review a scenario involving Sam, an employee of ABC Paper Corp.

Scenario – Sam & ABC Paper Corp.

Sam had signed an agreement nondisclosure as a condition of his employment with ABC but, unfortunately, has violated the terms by downloading a list of clients belonging to the company. This scenario implies that the subject of intellectual property in question is that of trade secrets and more specifically the disclosure of information (client list) to a third party.

The act of downloading lists of customers to a flash drive to share with third parties with the intention of obtaining personal benefits and interest was unethical and in violation ABC’s rules and regulations. In fact, Sam was responsible for maintaining the list of clients and can face some charges when he decided on violating the terms of his contract with his principal employer (Wahlgren, 2002).

Unlike other types of intellectual property, it is not possible to obtain protection by registering one’s trade secret. In fact, security only takes place if measures are taken to control the dissemination and misappropriation of information (Pagattaro, Cahoy, Shedd & Morehead, 2015). Most businesses use confidentiality agreements, limited access to confidential information, restrictive post-employment agreements, and other security practices to maintain trade secrets. By protecting its intellectual property, the ABC Company must have observed its competitors and others in the industry as if competing for ideas. As an employee, Sam was entrusted with of the company’s secrets and exposed this information to ABC’s unfair competition.

Tort is a legal word developed throughout the years to describe, in general, the different types of claims that impose economic and financial losses as a result of some misbehavior, apart from a breach of contract. This term refers to false presentations, fraud, a breach of contract, encouragement, unfair competition, trade name, trademark infringement and interference with business relationships (Emanuel, 2015). The term may also refer to a specific fiduciary, custody, and data requests contained in good faith.

In this scenario, Sam did commit a few torts that could subject him to severe penalties. One of them, previously mentioned in the situation, was the violation of nondisclosure as he committed to providing the company, XYZ, with the list of customers belonging to his current employer. Another tort that Sam committed was negligence; in fact, there is a code that people should follow about conduct, and there is also a responsibility to behave in a way to reduce or avoid the risk of harm to others.

Certain aspects are necessary to demonstrate when a person has acted negligently; for example, the plaintiff must prove his or her wounds. In this case, it was evident that Sam pushing Natalie in her attempt to stop him while he proceeded to run out of the office had caused Natalie to fall and hit her head on the doorknob. This incident caused her to suffer a concussion, and, as a result, she made a complaint to the trustee. In such a case, Natalie could file a lawsuit accusing Sam of assault and battery. According to Pagattaro, Cahoy, Shedd & Morehead (2015), ” The person who intentionally creates such apprehension in another is guilty of the tort of assault” (p. 283). The relationship between employer and employee is primarily as an agent and the main report. The employee is required mainly to hold a fiduciary duty to the employer despite being bound by confidentiality, a non-pickup, and non-compete agreement. These problems are a primarily due to a former employee of a company who founded the competition with the previous employer, especially when the former employee was also involved.

On the same note, another party, company XYZ, also committed a tort as infringement in this scenario. Company XYZ displayed a corrupted act in soliciting Sam with a job offer only in exchange for the list of his current company’s client’s. In this regard, XYZ committed an act of interference and violation of the damages. The interruption or breach of contract implied that the action of a third party or foreigner resulted in the infringement or the termination of a contractual relationship. Each relationship between an employee and an employer has a fixed duration or a contractual relationship. In this scenario, the relationship between Sam and ABC would end due to Sam signing a confidentiality agreement. The company XYZ serves as the breach of this controversy as to a third party bribe Sam in offering him a job for ABC Company’s client list which was provided, thereby creating an attempt of interference and violation of the damages.

Sam’s actions may be subject to criminal liability for a couple of reasons. First, there are strict laws relating to the theft or misappropriation of trade secrets, such as customer lists as is in this case. Sam violated the non-disclosure agreement with his place of employment. This fact, alone, is sufficient evidence to prosecute in court. If brought to court, the jury may determine the extent to which the leak of information took place, the part XYZ Paper Co. played in the event, and also examine the measures taken by ABC Paper Co. to protect its data. In addition, the jury determines the value of the list and assess the importance it has for the rival company. Finally, the tribunal may also decide whether the ease or simplicity of the stolen information could circulate in other activities. With all that said, Sam may subject to criminal prosecution based on his actions mentioned previously.

Conclusion

Overall, the scenario mentioned above demonstrates, in a realistic way, how the misappropriation of trade secrets may lead to certain types of torts deserving of penalization by the law. Sam’s simple action of stealing the list of clients belonging to ABC Paper Co. at which he works was unethical all for personal gain and can lead to criminal prosecution because he disregarded the laws relating to the theft of trade secrets; not to mention, violating the terms of the confidentiality agreement.

References

B Reed, O.L., Pagattaro, M.A., Cahoy, D.R., Shedd, P.J., & Morehead, J.W. (2015). The legal and regulatory environment of business (17th ed.). New York, NY: McGraw-Hill.

Emanuel, S. (2015).Torts.

Wahlgren, P. (2002). Intellectual property. Stockholm: Stockholm Inst. for Scandinavian Law.

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