S.D Ind. Ruling in Case on Former Employee's Theft of Trade Secrets and Confidential Information

This past Thursday, Judge Sarah Evans Barker of the United States District Court for the Southern District of Indiana issued a decision, Bioconvergence LLC v. Attariwala, No. 1:19-cv-01745-SEB-MG, 2021 U.S. Dist. LEXIS 147766 (S.D. Ind. Aug. 5, 2021), denying the Plaintiff's motion for sanctions. The Plaintiff alleged that the Defendant had acquired trade secrets prior to her resignation. A state court entered a preliminary injunction requiring the Defendant to turn over data belonging to the Plaintiff, and preventing her from disclosing it. She was also forbidden to delete the data, and required to turn over the data to the Plaintiff's forensic expert within 24 hours.

After the action was removed to federal court, a new protective order was issued enjoining the Defendant from working from her employer and another competitor of the Plaintiff's. The Court found that the Defendant has saved more than 10,000 of her emails to .pst archives, which included more than 5,000 attachments. The Defendant copied the data to her work tablet, and also transferred it to a hard drive, and uploaded it to a cloud account.

In ruling on the motion, the Court found it relevant that the Plaintiff did not bring a motion to compel the production of the data the Defendant made a copy of. "Singota [the Plaintiff] has made no attempt to secure Ms. Attariwala's [the Defendant] compliance with the Preliminary Injunction Order undercuts Singota's stated belief that its trade secret and confidential information continues to be at a significant or imminent risk of misappropriation or misuse." Id. at *25.

The Court also faulted the Plaintiff for continuing to seek a motion for sanctions and to amend the inspection order, after the Defendant entered bankruptcy proceedings, stopped working for one of its competitors, and was unemployed in the same business sector. "It behooves both sides to curtail their prolonged, scorched-earth litigation strategies and move, with the guidance of the Magistrate Judge, to a prompt resolution of the remaining disputes." Id. at *32.