GOSHEN — A judge has issued a preliminary injunction against a Lippert Components employee in a lawsuit that accuses him of sharing stolen trade secrets with the RV maker.
The Oct. 30 order prohibits Vincent Smith from working for LCI in any way related to control systems for the RV industry. He and LCI are also prohibited from using any files that Smith took from ASA Electronics, an Elkhart maker of electronic control systems, which filed the lawsuit against its former employee last year.
ASA accuses Smith of misappropriating trade secrets under the Indiana Uniform Trade Secrets Act and of breaching non-competition and non-disclosure covenants.
Smith was an employee of ASA for more than 10 years and, as product development manager, was key in developing a control system called iN-Command, according to the complaint. It alleges that Smith downloaded hundreds of megabytes of highly sensitive and confidential business information from ASA’s password-protected network in February 2018, shortly before resigning and going to work for Lippert.
The lawsuit names former RV Sales Account Manager Rick Carver as another ASA employee who left for Lippert in March 2018. It accuses Lippert of “poaching” him and soliciting other ASA employees.
Smith contacted an ASA vendor and Carver contacted ASA customers after they started to work for Lippert, the lawsuit claims.
The suit was filed in Elkhart County Circuit Court in May 2018. It seeks to prevent Smith and Carver from using ASA’s trade secrets and to stop Lippert from employing Smith because of the risk that he could share trade secrets.
It also seeks to recover financial damages.
Smith and Carver denied the allegations in their answer to the lawsuit.
Smith said he accessed ASA’s network in order to update programs on his storage device to assist with connections when traveling to work with ASA partners overseas.
Carver acknowledged certain meetings with RV companies as well as communications about employment with Lippert, but denied the allegations surrounding them.
The two also said that ASA’s claims should be barred because the company suffered no actual damage, and should be “barred by the doctrine of unclean hands.”
In its own response, Lippert denied that it misappropriated any trade secrets or breached any covenants. It also denied a claim that the iN-Command system is “superior.”
It argued that the non-solicitation covenants that ASA seeks to enforce are void and unenforceable because they’re overly broad, unreasonably vague and represent “improper restraints of trade.”
In later written arguments that followed a series of court hearings in 2018, the defendants claimed that it’s unrefuted that Smith didn’t use any ASA information, that LCI doesn’t have the information and that Smith returned it to his former employer. That made a preliminary injunction unnecessary, they said.
“ASA has not identified any harm that has come or is even likely to come to ASA as a result of Smith having this information for a few months. What if Smith had returned the information two hours after submitting his resignation? 24 hours after his resignation? Two weeks after? None of those situations would be materially different than the current circumstances,” attorneys for Smith, Carver and Lippert wrote. “Put another way, there is no ‘status quo’ for the Court to restore because Smith’s return of the downloaded information already accomplished this.”
Misappropriated trade secrets
Judge Michael Christofeno’s injunction order follows hearings held in July, August and December 2018. He heard testimony about the original allegations and additional evidence that ASA later offered.
In his order, Christofeno observed that Smith become involved with an electronic control system, called OneControl, which was being developed by Lippert subsidiary Innovative Design Solutions Inc. The judge concluded that Smith misappropriated trade secrets and that ASA is likely to succeed on the merits of its trade secrets claim against him as well as its claim that he violated a non-disclosure agreement.
“Smith testified that it was mistake for him to take the file,” Christofeno wrote, “which confirms that he acquired the trade secret by improper means.”
He concluded that ASA will suffer irreparable harm if a preliminary injunction is not entered.
The injunction also bars Carver from any communication that would encourage a customer, employee or supplier of ASA to leave or compete against the company. It prohibits him from using or disclosing any confidential ASA data as well.
The judge ordered that the two sides go into mediation in front of Senior Judge Terry Shewmaker before Dec. 31. Christofeno said he will set a trial sometime in 2020, which is expected to last at least a week.
ASA CEO Tom Irions released a statement following the judge’s Oct. 30 order.
“It is unfortunate that companies must resort to the courts in order to protect their trade secrets and other sensitive business information. But it is also reassuring to know that when companies like ASA Electronics are forced to go to court, our local courts will not tolerate the misappropriation of such information,” he said. “This preliminary injunction is ot only a win for ASA, but for all local businesses who find themselves victimized by those who take the valuable trade secrets of others.”