Jurisdiction – Personal – Trade secrets

Listen to this article

Where two Georgia defendants charged with misappropriation of trade secrets and confidential information have moved to dismiss the plaintiff Massachusetts corporation’s complaint, the dismissal motion must be denied because a basis for exercising personal jurisdiction exists.

“… Plaintiff has presented evidence indicating that [defendant Gregory R.] Jordan was in contact — via email, telephone and sometimes in face to face meetings — with engineers and research technologists in [plaintiff] Crane’s Massachusetts offices and with Crane’s Legal Department here. These contacts were not sporadic or isolated. As to the nature of the contacts, the communications themselves were of a highly technical nature and appear to involve Jordan’s work in developing micro-optic technologies used in anti-counterfeiting products. The communications occurred during a four year time period when (according to Royal) Jordan was collaborating with Royal and others based in Dalton, Massachusetts on projects that involved highly sensitive proprietary and confidential information. Among them was a project that involved principles of moiré magnification — the subject of the patent application that Jordan filed after he left Crane that precipitated this legal action.

“In response, the defendants maintain that Jordan’s primary work in anti-counterfeiting technologies was done in Georgia with Georgia based employees of Visual Physics, and that the contact with Crane employees in Massachusetts was limited to assisting in the implementation or investigation of technologies to be used in ‘down-the-line’ products. That these Massachusetts employees did not themselves work in the field of micro-optics (as Jordan asserts in his affidavit) is beside the point, however, so long as Jordan was required by virtue of his employment relationship, to work together with them in developing Crane products using this technology. Moreover, in determining whether an individual has transacted business for purposes of personal jurisdiction, courts focus less on the specific content of the communications and more on their frequency and purposefulness. … Clearly, these contacts were purposeful, and not few in number.

“It is true that the cause of action must have ‘arisen from’ these contacts, but this statutory language is also general and broadly construed: it is satisfied if the claim was ‘made possible by or lies in the wake of the transaction of business in the forum state.’ … The communications with Massachusetts-based Crane employees was focused on the research that Jordan was doing, and it was by virtue of his research position that Jordan was able (according to the plaintiff) to acquire and develop the information that was the subject of the patent application. That the Crane employees in Massachusetts were of only limited assistance to him in this work and that the communications did not directly bear on the technology that is the subject of the patent application does not change this Court’s conclusion that this action ‘arose from’ Jordan’s contacts with this state and those contacts are sufficient to permit the assertion of personal jurisdiction.

“To the extent that this case arises from Jordan’s employment relationship, then defendants also point out that Jordan was not directly employed by the Massachusetts based Crane Corporation until one month before he left the company. Before that, he worked for Visual Physics and Nanoventions, both Georgia companies. But Visual Physics was wholly owned by CMOS, which was in turn wholly owned by Crane. … He had to have known that he was part of a larger organization, at the top of which was the Massachusetts based parent, Crane, and that his work would necessarily require contacts with Crane and its other Crane subsidiaries based in Massachusetts. That is indeed what occurred. To focus exclusively on the corporate niceties without regard to these Massachusetts connections would place form over substance. Indeed, that Jordan was employed directly by Crane, if only for a month, is not itself insignificant.

“If this Court has jurisdiction over Jordan personally, it necessarily follows that it also has jurisdiction over the co-defendant Ad Lucem. As the defendants concede, Ad Lucem is a ‘one-man’ company, with Jordan as its sole employee and its registered agent. For purposes of personal jurisdiction, the actions of an agent (here Jordan) may be imputed to the principal (here Ad Lucem). This is particularly true given that the patent application at issue in this case was assigned by Jordan to Ad Lucem, which stands to benefit from any wrongful conduct by Jordan that plaintiff is able to prove.”

Crane & Co., Inc. v. Jordan, et al. (Lawyers Weekly No. 12-116-16) (9 pages) (Sanders, J.) (Suffolk Superior Court) (Docket No. SUCV2016-00560-BLS2) (Aug. 31, 2016).

Click here to order the full text of the opinion.