Contemporary Business and Online Commerce Law 7th Edition by Henry R Cheeseman

Exercise 9

Ethics Integrated Cash Management Services, Inc. (ICM), designs and develops computer software programs and systems for banks and corporate financial departments. ICM’s computer programs and systems are not copyrighted, but they are secret. After Alfred Sims Newlin and Behrouz Vafa completed graduate school, they were employed by ICM as computer programmers. They worked at ICM for several years, writing computer programs. They left ICM to work for Digital Transactions, Inc. (DTI). Before leaving ICM, however, they copied certain ICM files onto computer disks. Within two weeks of starting to work at DTI, they created prototype computer programs that operated in substantially the same manner as comparable ICM programs and were designed to compete directly with ICM’s programs. ICM sued Newlin, Vafa, and DTI for misappropriation of trade secrets. Are the defendants liable? Did the defendants act ethically in this case? Integrated Cash Management Services, Inc. v. Digital Transactions, Inc., 920 F.2d 171, Web 1990 U.S. App. Lexis 20985 (United States Court of Appeals for the Second Circuit)