Harvard Apparatus, Inc. v. Cowen

• Decision Date: 23 January 2001
• Docket Number: No. Civ.A. 98-11124-MBB.,Civ.A. 98-11124-MBB.
• Citation: 130 F.Supp.2d 161
• Parties: HARVARD APPARATUS, INC., Plaintiff, v. Barry COWEN, d/b/a Yale Apparatus, Defendant.
• Court: U.S. District Court — District of Massachusetts

130 F.Supp.2d 161

HARVARD APPARATUS, INC., Plaintiff, v. Barry COWEN, d/b/a Yale Apparatus, Defendant.

No. Civ.A. 98-11124-MBB.

United States District Court, D. Massachusetts.

January 23, 2001.

COPYRIGHT MATERIAL OMITTED

Franklin H. Levy, Abrams, Roberts, Klickstein & Levy, Boston, MA, for Harvard Apparatus, Inc., plaintiff.

Edward Rudnitsky, Watertown, MA, for Barry Cowen dba Yale Apparatus, defendant.

Anthony A. Bongiorno, Christopher R. Bush, McDermott, Will & Emory, Boston, MA, for Kent Scientific Corporation, defendant.

MEMORANDUM AND ORDER RE: DEFENDANT'S MOTION FOR SUMMARY JUDGMENT (DOCKET ENTRY # 70); DEFENDANT BARRY COWEN'S MOTION TO STRIKE (DOCKET ENTRY # 71)

BOWLER, United States Magistrate Judge.

Plaintiff Harvard Apparatus, Inc. ("plaintiff" or "New Harvard") filed this copyright and trademark infringement action alleging that defendant Barry Cowen ("Cowen"), a former employee of a predecessor corporation, manufactured and offered for sale certain programmable syringe pumps under the name of the Yale Model YA-12 ("the Yale pump") which feature the trade dress of certain Harvard pumps and misappropriate the source code of such pumps. Cowen moves for summary judgment and also moves to strike the use of the words "suspicious" and "influenced" from the report of plaintiff's experts, David A. Vogel and David S. Bernazzani ("plaintiff's experts"). (Docket Entry ## 70 & 71). After conducting a hearing, this court took the motions (Docket Entry ## 70 & 71) under advisement.

PROCEDURAL BACKGROUND AND STANDARD OF REVIEW

The verified complaint divides itself into five counts but alleges multiple causes of action in various counts. These causes of action are as follows: (1) trade dress infringement in violation of section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) ("section 43(a)"); (2) violation of the Massachusetts antidilution statute, Massachusetts General Laws chapter 110B ("chapter 110B"); (3) violation of the Massachusetts consumer protection statute, Massachusetts General Laws chapter 93A ("chapter 93A"); (4) copyright infringement in violation of 17 U.S.C. § 101; (5) misappropriation of a trade secret, i.e., the source code for the Harvard pumps, in violation of Massachusetts General Laws chapter 93, sections 42 and 42A ("section 42" or "section 42A") (Count IV); (6) theft of a trade secret in violation of 18 U.S.C. § 1832(a) ("section 1832"); (7) misappropriation of confidential and proprietary business information, i.e., the source code for the Harvard pumps, under Massachusetts common law (Count V); (8) misappropriation of a trade secret under Massachusetts common law (Count V); and (9) common law conversion. (Docket Entry # 52).

Although the fourth and ninth causes of action technically remain in this action, as previously noted (Docket Entry # 68), they are weak and could not support a preliminary injunction. With respect to the copyright infringement claim of the source code, registration is a prerequisite to suit, 17 U.S.C. § 411; Geoscan, Inc. of Texas v. Geotrace Technologies, Inc., 226 F.3d 387, 392 (5th Cir.2000); Brewer-Giorgio v. Producers Video, Inc., 216 F.3d 1281, 1285 (11th Cir.2000), and the source code remains unregistered (Docket Entry # 66, Ex. A).¹ With respect to the conversion claim, this court previously stated that it could not locate "any authority to suggest that Massachusetts has expanded the common law tort of conversion beyond its traditional application to chattels." (Docket Entry # 68, n. 3). Plaintiff is therefore ordered to advise this court on or before February 8, 2001, whether it wishes to press these causes of action. If not, plaintiff should file a voluntary dismissal of the causes of action or a stipulation of dismissal on or before February 8, 2001. If plaintiff wishes to proceed with one or both causes of action, it is ordered to provide this court with legal authority to maintain the cause[s] of action on or before February 8, 2001.

As to the sixth cause of action, section 1832 is a criminal statute which prescribes the theft of trade secrets. Violation of the statute is punishable by a fine or incarceration. If plaintiff wishes to proceed with this cause of action, it should provide this court with legal authority of the ability to maintain a private, civil cause of action under section 1832 on or before February 8, 2001. If plaintiff does not wish to proceed with this cause of action, it should file a voluntary dismissal of the cause of action or a stipulation of dismissal on or before February 8, 2001.

Turning to the summary judgment motion, with the exception of noting the withdrawal of the copyright infringement allegation, the supporting memorandum only addresses the first, seventh and eighth causes of action.² Hence, as the movant, Cowen fails in his initial summary judgment burden as to the chapter 110B, the chapter 93A and the section 42³ causes of action. These causes of action therefore remain in the case and, at this point in time, may proceed to trial.

Summary judgment as to the trade dress infringement claim in violation of section 43A and the misappropriation of trade secret and proprietary business information claims under Massachusetts common law "is appropriate where there are no genuine disputes as to material facts and the moving party is entitled to judgment as a matter of law." Saenger Organization v. Nationwide Insurance Associates, 119 F.3d 55, 57 (1st Cir.1997). In this respect, a "genuine" issue exists where "the evidence relevant to the issue, viewed in the light most flattering to the party opposing the motion, [is] sufficiently open-ended to permit a rational factfinder to resolve the issue in favor of either side." National Amusements, Inc. v. Town of Dedham, 43 F.3d 731, 735 (1st Cir.1995). "`[M]aterial' means that a contested issue of fact has the potential to alter the outcome of the suit under the governing law if the dispute over it is resolved favorably to the nonmovant." Smith v. F.W. Morse & Company, Inc., 76 F.3d 413, 428 (1st Cir. 1996).

The moving party bears the initial burden of informing the "court of the basis for the motion, and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact." DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir.1997). "As to issues on which the summary judgment target bears the ultimate burden of proof, she [or it] cannot rely on an absence of competent evidence, but must affirmatively point to specific facts that demonstrate the existence of an authentic dispute." McCarthy v. Northwest Airlines, Inc., 56 F.3d 313, 315 (1st Cir.1995); accord DeNovellis v. Shalala, 124 F.3d at 306. Factual disputes are resolved in favor of plaintiff, the nonmoving party. See Saenger Organization v. Nationwide Insurance Associates, 119 F.3d at 56. More specifically, "credibility determinations may not be made, and the evidence must be viewed favorably to the non-movant, with doubts resolved and reasonable inferences drawn in the non-movant's favor." Wanlass v. Fedders Corporation, 145 F.3d 1461, 1463 (Fed.Cir.1998).

FACTUAL BACKGROUND⁴

From 1988 to March 1996 Cowen worked as an employee of Harvard Apparatus, Inc. ("Old Harvard"). In 1988 and 1989 Cowen wrote the computer software source code ("the source code") for the Harvard 11 pump and the more advanced Harvard 44 pump.⁵ These pumps are bioscience pumps. As such, they differ from medical pumps which are regulated by the United States Food and Drug Administration ("the FDA").

After completing the source code for both the Harvard 11 and the Harvard 44 pumps in 1989, Cowen describes his involvement in these pumps as "minimal." He only earned a salary of $39,000 in 1988 and $42,900 in 1989.

In 1990 Old Harvard began developing a medical pump, eventually known as the Harvard 2 Medical Pump ("the Harvard 2 pump"). From 1990 or 1991 to January 3, 1997, Cowen worked "more or less exclusively" on developing the Harvard 2 pump. He developed the source code for the Harvard 11 and Harvard 44 pumps using Assembler language. Cowen used a more advanced version of this language to develop the source code for the Harvard 2 pump. According to Cowen, he "used the 44 code as the starting point for [his] development of the Harvard 2 [pump]." In essence, the source code of the Harvard 44 pump was modified to suit the requirements of a medical pump.

During his employment at Old Harvard, Cowen describes the security measures as lax. In particular, Cowen avers that Old Harvard did not install a burglar alarm system but simply locked the doors at the end of the work day. Engineering and production filing cabinets were not locked. Engineering computers were not password protected. Cowen recalls at least one, unidentified customer who removed the computer chip containing the machine code for the Harvard 44 pump and duplicated the machine code.⁶ With the knowledge of Old Harvard management, Cowen published an unidentified "source code" in a trade journal and received $100 compensation.

Cowen further notes that the machine code in "the Harvard pumps" can be acquired by removing the chip from the pump and reading the code with a device called an EPROM programmer. Cowen also points out that in 1992 Old Harvard instituted litigation against a former employee accusing him of selling pumps similar to Harvard's pumps.⁷ Cowen states that the employee continues to sell these pumps presumably without a licensing agreement.⁸ Cowen also describes three instances where Old Harvard supplied three customers with the source codes for the Harvard 11 pump and/or the Harvard 2 pump.

On the other hand, Diane Gargano ("Gargano"), a former employee of Old Harvard and President of Harvard Clinical Technologies, Inc. ("Harvard Clinical"),⁹ characterizes Cowen's claim that Old Harvard failed to take reasonable steps to safeguard its source code as inaccurate. She avers that all employees with access to Old Harvard's...