Informatics Applications Grp., Inc. v. Shkolnikov

• Decision Date: 27 December 2011
• Docket Number: No. 1:11cv726 (JCC/JFA).,1:11cv726 (JCC/JFA).
• Citation: 836 F.Supp.2d 400
• Court: U.S. District Court — Eastern District of Virginia
• Parties: The INFORMATICS APPLICATIONS GROUP, INC., Plaintiff, v. Mark B. SHKOLNIKOV, et al., Defendants.

836 F.Supp.2d 400

The INFORMATICS APPLICATIONS GROUP, INC., Plaintiff,

v.Mark B. SHKOLNIKOV, et al., Defendants.

No. 1:11cv726 (JCC/JFA).

United States District Court,

E.D. Virginia,

Alexandria Division.

Dec. 27, 2011.

Daniel Todd Campbell, Crowell & Moring LLP, Washington, DC, for Plaintiff.

Christine P. Hsu, Shulman Rogers Gandal Pordy & Ecker PA, Potomac, MD, for Defendants.

MEMORANDUM OPINION

JAMES C. CACHERIS, District Judge.

This matter is before the Court on Defendants' Motion to Dismiss [Dkt. 23] (the “Motion”). For the following reasons, the Court will grant in part and deny in part Defendants' Motion.

I. Background

Plaintiff The Informatics Applications Group (the “Plaintiff” or “TIAG”) brings this case against its former employee, Defendant Mark Shkolnikov (“Shkolnikov”), and his company, Defendant KEYnetik, Inc. (“KEYnetik”) (collectively, the “Defendants”), alleging that Shkolnikov, during the course of his employment, attempted to claim TIAG's technology as his own in various patents and patent applications.

A. Factual Background

1. Shkolnikov's Employment at TIAG

TIAG develops and delivers information technology services and products to the federal government and the private sector. (Amended Complaint [Dkt. 19] (“Am. Compl.”) ¶¶ 1, 11.) Shkolnikov was employed by TIAG from March 1, 2002 until his employment was terminated on March 17, 2010. (Am. Compl. ¶ 12.) He initially worked for TIAG as an independent contractor pursuant to an independent contractor agreement (the “Letter Contract”) executed on February 25, 2002. (Am. Compl. ¶ 13, Ex. 1.) On May 1, 2003, Shkolnikov became a TIAG employee, and assumed the positions of Chief Technology Officer and Senior Systems Engineer. (Am. Compl. ¶ 14.) Shkolnikov entered into an employment agreement (the “Employment Agreement”) that governed his employment at TIAG from May 1, 2003 until March 17, 2010. ( Id. Ex. 2.) In connection with the Employment Agreement, Shkolnikov also executed a document titled “Assignment of Inventions, Non–Disclosure, and Non–Competition Agreement” (the “Assignment Agreement”).¹ (Am. Compl. ¶ 15, Ex. 3.)

Shkolnikov's duties at TIAG focused on research and development, particularly with respect to hand-held computing devices. (Am. Compl. ¶¶ 16, 19–20, 22.) Shkolnikov worked with other TIAG staff in pursuing small business innovative research grants and served as a senior engineer on TIAG contracts supporting major systems development acquisition programs. (Am. Compl. ¶¶ 16–17.) Shkolnikov's work as a senior engineer centered on projects for the United States military and the United States Department of Defense. (Am. Compl. ¶¶ 17, 20.)

While employed at TIAG, Shkolnikov reported to Fred Goeringer, TIAG's co-founder, managing principal, and Chief Information Officer. (Am. Compl. ¶ 18.) Shkolnikov's knowledge of information systems was enhanced by the nature of his duties at TIAG and collaboration with Goeringer and TIAG's customers. (Am. Compl. ¶ 19.) While working on projects at TIAG, Shkolnikov, Goeringer, and others collectively developed technologies for hand-held devices and related systems, including the development of improved methods for user input and interaction. (Am. Compl. ¶¶ 22–23.) These innovative methods were often presented to TIAG's customers in written presentations, pursuant to non-disclosure and confidentiality agreements. (Am. Compl. ¶ 24.) One written presentation presented to a TIAG customer was entitled: “Freehand: Data Entry and Screen Navigation Solution for Cell Phones, Personal Digital Assistants, Pagers, MP3 Players, Toys, GPS Receivers, e-Books, Remote Controls, Calculators, Cameras, Multimeters and Other Handheld Electronic Gadgets” (the “Freehand Presentation”). ( Id.) Shkolnikov, without TIAG's knowledge or consent, incorporated many of the details of this presentation in U.S. Patent No. 7,002,553 (the “'553 Patent”) and on KEYnetik's website. ( Id.)

2. Shkolnikov's Employment Agreements

Under the terms of the Letter Contract, Shkolnikov agreed to the following:

Al. OWNERSHIP OF MATERIALS RELATED TO SERVICES. The parties agree that all ideas, know-how, processes, information, drawings, documents, designs, models, inventions, copyrightable material and other tangible and intangible materials authored, prepared, created, made, delivered, conceived or reduced to practice, in whole or in part, by Contractor in the course of providing the Services, including without limitation computer programs, computer systems, data and documentation, (collectively, the “Works”) are the sole and exclusive property of TIAG and shall be considered works made for hire. In the event any such Works do not fall within the specifically enumerated works that constitute works made for hire under the United States copyright laws, Contractor hereby irrevocably, expressly and automatically assigns all right, title and interest worldwide in and to such Works to TIAG, including, without limitation, all copyrights, patent rights, trade secrets, trademarks, moral rights and all other applicable proprietary and intellectual property rights.

(Am. Compl. Ex. 1 at 6.)

The Assignment Agreement signed by Shkolnikov provided that:

If at any time during his[ ] employment, Employee shall (alone or with others) make, conceive, create, discover, invent or reduce to practice any invention, modification, discovery, design, development, improvement, process, software program, work of authorship, documentation, formula, data, technique, know-how, trade secret, or intellectual property right whatsoever or any interest therein (whether or not patentable or registrable under patent, copyright, trademark, or similar statutes or subject to similar protection) (herein called “Developments”) that (i) relates to the Company's business, or that relates to the business of customers or suppliers of the Company and to activities undertaken by the Company on behalf of such customers or suppliers, or relates to any products or services being developed, manufactured or sold by the Company, (ii) results from tasks assigned to Employee by the Company, or (iii) results from the use of premises, equipment or property (tangible or intangible) owned, leased, or contracted for by the Company (“Company Developments”), such Company Developments and the benefits thereof are and shall immediately become the sole and exclusive property of the Company and its assigns, as works made for hire.

(Am. Compl. Ex. 3 at 2.) Shkolnikov also agreed to “promptly disclose” each Company Development to TIAG and “to take all steps necessary” to ensure TIAG's ownership of those developments. ( Id.)

In executing the Assignment Agreement, Shkolnikov assigned “all rights, title, and interest (including, but not limited to, all patent rights, copyrights, and trademarks) in and to the Company Developments and all benefits and/or rights resulting therefrom to the Company and its assigns without further compensation” and agreed that he “shall communicate to the Company, without cost or delay, and without disclosure to any third party, all available information relating to the Company Developments.” ( Id.) Shkolnikov also agreed to “irrevocably transfer[ ] and assign[ ] to the Company: (i) all worldwide patents, patent applications, copyrights, mask works, trade secrets, and other intellectual property and proprietary rights in and to any Company Development; and (ii) any and all ‘Moral Rights' ... Employee may have in or with respect to any Company Development.” (Am. Compl. Ex. 3 at 3.)

TIAG acknowledged in the Assignment Agreement that Shkolnikov had, prior to his employment, created “Developments” and could, during and after the period of his employment, create additional Developments. ( Id.) The parties agreed that such Developments would only be deemed Company Developments subject to the Assignment Agreement if created by Shkolnikov in the course of performing his duties as a TIAG employee. ( Id.) TIAG guaranteed that it would never claim any rights to any Developments “(A) done before the Company and the Employee entered into this agreement, (B) any Employee Developments subsequent or otherwise related to these existing Developments, and (C) any other Employee Developments conceived and created outside of the scope of his services as an employee of the Company.” ( Id.)

The Assignment Agreement further provided that “all information, concerning the Company's business, business relationships, intellectual property, or financial affairs (collectively “Proprietary Information”) of a private, secret or confidential nature,[ ] whether or not in writing, is and shall be the exclusive property of the Company.” (Am. Compl. Ex. 3 at 1.) The Assignment Agreement defined Proprietary Information to include, among other things, (1) Technology, (2) Other Products and Services, and (3) Business Practices, Marketing Plans and Customer Lists. ( Id.) In addition, Proprietary Information included “[a]ll information ... not generally known to the public or within the industries served by the Company, or any other trade in which Company competes, that gives Company an advantage over its competitors, and the physical embodiments of all such information in any tangible form.” ( Id.)

Shkolnikov agreed that he would “not disclose any Proprietary Information to any person or entity or use the same for any purposes (other than in the performance of his[ ] duties as an employee of the Company), either during or after his[ ] employment with the Company, unless and until such Proprietary Information has become public knowledge without fault by Employee.” (Am. Compl. Ex. 3 at 2.) He further agreed that “all documents or othertangible materials in any form whatsoever containing Proprietary Information, whether or not created by Employee, that come into his[ ] custody or possession, are the exclusive property of the Company to be used by Employee only in the performance of his[ ] duties for the Company.” ( Id.)...