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Advanced Tech. Servs., Inc. v. KM Docs, LLC

Court of Appeals of Georgia

November 21, 2014

ADVANCED TECHNOLOGY SERVICES, INC.
v.
KM DOCS, LLC et al

Reconsiderations denied December 4, 2014.

Page 822

Trade secrets. Fulton Superior Court. Before Judge Baxter.

William W. White, for appellant.

Rachelson & White, Ira L. Rachelson, for appellees.

BRANCH, Judge. Barnes, P. J., and Boggs, J., concur.

OPINION

Page 823

Branch, Judge.

Advanced Technology Services, Inc. (" ATS" ), filed suit against two former employees and the company the two men formed, asserting several claims arising out of allegations that the defendants used ATS trade secrets and confidential information improperly in their new business venture. The defendants removed the case to federal district court, which granted summary judgment in their favor on ATS's claim of copyright infringement and remanded the remaining claims to the Superior Court of Fulton County. The superior court granted summary judgment to the defendants on the remaining claims, and ATS appeals. For the reasons that follow, we affirm.

On appeal from the grant of summary judgment, appellate courts " conduct[ ] a de novo review of the evidence to determine whether there is a genuine issue of material fact and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law." Shekhawat v. Jones, 293 Ga. 468, 469 (746 S.E.2d 89) (2013); State of Ga. Dept. of Corrections v. Developers Sur. and Indem. Co., 324 Ga.App. 371, 372 (750 S.E.2d 697) (2013).

[330 Ga.App. 189] Construed in favor of ATS, the record[1] shows that ATS, which now has five employees,

Page 824

develops and sells one product, a document management program called OptiDoc, for which it has approximately forty-four customers. Miles Waldron began employment with ATS in February 2001 as the lead software developer, and in July 2003, he entered into a " Trade Secrets and Confidential Information Agreement" (the " Trade Secrets Agreement" ).[2] In the Trade Secrets Agreement, Waldron agreed that all software developed by ATS employees, with certain limitations not relevant here, is an ATS trade secret, constitutes confidential information, and is owned by ATS. He agreed not to remove any such information from ATS without permission, not to utilize it to create software for his own or a third party's use without permission and a license, and not to reveal it to a third party without permission. Waldron also agreed to return all ATS software and related information upon termination and to submit his computers and other devices to ATS for inspection in this regard.

While at ATS, Waldron personally rewrote most of the modules of ATS's OptiDoc system to create a new version. To do so, he kept the source code for OptiDoc on his work computer, but he sometimes worked on the source code at home using his personal computers and a computer he built for the purpose of performing ATS work at home. An ATS employee averred that Waldron built the computer after November 2009, and that he would bring it to work, " hook it up and use it during the day, and take it home each day at the end of the day."

In March 2009, ATS hired Harvey Heath to work in sales. Later in 2009, Waldron, at Heath's request, enhanced the OptiDoc software to allow a person to continue working without having to log in repeatedly; the parties referred to this enhancement as a " secret" or " pop-up viewer" module. ATS alleges that Waldron did not tender this software to ATS when he resigned. The allegation is based on one sentence in an e-mail from Waldron to ATS's president in which Waldron said, " There is already a top secret built in way to make our [330 Ga.App. 190] viewer pop up without forcing a login[; ] I did this for [Heath] some time ago."

In June 2009, while both men were employed by ATS, Heath reserved a web domain in the name of " www.kmdocs.com." In September, the two men established an entity named KM Docs, LLC, in order to take advantage of a business opportunity that Heath had learned about and conveyed to Waldron. During that month, without informing ATS or seeking permission, Waldron wrote a custom software " bridge" application on behalf of KM Docs for a document management system company; Waldron admitted that the customer might have been a competitor of ATS. Heath and Waldron split the $5,000 paid by the customer for the work. Waldron used his personal ...


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