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HP guilty of misappropriation of trade secrets

November 5, 2014

gavelOEM fined for misappropriating programme designed by a company it employed to track fraud and counterfeiting.

Business-cloud.com reported that HP has been found guilty of misappropriating the trade secrets of Ohio-based Professional Investigation and Consulting Agency (PICA), which the OEM had reportedly “employed to track fraud, counterfeiting and stolen goods”; with the case first filed by PICA two years ago and brought forward in the Delaware Superior Court’s Complex Commercial Litigation Division.

The claim was that HP had misappropriated a programme for tracking the HP sales channel and identifying “a range of problems” such as “sales and discount fraud, grey marketing” and “stolen or counterfeit goods”; with the programme designed by PICA. It was found by the jury that “HP did not do this inadvertently but ‘did so maliciously and willingly’”.

In addition to this, the OEM was found guilty of “stealing investigative methods, breaching its covenant of good fair and fair dealing as well as defaming PICA”, resulting in HP being forced to pay damages to PICA totalling $6,518,000 (€5,220,247).

The article notes that “the deal between HP and PICA was also the subject of a lawsuit” in 2010, when MMCA Group won a judgement against the OEM regarding a “breach of contract” whereby HP had been “accused of unlawfully terminating an investigative services agreement” with the Group. This lawsuit, filed in 2006, had also named PICA as co-defendants, with part of it also alleging that HP had misappropriated trade secrets with MMCA, although this allegation was dismissed by the judge.

HP reportedly settled this previous case “out of court for an undisclosed sum”, with the article stating that “it would be a surprise if [the case] were not part of the evidence of previous bad behaviour that PICA put in front of the jury” in its case against HP.

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