.. d this position, instead of creating a new architecture for the display list driver and deriving new algorithms, he used the ones he had created while working for VMI, with some slight modifications. “In two separate exit interviews with VMI, Berkes was reminded of his confidentiality obligations under the Invention and Nondisclosure Agreement.”(United State District Court for the District of Vermont 1996, 9). Autodesk and Berkes were well informed as to the potential of violating the Trade Secret Laws but were obviously willing to take the risk. Autodesk in turn was given ample opportunity to fix the code that violated the trade secret laws but due to deadlines they opted not to, apparently for economic reasons. The protection of trade secrets has been going on for centurys.
Companies and individuals not only rely on the law to protect them but also take their own extreme measures. In the case of the Coca-Cola Company they have their ingredients list, mixing, and brewing formulas locked in an Atlanta bank vault. Although this may seem extreme it is necessary in order to maintain their competitive and economic edge. While a company or individual can place written material containing ideas, formulas, plans and other material manifestations of ones inventive creation under lock and key, it cannot place an individual or an individuals mind under lock and key. It is for this very reason that Non-Compete Agreements and Invention and Nondisclosure Agreements are frequently entered into between employers and employees. Some companys might require their employees to sign a Non-Compete Agreement.
Although the Non-Compete Agreements are meant to protect a companys interests, the courts tend to frown on them. For a Non-Compete Agreement to hold up in a court of law it must contain realistic expectations, geographic and/or industry limitations, and a time frame. The Non-Compete Agreement typically restricts an employee from working in an identical job at a direct competitor for approximately six to eighteen months. However, the Non-Compete Agreement cannot put undue hardship on the employee. The employee must be able to find gainful employment in their area of expertise. This agreement is usually directed at high level executives and creative employees, such as engineers.
Non-Compete Agreements are illegal in California but legal in New York and many of the eastern states. The Invention and Nondisclosure Agreement generally covers a broader language and is construed by the courts as a protection agent for companies. The Invention and Nondisclosure Agreement prevents the disclosure of Trade Secrets outside of the company an employee is or was employed by. This is agreement is easily enforced by the courts because it is an extension of the Uniform Trade Secrets Act, established in 1979. The Invention and Nondisclosure Agreement tends to be required at all levels of a company. The agreement is legal in most states.
In both cases Non-Compete Agreements and Invention and Nondisclosure Agreements are usually heavily worded in order to protect the company. They also provide the company with ammunition if they are forced to go to court because of a Trade Secret Violation. In the case of VMI versus Autodesk, Berkes had signed an Invention and Nondisclosure Agreement which gave VMI the upper hand in court. However Berkes attempted to argue that VMI was not specific as to what trade secrets it was attempting to protect under the Invention and Nondisclosure Agreement, therefore, VMI was seeking to transform the agreement into a Non-Compete Agreement that would unfairly interfere with future employment options. It must have been obvious to the court that this Invention and Nondisclosure Agreement of which VMI and Autodesk were aware did not keep Berkes from being hired by Autodesk and initially being assigned to non-competing projects. This in and of itself shows that Berkes was marketable based on his skills and abilities apart from what he developed at VMI.
To argue otherwise Berkes and Autodesk would be practically admitting that Berkes was hired so that Autodesk could benefit from the technology Berkes helped develop while he was employed by VMI. The trade secret laws were put into effect to protect the ideas and products of an individual or company. Although trade secret laws were meant to protect they can also harm an individual. An employee should be aware of any agreement he signs upon entering a company and should uphold the agreement to which he committed. Engineers gain their ideas, techniques, and knowledge from experience which in turn enhances their careers. There is a fine line between what knowledge is considered an individuals and what knowledge is considered a companys.
It is the job, responsibility, and ethical duty of the employee and the employer, both former and current, to make sure all parties are well informed and do not cross the boundaries set forth by the law. In the case of Vermont Microsystems, Inc. (VMI) versus Autodesk, Inc. these lines were crossed and ultimately Autodesk paid the consequences both financially, legally, and ethically. Works Cited Anderson, Judy.
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Accessed: September 12, 1998. “Reasonable royalty award appropriate, but amount was error, 2nd Cir. Rules”. Mealeys Litigation Reports: Intellectual Property, Section on Trade Secrets, vol. 6 no. 13.
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