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Without using either patents or copyright to protect its softwarecreation, Connecticut’s tiny Dreamcatcher Software Development ispursuing a federal action that relies on less exotic legal tools — basicconfidentiality contracts and trade secrets. In the late 1990s, Robert Brown, an Avon volunteer football coach, grewfrustrated with all the paperwork involved in the administration of aPop Warner team. He figured that a software program could make the jobsimpler and more organized for others like him in the 1,125 Pop Warnerfootball and cheerleading associations around the country. Brown and Waterbury businessman Vince McDonald formed Dreamcatcher, alimited liability company, and produced a prototype program. In 1999,Dreamcatcher approached officials at Pop Warner Little Scholars Inc.,which has a Web site of resources for children, parents and coaches. At first, according to the federal case now playing out in Hartford, PopWarner officials were enthusiastic and receptive. Jon Butler, the PWLSexecutive director, told Brown his organization was interested, andarranged to see the program in December 1999. Brown had PWLS sign aconfidentiality agreement at the outset. For the next nine months, PWLSled Dreamcatcher to believe the two entities were “virtually strategicpartners.” But according to Dreamcatcher, between 1999 and 2001, PWLS was secretlyusing the Dreamcatcher ideas to develop its own administrative software,in violation of the confidentiality agreement. Dreamcatcher contendsthat PWLS tarnished its image with the potential customers by sayingDreamcatcher’s product was “non-sanctioned” and was using a Microsoftproduct without a license. Dreamcatcher’s lawyer, Richard C. Robinson of Pullman & Comley’sHartford office, said Pop Warner officials “suddenly pulled the rug outfrom under my clients, and started treating them like pariahs.” In 2001, Dreamcatcher sued, alleging violations of Connecticut’s tradesecrets and unfair trade practices acts. It accused PWLS of violatingthe confidentiality contract and ruining its legitimate businessexpectations. Pop Warner counterclaimed that Dreamcatcher violated PWLS’s trademarkrights by, among other things, calling the program “PW Administrator.” It also asked U.S. District Judge Alfred V. Covello to scuttleDreamcatcher’s case and rule it wasn’t worthy of jury’s time, on sixdifferent grounds. But Covello didn’t see it that way. He ruled Jan. 6, that Dreamcatcher’scase had plenty of questions that merited a trial. Danbury lawyer Anthony B. Corleto, representing Pop Warner, had arguedthat Dreamcatcher never shared any trade secrets or the program’s sourcecode. But Covello noted that a trade secret can be a combination offairly basic elements, including the concept of how the program worked,how it was organized, and the developers’ plans for use of it. A “tradesecret” recipe, the judge pointed out, can consist of common cookingingredients. Covello noted that Dreamcatcher negotiated an “extensive”confidentiality agreement. He rejected Pop Warner’s argument comparingthe software to the architecture of a building, which, once constructed,becomes ascertainable to anyone who looks at it, and loses its secrecy. The internal processes of Dreamcatcher’s software are not readilyidentifiable, obvious or easily duplicated, the judge countered. He tookfew words to reject the notion that Pop Warner never learned anythingfrom Dreamcatcher, and couldn’t have breached the confidentialityagreement. The sports league argued that because it’s a nonprofit organization, itshouldn’t fall under the federal Lanham Act protecting trademark rights,since that limits actions to defendants who sell goods and services. PopWarner’s interest in driving customers to its Web site and attractingrevenue from advertisers was sufficient, Covello concluded. The two areas in which Pop Warner was able to narrow Dreamcatcher’s casewere its claims that Pop Warner interfered with a business relationshipand violated a license agreement. The business relationship was toospeculative, the judge found. He also concluded the terms of the licenseagreement, which focused on reverse-engineering, did not apply to PopWarner’s actions. Corleto said the business relationship claim and the licensing countwere the two most important parts of Dreamcatcher’s case, and thatlosing on those grounds will make it harder for Brown and McDonald tocatch their dream of winning $600,000 for loss of business. He said thatother Pop Warner participants had created useful spreadsheets and othertools, which they shared for nominal cost, in the $25 range. ButDreamcatcher’s projected prices of $550 to $1,100, for software andhardware, was in a far different league, and that caused the falling offwith the Pop Warner officials, Corleto said. “Their claim would work better if it were patentable,” Corletocontended. “They can’t articulate what their trade secret is, and I’mfully confident we’ll prevail if we go to trial.” William J. Cass, a patent litigator at Bloomfield’s Cantor Colburn,called the issues in the Dreamcatcher case “a classic example” of theimportance of contract and trade secret protections for a softwaredeveloper. Cass, who is not involved in the dispute, noted that bothcopyright and patents are recognized methods of protecting a softwareprogram. “It’s a classic problem that confronts people who have developedsoftware,” said Cass. “They get into a joint venture relationship andstart to tell people how the software works. They may have copyrightedthe source code, but unless there’s a clear copying of that code,there’s no theory under copyright to go and sue someone.” “But what Dreamcatcher did,” Cass added, “was smart, with itsconfidentiality agreement. One of the first things you can do to protectintellectual property is through contracts-confidentiality agreementsfor employees, joint development agreements, and disclosure agreements.” “If you’re giving them the business idea of how to fill a need in themarketplace, a contract can be the best form of intellectual propertyprotection — where a copyright or patent or a trademark wouldn’t besufficient,” Cass concluded.

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