A federal judge has ruled a United Arab Emirates business that copied trade secrets from a Connecticut competitor was “willful and malicious” and ordered the overseas company to pay $3.4 million in damages.
In his ruling Friday, District Judge Jeffrey Meyer said he did not believe a now-deceased former employee of Assa Abloy willingly gave a USB drive to Task FCZ, as Task claimed. Assa Abloy, based in New Haven and Berlin, Connecticut, manufactures door-security systems and related products.
In a July 31 bench trial in front of Meyer, attorneys for Task, which also makes and sells doors and locks, said Assa Abloy’s Jim Peairs willingly gave the UAE company the copied material.
Peairs, a business development manager for Assa Abloy’s sales and marketing group, reportedly misplaced the device while on a trip to the UAE, according to court papers. Peairs died from pneumonia two months after the device went missing.
The USB drive had extensive sales and financial records from Ceco, a subsidiary of Assa Abloy. The device also stored Peairs’ personal information, including his passport, driver’s license, and insurance and credit cards.
A daughter of Task’s owner found the device, and nearly 1,100 pages of documents were printed from it, according to court papers.
Meyer reiterated several times in his decision that he believed Pearis never intended to give the device to Task.
“I have already concluded, by a preponderance of the evidence, that the defendant accessed the drive without authorization,” Meyer wrote. “I further find that the defendant did this knowing full well that it has no authorization. Defendant had not introduced evidence to support any claim of a good faith belief that it has authorization.”
The defense called no witnesses during the bench trial, Meyer noted.
Task previously took Ceco to arbitration after it terminated an agreement with Task over concerns with products and delinquent royalty payments. Task reportedly used information on taken from the USB drive in its breach of contract arbitration claim.
Task, Meyer wrote, “did not just rely on these documents, however, but altered several of them to bolster its case against Ceco.”
The arbitrator rejected Task’s claim against Ceco and sanctioned Task $274,257 for altering evidence. Assa Abloy filed its suit against Task in May 2015.
In his ruling, Meyer found Task liable for both computer crime claims and violating the Connecticut Uniform Trade Secrets Act. Meyer ordered Task to pay nearly $1.2 million in compensatory damages and $2.3 million in punitive damages. In addition, the judge ordered the USB drive returned and all documents taken from it destroyed.
Task was represented by Ronald Roark, a solo practitioner from Canton, Michigan.
Roark said Monday he was “disappointed with the decision, especially since we do not know what Jim Peairs intended to do,” Roark said. “There was no evidence that he did not give the document to my client. The court made an inference and piled on the damages. There are a lot of damages based upon those inferences. ”
Assa Abloy was represented by Timothy Diemand and Claire Coleman of Wiggin and Dana in New Haven. Diemand declined to comment Monday, and Coleman did not respond to a request for comment.