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Crane & Co. Inc. v. Jordan

Superior Court of Massachusetts, Suffolk

August 31, 2016

Crane & Co., Inc.
v.
Gregory R. Jordan et al No. 134824

         Filed September 1, 2016

          MEMORANDUM OF DECISION AND ORDER ON DEFENDANTS' MOTION TO DISMISS

          Janet L. Sanders, Justice

         Crane & Co., Inc. (Crane) brought this action against the defendants, Gregory R. Jordan (Jordan) and Ad Lucem Corporation (Ad Lucem), claiming that the defendants misappropriated Crane's trade secrets and confidential information after Jordan left his job at Crane in June 2013. Crane's Amended Complaint contains seven counts: breach of a confidentiality agreement (Count I), misappropriation of Crane's confidential information and trade secrets under common law (Count II), misappropriation of Crane's confidential information and trade secrets under G.L.c. 93, § § 42, 42A and O.C.G.A. § § 10-1-762, 10-1-763 (Counts III and IV), conversion (Count V), unjust enrichment (Count VI), and violation of G.L.c. 93A, § § 2, 11 (Count VII). The case is now before this Court on the defendants' motion to dismiss pursuant to Mass.R.Civ.P. 12(b)(2) and Mass.R.Civ.P. 12(b)(3). The defendants move to dismiss all counts of the Amended Complaint for lack of personal jurisdiction and forum non conveniens . After careful review of the materials submitted by the parties, this Court concludes that the defendants' motion must be Denied .

         BACKGROUND

         For purposes of this motion, this Court takes as true the factual allegations in the Amended Complaint. Because the motions raise an issue of personal jurisdiction, the parties have also submitted affidavits with exhibits. The facts contained in those submissions are important to resolution of the motion before the Court and, together with the Complaint's allegations, can be summarized as follows.

         Crane is a Massachusetts corporation with a principal place of business in Boston, Massachusetts. It is an integrated manufacturer and supplier of currency paper, printed banknotes, and security technologies. Crane develops, among other things, paper-based counterfeit deterrents, such as advanced security threads, watermarks, and moire-type magnification systems. Jordan is a life-long resident of Georgia. Ad Lucem is a Georgia corporation with a principal place of business in Georgia. Jordan is Ad Lucem's only employee and holds the roles of Chief Executive Officer, Chief Financial Officer, Secretary, and registered agent of the company.

         In April 2004, Nanoventions, Inc. (Nanoventions), a Delaware corporation based in Georgia, hired Jordan as a senior project engineer. At Nanoventions, Jordan was responsible for researching and developing new micro-optic technologies that are involved in various anti-counterfeiting products. In connection with his hiring, Jordan signed a Personnel Confidentiality and Non-Solicitation Agreement (the Confidentiality Agreement) that required him to keep confidential all information that became known to him as a result of his employment with Nanoventions and prohibited him from disclosing or otherwise using such information outside of his employment. He also agreed to assign to Nanoventions all title, interests, and rights, including intellectual property rights, in any inventions made by him or with others during the course of his employment. Jordan worked at Nanoventions for the next four years.

         On September 26, 2008, Nanoventions entered into an Assignment and Assumption Agreement with Visual Physics, LLC (Visual Physics), a Crane subsidiary based in Georgia. The Assignment Agreement explicitly included Jordan's Confidentiality Agreement. The Assignment and Assumption Agreement was part of three-way corporate transaction whereby Crane, through another wholly owned subsidiary, Crane Micro-Optic Solutions, LLC (CMOS), purchased all of the outstanding equity interests in Visual Physics. Thus, CMOS, through Visual Physics, acquired the right to enforce the Confidentiality Agreement Jordan had signed with Nanoventions.

         On April 11, 2011, Jordan signed an acknowledgment confirming that he had received and read the CMOS Employee Handbook. The Handbook included a provision that stated: " Employees should be aware that CMOS retains legal ownership of the product of their work. No work product created while employed by CMOS can be claimed, construed, or presented as an employee's property, even after employment by CMOS has been terminated or the relevant project completed." For the next four and half years, Jordan worked as an employee of CMOS. In May 2013, as a result of a corporate reorganization, employees of CMOS became direct employees of Crane. Jordan terminated his employment with Crane on June 3, 2013, receiving his last two paychecks directly from the Massachusetts-based company.

         During his tenure at CMOS and Crane, Jordan worked on various projects involving single-layer moire magnifier systems; one version of this technology--the " Gregison" --was even named after him. In connection with this employment, Jordan worked closely with Massachusetts-based Crane employees and would on occasion travel to this state. Of particular significance to the issue before the Court is the affidavit of Jeffrey Royal, a technologist for a Crane subsidiary located in Dalton, Massachusetts. Royal states that he and his co-workers worked closely with Jordan from December 2009 to May 2013 on many projects that involved highly sensitive, proprietary and confidential information regarding Crane's currency security technologies. This collaboration included communications between Jordan and Massachusetts-based employees via e-mail, telephone and on occasion in face-to-face meetings in Massachusetts. Attached to Royal's affidavit as exhibits are eighty e-mails between Jordan and Massachusetts-based Crane employees that contain what appears to be highly technical information related to the research and development of Crane's anti-counterfeiting technology and products.

         On June 13, 2013, ten days after he left Crane, Jordan filed United States Provisional Patent Application No. 71/836, 762, entitled " Moire Magnification Systems, " with the U.S. Patent and Trademark Office (762 Provisional). Crane alleges that the 762 Provisional describes inventions by Jordan that are derived from and/or reflect confidential information that he learned or developed during the course of his employment with Crane. On June 13, 2014, Jordan filed United States Non-Provisional Application No. 14/304, 330 (330 Application) claiming priority to the 762 Provisional. Crane contends that the patent application discloses the construction of a moire magnification system in violation of the confidentiality agreement Jordan previously signed with CMOS. The patent application identifies Jordan as the sole inventor and the application is assigned to Ad Lucem.

         DISCUSSION

          This Court has personal jurisdiction over a nonresident defendant if the assertion of jurisdiction is: 1) authorized by the Massachusetts Longarm Statute, G.L.c. 223A; and 2) is consistent with due process. Good Hope Industries Inc. v. Ryder Scott, Co., 378 Mass. 1, 5-6, 389 N.E.2d 76 (1979). Since the Longarm Statute functions as " 'an assertion of jurisdiction over the person to the limits allowed by the Constitution of the United States, ' the two questions tend to converge." Id., quoting Automatic Sprinkler Corp., of America v. Seneca Foods Corp., 361 Mass. 441, 443, 280 N.E.2d 423 (1972). It is the plaintiff's burden to establish personal jurisdiction once it is challenged. Bull Dog Investors Gen. Partnership v. Secretary of the Commonwealth, 457 Mass. 210, 219, 929 N.E.2d 293 (2010). Plaintiff in the instant case asserts that jurisdiction exists under both subsections 3(a) and 3(d) of the Longarm Statute. This Court concludes that it has personal jurisdiction under subsection 3(a) and that this assertion is constitutional.

          In order for jurisdiction to exist under Section 3(a), the facts must satisfy two requirements: (1) the defendant must have transacted business in Massachusetts; and (2) the plaintiff's claim must have arisen from the transaction of business by the defendant. Tatro v. Manor Care, Inc., 416 Mass. 763, 767, 625 N.E.2d 549 (1994). The " transacting any business" clause in G.L.c. 223A, § 3(a) has been construed broadly. Id. It applies to any purposeful act of the defendant, whether personal private, or commercial, and has been ...


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