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Viken Detection Corp. v. Videray Technologies Inc.

United States District Court, D. Massachusetts

January 7, 2020

Viken Detection Corporation, Plaintiff,
v.
Videray Technologies Inc. and Paul E. Bradshaw, Defendants.

          MEMORANDUM & ORDER

          Nathaniel M. Gorton United States District Judge

         Viken Detection Corporation (“Viken” or “plaintiff”) brings this suit against Paul Bradshaw (“Bradshaw”) and Videray Technologies Inc. (“Videray”) (collectively “defendants”), alleging that Bradshaw misappropriated Viken's confidential information when he left Viken to form Videray to compete directly with Viken. Viken asserts that defendants' conduct constitutes 1) a violation of the Defend Trade Secrets Act (“the DTSA”), 18 U.S.C. § 1836(b)(1); 2) a violation of the Computer Fraud and Abuse Act (“the CFAA”), 18 U.S.C. § 1030; 3) misappropriation of trade secrets, M.G.L. c. 93, §§ 42 and 42A; 4) breach of contract; 5) breach of the duty of loyalty; and 6) tortious interference with contracts.

         Pending before the Court is the motion of defendants to dismiss all counts of plaintiff's complaint (Docket No. 26).

         I. Background

         A. The Parties

         Viken, formerly known as “Heuresis Corporation”, is a Delaware corporation with its principal place of business in Massachusetts. Viken produces and sells hand-held x-ray scanners used by law enforcement and security professionals to discover concealed explosives, narcotics and other contraband in a quick and cost-effective manner. Among Viken's main products is the HBI-120, which is a hand-held x-ray backscatter imaging device.

         Videray is a Delaware corporation with its principal place of business in Massachusetts. Bradshaw is a resident of Massachusetts and the founder and president of Videray. Videray has developed the PX1 which, like the HBI-120, is a hand-held x-ray backscatter imaging device.

         B. Bradshaw's Employment with Viken

         Bradshaw began his employment with Viken in November, 2013, as its Director of Engineering. He also periodically acted as Viken's Information Technology Administrator (“ITA”). At some point during his employment, Bradshaw was assigned to a team tasked with developing the HBI-120.

         As part of his role on that team and as Viken's Director of Engineering, Bradshaw had access to proprietary and confidential information regarding the design, performance, marketing and strategic plan for the HBI-120, as well as potential modifications, improvements and design changes to that device. That information, which was stored electronically, was subject to access restrictions and password protection. In his role as ITA, Bradshaw was charged with implementing and overseeing most or all of the electronic access controls used to protect the HBI-120 proprietary and confidential information.

         Bradshaw stored proprietary and confidential information relating to the HBI-120 on his desktop computer, laptop computer and personal Dropbox account. His Dropbox account allegedly contained approximately 1, 800 sensitive files in a folder named “Hbi120.” Bradshaw also kept files related to the plans for other Viken products on his personal Dropbox.

         Others on Viken's research and development team purportedly had access to the files on Bradshaw's personal Dropbox account, including the former CEO of Viken, Henry Grodzins (“Grodzins”). The current CEO of Viken, Jim Ryan, attests, however, that he is not aware that anyone at the company previously knew that Bradshaw stored sensitive Viken documents on his personal Dropbox account.

         Viken requires all new employees to sign a nondisclosure agreement (“the NDA”). Bradshaw was compelled to sign the NDA as a condition of his employment. Pursuant to that contract, he agreed that he would

keep in strictest confidence and trust all Proprietary Information [as defined in the NDA], and . . . not use or disclose any Proprietary Information without the written consent of the Company, except as may be necessary in the ordinary course of performing my duties to the Company.

         Bradshaw also agreed that he would not retain any Proprietary Information of Viken upon termination of his employment. He further agreed that during his employment and for a period of one year thereafter, he would not 1) recruit or solicit for employment any employee of Viken or any affiliate of the company (or a former employee within his or her one-year grace period) or 2) interfere with Viken's business relationships with other persons or companies by inducing or attempting to induce a person or company to refrain from or discontinue doing business with Viken.

         C. The Alleged Misconduct

         In June, 2017, Katie McCabe (“McCabe”), a former employee of Viken, informed the company that while Bradshaw was still working at Viken, he told her that he planned to leave Viken and start a new company that would produce and sell a competing product. She also alleged that, while still employed by Viken, Bradshaw met with a potential investor to solicit funds for his new company. He also purportedly solicited co-workers to leave with him by accessing confidential salary and equity information from Viken's protected server.

         McCabe also alleged that Bradshaw failed to share customer feedback with Viken as to potential product improvements, while telling his co-workers that his new product would include those improvements. She told Viken managers that Bradshaw asked other employees to help him collect confidential Viken customer information for use at his new company. Finally, Bradshaw purportedly told McCabe that, in reference to a computer on which he kept proprietary and confidential information about the HBI-120, “I have everything I need”. Bradshaw vigorously denies those allegations but at least one other Viken employee reiterates McCabe's assertions.

         In May or June, 2017, Viken terminated Bradshaw's employment, at least partly as a result of McCabe's allegations. Within a few days after his termination, however, then-CEO Grodzins offered Bradshaw his job back because he believed that McCabe either lied or exaggerated about Bradshaw's conduct. Bradshaw declined the offer of re-instatement.

         Viken alleges that within two months after he left the company, Bradshaw formed Videray. Videray has developed the PX1 which apparently has the same external design, ergonomics and operating characteristics as Viken's HBI-120. Viken alleges that the PX11) is the same size and shape, 2) uses approximately the same x-ray energy, 3) uses approximately the same power and 4) likely ...


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