Wednesday, December 30, 2009, 12/30/2009 10:03:00 AM

South Carolina Man Charged With Trade Secret Theft from Company He Last Worked With 8 Years Ago

By Todd

The Sun News from Myrtle Beach, South Carolina is reporting that Thomas Flynn, 60, who was a plant manager at Metglas for more than 20 years beginning in 1975, was arrested last week and charged with misappropriation of trade secret information with intent to injure.

"He was there for quite a while and certainly had a lot of access to a lot of different information and a lot of different proprietary things," said Rachel Platt, Metglas' executive director for human resources. Metglas, which is based in Conway, makes metal ribbons used in electric transformers.

Mr. Flynn's attorney raised an interesting defense "Our position is that not only did he not do anything wrong, but he never worked for Metglas," said Gene Connell, Flynn's attorney. Flynn worked for Honeywell and not Metglas, he said. Tokyo-based Hitachi Metals bought Metglas Solutions Division of Honeywell in 2003.

Flynn retired from the company in 2001 and several years later was approached by Vijai, where he now works, Connell said. When Flynn left the company, he didn't sign any covenant not to compete or any form about trade secrets, said Connell, who said he handled the separation package.

"His reputation is being besmirched for something he didn't do," he said. "We deny categorically that any documents were taken, any plans or any electronic records or anything else."

Metglas began to suspect something was wrong when company officials got a call from one of their manufacturers. The manufacturer told the company it had been contacted by Vijai Electricals and asked to produce a product that was similar to the product it makes for Metglas.

The drawings Vijai submitted raised questions with the manufacturer and prompted them to call Metglas.

"It was specific enough to our vendor that they were concerned and it sent a red flag," Platt said.

Shortly after Metglas got that information, it turned the investigation over to the solicitor's office, which investigated and filed the charges against Flynn. Flynn was arrested Dec. 23, held briefly and then released after posting $25,000 in bail.

We'll keep an eye on this one for you, but we'd like to revisit Mr. Flynn's attorney's defense of "he didn't even work there." It is not necessary that someone be an employee of a trade secret owner for a misappropriation claim to be made. All one needs to think of is the computer hacker - they aren't employees (usually) and they can misappropriate trade secrets. Nor does the attorney's protestation "he didn't sign a noncompete" and "he didn't take any written materials" really matter. Courts have held that memorizing a trade secret, as opposed to stealing paper or data files that the trade secret is contained on, can constitute misappropriation. The trade secret laws are statutues. Those statutes are codified in law. They don't require a contract between the trade secret holder and the alleged misappropriator.

We aren't passing judgment on whether the methodologies Metglas claims this person stole actually rise to the level of trade secrets OR whether Mr. Flynn even assisted Vijai Electricals in doing anything improper. We just thought the attorney's public statements to be interesting.


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