Michigan Company Sues New York City For Misappropriation of Trade Secrets Relating to Technology Utilized to Identify 9/11 Victims

In a recent presentation I gave to the annual conference of the American Intellectual Property Law Association, I noted that one of the risks of being a contractor with the government is that they might steal the contractor's trade secrets.

Well, GenomeWeb News is reporting that in a complaint filed in March in the US District Court for the Southern District of New York, Gene Codes, based in Ann Arbor, Mich., alleges New York's Office of Chief Medical Examiner improperly shared proprietary information about its software with the Federal Bureau of Investigation.

In the complaint, Gene Codes said that OCME approached it following the 9/11 attacks in lower Manhattan to develop the software to identify victims of the attacks and to organize the DNA data of the 2,800 victims and 20,000 fragmented remains located at Ground Zero.

OCME had already been using a previously developed software program called Sequencher for the analysis of mitochondrial DNA, Gene Codes said, and added that in order to carry out the 9/11-related tasks it "suspended its existing commercial software research and development activities and devoted all of its efforts and energies to developing a new and groundbreaking system of DNA profile matching technology."

The new software eventually was called Mass-Fatality Identification System, or M-FISys.
Gene Codes was awarded a three-year contract worth $13 million by OCME for developing the software.

After the contract expired, however, OCME infringed on trade secrets associated with M-FISys, Gene Codes alleges, by providing access and information about the software to the FBI, violating the contract it had with OCME, as well as Gene Codes' IP rights.

According to the suit, violations included OCME employees printing out confidential database schema from the M-FISys software "for the purpose of enabling FBI to extract," Gene Codes' trade secrets "in order to develop and enhance the functionality of" CODIS, another software program that was in use by FBI, the company said in its complaint.

Gene Codes is asking for at least $10 million in damages.

BUT the Big Apple isn't buying what Gene Codes is selling - they're suing too!

New York City is countersuing Gene Codes and is asking that the company's lawsuit be dismissed. It also asks for $10 million in damages.

According to the city, Gene Codes approached OCME in late September 2001 to develop the new software. Under its contract with Gene Codes, the city claims it obtained a "perpetual, royalty-free" license to use the M-FISys software for non-commercial purposes. In exchange, Gene Codes could claim copyright ownership of the software but not commercially exploit the program, New York alleges.

New York City alleges Gene Codes breached its contractual obligations by, among other things, failing to properly train OCME personnel for use of M-FISys; failing to provide upgrades and revisions of the software to OCME after the contract expired as was required; and failing to provide OCME with a version of M-FISys that could generate data in a CODIS format, "although such functionality was specifically requested by OCME and later incorporated in a newer version of M-FISys."

We'll watch this one for you.