Advanced Technology Services, Inc. v. KM Docs, LLC
330 Ga. App. 188
| Ga. Ct. App. | 2014Background
- ATS sued former employees Waldron and Heath and KM Docs for misappropriation, confidentiality breaches, torts, fraud, RICO, and copyright; federal court granted summary judgment on copyright and remanded remaining claims; state court granted summary judgment for defendants; on appeal ATS challenges remaining claims.
- Waldron signed a Trade Secrets and Confidential Information Agreement recognizing ATS ownership of software and prohibiting removal or use outside ATS without permission; he allegedly rewrote OptiDoc modules, used personal devices, and created KM Docs/ docUnity after leaving ATS.
- Heath helped form KM Docs; defendants began docUnity/docDNA development for KM Docs after ATS awareness; KM Docs later became docUnity, LLC with Waldron, Heath, and an investor ownership structure.
- Evidence shows Waldron created a viewer module for OptiDoc, a bridge application for KM Docs, and potential docUnity work; ATS alleges these were derived from ATS trade secrets.
- ATS asserted multiple counts including breach of contract, misappropriation of trade secrets, confidentiality violations, and conspiracy; collateral estoppel from the copyright case limits some claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether collateral estoppel bars ATS’s remaining claims. | ATS argues federal ruling precludes re-litigation. | Waldron/Heath contend issues not decided by fed court. | Collaterally estopped only on OptiDoc-related claims; other claims survive. |
| Whether the Trade Secrets Agreement ambiguously restricts outside-work software. | Agreement prohibits development of any software outside ATS. | Agreement limited to ATS-owned software developed for ATS. | Ambiguity; treaty construed against ATS; certain outside-work software not prohibited. |
| Whether Waldron’s return of ATS material and deletion of OptiDoc source code were properly resolved. | Waldron failed to return or erased code as required. | Waldron testified he deleted code; same corroborated by documentation. | No genuine issue; summary judgment proper for return/deletion claim. |
| Whether ATS can pursue claims about the viewer module and bridge software. | These were misappropriated or improperly used. | Not proven to derive from ATS confidential information. | Claims fail; no evidentiary support. |
| Whether Heath/Waldron conspired or tortiously interfered with ATS. | Conspiracy and interference occurred via Trade Secrets Agreement breaches. | No breach or improper interference proven. | Claims rejected on aggregate grounds. |
Key Cases Cited
- MiTek Holdings v. Arce Engineering Co., 89 F.3d 1548 (11th Cir. 1996) (copying requires direct or proved indirect evidence of access and similarity)
- Park ’N Go of Ga. v. United States Fidelity & Guar. Co., 266 Ga. 787 (1996) (contract interpretation against drafter when ambiguous)
- Feist Publications v. Rural Tel. Svc. Co., 499 U.S. 340 (1991) (copyright ownership and copying requirements)
- Prophecy Corp. v. Charles Rossignol, Inc., 256 Ga. 27 (1986) (contract interpretation and evidence assessment in summary judgment context)
- Hinely v. Alliance Metals, Inc. of Atlanta, 285 Ga. App. 230 (2007) (collateral estoppel applicability in state court follow-up)