BTS, USA, Inc. v. Executive Perspectives, LLC
142 A.3d 342
Conn. App. Ct.2016Background
- BTS USA (plaintiff) and Executive Perspectives, LLC (EP) are competitors in business-simulation products; plaintiff accused EP and former employee Marshall Bergmann of misappropriating trade secrets after Bergmann left BTS for EP in 2010.
- BTS alleged misappropriation of product technology, client/vendor information (including a packaging vendor contact, Topczewski/Ironwood), and wrongful solicitation (RBC), seeking damages and injunctive relief under CUTSA and related claims.
- Pretrial discovery dispute: court authorized a very limited inspection (20% of the 6 products BTS listed → effectively one product) by a court-appointed neutral expert; the expert found no similarity in the inspected product and requested broader access, which the court denied.
- Trial court credited defendants’ proof (including prior due diligence disclosures in 2008, EP’s longstanding product inventory, and how the Conductor box came to be in third-party hands) and rejected BTS’s misappropriation claims as unsupported; some CUTSA theories were deemed colorable early but became specious during discovery.
- The trial court found portions of BTS’s CUTSA claims were maintained in bad faith (post-2011 persistence despite discovery undermining premises) and awarded EP attorney’s fees under Conn. Gen. Stat. § 35-54, reducing the requested fees by 10% because of intertwined claims. BTS appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of inspection of EP products | Court abused discretion by limiting inspection to one product; needed broader sampling to detect misappropriation | BTS’s claims were speculative; limited inspection appropriate to protect EP’s trade secrets | Court acted within discretion; limitation was based on speculative nature of BTS’s allegations and law-of-the-case deference to prior discovery orders |
| Whether vendor contact (Topczewski/Ironwood) is a trade secret | Vendor’s unpublished contact name and email are BTS trade secrets and were misappropriated | Vendor identity was not kept secret (public/prior disclosures, no confidentiality imposed); info lacks independent economic value | Court found vendor identity/contact not a trade secret and not misappropriated; affirmed |
| Denial of injunctive relief under CUTSA | Injunction warranted to prevent continued or threatened use of BTS secrets | No ongoing or threatened misuse; last arguably wrongful act was in 2010; no harm shown | Court did not abuse discretion in denying injunction given lack of present or threatened misappropriation or harm |
| Finding of bad faith and attorney’s fees apportionment | Fee award improper because EP failed to apportion fees between colorable claims and those pursued in bad faith | Claims and defenses were factually and legally intertwined; apportionment impracticable | Court’s bad-faith finding supported by record; fee award (with 10% reduction) was permissible given intertwined claims; affirmed |
Key Cases Cited
- Brody v. Brody, 153 Conn. App. 625 (Conn. App. 2014) (discovery rulings rest in trial court’s discretion; opposing party may seek protective orders under practice rules)
- Lydall, Inc. v. Ruschmeyer, 282 Conn. 209 (Conn. 2007) (definition and elements of trade secret under CUTSA)
- Total Recycling Servs. of Conn., Inc. v. Conn. Oil Recycling Servs., LLC, 308 Conn. 312 (Conn. 2013) (where claims are factually intertwined, apportionment of attorney’s fees may be impracticable and full recovery is allowable)