With regards to identification and discussion of any IP related risks:




With regards to identification and discussion of the protectability of any IP:



I would not take any chance on investing in this company.  First, although the company may be capable of protecting some of its IP, the amount of protection that it is entitled is limited and certainly does not give it any substantial competitive advantage over its potential competitors.  The only exception is possibly its brand name (trademark) and correlating domain name.  Second, due to the nature of the business there is both civil and criminal liability created with the services offered by this web-site.  I would want nothing to do with it.  Third, I think it is immoral and counter to good ethics to endorse this type of web-site.  As such, I could never support it financially or otherwise. 






            Epitime has two choices in this matter.  They can either try to protect their proprietary system through the use of trade-secret law or they could try to protect their system through the use of the patent system.   I would recommend that Epitime uses trade-secret law to protect their system.  I do not recommend that they file a patent.  My reasoning is as follows:


The pros of Trade Secret protection (not filing a patent) are:



The pros of Patent Protection (and not using Trade-Secret protection) are:


Even though patents certainly have many advantages, I would feel much more comfortable recommending to my client that they put in place trade-secret protection “secrecy” procedures in their company and treat the formula like Coke’s secret formula.  Although patent protection is theoretically possible, the risk in disclosure may not be worth it since there is a chance the patent would not be granted and the formula would be disclosed with no protection. 










            I would recommend to my client that they do not hire Suzie, unless Pine Noodles was in the State of California.  As Suzie is under a restrictive contract, she will be limited in what she can do for her new employer and there may be multiple causes of action against her.

            First, her restrictive covenant not to engage in conflicting employment may be enforceable if it is reasonable from the standpoint of the employer, the employee, and public policy.  Having Suzie work for one of Doubleshaft’s customers may be viewed as conflicting employment as it could lead to Doubleshaft not only losing Pine Noodles as a customer but also potential advertisers as clients/associates of Doubleshaft that place advertisements in Pine Noodles.  This would probably be viewed as reasonable justification for enforcing such an agreement in most jurisdictions.  This could be one potential cause of action (“COA”) against Suzie which could result in some injunctive relief thereby terminating Suzie’s relationship with Pine Noodles.

            Second, the clause with regards to Solicitation of Customers could also be a potential COA against Suzie as she would likely be soliciting some of Doubleshaft’s advertisers to procure placement in Pine Noodle’s publication.  The advertisers could certainly be viewed as customers of Doubleshaft.  As such, she would be in breach of this contractual term.  This could be another potential cause of action (“COA”) against Suzie which could result in some injunctive relief thereby terminating Suzie’s relationship with Pine Noodles.

            One issue to analyze here is the extent of trade-secret information that Suzie may be privileged to.  If that exists, she may be limited due to her confidentiality agreement on what she can utilize for her new employer.  In the case of Wexler, the scientist was allowed to utilize his “aptitude, his skill, his dexterity…and other subjective knowledge” while obtained in the course of his employment.  That remained his property because he was not under a restrictive covenant with his employer. However, in the instant case, Suzie did enter into a restrictive covenant, which restricts her disclosure of such trade-secret & confidential information, such as customer (advertiser) lists.  This may limit the effectiveness of her employment if that information would be critical to her success.

            Under the Inevitable Disclosure Doctrine, Doubleshaft could get an injunction against Suzie working for Pine Noodes (if they are viewed as a competitor) when her new job duties will inevitably require the disclosure of Doubleshaft’s trade-secrets.  One of these trade-secrets could potentially be customer / advertiser lists. 

            Under California law, I would recommend hiring Suzie.  It is the public policy of the State of California to encourage employee mobility.  As such, non-compete agreements are void in California.  This agreement Suzie was asked to sign had non-compete elements and, as such, are generally void in California.  So if Suzie lived in Wisconsin and her new employer resided in California, she would be under little risk from a injunctive ruling from a California court.  If there was a ruling against her in another state that did enforce non-compete agreements, the California courts would still not honor the request of an out of state court for injunctive or other relief against Suzie or Pine Noodles in California.

            In summary, unless in California, I do not recommend hiring Suzie as she her employment may be terminated by the courts and, even if it is not terminated by the courts, her effectiveness may be limited due to her limitations on disclosure of trade-secret information that would be critical to her success in her new position.