A modified Excel spreadsheet does not qualify as confidential property and an employee who creates something similar to that at his new company can't be charged with misappropriating trade secrets, the Arizona Court of Appeals has ruled.
The judges rejected the arguments by attorneys for Arizona Office Technologies that Hugh Marks acted improperly in creating a spreadsheet program for Infincom. They said the original program Marks created for his first employer does not qualify as a trade secret.
Court records show Marks was employed by CB Document Solutions, a firm that sold and leased office equipment and sold service contracts and supplies. He also was the operations manager, responsible for ensuring that the sales process ran smoothly.
While there he developed and maintained a spreadsheet-based program called Elite to streamline the paperwork of the sales force.
Instead of completing numerous documents by hand, staff entered key data into Elite which then automatically went into other documents.
In April 2006 CB merged with AOT which performed similar services. Marks and others submitted their resignations soon after.
Marks started his own consulting firm, helping others to write a business plan for a new company known as Infincom which provided printers, copiers and supplies.
That business plan included mention of his background creating Elite. It also included information on AOT sales teams and results for individual sales staffers, including revenue, goals and profits.
Eventually Marks joined Infincom as a full-time employee, developing a program he called Helix to streamline the sales program. AOT sued.
At trial, Marks said Elite was simply an Excel spreadsheet with imputed mathematical formulas to reduce paperwork. He said he created similar programs, both before and after working at AOT, and said he developed Helix from scratch.
The trial judge issued a directed verdict in favor of Marks, resulting in the appeal.
Judge Margaret Downie, writing for the unanimous appellate court, said the trial judge was correct in concluding that AOT did not present sufficient evidence for a juror to conclude that Marks misappropriated Elite which the company insisted was its "proprietary or confidential property."
She said Arizona law requires some proof that the person accused actually took a "trade secret." Downie said while that does not have to have the uniqueness of something that can be patented, it must be "sufficiently novel" so as to not be readily ascertainable to competitors.
"The evidence established that Elite was, quite simply, an application of an Excel spreadsheet," the judge wrote. She also noted Marks' testimony, which was not challenged, that he had created "probably hundreds" of Excel applications to improve organizational efficiency at other companies.
"Marks had neither the ability nor the legal duty to erase from his memory skills he had acquired in creating effective spreadsheets," Downie said.
Anyway, the judge said, there is nothing to show Marks acquired his knowledge of Elite through improper means, or that he took the template of the program when he left the company.
The court did not directly address the issue of Marks having sales figures for AOT but did note that all the information Marks had was posted on a board in an area which was accessible to both employees and others not working for the company.