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Xerox Sues 3 Former Senior Execs' For Misappropriating Trade Secret
Xerox Accuses 3 Ex-Execs’ Startup Of Copying Biz Model
By Kurt Orzeck.Law360, Los Angeles (March 16, 2015, 5:50 PM ET) — Xerox Corp. on Monday sued three former senior executives in Connecticut federal court, claiming they conspired to misappropriate its allegedly confidential technology information, trade secrets and intellectual property for their competing customer-service technology startup, TopBox LLC.
The complaint says the defendants — while still working for Xerox — sought funding for their new venture and approached at least one potential customer who allegedly did millions of dollars in annual business with Xerox. The suit also accuses them of breaching their contracts and employee duties of loyalty, and soliciting other Xerox employees to work for TopBox.
Along with TopBox, Xerox is suing Christopher L. Tranquill, the former head of Xerox's customer care services business unit; and Jeffrey S. Yentis and Brian K. Timmons, a managing director and senior vice president, respectively, who worked under Tranquill. The suit claims that, for at least 11 months before Tranquill resigned in October, they collaborated on the recently launched TopBox, which allegedly uses the same customer-service analytics technology whose initiatives they supervised while at Xerox.
As a result of their high-level access at Xerox, the defendants allegedly identified and implemented strategic methodologies, trends and marketing plans that could help them gain a competitive marketplace advantage, the complaint states. Their roles also allegedly required them to become intimately familiar with Xerox’s services, development plans and applications.
“This is exactly the kind of commercially valuable information that an opportunistic competitor such as TopBox … [would use] to divert Xerox customers and market share by using Xerox assets in which defendants have invested none of the years of time, effort and expense that Xerox has invested, including by its support of defendants’ former work as Xerox senior executives,” the suit says.
In or around November 2013, Tranquill allegedly asked Yentis and Timmons to join him in launching a Xerox competitor, the trade-secrets complaint alleges. Over the course of their alleged solicitations, Timmons told Tranquill that one client had predicted they would “have a pretty good shot at getting a deal” with that company, according to the suit.
In February of last year, they allegedly registered a website for TopBox, which they allegedly positioned to compete with Xerox in the highly competitive market for value-added customer care services. Defendants registered the company the following March, according to Monday’s suit.
During the 11-month period at issue, Tranquill allegedly continued supervising Xerox’s competitively important analytics, data mining and performance evaluations applications. He orchestrated the resignation of Timmons in late June and Yentis in early September, the complaint says.
Xerox claims TopBox has stated on social media that its services include contact center operational improvements, root cause analysis and structuring unstructured data — all of which they allegedly supervised while working as senior executives for the plaintiff.
The suit — which also alleges unfair competition, among other claims — seeks an injunction blocking defendants from all sales-related activity involving customers with whom they worked while at Xerox, and using Xerox’s product or design information or other allegedly confidential materials. It additionally requests unspecified damages and other relief.
A TopBox spokesman declined comment Monday. A Xerox spokesman declined additional comment beyond the suit Monday.
Xerox is represented by Elizabeth M. Lacombe and Michael R. Gottfried of Duane Morris LLP, with Thomas T. Loder and Lawrence H. Pockers of the same firm serving of counsel.
Counsel information for the defendants wasn’t immediately available Monday.
The case is Xerox Corp. et al. v. Christopher L. Tranquill et al., case number 3:15-cv-00380, in the U.S. District Court for the District of Connecticut.
–Editing by John Quinn.
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