Northern California Record

Sunday, April 5, 2020

Judge rules tech company's case against former employee to move forward


By Rich Peters | Mar 12, 2020

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SAN JOSE – A U.S. District Court judge has ruled that a tech company’s case against a former employee secretly compiling confidential information would move forward in part.

The defendants, Venkata Panchumarthi and Truinfo Technologies Inc., moved to dismiss the plaintiffs', Calsoft Labs Inc. and PVR Technologies Inc., second amended complaint against them.

In February 2016, Calsoft Labs, a Santa Clara-based technology company, purchased PVR from Panchumarthi. At the same time, Panchumarthi agreed to serve as PVR’s CEO until Aug. 31, 2018.

“Once Panchumarthi was no longer PVR’s CEO, Calsoft and PVR hired Panchumarthi’s new company, Truinfo Technologies, as an independent contractor,” according to the court’s background. “Plaintiffs and Truinfo parted ways on December 31, 2018. According to the plaintiffs, Panchumarthi secretly compiled confidential information during their relationship to compete against the plaintiffs.”

Judge Nathanael M. Cousins at the Northern District of California, granted the defendants dismissal of 10 of the claims against Panchumarthi and Truinfo Technologies, denying two others.

Cousins did not throw out Calsoft’s allegations under the Computer Fraud Abuse Act (CFAA). 

“Under the CFAA, anyone who ‘intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains . . . information from any protected computer . . . shall be punished . . . .’ A ‘protected computer’ includes any computer ‘used in or affecting interstate or foreign commerce or communication',” reads the judge’s ruling.

“The CFAA allows ‘[a]ny person who suffers damage or loss by reason of a violation of this section [to] maintain a civil action against the violator to obtain compensatory damages and injunctive relief or other equitable relief.’”

Additionally, charges were not dropped under the Unfair Competition Law, which prohibits any “unlawful, unfair or fraudulent business act or practice,” according to the law. “Each prong of the UCL is a separate and distinct theory of liability.”

The plaintiffs have two weeks to file a third amended complaint.

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U.S. District Court for the Northern District of California