DICE sues Bold, claiming violation of trade secret act

BAY CITY, Mich. and COLORADO SPRINGS, Colo.—Alleging violation of the Michigan Uniform Trade Secret Act, central station automation platform provider DICE is suing its competitor Bold.

DICE on Aug. 16 filed a three-count suit against direct competitor, Colorado-based Bold, in the U.S. District Court's Eastern District of Michigan. Michigan-based DICE alleges conversion (civil as opposed to criminal theft), and unjust enrichment realized from the alleged theft. The suit seeks damages "in an amount equal to this unjust enrichment, together with attorney fees, court costs and statutory interest."

An attorney for Bold told Security Systems News the suit is groundless.

Not named as an actual defendant, though central to DICE's complaint, is former long-time DICE employee Amy Condon. Condon started at the company as a customer service rep in 1997 and, after 14 years filling positions including software engineer, disaster recovery coordinator, and product support, left DICE in May 2011 for a software support position with Bold. DICE alleges in its complaint that "the actions of Amy Condon … have enabled Bold to receive the benefit of years of DICE software development. DICE estimates that it has expended an amount in excess of $5,000,000 developing the software misappropriated by Bold."

The suit contends Condon "accessed DICE servers located at client sites and initiated file transfers of proprietary signal processing intelligence software," and did so in July—two months after she terminated her employment at DICE and began working for Bold. The complaint does not elaborate on how Condon accomplished the alleged file transfers.

As to why Condon was not personally named in the complaint, DICE attorney Craig Horn, of Braun Kendrick Finkbeiner P.L.C., said DICE was interested in addressing the root cause rather than the symptom.

"From a technical standpoint, [Condon] is acting as an agent of Bold, and so if we're correct in our allegations with regards to her actions then Bold ends up being responsible," Horn told Security Systems News.

Security industry attorney Eric Griffin, former general counsel for Protection 1, said the complaint was representative of many lawsuits in the industry.

"Other than the software angle, the litigation looks to be about fairly typical 'improper customer poaching/solicitation' issues, which are unfortunately all too common in the security industry," Griffin told SSN.

DICE's filing contends there is a larger issue than one employee allegedly stealing proprietary software and delivering it to a competitor, however. Included as Exhibit B in the filing, a June 3 letter from DICE counsel to Bold Technologies alleges the Colorado-based firm engaged in deceptive sales practices akin to those usually associated with unethical door-knocking salespeople.

The letter from Braun Kendrick Finkbeiner P.L.C. to Bold president Rod Coles alleges certain representatives of Bold "have been telling DICE clients and DICE prospective clients, among other things, that DICE is going out of business, that DICE is losing numerous clients, and that your company, Bold Technologies, Ltd., has hired all of DICE's best people."

Attorney Horn said DICE simply wants everyone to play fair.

"It's a hard line to draw. We live in America and competition is good. I'm sure Bold is going to say this is just the sort of rough-and-tumble, competitive world we live in," Horn said. "DICE's position is that they acknowledge everyone's right to be out there competing, but they have to play by the rules."

Calls to Bold president Coles and emails to Condon were not returned by deadline.

Christopher Cataldo, partner with Bold counsel Jaffe Raitt Heuer & Weiss PC, told SSN the allegations were groundless.

"We believe the allegations to be without merit and intend to defend the suit vigorously," Cataldo said.

Bold has until Sept. 13 to file a response in court to the complaint.

Security Systems News continues to report on this story.