Automated Systems v. SBC

Citation: Automated Sys., Inc. v. Service Bureau Corp., 401 F.2d 619 (10th Cir. 1968).

Factual Background
Plaintiff developed inventory control software for the automotive parts business in which database updating was made through punch cards kept in a "tub file." Defendant, after contracting to act as the exclusive sales agent in marketing the plaintiff’s inventory control system on a trial basis, terminated its

contract with plaintiff after the trial period expired and developed a similar, competing system where input was made through tape from an adding machine.

The employee most responsible for developing defendant's inventory control system, had, prior to beginning the trial period in the exclusive sales contract, wide experience in data processing and systems analysis, but had gained all of his expertise in the automotive parts business while working with plaintiff under the exclusive sales contract.

Trial Court Decision
The court held that the knowledge about the automotive parts business which the employee gained

from his dealings with plaintiff during the trial period was merely "general information" about that type of business not entitled to trade secret protection.