Case Dismissed in Florida Unfair Competition Case Between Tech Companies that Shared Information

Rapidly changing business conditions can lead companies to work together on certain products and initiatives. This type of collaboration is frequently seen in high-tech industries where businesses choose to pool resources and existing intellectual property in order to develop a new product or service that benefits both of them. When these collaborations work, it could be lucrative for all involved parties, but conflicts can also arise that trigger recriminations and litigation. 

AirPro Diaganostics, a Florida company, and Opus IVS are both companies that produce technology designed to assess automobile operation and determine what repairs are required. In 2017, the two businesses entered into a Mutual Party Agreement by which they would share product and marketing information with the possible goal of producing scanning technology together. The companies referred to this effort as “Project Waterfall." Though some preliminary discussions occurred, the collaboration never really got off the ground, and the businesses went their separate ways a few months later. 

Shortly after that, AirPro alleged that Drew Technologies, an affiliate of Opus, used information gained from AirPro during Project Waterfall to create a competing remote diagnostic product. AirPro filed suit, claiming that Opus breached the Mutual Party Agreement and engaged in unfair competition. Among other allegations, AirPro said Opus changed software licensing terms and used their confidential pricing information. In response, Opus alleged that AirPro also violated the companies’ agreement.  

Years of litigation followed, but U.S. District Judge Linda Parker dismissed both parties’ claims, finding that terms of the agreement were not violated and that no business tort had taken place. For a finding of unfair competition, some fraudulent or deceptive conduct must be shown. Here, Opus noted that the pricing information in question was public, which might have led to the dismissal. Even in situations where fraud or deception is proven, an unfair competition plaintiff also has to demonstrate causation and damages. 

Companies that work together on a specific project should be extremely diligent about sharing proprietary tools and data. Relevant agreements should specify how confidential information may be used, by whom (including affiliates), and whether competitive development is restricted, during and after the period of cooperation. It is also wise to specify the penalties for the improper use of information.

Clay Parker, Esq. The Florida Lawyer represents companies in various types of business tort matters, including claims relating to alleged unfair competition and tortious interference. To schedule a consultation, please call [ln::phone] or contact us online. Our office is in Orlando.