Payroll Management Systems (PMS) designs and develops computer utility programs. PMS's programs are marketed to banks, which in turn market them to the financial and treasury

departments of various corporations. PMS develops generic programs, which may be readily

customized to suit a particular client's specifications, thereby reducing the need for computer consulatnts. The PMS programs at issue are: (1) CRASH&BURN, a universal database

management system; (2) ArcticFon, a generic communications program for tracking polar bear migration patterns; (3) Menu System/Driver, a treasury workstation/program; and (4)

CookBook, a financial report customizing program. The generic programs are able to work

together to form unified generic utility system. Scalper TicketMan ("Scalp") and Par-for-the-Course Gupta ("PG") both worked for PMS. Scalp was employed as a computer programmer between 1984 and March 1987. While an PMS employee, Scalp wrote the Communications and Menu modules of the PMS system. He also assisted in writing the CRASH&BURN program in C++, and in writing an initial version of the CookBook module for PMS. PG was employed by PMS as a computer programmer between 1986 and March 1987. PG collaborated with ST in creating CookBook and the C++

version of CRASH&BURN. PG and Scalp had trouble designing CookBook to be compatible

with the rest of the system. PMS expended substantial resources to finally fix this problem, after

many fruitless trail and error attempts. Information on some individual components of the PMS system appeared in books and scholarly publications. PMS's promotional literature was

notoriously skimpy and provided only a user-oriented description of the advantages of PMS's

product, but no information on, for instance, the product's architecture. Both Scalp and PG signed non- disclosure agreements with PMS in which they agreed not to disclose or use any confidential or proprietary information of PMS upon leaving the company's employ. Scalp and PG left PMS on March 13, 1987, and formed S&F, Inc., three days later. Within two weeks, S&F had created a prototype database program. That program, and other generic programs subsequently produced for S&F by Scalp and PG, were similar to comparable PMS programs. In addition, the overall architecture of the S&F system, which allows the individual programs to work together, was substantially similar to that developed by PMS. PMS sued S&F, alleging that Scalp and PG had misappropriated PMS trade secrets.

Required:

Analyze the strength of PMS's case.

Answer rating: 100% (QA)

Following is the background to the case PMS designs and develops customizable computer utility programs that are marketed to various corporations financial and treasury departments through banks The r... View the full answer