VMI Essay Research Paper Thiscountry

VMI Essay, Research Paper

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country’s economy thrives on its trade secrets and without them the economy

would lack its competitive edge and economic value. The trade secret laws date

back to Roman law which punished a person who forced another person to reveal

secrets relating to his master.s commercial affairs. The current trade secret

laws evolved in England during the Industrial Revolution and the first reported

trade secret case in the United States was Vickery versus Welch in 1837. In 1979

the National Conference of Commissioners of Uniform State Law imposed the

Uniform Trade Secrets Act which has now been adopted by a majority of the

states. In previous years these laws have been modified to meet the needs of our

growing technological society by incorporating such things as the Invention and

Nondisclosure Agreement and intellectual property laws. Trade secret laws

protect a company.s information that is not publicly known therefore allowing

a competitive and economic edge over their competition. Intellectual property

violations fall under the trade secret laws which are used to determine if a

company or individual has compromised any information of another company or

individual. The issue of ownership of intellectual property is not only a legal

issue but also an ethical issue that engineers face in their careers. In the

case of Vermont Microsystems, Inc. (VMI) versus Autodesk, Inc. the court

determined that Autodesk violated the trade secret laws despite the warnings by

VMI. In doing this they not only compromised themselves legally and economically

but also ethically. Otto Berkes developed a Display List Driver while working

for VMI. After completing that project he took a position at Autodesk in the

fall of 1991. At that time the president of VMI sent a letter to Autodesk

warning that Autodesk should be careful because Berkes was privy to VMI.s

trade secrets. However, in March of 1992, Berkes lobbied the management of

Autodesk to include the display list driver in R12 windows. He then became

directly involved in working on the specifications for a prototype of the

display list driver. In designing this prototype he used two algorithms, the

triangle shading algorithm and the BPS algorithm, that he had developed while

working for VMI. Soon after, VMI learned Berkes was working on the development

of the display list driver for Autodesk. VMI once again warned Autodesk, via a

written notification, that they were at risk of trade secret violation. In

October 1992, Autodesk and VMI met to attempt to resolve their differences. VMI

offered to transfer all technology to Autodesk for 25.5 million dollars. After

receiving VMI.s proposal Autodesk considered proposals from other company.s

in order to replace the display list driver Berkes had developed. Autodesk

rejected all proposals including the offer made by VMI and apparently for

economic reasons decided to go ahead and ship their current version of the

display list driver despite the ethical and legal ramifications. The issue the

court had to determine was whether or not trade secret misappropriation

occurred. It was VMI.s responsibility to prove to the court that a trade

secret misappropriation had occurred. In complying with these laws, VMI

submitted evidence of eleven instances of trade secret misappropriation. The

first instance was the issue of the overall architecture. The courts felt that

VMI.s next eight instances were incorporated into that of the first instance.

In comparing Autodesk and VMI.s architecture the variables, parameters,

structures, and implementation of management functions of the two software

programs were almost, if not, identical. The add-on software that Berkes

designed, for both Autodesk and VMI, included the same functions and tools.

Everything from the management of bounding boxes to the location of entities was

identical. There were such similarities between the design of both company.s

products that the courts could not help but rule that Autodesk had violated the

trade secret laws for the first instance. The last two instances of trade secret

misappropriation were the triangle shading and BPS algorithms. The triangle

shading algorithm was so close to that of VMI.s that one expert witness

reported that "the resemblance goes right down to the names of variables,

names of macros, and even many of the comments. Another pronounced the

algorithms .identical." (United State District Court for the District

of Vermont 1996, 8). Concerning the BPS algorithm, Berkes filed a counterclaim

against VMI, claiming that he was entitled to use BPS algorithm even if VMI has

the same technology. He argued that he had developed the software on his own

time and was therefore entitled to use it as he pleased. It can be argued that

an employee has the right to carry his knowledge, skills, and ex

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