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OMG Fidelity, Inc. v. Sirius Technologies

November 16, 2006

OMG FIDELITY, INC. PLAINTIFF,
v.
SIRIUS TECHNOLOGIES, INC. DEFENDANTS.



The opinion of the court was delivered by: David E. Peebles U.S. Magistrate Judge

DECISION AND ORDER

Plaintiff OMG Fidelity, Inc. ("OMG"), asserting diversity of citizenship as a basis for this court's jurisdiction, has commenced suit against defendant Sirius Technologies, Inc. ("Sirius"), a competitor, asserting that with the aid of a former OMG employee, Sirius has taken advantage of plaintiff's trade secrets and confidential information for the purpose of wresting away from OMG one of its key customers. Although not yet having moved for preliminary injunctive relief, plaintiff seeks the court's permission to engage in immediate pretrial discovery and an order shortening the prescribed time for the defendant to respond to its discovery requests.

Having considered the extensive written submissions of the parties and heard oral argument regarding plaintiff's application, I find no good reason to defer commencement of pretrial discovery in the case, and thus will grant plaintiff permission to proceed with its contemplated initial discovery efforts. I am not convinced, however, of the need for such urgency as to justify shortening of defendant's prescribed time to answer plaintiff's discovery demands, and will therefore decline plaintiff's invitation to require defendant to expedite its responses to the proposed requests.

I. BACKGROUND

OMG is a Delaware Corporation with its principal place of business in South Plainfield, New Jersey. In its complaint, OMG proclaims itself as "a leading producer of electroless nickel applications, including . . . for use with memory disks." Complaint (Dkt. No. 1) ¶ 6. In conjunction with its production processes, OMG claims to own proprietary technology, including formulae, which it has developed at considerable effort and expense, and which it strives mightily to protect.

At the center of the present controversy, although not a named party to the action, is Alan Ruffini, a former employee who was involved in the development, production and sale of certain electroless nickel applications with respect to memory disk products for OMG and a predecessor, Auric Corporation.*fn1 While at Auric, Ruffini, who possesses a Ph.D. degree in organic chemistry, was subject to an employment agreement which included restrictions concerning his use and dissemination of confidential information acquired during the course of his employment.

Ruffini resigned from OMG in 2001, and has since become affiliated with Sirius, a company founded by Matthew J. Sisti in 1991, and headquartered in Oriskany, New York.*fn2 Sirius is a direct competitor of OMG and, like the plaintiff, is engaged in research and development in the field of electroless nickel technology.

Another key participant in the present controversy, although also not named as a party to the action, is Komag, Inc. ("Komag"), a corporation headquartered in California and engaged in the manufacture of "thin-film" disks for use in digital data storage on such items as personal computers, personal stereo equipment, digital video recorders, game boxes and other consumer electronic devices which require such storage capacity. Komag is a customer of OMG, purchasing from it electroless nickel plating applications for its thin film memory disks. According to OMG, it has been Komag's exclusive source of electroless nickel and related technology support since 1995.

OMG became aware of efforts by Komag, dating back to as early as 2003, to develop a second source for electroless nickel applications to be utilized in its production of thin film memory disks. In its complaint plaintiff alleges that largely through the efforts of Dr. Ruffini, Sirius has agreed to sell Komag a formula for blending its own electroless nickel for use in the production of its memory disks, and to provide technical support and manufacturing know-how to assist Komag in performing its electroless nickel application. To further those efforts to blend its own electroless nickel application Komag has purchased and installed the necessary tanks at its manufacturing facility in Malaysia. Plaintiff maintains that the formula and knowledge disclosed by Sirius and Dr. Ruffini to Komag includes or is derived from confidential proprietary information of OMG to which Dr. Ruffini had access during the time of his tenure there.

II. PROCEDURAL HISTORY

Plaintiff commenced this action on October 4, 2006. Dkt. No. 1.

Plaintiff's complaint asserts various state law causes of action, including tortious interference with contract (Counts I and II); trade secret misappropriation (Count III); unfair competition (Count IV); and conversion (Count V). According to a return filed with the court, service was subsequently effectuated upon the defendant on October 4, 2006, through its vice president for finance, and additionally on October 5, 2006, through the New York Secretary of State. Dkt. No. 3. Defendant's time to answer plaintiff's complaint has since been extended, on consent of the plaintiff, until November 23, 2006. Dkt. No. 4.

On October 27, 2006, OMG moved seeking an order permitting expedited discovery in the case. Dkt. No. 5. Specifically, plaintiff's motion seeks leave to serve sets of five interrogatories and five document discovery requests, as well as to take the depositions of Komag and Sirius pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, and of Dr. Ruffini. Plaintiff's motion also proposes the entry of a stipulated, Rule 26(c) protective order to safeguard the confidentiality of materials exchanged during the course of discovery. Dkt. No. 5.

OMG's motion is vigorously opposed by Sirius, which argues that plaintiff's efforts in filing this action and seeking expedited discovery represent nothing more than an attempt to gain information regarding defendant's proprietary information and its relationship with Komag. Defendant asserts that discovery should not be permitted in the case until the issuance of a ruling upon an ...


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