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IT Service Co. Sues Industrial Software Maker For Breach Of Contract, Conversion

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On Tuesday in the Eastern District of Pennsylvania, plaintiffs information technology service companies Ciright Systems, Inc (Ciright); Ciright Digital Media, LLC (CDM); and MyCiright, Inc.; and Ciright Strategic Holdings, LLC (CSH) filed a complaint against defendants SmarTECHS, LLC, a software publisher for industrial applications, and Remy De Vlieghere for breach of contract asserting that the defendants have used converted property and failed to pay the plaintiffs for their services.

According to the complaint, in January 2018, Ciright “entered into licensing agreement (‘the Agreement’) with SmarTECHS to license certain patented software and technology applications defined as ‘Licensed Intellectual Property’ (‘LIP’) in the Agreement.” Additionally, the complaint stated that CSH provided front end application development services to SmarTECHS over the past few years. However, the plaintiffs asserted that they “recently discovered that certain confidential applications and databases have been converted by two (2) former Ciright employees located in India”; these employees were subject to confidentiality agreements and had access to core applications and databases not available to the public. The plaintiffs noted that these core applications were essential for products in the LIP in the Agreement. However, these employees’ converted property is not licensed in the Agreement. Furthermore, the plaintiffs asserted that the defendants are trying to use the converted property to build a separate or new system, which violates their agreement with Ciright.

In particular, the plaintiffs claimed that defendant De Vlieghere is working with the two former employees, allegedly accessing them and the converted property. Moreover, the plaintiffs contended that defendant De Vlieghere has removed all documents and records from the office and has stopped providing CDM access to the office and these documents. The plaintiffs averred that while they have asked the defendants to cease and desist in regards to the aforementioned conduct, the defendants purportedly continue to use the converted property. Furthermore, the defendants allegedly owe CSH approximately $224,067.50 for invoices that are past due. As a result of this and the aforementioned conduct, the plaintiffs proffered that they have been harmed by the defendants’ actions.

SmarTECHS is accused of breach of contract for allegedly breaching its obligation to Ciright by “breaching the implied covenant of good faith and fair dealing and failing to develop, product, manufacture, market, and sell products in accordance with the Agreement.” Other counts against the defendants include unjust enrichment, conversion, violation of the Trade Secrets Act, tortious interference with contractual and business relations, and breach of fiduciary duty.

The plaintiffs have sought declaratory judgment in their favor, an injunction, the appointment of a receiver, an award for damages, an award for costs and fees, and other relief.

The plaintiffs are represented by Davis Bucco Makara & Dorsey.

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