Last week, ProLogic, Inc. (ProLogic) voluntarily dismissed — without a settlement — the last of the claims remaining in its lawsuit against Aquarian Systems, Inc. (Aquarian) and two former employees who became employees of Aquarian. A team of Crowell & Moring lawyers successfully represented Aquarian and, after the claims against Aquarian were dismissed by ProLogic in May, the individual defendants. What began as a complaint seeking $25 million in damages for alleged trade secret misappropriation, tortious interference, and breach of contract, ended with a dismissal of all claims against Aquarian and the individual defendants, without any settlement or payment.

The claims in the complaint centered around the alleged misappropriation of software created by ProLogic and delivered to the U.S. Department of State (DoS). Aquarian served as the administrator of that software as a subcontractor to ProLogic. The DoS contract, however, was established as a small business set aside, rendering ProLogic ineligible for the continuation of the contract.  Aquarian, a small business, submitted a proposal for the new contract and won.

From the beginning, the defendants viewed ProLogic’s claims as lacking merit. The defendants’ position was that there could have been no misappropriation of trade secrets because the software resided only on government systems, and DoS has a broad license to it. Additionally, ProLogic was ineligible to continue working on the Department of State contract because of its size. In fact, ProLogic failed to even bid on the new contract.  Therefore, ProLogic suffered no avoidable loss, and its tortious interference and non-compete claims were also doomed to fail.

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