Running head: BUSINESS TORTS AND INTELLECTUAL PROPERTY 1

Business Torts and Intellectual Property

Karen Kuykendall

321/Ethical and Legal Topics in Business

August 23, 2017

University of Phoenix
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According to Miller & Loren (2016), Intellectual property is result of a work or an

intention of somebody or an organization through creativity and one has a right over it and

can secure it. Intellectual property is an aspect that companies are very much cautious about

and any breach may result in a violation. It comes in many different forms, such as logos,

artwork, trade secrets, and trademarks. Intellectual property infringement refers to the

violation of the rights in intellectual property. Ethics are very crucial for an organization and

every employee should be able to adhere to them to ensure that the operation of the

organization is running smoothly.

Torts, on the other hand, are wrongful acts and behaviours. Torts usually lead to civil legal

liability. Business torts is an unlawful act that infringe on an individual’s rights. Business

torts, also have legal consequences. These legal implications are civil in nature. An

organization or a person that commits wrongs is liable punishment.

Intellectual Property at Issue

Companies can own different intellectual properties, for instance patents and inventions.

Another intellectual property that is very common is the data in which a company practices,

in most cases it is confidential and should not be shared without the authorization of the

company. The intellectual property issue that portrays itself, in this case, is theft of data

which amounts to trade secrets. Trade secrets are one of the main intellectual properties that a

business can possess. Various businesses have restricted access to confidential information,

non-disclosure, agreements, post-employment contracts and other security practices to keep

their trade secrets safe.

In this situation, Sam disregards the terms of the non-disclosure agreement he signed with

ABC Paper Corp. He is approached by XYZ Paper Co. for employment if he brings his client

list with him. This is a breach of an agreement with ABC Paper Corp. The client list that
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Sam created became the property of ABC Paper Corp. and he was required to keep it

confidential.

Are Sam's Actions Ethical

Ethics can guide the way in which employees behave, they are able to adhere to the

company’s policies as they work to meet the goals set for them by the company while

bringing no harm in the organization way (DesJardins, 2011). Sam’s actions are not ethical

for several reasons. As an employee of ABC Paper Corp, he should follow the proper channel

of the company. He decided to trade ABC Paper Corp.’s secrets to another company which is

unethical and unlawful (Lemley, 2004) and in the process, he breaks a confidentiality

agreement. Furthermore, when Sam was caught downloading his client list, Natalie grabs the

flash drive and runs out of the office. In the process, Sam shoves Natalie as she attempted to

stop him. This resulted in Natalie falling and hitting her head against the doorknob. As a

result of hitting her head she sustains a concussion. This is not an ethical decision since it is

wrong and can gravely harm the business operations of the company as well as take a toll on

the financial aspect of the business.

Types of Tort Sam Committed

Tort is simply a civil wrong; that can cause harm to another person. It includes cases of

negligence as well as those caused intentionally. In Sam’s case, there is a tort that is

intentional and contractual relations interference. An intentional tort is whereby the civil

wrong is committed against an individual or property. This can bring harm to a business

relationship or the economic interest. Sam also commits the tort of contract interference; he

signs a non-disclosure agreement as he joins the company which he breaks when he steals the

client list to take it to the other company. He also commits the tort of negligence; each

company normally expects their employees to behave and conduct themselves in a certain

manner. Sam shoves his boss, Natalie who falls when she tried to stop Sam. She is injured
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and Sam’s action put Natalie in harm’s way. Another tort that can be identified in this

scenario is fiduciary duty claim tort. The employee normally has some fiduciary duties

towards the employer regardless of the existence of a non-disclosure contract. Sam’s actions

do not show respect for this relationship. In this scenario, there are two people who are guilty

of committing a tort Sam and his new boss from XYZ Paper Co.

Sam's Actions Subject Him to Criminal Liability

There are several things that Sam does that can render him to be criminally liable, to start

with theft of trade secrets. Trade secrets are something that a company has and it can have an

economic advantage over its competitors with, for instance, a practice, a design, a pattern and

information among other things (Menell, Lemley, & Merges, 2016). Sam knew that the client

list belonged to ABC Paper Corp. He had also signed a non-disclosure clause. A non-

disclosure clause is also referred to as a confidentiality clause, it is normally a legal

obligation, which compels the parties that get involved to keep the information they have

confidential. Sam is in breach of the non-disclosure agreement and is therefore liable of

stealing trade secrets. Another issue that causes Sam to face criminal charges is when the

boss falls and suffers a concussion. The act of causing bodily harm to another person is a

criminal offense.

In summary, the situation on hand displays an excellent example of misappropriation of

trade secrets which may result in certain kinds of torts that are punishable by the law. Sam’s

simple action of stealing his client list from ABC Paper Corp. can result in a criminal

prosecution because he carelessly ignores the laws against theft of trade secrets. Furthermore,

he disregards the terms of the non-disclosure agreement.

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References

Barry, N. (2016). Business ethics. Springer.

DesJardins, J. R. (2011). An introduction to business ethics. McGraw-Hill.

Gross-Schaefer, A., Trigilio, J., Negus, J., & Ro, C. S. (2000). Ethics education in the

workplace: An effective tool to combat employee theft. Journal of Business

Ethics, 26(2), 89-100.

Menell, P. S., Lemley, M. A., & Merges, R. P. (2016). Intellectual Property in the New

Technological Age: 2016-Chapters 1 and 2.

Miller, J. S., & Loren, L. P. (2016). Intellectual Property Law: Cases & Materials