X-IT and Kidde
As a start-up company, intellectual property is one of the most valuable assets, especially as a protective barrier to competing companies. The protection of intellectual property is essential for the livelihood of a young company that is working to get their product to market. As a result, when a start-up deems that a competitor has infringed upon their intellectual property, it is in their right to take legal action against said competitor for the infringement. This was the case with X-IT, who saw Kidde Safety’s production of a similar emergency escape ladder as a direct violation of their intellectual property.
In the court of law, X-IT can make numerous claims against Kidde Safety in regards to the emergency escape ladder. First and foremost, X-IT can claim that Kidde violated confidentiality agreements that the two companies agreed upon. In these confidentiality agreements, executed on June 8, 1999, it clearly states that X-IT would give information on its business, financial condition, operations, assets, and liabilities in exchange for the agreement that all information delved would remain confidential. This included only telling those employees within Kidde that needed the information for evaluation of whether or not Kidde should acquire X-IT. It also meant that any information given would only be used for the sole purpose of making this evaluation and nothing else. However, Kidde did not satisfy these terms. First of all, Kidde began investigations of whether they could produce their own similar product without violating any of X-IT’s pending patent application. In court, this could be interpreted as using the information disclosed as part of the confidentiality agreement for purposes other than those designated by X-IT, namely for determining whether it was worthwhile for Kidde to purchase X-IT. Kidde was potentially using the information they had received from X-IT to see whether they could avoid acquiring X-IT and produce a...
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