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Greenville Businessman Ordered To Pay $4.6 Million For Taking Trade Secrets, Breaching Fiduciary Duty

GREENVILLE, S.C., Nov. 20, 2012 /PRNewswire/ -- A federal judge today ordered a Greenville-area businessman and his company to pay more than $4.6 million in damages and costs for misappropriation of trade secrets, breach of fiduciary duty, and other misconduct related to the sale of his former Greenville employer in 2008.

The order, against J. Adam Shirley and his company, Prism Content Solutions LLC, stems from the sale of the assets of Cox CustomMedia Inc., a Greenville publishing company that had employed him as a senior sales executive. Shortly after the sale, Shirley abruptly resigned from CustomMedia to form a competing company and was accused by CustomMedia's acquirer, Uhlig LLC, of taking trade secrets, customer lists, thousands of computer files and other CustomMedia intellectual property in breach of his employment agreement and South Carolina law. 

Uhlig welcomed today's damage award, emphasizing the critical value of intellectual property and electronic data in the Internet era. It also expressed hope that the size of the award, which includes punitive damages, would help deter misconduct in similar cases.  

"We believe it is essential for the courts to recognize the seriousness of trade-secret misappropriation, regardless of the form it takes," the company said in a statement. "The theft of critical business information in electronic form is often difficult to prove, but in economic terms it can be far more damaging and dangerous than the theft of physical property. Decades of work and millions of dollars in value can be stolen using digital devices no bigger than a pack of gum."

Today's order, by U.S. District Judge J. Michelle Childs, follows a jury trial late last year in U.S. District Court in Greenville. After hearing nearly three weeks of evidence, the 10-person jury returned a verdict in favor of Uhlig on all claims and awarded damages for misappropriation of trade secrets, breach of employment agreement, tortious interference with an employment agreement, breach of fiduciary duty and duty of loyalty, aiding and abetting a breach of fiduciary duty and/or a duty of loyalty and tortious interference with prospective contractual relationships. Several other defendants associated with Shirley were originally named in the case, but reached settlements with Uhlig or were dismissed from the case before trial.

Prior to today's order, the Court also enjoined Shirley and Prism from using trade secrets taken from CustomMedia, which was a major provider of custom publishing services to residential communities and senior living facilities throughout the United States.

The accusations against Shirley centered on electronic evidence obtained through forensic examination of computers and storage devices used by Shirley and his associates, including several high-volume USB drives that Uhlig's experts concluded had been used to download information from CustomMedia's computer systems at the time of Shirley's departure.

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