Virginia Business Litigation Lawyer Blog

On May 4, 2011, United States District Judge Claude M. Hilton of the Eastern District of Virginia issued an opinion rejecting a claim that LogMeIn Inc., a Boston-area computer-access company, had infringed a patent owned by Canadian competitor 01 Communique Laboratory Inc. Judge Hilton granted summary judgment of noninfringement for LogMeIn, finding that LogMeIn's devices that permit a communication session between a personal computer and a remote computer cannot, as a matter of law, be construed to infringe 01's patent, due to differences in the technology used by the competing devices.

In evaluating the patent claim, Judge Hilton reviewed the patent prosecution history and examined the way in which the Patent and Trademark Office and the inventor had previously described and understood the reach of the patent, including its limitations. The court found that LogMeIn's product was dissimilar enough from 01's intellectual property as to avoid any finding that infringement had occurred. Specifically, Judge Hilton found that 01's patent, by its own admission, was to be limited to a system in which only a single device perform the multiple duties of the so-called "location facility," including creating communication sessions, receiving a request for communication with the personal computer from the remote computer, locating the personal computer, and creating a communication channel between the remote computer and the personal computer. If several devices together performed those functions, the judge found, the patent's claims were not implicated.

"The accused LogMeIn products do not have any 'location facility' that locates a personal computer and 'itself' creates a communication channel between a remote computer and the personal computer," Judge Hilton wrote. "In briefing the Motion for Preliminary Injunction, 01 admitted that LogMeIn's products function in precisely the manner that 01 told the PTO the '479 Patent does not cover - that is, by distributing the functions of the 'location facility' among different devices," the judge added. No one component of the LogMeIn system itself performs all the needed functions of the "location facility" under the Court's construction of the term, the judge noted.

LogMeIn has about an 18 percent share of the market for products that permit a personal computer to obtain access to a remote computer over the Internet.

A highly sensational case filed recently against the prestigious Sidwell Friends School in Washington, D.C., may end up raising interesting legal questions about the responsibility of private schools to supervise the actions of their school psychologists. In the $10 million civil suit filed in D.C. Superior Court, Arthur Newmyer, father of a kindergarten student at Sidwell, alleges that Jack Huntington, while working as the school psychologist and counseling Newmyer's daughter, carried on a sexual affair with Newmyer's wife, Tara, a former associate attorney at Dickstein Shapiro LLP, a large Washington law firm. So far, at least three judges have recused themselves from the case, apparently due to their close ties to the prestigious institution.

Earlier this year, Huntington left the school. The lawsuit contends that he was fired after the school learned about sexually explicit e-mails that Huntington sent to Tara Newmyer from the school's computer system. According to the complaint, Huntington and Tara Newmyer arranged "play dates" for the girl so that they could meet and carry on their clandestine affair. The counseling sessions, the complaint says, occurred off school property.

A spokesman for Sidwell has said that the school will "vigorously defend" itself against allegations that he said were "completely without merit." The explosive allegations in the lawsuit filed by Arthur Newmyer, himself a Sidwell graduate who has been extremely active in supporting the school over the years, have become a major topic of discussion at the private school, whose students include President Obama's daughters Malia and Sasha.

Psychologists' ethics rules require them to put the needs of their clients first; in this case, that would be the kindergarten student. The ethics rules in Maryland and the District of Columbia, the relevant jurisdictions, prohibit a psychologist from having an affair with a parent of someone he is counseling.

So why sue the school? The complaint charges the school with "negligent supervision" -- claiming that the school had an obligation "to supervise the employees under its control in order to prevent them from harming students in its care." Thus, any emotional harm to Arthur Newmyer and to his daughter as a result of Huntington's actions could be legally placed at Sidwell's door. The complaint says that school officials knew that Huntington was counseling the girl, knew of the affair, and consented to the affair, continuing "to support his actions for nearly a year" until he left the school.

Expect the school to contest these allegations. Tara Newmyer's attorney has said that Huntington was not treating her daughter "in any professional capacity," and according to The Washington Post, the school sent a letter to parents asserting that it "does not believe that anyone it employed ever had a therapeutic relationship" with the girl. So this interesting and sad case will require some factual development before anyone can predict its end. Still, one has to wonder: if the situation described in the Complaint caused the young daughter so much "emotional distress, mental anguish, humiliation, [and] embarrassment," then is filing this high-profile lawsuit really the best thing for her?

Not all noncompete agreements in Virginia are subject to the restrictive rules governing noncompete agreements formed between employers and employees. Noncompete agreements entered into between two sophisticated parties outside of the employment context may be governed by the less-restrictive standards that govern ordinary contracts. A federal court in Virginia recently denied a motion to dismiss a breach-of-contract claim on this basis, rejecting the argument that the noncompete agreement was unenforceable as a matter of law.

In McClain v. Carucci, a construction and engineering company sued a former employee for allegedly violating a noncompete agreement by forming a competitive company. The noncompete agreement was not entered into as part of the employment relationship, but was part of a larger settlement agreement the parties signed to resolve the company's allegations that the former employee had embezzled nearly $286,000 of the company's funds.

The court found that the justification for exercising heightened scrutiny of noncompete covenants in employment agreements does not apply where the noncompete covenant is part of a post-employment settlement contract. Virginia courts have already held that where a contract for the sale of a business between a vendor and buyer contains a covenant not to compete, greater latitude is allowed in determining the reasonableness of the noncompete than when the covenant arises out of an employment contract. A different standard applies because employees usually have comparatively little bargaining power, whereas the sale of a business usually involves sophisticated parties capable of negotiating at arm's length for a fair deal.

Similarly, since McClain and Carucci negotiated the terms of the noncompete after the employment relationship had ended, the usual concerns about unequal bargaining power were absent. Here, the court reasoned, the parties negotiated at arm's length; it was not a "take it or leave it" situation imposed by an employer. Therefore, the court applied a mere "reasonableness" standard to evaluate the noncompete and did not apply the more rigorous test requiring consideration of the duration of the restraint, the geographic scope of the restraint, and the extent of the activity being restricted.