The Defendant in SQL Sentry, LLC v. ApexSQL, LLC, 2017 NCBC 105 was alleged to have copied the Plaintiff’s software program which was designed to make “resource intensive T-SQL queries. . . in the Microsoft enterprise database platform, SQL Server.” Op. Par. 5. (Ask your IT person).
Adding insult to injury, the Defendant marketed the program it had copied under the same trademark used by the Plaintiff to sell its competing program (“Plan Explorer”).
So, when representatives of this Plaintiff walk into your office, what claims do you fire off in your Complaint against that thieving Defendant? Trademark infringement, obviously. How about a claim for conversion?
Maybe. Electronic data is personal property, so it falls into the category of property which is subject to a claim for conversion. Op. ¶14.
But the Plaintiff ran into a problem with its conversion claim. It still had full access to its software, and that killed its conversion claim.
The NC Business Court has repeatedly “held that making a copy of electronically-stored information which does not deprive the plaintiff of possession or use of information, does not support a claim for conversion.” Op. ¶15 (citing RCJJ, LLC v. RCWIL Enters., LLC, 2016 NCBC 44, ¶67; accord New Friendship Used Clothing Collection, LLC v. Katz, 2017 NCBC 71, ¶77; Strategic Mgmt. Decisions, LLC v. Sales Performance Int’l, LLC, 2017 NCBC 68, ¶18; Addison Whitney, LLC v. Cashion, 2017 NCBC 50, ¶39.
Trying to fit a 21st century development like ESI into a tort like conversion, which has been around since the 1500’s, is like trying to fit a round peg into a square hole.
If you are insistent on including a conversion claim in your lawsuit over improper copying of electronic data, you might do better suing in federal court. The United States District Court for the Western District of North Carolina has recognized such a claim. Bridgetree, Inc. v. Red F Marketing, LLC, 3:10CV228-FDW, 2013 WL 443698 (W.D.N.C. Feb. 5, 2013).
But avoid the NC Business Court.