Henderson v. Axiam, Inc.

1999 Mass. Super. LEXIS 580 (1999)

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Henderson v. Axiam, Inc.

Massachusetts Superior Court
1999 Mass. Super. LEXIS 580 (1999)

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Facts

Axiam, Inc. (defendant) was a closely held technology corporation that manufactured and sold products used to build rotating devices, including for use in the manufacture of jet engines. Axiam hired Philip Holt and his wife (defendants) in 1992; by 1994, Holt was Axiam’s president. Before Holt joined Axiam, Axiam’s founders and employees began developing a product later known as SmartStack, which helped reduce vibrations during manufacturing processes. In 1995, Axiam began working on a new and improved version of SmartStack, called SuperStack. Holt was not involved in the creation or development of SmartStack or SuperStack. In 1996, Holt decided that he wanted to spin off Axiam’s SuperStack product into a new company that he owned, and Holt began taking steps toward that goal. For example, he decided not to seek a patent for SuperStack to try to prevent Axiam from claiming the patent or product as its own. He also delayed and, at times, stopped the continued development of SuperStack by Axiam employees. Holt also marketed SuperStack to potential buyers under his personal company, not Axiam. Holt used Axiam resources to put together his marketing presentation but hid the fact that he was presenting SuperStack under his own company’s name from Axiam’s board. Holt also claimed that he was the inventor of SuperStack, despite not having any role in its inception, creation, or testing. Axiam’s shareholders, including its former director Colt Henderson (plaintiff), sued Holt and his wife in their personal and individual capacities.

Rule of Law

Issue

Holding and Reasoning (Grasso, J.)

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