Pepper v. International Gaming Systems, LLC

In 1994, Daniel Pepper (plaintiff) allegedly began developing software to computerize bingo games. Charles Crosslin (defendant) provided Pepper with a computer and funding but dropped out of the software-development project in June 1995. Pepper subsequently developed the software independently and applied for copyright registration on October 2, 1995. On October 21, 1995, while Pepper’s copyright application was pending, Joseph Lerner (defendant) began working as a consultant for Crosslin and Pepper. Lerner signed a one-paragraph confidentiality agreement prohibiting disclosure of any information about the bingo-software project. Pepper gave Lerner a copy of the software, and Lerner had several meetings with Pepper to receive updated graphics and program information. Stephen Patton (defendant) accompanied Lerner to one meeting. Pepper alleged that Pepper, Patton, and Lerner agreed to market the bingo software together, with Pepper to retain a one-half interest in the project and Patton and Lerner to share the other one-half interest. Lerner and Patton formed International Gaming Systems, LLC (IGS) (defendant) to market and sell the software. Pepper demonstrated the software to potential investors and divulged information about the software to IGS without entering any further nondisclosure agreements. According to Pepper, at some point, Patton, Lerner, and IGS stole attributes of Pepper’s software and began to produce and market a separate bingo program called Cadillac Bingo. Pepper sued IGS, Crosslin, Patton, and Lerner in federal court in Mississippi, alleging claims including trade-secret misappropriation. IGS, Crosslin, Patton, and Lerner moved for summary judgment, asserting that no trade secrets existed because Pepper had freely disclosed the software to third parties. IGS, Crosslin, Patton, and Lerner also asserted that Pepper could not prove trade-secret misappropriation because Pepper had not presented an expert report establishing that the bingo program’s substance could not have been ascertained through reverse engineering.