Supreme Court Allows Suit for Breach of Confidentiality Agreement against Internet Company’s Former Director

By Lewis Tesser, Partner, and Timothy Nolen, Associate

An opinion out of the Supreme Court, New York County, provides an example of how business law is applied to the evolving area of internet online gaming. The litigation involves issues of business law, contract law, civil practice and breach of fiduciary duty.

The case, First Games Publisher Network, Inc. v. Afonin, 650092/10, NYLJ 1202511606133 (Sup. Ct. N.Y. County August 12, 2011), concerned a plaintiff who had hired the defendant to be one of plaintiff’s directors. The defendant signed a confidentiality agreement which prohibited defendant from using plaintiff’s intellectual property for his own benefit. Subsequently, plaintiff learned that the defendant supposedly used a source code derived from plaintiff’s game to develop another game. Justice Bransten found that this conduct supported plaintiff’s causes of action for both breach of the Confidentiality Agreement and common-law breach of fiduciary duty. Specifically, the Court noted that the defendant was in a position of trust and that the allegations of wrongdoing were sufficiently detailed to meet the plaintiff’s pleading requirement. Accordingly, defendant’s motion to dismiss was denied.

At Tesser, Ryan & Rochman, our attorneys have years of experience representing clients in disputes between corporate directors, officers and employees. Whether our client is a partner or employee at an internet company or a shareholder of a corporation, our experience can help clients resolve disputes.