Plaintiff Eldorado Stone, LLC, was a specialty building materials siding company and manufacturer of architectural stone veneer for residential and commercial use. Eldorado had proprietary technology that allowed it to offer customized stone profiles designed to look like real stone. It sells its products in the U.S., Canada, Europe and Asia.
Alfonso Alvarez was hired as a process engineer by Eldorado's predecessor, StoneCraft Industries, on Jan. 14, 2002. Jose Martinez joined the company on June 18, 2002.
In July 2002, StoneCraft presented Alvarez and Martinez with an employee handbook explaining their obligations regarding the confidentiality of the manufacturer's proprietary products and information. Later that year, StoneCraft was acquired by Eldorado and all of the former employees of StoneCraft became employees of Eldorado.
Alvarez and Martinez were presented with an Eldorado employee handbook in January 2003. Like the StoneCraft handbook, it detailed the obligations employees had regarding the confidentiality of proprietary information.
The two men were presented with a Trade Secrets/Proprietary Information Agreement in July 2002. Alvarez didn't sign the agreement for two years after receiving it.
In March 2004, a user signed onto Eldorado's computer network under the name "A Alvarez" using Alvarez's computer. The user downloaded 644 megabytes of information and burned it onto an external CD. The information that was downloaded included proprietary information of the company. On May 18, 2004, he resigned from his position at Eldorado.
While still at Eldorado, Alvarez and Rob Hager registered a limited liability company, RBC Investments, in Arizona. They are also listed as officers and directors of Renaissance Stone. Eldorado repeatedly requested that Alvarez return the CD he burned to them. Alvarez refused.
In July 2004, Renaissance Stone registered to do business in Nevada.
On Aug. 23, 2004, Martinez resigned from Eldorado, stating that he was returning to school.
Alvarez solicited Martinez to join Renaissance Stone in 2004. Renaissance began using products that Eldorado claimed were proprietary.
Eldorado Stone sued Renaissance Stone Inc., Alfonso Alvarez, Renaissance President Joseph Smith and Robert Hager for trademark infringement, unfair competition, trademark dilution, trade dress infringement, misappropriation of trade secrets, intentional interference with economic relationships, negligent interference with economic relationships, conversion and constructive trusts.
Eldorado's counsel contended that the intellectual property that was stolen was worthy of protection because it took decades to develop.
The defendants denied using Eldorado's trade secrets in the manufacture of Renaissance's products. They also denied infringing on Eldorado's trademarks and copyrights or interfering with its economic relationships. They claimed that Eldorado could not copyright common colors of concrete and that outsiders were allowed into the Eldorado plant and weren't required to file nondisclosure agreements. They contended that Renaissance used a different base mix for its concrete. They said that the "mold box" sequencing method that Eldorado used was already public domain before Alvarez was hired.

United States District Court, S.D. California
Eldorado Stone LLC, Eldorado Stone Operations, LLC v. Renaissance Stone, Inc.
Alfonso Alvarez, Jose Galvez Martinez, Joseph Smith, and Rob Hager
No. 04-CV-02562-JM-CAB

DATE OF VERDICT/SETTLEMENT: May 30, 2007