Nitch over, Aronson pointed out that Nitch would no longer have to put up with any competition if he worked for Service Systems. He also boasted that he had copied his program from Computer Care, getting information from current or former Computer Care employees. Wooing Nitch with a salary of $ 1500 per week in addition to commissions (his sole compensation at Computer Care consisted of commissions), Aronson eventually persuaded Nitch to come aboard. (Nitch).
Nitch informed Kaufman that he was leaving and went to work for Service Systems in late July 1990. After less than a week, Nitch quit; and asked Kaufman if he could return to work for Computer Care; eventually Kaufman said yes, and Nitch returned for a salary of $ 600 per week plus commissions. (Nitch direct, Kaufman direct). Nitch left Service Systems because he learned that its computerized reports were unusable. In fact, they were so riddled with errors that Aronson, Feldgreber, and Simon agreed that they were unusable. (Nitch direct). On August 1, 1990, the Service Systems representatives promised to correct the problems in the reports over the weekend, but reports prepared at the end of August likewise were filled with obvious errors. (Nitch direct, Pl. Ex. 26).
Eventually the arrangement among Riordan, O'Rourke, Feldgreber and Aronson broke down, but Feldgreber and Aronson
continued to set up Service Systems without their former partners. (Aronson direct).
While obtaining Computer Care's information and materials from Riordan and O'Rourke, Aronson knew that Riordan and O'Rourke were agents of Computer Care. (Riordan direct).
Some of the information Aronson obtained from Riordan was confidential, including Computer Care's know-how and information about the structure of the system and also a confidential customer list that Riordan prepared specifically for Service Systems. (Kaufman direct, Riordan direct, Pl. Ex. 5). This information is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure and use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality. (Kaufman direct).
The pervasive errors in Service Systems' reports harm the reputation of Computer Care because Service Systems' reports mimic Computer Care's reports and because the overall systems of the two companies are, except for the errors, substantially similar. (Nitch, Kaufman direct). As further evidence of this harm, Computer Care has heard from customers who are disenchanted with Service Systems' business but afraid to try Computer Care's services because they seem so similar. (Nitch direct, Kaufman direct).
Computer Care's reputation also is harmed because of the rumors being spread -- some of them by Aronson -- that he enticed away Computer Care's agents to work for him. (Kaufman direct).
In its sales presentations to potential customers, Service Systems representatives makes false advertising claims that deceive customers into believing that their service is Computer Care and not Service Systems. In particular, they falsely state that they are part of a test that Chrysler Corporation did using Computer Care's program which demonstrated that Computer Care's services successfully generated business, and also falsely state that they represent thousands of dealers and have done so for a long time, when in fact Service Systems represents less than one hundred dealers and has been in business for a short time. (Aronson direct, Nitch direct, Pl. Ex. 10, 25 and 25A).
Service Systems also has copied all the documents that are essential to Computer Care's business, including the Computer Care Reminder Letters; the three Computer Care computerized reports called the Profit Builder Response Analysis, the Workdue Schedule, and the Service Schedule; and the Computer Care sales brochure titled "Win or Lose." (Pl. Ex. 16, 17, 18, 26, 27, and 28). The evidence shows that Service Systems' documents are confusingly similar to the inherently distinctive and nonfunctional format, design, and total image of Computer Care's documents.
Further, after receiving from Riordan Computer Care's confidential information including information about the
structure of Computer Care's system, Aronson and Service Systems used this information to set up the Service Systems' program. (Kaufman direct, Riordan direct, Nitch).
Evidence adduced at trial establishes that -- despite their representations to the contrary -- Aronson and Service Systems have promoted their business through false advertising. Defendants' false statements are intended to deceive potential customers into believing that Service Systems has a record of experience, customer satisfaction, and successful performance substantiated by objective evidence. Service Systems has no such record; that solid track record in fact belongs to Computer Care.
Service Systems and Aronson's false advertising has included the following statements:
(a) Service Systems has "hundreds of auto dealers" and "dealers all over the country" using its services. (Aronson direct, Nitch direct, Pl. Ex. 20 at 5, 25, 25A at 2). Service Systems has made this false statement since July or August 1990. (Nitch direct, Streicker Trans., 12). Defendants now have admitted that this statement is false (Aronson direct); the truth is that Service Systems is a start-up company in the Chicago area that even in December