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StumblePart of Cupcakery lawsuit over trade secrets dismissed
Thursday, March 18, 2010 | 9:37 a.m.
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A judge on Wednesday dismissed part of a lawsuit filed by Las Vegas cupcake company The Cupcakery claiming a former worker stole trade secrets and infringed on Cupcakery trademarks by opening gourmet cupcake shops in California.
The Cupcakery, launched by Pamela Jenkins in 2005 and now with multiple shops, filed suit in U.S. District Court in Las Vegas in May 2009 against former employee Andrea Ballus, who has opened cupcake shops in Napa, Cotati and Santa Rosa, Calif., called Sift: A Cupcakery.
The suit charged Ballus has been profiting from The Cupcakery's trademarks and other intellectual property assets.
Jenkins' company alleged Ballus applied for and was hired for a part-time position at The Cupcakery in January 2008 and that while working there, she registered the trade name Sift: A Cupcakery with the California Secretary of State.
"Ballus used plaintiff’s trade secrets and confidential information obtained during the course and scope of her employment at The Cupcakery to develop a competing cupcake business," the suit charged. "Ballus procured her employment with The Cupcakery under false pretenses and in order to obtain such confidential information and other trade secrets regarding plaintiff’s business model to aid in the development of her own gourmet cupcake business."
Ballus was represented in the case by attorneys James Olson, Michael Stoberski and Jeffrey Allen of the Las Vegas law firm Olson, Cannon, Gormley & Desruisseaux.
Her attorneys argued in court papers that "the term 'Cupcakery' is a generic term and therefore is not protectable or enforceable as a trademark under federal or Nevada state law."
They also said that with Nevada being an at-will employment state -- in which employment relationships can be terminated by either party at any time for any reason -- there is no "special relationship" between employers and employees that would have required Ballus to disclose her plans.
U.S. District Judge Kent Dawson didn't address the trademark claim, but ruled Wednesday that: "Plaintiff has failed to demonstrate that the relationship between Ballus and plaintiff, her employer, was such that Ballus’s failure to disclose gives rise to a misrepresentation or fraud claim."
"While plaintiff avers that (Ballus) signed a confidentiality agreement which may give rise to the creation of a special relationship, plaintiff has failed to include the language of said agreement, or how this alleged agreement imposed upon (Ballus) a duty to disclose that she intended to move to California, that she had any intention to open a cupcake business, or that she had registered Sift as a limited liability company with the California Secretary of State," Dawson wrote in his ruling.
But the legal battle may not be over. Dawson gave attorneys for The Cupcakery 30 days to file an amended lawsuit with proof of a special relationship between Ballus and The Cupcakery that would have required Ballus to disclose her plans.
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I invented the cupcake! It's a bakery that sells cupcakes, big deal.
I hope the employee didn't steal the cupcake recipes, too--it would be a travesty for The Cupcakery's disgusting, artificial-tasting cupcakes to be spread to any other unsuspecting customers who are innocently looking for a sweet treat.
The Cupcakery's mediocre cupcakes at expensive prices is a "secret" not worth stealing.
Are you sure it wasn't Al Gore who invented the cupcake?? He invented the internet!!! (looking innocent)
Yes! Just what we need to get away from politics, recessions, etc! A lawsuit regarding cupcakes, Super Duper.
The age of the $3.50 cupcake is over. Self-serve yogurt is the new cupcake.
this is ridiculous the employer should have security against staff stealing recipes or opening in competition using their ideas
I prefer the way that companies protect their trade secrets in Gibson's novels. There just isn't enough blooodshed here to make this conflict very interesting at all.
I thought this was an article about New Mexico's Non-Conference scheduling strategies.
My bad.
tiabear You are an idiot. Gore never claimed to have invented the internet. He did work on what would become the internet years before it was reality, as did many other people.By the way when you have earned as many rewards for contributions to society as Gore has then we will listen to more of your stupidity. More juvenile right wing bs. by some lying Fox News and Rush Limbaugh convert. By the way has rush kicked his drug habbit yet?
What part of the business model could she possibly steal? Oven temperatures? Ratio of ingredients? Trying to keep a straight face while telling customers that a dozen cupcakes is $35?
Are you kidding me! Well i hope she sells cupcakes at a reasonable price like $1.00-$1.50ea. I used to be a big fan of the cupcakery until Ms.Jenkens jacked up her prices!It insults our intelligence! Pamela do you realize that one of your cupcakes cost more than a gallon of reg.Gas,& a gallon of milk.OH let me see should i put gas in my car & buy milk? NO im gonna buy some cupcakes & live in street! HELLO we are in a recession!Do you realize that i could buy a whole fresh bannana cream pie at Marie Calanders for the price of TWO of your cupcakes. Lower your prices & we will be back but not until then.Greedy,Greedy,Greedy
shelly82, selling the cupcakes for cheaper doesn't make them any more stomach-able. They're dry and plastic-y tasting at $3.50, the same as they are at $1.50.