Full opinion text
MEMORANDUM AND ORDER WOLF, District Judge. I. SUMMARY Plaintiff Picker International Corporation (“Picker”) designs, manufactures, sells, and services medical diagnostic equipment including the computed tomography scanners (“CT Scanners”) involved in this case. Defendant Imaging Equipment Services, Inc. (“Imaging”) is an independent servicing organization (“ISO”) which competes with Picker to service Picker produced CT Scanners. Defendant Thomas J. Quinn is the founder and President of Imaging. Picker initiated this action in 1987, in the United States District Court for the Western District of Pennsylvania, alleging that Imaging and Quinn had misappropriated Picker’s trade secrets and violated its copyrights in the course of competing to service Picker Synerview CT Scanners. Picker initially sought both damages and injunctive relief. Later in 1987, Picker filed suit in this court against Imaging and Bruce Leavitt, a former Picker employee who had been hired by Imaging, for Leavitt’s alleged breach of his agreements not to compete with Picker or misappropriate Picker’s confidential business information. Once again, Picker originally sought both damages and injunctive relief. On February 13, 1989, the parties agreed to a Partial Final Injunction restraining Imaging from using the voluminous Picker documents and software Leavitt had brought to Imaging after terminating his employment with Picker. The case filed in Pennsylvania was transferred to this court. Imaging responded to Picker’s actions by filing counterclaims alleging that Picker had violated federal anti-trust laws and various state laws in an illegal effort to monopolize the market for the servicing of its CT Scanners. The progress of these cases was twice stalled by Imaging’s filing for bankruptcy and the automatic stay of litigation those filings generated. In 1994, Picker obtained relief from the automatic stay by waiving its claims for damages and agreeing to seek only injunctive relief in this case. In August 1984, the court granted Picker’s motion for summary judgment on defendants’ counterclaims. Picker International, Inc. v. Leavitt, 865 F.Supp. 951 (D.Mass.1994). Soon after Leavitt settled with Picker, admitting that he had misappropriated Picker’s confidential business information and agreeing to injunctive relief. A non-jury trial, lasting several weeks, was conducted in September and October 1994. The court took the case under advisement. Imaging and Quinn submitted two motions to re-open the trial. After a hearing on June 5, 1995, those motions were denied. After carefully considering the evidence, including the credibility of the witness, the court finds that Quinn and Imaging have for more than a decade engaged in a relentless and extensive campaign to misappropriate Picker’s legally protected intellectual property. The court also finds that defendants’ misconduct continued through trial in the form of testimony fabricated by Quinn. Accordingly, the court is issuing an Order which, among other things, requires that Quinn and Imaging return to Picker or destroy the Picker trade secrets, copyrighted materials, and confidential information they misappropriated, and enjoins the defendants from violating in the future Picker’s rights to control the dissemination and use of its legally protected intellectual property. In view of the pervasive and enduring misconduct of defendants, and of the nature of the relief ordered, the court is appointing James A. Ring, a former Special Agent of the Federal Bureau of Investigation, to serve as a Monitor to supervise and ensure compliance with the court’s Order. The reasons for these decisions are set forth in detail in this Memorandum. II. THE GENERALLY APPLICABLE LAW The following Findings of Fact and Conclusions of Law may be best understood in the context of the generally applicable law. While Picker relies on several legal theories, the essence of its allegations is that Imaging and its President, Quinn, systematically misappropriated and misused Picker’s trade secrets relating to the servicing of Picker CT Scanners. The parties have stipulated that the law of Massachusetts may be applied in analyzing this claim. There are six factors which are usually considered in determining whether information constitutes a trade secret: 1. The extent to which the information is known outside the plaintiffs business; 2. The extent to which it is known by employees and others involved in the plaintiffs business; 3. The extent of measures taken by the plaintiff to guard the secrecy of the information; 4. The value of the information to the plaintiff and to its competitors; 5. The amount of effort or money expended by the plaintiff in developing the information; and 6. The ease or difficulty with which the information could be properly acquired or duplicated by others. See Restatement of Torts § 757, comment b (1939); USM Corporation v. Marson Fastener Corporation, 379 Mass. 90, 98-99, n. 9, 393 N.E.2d 895, 900, n. 9 (1979); Data General Corporation v. Grumman Systems Support Corporation, 825 F.Supp. 340, 357 (D.Mass.1993), aff'd, 36 F.3d 1147, 1165 (1st Cir.1994). At the heart of this case is the third factor — the question whether Picker took adequate measures to protect what it now characterizes as its trade secrets. It is axiomatic that: “One who possesses a trade secret and wishes to protect it must act to preserve its secrecy.” USM Corporation, 379 Mass, at 97, 393 N.E.2d at 899-900. It is not necessary, however, that an “‘impenetrable fortress’ ” be erected to retain legal protection for a trade secret. Id. (quoting E.I. duPont de Nemours & Co. v. Christopher, 431 F.2d 1012, 1017 (5th Cir.1970), cert. denied, 400 U.S. 1024, 91 S.Ct. 581, 27 L.Ed.2d 637 (1971)). Rather, reasonable security precautions are required. Id. In determining whether reasonable security precautions have been taken: “Relevant factors to be considered include (1) the existence or absence of an express agreement restricting disclosure, (2) the nature and extent of security precautions taken by the possessor to prevent acquisition of the information by unauthorized third parties, (3) the circumstances under which the information was disclosed ... to (any) employee to the extent that they give rise to a reasonable inference that further disclosure without the consent of the possessor is prohibited, and (4) the degree to which the information has been placed in the public domain or rendered ‘readily ascertainable’ by the third parties through patent applications or unrestricted product marketing.” Id. at 98, 393 N.E.2d at 900 (quoting Kubik Inc. v. Hull, 56 Mich.App. 335, 356, 224 N.W.2d 80, 91 (1974)). In essence, what is reasonable depends on the circumstances of each case, considering the nature of the information sought to be protected as well as the conduct of the parties. Id. at 101, 393 N.E.2d at 902. Thus, as circumstances, including the foreseeable risk to information a party deems confidential, change the definition of the security precautions reasonably necessary to protect it may also change. Significantly for this case, in deciding whether to grant a plaintiff the protection it seeks, “a court should consider the relationship and conduct of the parties,” and “it [is] appropriate to balance a plaintiffs conduct in maintaining its security measures against the conduct of a defendant in acquiring the information.” Id. at 98, 393 N.E.2d at 900. Indeed, while a matter may not constitute a trade secret, it may be entitled to protection as confidential business information “against one who improperly procures such information. The law puts its imprimatur on fair dealing, good faith, and fundamental honesty. Courts condemn conduct which fails to reflect these minimum accepted moral values by penalizing such conduct whenever it occurs.” Id. at 104, 393 N.E.2d at 903; see also CVD, Incorporated v. Raytheon Co., 769 F.2d 842, 850 (1st Cir.1985), cert. denied, 475 U.S. 1016, 106 S.Ct. 1198, 89 L.Ed.2d 312 (1986) (“trade secret law is intended to maintain and promote standards of commercial ethics and fair dealing”). This ease also involves questions of federal copyright law, which proscribes the unauthorized reproduction and distribution of copyrighted works. 17 U.S.C. § 106. Implicated too is the common law prohibition against conversion by unauthorized use of the property of another. See e.g., Evergreen Marine Corp. v. Six Consignments of Frozen Scallops, 4 F.3d 90, 95 (1st Cir.1993). Fundamentally, however, this is a case in which Picker made reasonable efforts to protect its trade secrets, copyrighted materials, and confidential business information. Those efforts evolved over time to meet the escalating threat to Picker’s proprietary information posed by the changing industry for the servicing of CT Scanners. Quinn and Imaging, however, engaged in a relentless campaign to misappropriate and misuse Picker’s trade secrets, confidential business information, and copyrighted materials. The defendants also persistently attempted to cover-up their misconduct. That effort continued through trial. In these circumstances, Picker is entitled to substantially all of the relief it is seeking. III. FINDINGS OF FACT Having considered the direct and circumstantial evidence presented at trial, and assessed the credibility of the witnesses, the court finds- the following facts to be proven by a preponderance of the evidence. Picker is a New York corporation with its principal place of business in Highland Heights, Ohio. It manufactures, sells and services medical diagnostic imaging equipment, including CT Scanners. Imaging is a Pennsylvania corporation, with its principal place of business in Pittsburgh. It was formed in November, 1984, and commenced its business in January, 1985. Thomas J. Quinn has been involved with Imaging since its inception. He is now its President and largest shareholder. Imaging is an ISO, which competes with Picker for the opportunity to maintain and repair CT Scanners sold by Picker. A CT Scanner is a complex, diagnostic imaging system that utilizes computed tomography and x-ray technologies. It produces images of a cross-section of an area of a human body. It is, therefore, often more valuable than a conventional x-ray for diagnosing disease or injury. Picker entered the then new CT Scanner market in the mid-1970’s. At all times relevant to this ease, Picker has competed with other manufacturers for the sale of CT Scanners. Picker’s technology, like that of its competitors, has evolved over time. In 1982, Picker introduced its Synerview 600 and 1200 CT Scanners, which were in the industry regarded as the fourth generation of CT scanning technology. Depending on the features selected, a Synerview 600 CT Scanner cost between $600,000 and $800,000, and a Synerview 1200 CT Scanner cost between $800,000 and $1,100,000. The Synerview CT Scanners were Picker’s most successful product. There are about 75 Synerview 600 CT Scanners and 525 Synerview 1200 CT Scanners still in operation in the United States today. CT Scanners are usually utilized in the United States for eight to ten years, when they are typically replaced by more advanced technology. If properly maintained and repaired, however, a CT Scanner will not wear out. The maintenance and repair of CT Scanners is of vital importance to purchasers. A high quality image is essential to the function CT Scanners perform. Reliability is valued because the CT Scanners are employed for emergency procedures and are also often scheduled for use many hours a day, for up to seven days a week, to maximize their profitability. Picker’s CT Scanners require routine maintenance of several hours to a day each week, and emergency diagnosis of problems and repairs is commonly needed. The cost and quality of service is a factor customers consider in deciding whether to buy a CT Scanner from Picker or one of its competitors. Such service is expensive, at times exceeding the purchase price of the CT Scanner over an eight to ten year period. Picker sold its Synerview CT Scanners with a warranty which provided free service for one year. At the expiration of the warranty period, Picker offered a series of service options, including providing maintenance and repairs for a fixed fee or on a time and materials basis. In 1982 and 1983, a few customers had in-house service engineers. In that period the vast majority, however, relied on Picker to service the CT Scanners it had sold. Picker invested a great deal of time and money in developing the software and documents necessary to maintain and repair its Synerview CT Scanners. This software and documentation was designed to permit Picker to perform tests to determine whether its CT Scanners were operating properly. The service documents and diagnostic software enable Picker to engage in efficient preventive maintenance, to identify the cause of any malfunction quickly, to repair any problem promptly, and to replace any components not functioning properly. Picker’s service materials fall into four general categories: (i) diagnostic computer software designed to enable its user to determine whether the CT Scanner or its components are operating according to specifications and to isolate malfunctions; (ii) technical bulletins and service engineering notes designed to enable their user to better install upgrades and modifications and to better test, troubleshoot and repair the CT Scanners; (iii) service manuals designed to enable their user to maintain, troubleshoot and repair CT Scanners more quickly and reliably; and (iv) classroom training materials designed to provide instruction concerning the general theory and operation of a CT Scanner, and the techniques for maintenance and repair. Picker has since the early 1980’s designed several new generations of diagnostic software, which it makes available to its field service engineers to enable them to test CT Scanner performance and identify malfunctions rapidly. Picker has also periodically prepared and distributed to its field service engineers service engineering technical bulletins and technical notes. These service engineering bulletins and notes detail new and improved service techniques for the maintenance and repair of CT Scanners and instruct field service engineers concerning equipment modifications to enhance the performance and safety of CT Scanners. Picker also has developed or compiled service manuals for its CT Scanners and each major system component. These manuals provide information on CT Scanner design and describe maintenance, troubleshooting, and repair techniques. The average set of service and repair manuals comprises more than sixty volumes and takes up three feet of shelf space. Because of their bulk these manuals are not, as a practical matter, portable. In order to ensure availability for service when the customer needs it, Picker often stores its service and repair manuals in the radiology suite of each customer site where Picker is providing service. Storing the manuals at the customer site benefits the CT Scanner owner and its patients because it greatly enhances Picker’s ability to provide the customer with the prompt and rehable service which this type of medical equipment requires. Each set of service manuals is uniquely suited to serve as a reference for the maintenance and repair of the corresponding CT Scanner because CT Scanners vary from one another depending on their vintage, upgrades and the options selected by the customer. Picker has also developed classroom training materials, including information on the theory and operation of the CT Scanner. These classroom training materials enhance the ability of field service engineers to service and repair CT Scanners and enable them to begin providing accurate and rehable service at an early stage of their career. Picker spends more than one million dollars per year to develop and update its diagnostic software, service engineering technical bulletins and notes, service manuals and classroom training materials concerning its CT Scanners. As indicated earlier, in 1982 and 1983 virtually all Synerview CT Scanners were serviced by Picker employees. A few customers, however, utilized in-house engineers to provide service after Picker’s warranty expired. In 1982 and 1983, Picker had a long established and published policy requiring that employees not disclose “proprietary” or “confidential” information without the authorization of the company. To implement this policy, as consideration for employment and training, each Picker service engineer was required to execute a confidentiality agreement. That agreement provided, among other things, that the employee would not at any time, without Picker’s written consent, disclose any “secret” or “confidential” information acquired in the course of his or her employment, and would return to Picker all manuals and other materials provided by Picker upon the termination of his or her employment. Picker trained its service engineers concerning the installation, maintenance and repair of its CT Scanners. Such training took several months and was provided at a facility dedicated to training. The facility was not accessible to the public or to Picker employees who did not have a legitimate business reason to be there. There was a security guard at the entrance. Picker employees authorized to enter the training facility wore identification badges. Authorized guests also wore passes. Picker training materials were kept in a caged area, and were usually accessed only by an individual employed by Picker. In 1983, at the outset of their training, the students were reminded that some of the information they would be receiving was confidential and that they had an obligation to protect it. In 1981, Picker sold one of the first Syner-view 1200 CT Scanners to C.A.T. Associates, for delivery in 1982. C.A.T. Associates was an entity formed by Drs. Joseph Marasco, Jr. and Thomas Pittman, radiologists who were associated with St. Francis Hospital in Pittsburgh, Pennsylvania. The Synerview CT Scanner was installed at St. Francis Hospital, and it was C.A.T. Associates intent to later transfer ownership of the equipment to the Hospital. At the time the sale was negotiated, Picker agreed to C.A.T. Associates’ request that Quinn be trained to service the Synerview 1200 CT Scanner on C.A.T. Associates’ behalf. C.A.T. Associates had Quinn made an employee of St. Francis Hospital so he would not be prejudiced with regard to seniority when ownership of the Synerview CT Scanner was transferred to St. Francis Hospital. Picker, however, was not informed of this arrangement. Rather, prior to 1985, Picker regarded Quinn as an employee of its customer, C.A.T. Associates. Picker’s belief that Quinn was employed by C.A.T. Associates was reasonable. Indeed, in his initial deposition Quinn repeatedly testified that he had been employed by C.A.T. Associates. Picker’s contract of sale with C.A.T. Associates included the following then standard Picker provisions: 10. DATA RIGHTS No rights to any intellectual property residing in the Equipment, software, documentation, or any data furnished hereunder are granted except the right to use such intellectual property. Customer will use the same standard of care to protect Picker’s confidential information as it uses to protect its own confidential information. Customer recognizes that, among other things, computer software necessary to the operation of the Equipment is confidential information belonging to Picker or to third parties to whom Picker is under an obligation not to disclose confidential information except to certain authorized parties, of whom Customer is one. Customers shall have no right to copy, reproduce or disclose to others in whole or in part any of the above without the prior written permission of Picker. 11. TRANSFER OF PICKER’S CONFIDENTIAL INFORMATION UPON RESALE OF EQUIPMENT. In the event that Customer resells the Equipment, Picker warrants that it will permit customer to transfer Picker’s confidential information, which it has provided to customer and which is necessary to operate the Equipment, to its resale customer provided, however, that such resale customer first agrees to protect the confidentiality of such information upon reasonable terms and conditions and upon the payment to Picker of a reasonable fee for the transfer of such confidential information. August 3, 1981 Picker Quotation to C.A.T. Associates, Trial Exhibit 54. Quinn was familiar with this contract of sale by virtue of his roles in advising C.A.T. Associates concerning its negotiation and in participating in the installation of the Synerview CT Scanner at St. Francis Hospital. The foregoing provisions informed Quinn, among others, that: Picker viewed some of the documents and software being sold for use in operating the CT Scanner as its proprietary, confidential information; that the customer had only the right to use that information in connection with the operation of the CT Scanner it had acquired; and that the customer and those acting for it had no right to reproduce or disclose such information to any other entity or individual without Picker’s prior, written authorization. The foregoing, standard provisions of the C.A.T. Associates contract of sale do not refer to any documents or software concerning the maintenance and repair of the Syner-view CT Scanner because none were sold to C.A.T. Associates. Rather, while Picker in 1981 sold C.A.T. Associates the information necessary to operate the Synerview CT Scanner, it did not sell it the documents and software necessary to service it. It was Picker’s practice in 1981 and 1982 to ship service manuals and diagnostic software, which contained some items identified as Picker’s proprietary confidential information, and which Picker continued to own, with the Synerview CT Scanner, for use by Picker service engineers in maintaining and repairing that particular device. In negotiating the contract to sell a Synerview 1200 CT Scanner to C.A.T. Associates, Picker agreed to permit Quinn to participate in its servicing and to use Picker’s manuals and software to do so. At all times prior to January 1985, however, Picker reasonably regarded Quinn as an employee of C.A.T. Associates, who was subject to the Data Rights restrictions in the contract of sale, and who would use Picker’s service manuals and software only to service the single C.A.T. Associates CT Scanner at St. Francis Hospital. In 1982, Quinn had meaningful experience with computers and with CT Scanners. He had worked for Burroughs Corporation providing computer services for the banking industry. Quinn later worked for a competitor of Picker, Pfizer Corporation, servicing its CT Scanners, including one installed at St. Francis Hospital. This experience led to his association with C.A.T. Associates. As contemplated when C.A.T. Associates purchased the Synerview 1200 CT Scanner, Quinn worked with Picker personnel to install it at St. Francis Hospital and to maintain it during the warranty period, which ran until September or October 1983. C.A.T. Associates was pleased with the quality of the Synerview 1200 CT Scanner, but expressed concern about the servicing of it. C.A.T. Associates wrote to Picker, however, that this could be made “less of a concern by having our own field service engineer, Mr. Thomas Quinn, receive appropriate instruction on servicing the unit,” as had been promised when the sale was negotiated (emphasis added). October 28,1992 Letter from Dr. Joseph A. Marasco, Jr. to Walter Zukow-ski, Trial Exhibit 55. Thus, Quinn was offered the training that Picker provided its own field service engineers. Quinn’s training, for which C.A.T. Associates paid, was scheduled for the early summer of 1983, at the Picker training center in Ohio. The standard Picker training course involved three levels of instruction. Because he felt that the first level course was too basic for someone with his experience, Quinn did not attend it. Thus, he was not present when the instructor reminded the students that some of the information they would receive was confidential to Picker and had to be protected as such. Nor was Quinn required to sign a confidentiality agreement. Rather, he was one of about 30 in-house service engineers employed by Picker customers who were trained by Picker before it instituted the requirement that they each sign a confidentiality agreement to supplement the Data Rights restrictions contained in Picker’s standard contract of sale. Quinn did, however, know that he was being trained by Picker to work on the Syn-erview 1200 CT Scanner installed at St. Francis Hospital; that the training was conducted in a secure facility, which was accessible only to certain Picker employees and a small number of other authorized individuals; and that training materials were kept in a caged area and usually distributed to authorized recipients by a Picker employee. He also knew that he was being treated, in essence, like á Picker field service engineer because he was viewed by Picker as a trusted partner in providing service for the Syner-view CT Scanner installed at St. Francis Hospital. Although it eventually became evident that Picker’s trust in Quinn was misplaced, it was reasonable in 1983. ' When Quinn was trained, there were few ISOs in the medical industry generally, and none competing for the servicing of Synerview CT Scanners. The ISOs offering service for other medical devices were founded by former employees of their manufacturers; it appears that none had been started by in-house service engineers trained by manufacturers. Quinn attended several months of level two and three Picker training, but did not fully participate. Because he declined to take exams or engage in certain exercises, he was not deemed by Picker to have completed the training successfully. He was, however, provided considerable information and voluminous documentation, which he supplemented by taking extra copies from the caged area when the attendant was absent. As part of his training, Quinn received certain service manuals and training materials, including the 1983 edition of the X-Ray Control Manual, the 1983 edition of the Installation Manual, the 1983 edition of Schematic Drawings, SS1200 (operating) Software Manual, CRT Perkin Elmer User’s Guide, and the High Speed Starter Guide. At the time of Quinn’s training, the binders in which these materials were provided did not designate them as “confidential” or as “proprietary” information of Picker. However, some of the documents — particularly those relating to software documentation — were marked as proprietary to Picker, with legends stating they could not be copied, disclosed or used without the express written permission of Picker. It was expensive and time-consuming for Picker to develop many of the materials Quinn received in training. For example, the 1983 edition of the Schematic Drawings, which were prepared by Picker design and manufacturing engineers, took about five man-years to develop. All of the materials Quinn obtained in training had considerable commercial value to Picker because they enabled its employees and authorized others to efficiently and effectively diagnose and correct difficulties for customers who put a premium on reliability and mixiimizing “downtime.” Those materials also permitted Picker to minimize repair costs by precisely identifying any malfunctions. Most of the software and documentation created by Picker, based upon its experience developing its own CT Scanners, could not as a practical matter be duplicated by ISOs or others. Picker never sold items such as the SS1200 Software Manual, many parts of which were designated as Picker proprietary information, the CRT Perkin Elmer User’s Guide, and the High Speed Starter’s Guide to the general public or, when they emerged, to Picker’s competitors. Picker rightly regarded the materials Quinn received in training to be the property of C.A.T. Associates. C.A.T. Associates understood it had sold them to St. Francis Hospital when ownership of the Synerview 1200 CT Scanner was transferred to the Hospital. Quinn testified at deposition and at trial that he was given Picker’s DS02 diagnostic software in the course of his training in Ohio and again by Picker employees during the period the C.A.T. Associates CT Scanner was under warranty. This testimony is not credible. Quinn’s training ended in August 1983. The warranty on the CT Scanner installed at St. Francis Hospital expired no later than October 1983. DS02, however, was not developed by Picker until late October 1983, and was not released to its field service engineers until January 1984. Thus, Quinn did not receive it in training or from Picker employees while working with them when the C.A.T. Associates CT Scanner was under warranty. The diagnostic software Quinn encountered in training and while the CT Scanner at St. Francis Hospital was under warranty was DSOl, the manual for which had a Picker proprietary legend. DS02 was the second generation of Picker’s diagnostic software for its Synerview CT Scanners. It contained 152 programs containing diagnostic tests. Picker authored 95 of the tests. The remaining 57 tests were developed by the Perkin Elmer Corporation, the manufacturer of the computer system used in the Picker CT Scanner. Picker incorporated its tests and Perkin Elmer’s tests into a unique program capable of servicing the entire Synerview CT Scanner system. Picker also developed a manual of its materials and materials prepared by Perkin Elmer, which is essential to the use of DS02. It took Picker about three man-years to develop the first generation of its diagnostic software, DSOl, and the manual for it. It took another one and one-half man-years to develop DS02 and its manual. Comparable investments were needed to develop the next generations of diagnostic software, DS03 and DS04, and their manuals. As indicated earlier, Picker’s diagnostic software and manuals are very important to its business. Customers put a premium on minimizing “downtime,” and diagnostic software is an invaluable tool in any effort to do so. As a practical matter, it would not be feasible for anyone else to develop comparable diagnostic software and manuals for the Synerview CT Scanner. At the time DS02 was developed there were no ISOs competing with Picker to service Synerview CT Scanners. In contrast to its successor, DS03, the DS02 software did not have a proprietary legend displayed on the computer screen or a lockout mechanism. The software documentation for various DS02 tests each included in the manual, however, contained the following legend: THIS DOCUMENT CONTAINS PROPRIETARY INFORMATION. IT IS THE EXCLUSIVE CONFIDENTIAL PROPERTY OF PICKER CORPORATION. COPYING, DISCLOSURE TO OTHERS, OR OTHER USE IS PROHIBITED WITHOUT THE EXPRESS, WRITTEN AUTHORIZATION OF PICKER CORPORATION. DS02 Service User’s Guide, Section VI, Trial Exhibit 77H. DS02 was provided to Picker field service engineers in January 1984. It was also evidently available for use by those customers who employed in-house engineers, subject to the restrictions imposed by the standard terms of the contracts for sale and by the foregoing proprietary legends on the software documentation. In late 1983, Picker anticipated the emergence of ISOs as competitors for the servicing of its Synerview CT Scanners. It, therefore, began to take additional measures to protect what it considered to be its trade secrets and confidential business information. For example, in about late 1983 or early 1984 Picker began placing all of its service manuals in binders with prominent legends declaring the information they contained to be proprietary and notifying the recipients that such information could not be copied, disclosed or used without Picker’s permission. Picker also then began to place copyright notices and proprietary- legends on the cover of its service manuals and certain other documents. In addition, in March 1984, Picker issued a memorandum reminding all employees of their obligation to protect specified forms of trade secrets and confidential information, and again directing them not to disclose such information without written permission. At about the same time, in return for training and continued employment, Picker required its employees to execute another confidentiality agreement, which explicated their obligation to return all Picker materials to the company upon the termination of their employment and prohibited them from competing for the servicing of CT Scanners they serviced for Picker during the year after their departure. This agreement was supplemented by a new termination agreement which called upon the departing employee to certify that he or she had returned all Picker property and to reaffirm recognition of the obligation to maintain the secrecy of Picker confidential information. In late 1983, Picker also began conducting separate training programs for customer in-house service engineers. Those classes provided instruction only in basic service technologies. The trainees received only limited documentation, not including much of the proprietary materials that Picker provided its own employees. Beginning in 1985, customer employees receiving elassroom training were required to execute confidentiality agreements. The first ISO to offer service in competition with Picker for its Synerview CT Scanners was R2 Corporation, which was formed in February 1984. Picker promptly perceived that R2 Corporation was improperly using its intellectual property and filed suit. That litigation was settled. The settlement did not permit R2 to use DS02, among other things. When the media reported in 1992 that R2 Corporation was using DS02, R2 responded to a demand from Picker by reaffirming that it was not using DS02, and would not do so. Imaging was formed in November 1984 as the second ISO to offer, among other things, service for Synerview CT Scanners. C.A.T. Associates was a principal shareholder of Imaging. Quinn, who declined an opportunity to work full-time servicing the various CT Scanners at St. Francis Hospital, became the principal employee of Imaging when the company became operational in January 1985. As Imaging acquired additional employees, it required them to sign agreements with confidentiality clauses similar to Picker’s. From its inception, Imaging’s capacity to service Picker Synerview CT Scanners has been based on the misappropriation of Picker’s intellectual property. After Imaging was established, Quinn moved to Imaging’s office all of the Picker service and repair manuals and classroom training materials that had been furnished to him as a representative of C.A.T. Associates for the servicing of the one Synerview CT Scanner at St. Francis Hospital. Those documents were the property of C.A.T. Associates or St. Francis Hospital, neither of which obtained the permission of Picker required by the Data Rights provision of the contract of sale before any disclosure to another entity, such as Imaging, could properly be made. Dr. Morasco viewed the documents as the property of St. Francis. However, Quinn kept them for Imaging’s use at other sites when it lost its contract to service the Synerview CT Scanner at St. Francis Hospital to Picker in 1986. Imaging, in some unauthorized fashion, obtained a copy of DS02 and used it in its business, which initially consisted primarily of the contract it had to service the CT Scanner at St. Francis Hospital. Imaging knew that Picker had sued R2 Corporation to prevent it from using DS02, and did not want to risk litigation which could have been fatal to its fledgling business. Picker, in turn, did not wish to risk its relationship with St. Francis Hospital, which it correctly viewed as a future customer for its CT Scanners and post-warranty service business. Thus, Picker and Imaging, each receiving valuable consideration, entered into a limited Licensing Agreement. See March 25, 1985 License Agreement for Service Diagnostic Software, including Addendum, Trial Exhibit 83. The Licensing Agreement allowed Imaging to use DS02, without payment to Picker, to service the Synerview Scanner at St. Francis Hospital. In return, Imaging acknowledged that DS02 was “the exclusive property of Picker and agree[d] to treat [DS02] as confidential, proprietary information of Picker.” Id. at ¶ 1.2. Imaging also undertook to assure that its employees would not copy DS02, disclose it to others, or use it anywhere except at St. Francis Hospital without the written consent of Picker. The agreement provided that the license would expire when DS02 was no longer being used by Imaging at St. Francis Hospital. Although Imaging agreed to the terms of the Licensing Agreement, it did so reluctantly. Imaging wanted to use DS02 at sites in addition to St. Francis Hospital. Thus, it had included in the Licensing Agreement a provision allowing it to use DS02 at other sites if Picker did not reasonably object; if Picker registered a reasonable objection, Imaging agreed not to use DS02 at the site at issue. Imaging made several requests to use DS02 at additional sites, both before and after the January 1986 termination of its service contract for the Synerview CT Scanner at St. Francis Hospital, which operated to end the Licensing Agreement. In each instance Picker reasonably objected. Nevertheless, Imaging copied DS02 and used it at virtually all of the more than 15 sites it serviced. In connection with this, Imaging also copied and distributed to its employees Picker’s DS02 User’s Guide, after removing the page with the Picker proprietary legend. In correspondence between counsel after January 1986, Imaging repeatedly contended that it had a right under the Licensing Agreement to use DS02 at sites other than St. Francis Hospital. Imaging did not then claim, however, that DS02 was not Picker’s proprietary, confidential information. In 1987, Picker sued Imaging in the United States District Court for the Western District of Pennsylvania. That case was transferred to this court. At the commencement of trial, Imaging stipulated that Imaging and Quinn had no right under the Licensing Agreement to use DS02 after January 1986. Defendants now contend, however, that it was proper for them to use DS02 because DS02 did not constitute Picker proprietary information or a trade secret, and was not registered with the United States Registrar of Copyrights. Imaging also obtained the next generation of Picker’s diagnostic software; DS03, and the experimental version of it, DSX3. It appears that Imaging initially obtained this software from Picker customer sites, including the Monsour Hospital in Pittsburgh, Pennsylvania and Physicians Medical Imaging in Youngstown, Ohio. It took Picker about one and one quarter man-years to develop DS03. When it was released in late 1984 or early 1985, ISOs were competing with Picker to service its Synerview CT Scanners. Thus, Picker utilized proprietary legends which appeared on the computer screen when DS03 was run and a lockout mechanism intended to keep the software from being copied and used at other sites. The DS03 manuals also contained Picker proprietary legends. Quinn knew that Picker was trying to protect DS03. Nevertheless, Imaging used DS03 whenever it could access it at sites where Picker had installed it, copied DS03, and used it without the authorization of Picker. Imaging also acquired a copy of the copyrighted 1984 edition of Picker’s Service Reference Handbook, which Picker field service engineers used in servicing the Synerview CT Scanner. Pursuant to Picker policy, this document was not supposed to be sold or disclosed to anyone outside of Picker. It appears, however, that Imaging managed to buy a copy from Picker’s parts department. That copy had a copyright notice on the front cover and title page. Imaging also took a copy of the Service Reference Handbook that Picker stored at Physicians Medical Imaging. Imaging removed pages of the Service Reference Handbook with the copyright notice and Picker proprietary legend, copied the rest of the document, and issued it to Imaging employees for use in servicing Synerview CT Scanners. Similarly, Imaging acquired, from Mons-our Hospital, the copyrighted 1985 edition of the Schematic Drawings of the Synerview CT Scanner. Like the earlier editions, these drawings were time-consuming and expensive to develop. They had considerable value to Picker, and to anyone seeking to compete with Picker to service Synerview CT Scanners. Once again, without Picker’s permission, Imaging removed the pages containing Picker’s copyright notice and proprietary legend, copied the 1985 edition of the Schematic Drawings, and distributed them for use by its employees. Imaging also obtained the Picker’s System Performance Test, which Picker field service engineers regarded as their “bible.” This document is replete with Picker proprietary legends prohibiting their unauthorized copying, disclosure or use. Imaging, however, again removed the pages containing these legends, copied the remainder of the document, and distributed them for use by Imaging employees. In addition, Imaging obtained the Picker Installation Manual, removed the front cover with the Picker proprietary legend, and distributed copies to its employees. With regard to this document, however, Imaging affixed its own stamp, stating: “PLEASE DO NOT COPY WITHOUT PRIOR APPROVAL OF IMAGING EQUIPMENT SERVICES, INC.” Thus, Imaging not only utilized Picker’s Manual, but sought to pass it off as its own. While it is not clear how Imaging obtained all of the Picker materials it utilized, Quinn stole at least one item from a Picker employee. He was present when a Picker field service engineer was repairing a Synerview CT Scanner at the Forbes facility in Pennsylvania. The Picker employee left his briefcase behind when he left the radiology suite temporarily. Quinn removed a confidential Picker Technical Note, had it quickly copied, and replaced it before the field service engineer returned. Imaging also regularly utilized many other documents which Picker regarded as its trade secrets, even though they did not have proprietary legends or copyright notice. Many of these were documents Quinn had obtained from Picker while being trained to service the Synerview CT Scanner at St. Francis Hospital. In 1987, Imaging improperly employed Bruce Leavitt, a former Picker employee, in part to gain access to Picker confidential information that Leavitt misappropriated when he left Picker. Leavitt began working for Picker in 1983, servicing its CT Scanners. At that time he signed the Picker standard confidentiality agreement, undertaking to use Picker’s trade secrets only on behalf of Picker, and not to disclose them to third parties. In 1984, Leavitt executed a second confidentiality agreement, which added the obligation that he, for a year after leaving Picker, not compete to service any Picker CT Scanner he had worked on while employed by Picker. As a Picker field service engineer, Leavitt was provided a great deal of Picker proprietary information and software, including DS02, DS03 and DSX3. Much of that information contained proprietary legends and copyright notices. In 1986, Leavitt was primarily employed by Picker to service a Syn-erview CT Scanner at the Leonard Morse Hospital in Massachusetts. In November 1986, Leavitt contacted Imaging seeking employment. Quinn knew of Leavitt’s agreements and obligations to Picker. Quinn, however, hired Leavitt, expecting he would bring with him valuable Picker proprietary information. Leavitt terminated his employment with Picker. He refused, however, to return the Picker service documents and diagnostic software he was issued or to sign the standard Picker termination forms reaffirming his obligation to protect the confidentiality of its trade secret. Leavitt provided Imaging with a great deal of Picker proprietary information, including DSX3, DS03, and a notebook with many technical notes and test procedures, and schematic drawings. These materials were so voluminous and valuable that Imaging bought a copying machine to reproduce them. Imaging then removed the pages with copyright notices and proprietary legends, copied the documents, and provided them to its employees for their use in competing with Picker. In violation of his agreement not to compete, Leavitt’s initial assignment for Imaging was to service the Synerview CT Scanner at the Leonard Morse Hospital that he had maintained as a Picker employee. In connection with this, Leavitt advised the Hospital not to return to Picker the manuals and other service documentation Picker regarded and had marked as proprietary. Picker sued Leavitt and Imaging, in this court, for misappropriating its proprietary information and for conspiring to violate Leavitt’s non-competition agreement. The parties agreed to a Partial Final Injunction, entered on February 13, 1989, pursuant to which Imaging agreed not to use 111 categories of documents and software obtained from Leavitt and certain other materials. Leavitt was assigned by Imaging to work on Picker equipment at sites other than the Leonard Morse Hospital. Picker also sued the Leonard Morse Hospital and succeeded in obtaining the return of its manuals and other documentation. Prior to the trial of this case, Picker and Leavitt reached a settlement in which Leavitt agreed, among other things, that certain documents and software constituted the exclusive, confidential property of Picker and acknowledged that his failure to return them earlier had violated his employment and confidentiality agreements with Picker. In response to competition from ISOs, including Imaging, Picker increased its efforts to protect its proprietary intellectual properly. In about 1986, it revised its standard contract for sale to provide that: all operating software was merely licensed for customers use and remained the property of Picker; that the customer had no right to copy or transfer the software and related documents; and that the customer would take the necessary steps to protect the confidentiality of Picker’s proprietary information. With regard to service software and documentation, the new standard terms provided that: Any maintenance or service software and documentation shipped to or located at Customer’s premises is intended solely to , assist Picker employees in the installation, testing, service, and maintenance of the Equipment ... and Customer agrees to restrict access to such maintenance or service software and documentation to Picker employees only. Standard Quotation Form, Revised 4/86, Trial Exhibit 16A. By 1987, Picker had a policy that Picker proprietary documentation at customer sites should be kept in locked cabinets. This policy was not always followed in practice. The documents Picker regarded as proprietary, however, were clearly marked with proprietary legends and, in some instances, with copyright notices. In 1989, Picker issued a policy statement that the proprietary legend be placed on each page of proprietary documents, as well as on the cover. New of the documents introduced as evidence in this case had the legend on each page. Also in response to the emergence of ISOs, Picker by 1987 developed a set of non-proprietary service manuals which a customer could retain and use if it did not employ Picker to service its Synerview CT Scanner after the warranty period expired. These manuals contained only basic information and were not as useful as the much more sophisticated Picker proprietary manuals. The customer version of the manuals were copyrighted. As of 1987, Picker had a policy of replacing its proprietary service manuals with more basic customer service documentation prior to the expiration of the warranty period or any additional service agreement. As in the case of Leonard Morse Hospital, however, Imaging often encouraged customers to refuse to let Picker remove its proprietary service manuals. These efforts succeeded at several institutions, including Monsour Hospital and Physicians Medical Imaging. In such instances, Imaging not only used Picker’s materials to service the Synerview CT Scanner to which it directly applied, but copied them for use at other sites. There were many sites which did not have an exclusive service agreement with Picker or an ISO. Rather, they would use Picker or a competitor at various times, depending on the nature of the service or repair required. Picker kept its proprietary materials at a number of such sites. Although such materials were in proprietary binders, Imaging used them whenever possible. Similarly, if Picker had installed DS02 at such a site, Imaging used it and the related documentation which contained Picker proprietary legends. In 1988, Picker brought a claim against Dr. William S. Witt of Nashville, Tennessee, seeking to recover the service and maintenance manuals it had shipped to Dr. Witt in 1985. The manuals contained the Picker proprietary legend. In February 1989, the United States District Court for the District of Tennessee held that the manuals were the property of Picker, rather than “system documentation” which had been sold to the customer. The court found that Picker’s proprietary interest in the manuals was not extinguished by the fact that they had not been kept in locked cabinets. Accordingly, Dr. Witt was ordered to return Picker’s service manuals. See Witt v. Picker International, Inc., No. 3-88-0836 (M.D.Tenn., February 14, 1989). The Witt case was much discussed among ISOs. Quinn was fully familiar with it. Indeed, he hired Dr. Witt’s lawyer to represent him and Imaging in this case. Nevertheless, Quinn and Imaging continued to use documents bearing the Picker proprietary legend whenever possible. Imaging’s efforts to acquire the service manuals Picker placed in proprietary binders and copyrighted documents persisted to the eve of the trial. As described earlier, Quinn successfully encouraged Monsour Hospital not to permit Picker to remove its proprietary service manuals and other materials when Picker’s work there ended. In July or August 1994, Imaging purchased those manuals and a set of the Picker copyrighted 1985 edition of Schematic Drawings from Scanner Corporation, which owned the Synerview CT Scanner at Monsour Hospital. Scanner Corporation, however, did not own those manuals, which, as described earlier, Picker did not sell to customers. Indeed, under the 1985 version of the Data Rights provision contained in the Scanner Corporation contract of sale, Scanner Corporation acquired only the right to use the intellectual property residing in the CT Scanner, software and documentation it purchased, and undertook to protect it from others as Picker’s confidential information. See July 11, 1985 Picker Quotation to Scanner Corporation, Trial Exhibit 223. Although the evidence does not demonstrate precisely what Scanner Corporation purported to sell to Imaging, it did not have the right to transfer any intellectual property it had acquired from Picker. In conclusion, the evidence demonstrates that Imaging authored some technical notes, which it regularly stamped as confidential information of Imaging, but otherwise essentially built its business on documents and software developed at great expense by Picker for its own use. As the parties stipulated, the Picker service and repair documentation provides Picker with a competitive advantage. It is also of great value to any competitor of Picker which acquires it. IV. CONCLUSIONS OF LAW The foregoing facts prove that Picker’s business of servicing its Synerview CT Scanners is based on trade secrets which it has invested considerable time and money to develop, and which it has made reasonable efforts to protect. In contrast, Imaging’s business of servicing Picker’s CT Scanners is substantially based on a relentless campaign by Quinn to misappropriate and misuse Picker’s trade secrets, and enduring efforts to cover-up that misconduct, including the fabrication of testimony by Quinn at trial. Imaging’s misconduct in misappropriating and misusing Picker’s trade secrets and other legally protected intellectual property includes, but is not limited to: violating its licensing agreement concerning DS02; conspiring with Leavitt to violate his employment and confidentiality agreements with Picker in order to obtain Picker trade secrets; inducing Picker customers to violate their obligations to restrict the dissemination and use of Picker’s proprietary information; stealing Picker proprietary information from a Picker employee; illegally copying and distributing Picker’s copyrighted materials; in some instances passing off Picker’s protected materials as its own; and converting Picker’s proprietary personal property for use in competing with Picker. More specifically, Picker has proven the following of its claims. A. Diagnostic Software and Related Documentation Picker has proven that DS02 and successive generations of its diagnostic software, and the related documentation, are trade secrets; Picker reasonably sought to protect their confidentiality; and Quinn and Imaging misappropriated them. On one level this issue is quite simple. In order to obtain the license to continue to use DS02 and St. Francis Hospital — a right which was vital to Imaging’s fledgling business — Imaging agreed that DS02 was the “exclusive property” of Picker and would be treated as “confidential, proprietary information of Picker.” Trial Exhibit 83, supra, at ¶ 1.2. Imaging has stipulated that this license expired in January 1986 and that it had no right under the license to use DS02 after that date. See September 19, 1994 Stipulation. Imaging did, however, use DS02 at many sites after January 1986. It now claims that it was entitled to do so because DS02 was not a proprietary trade secret of Picker. The simple response to this claim is that Imaging is estopped from relying on it. See In the Matter of Uniservices, Inc., 517 F.2d 492, 496-97 (7th Cir.1975) (chief executive officer who had authority to require employees to sign confidentiality agreements as to trade secrets was estopped, after termination of his employment, from denying that data were trade secrets as to him); American Nursing Care of Toledo, Inc. v. Leisure, 609 F.Supp. 419, 427-28 (N.D.Ohio 1984) (plaintiffs who discovered alleged fraud but continued to adhere to contract for two years after discovery were barred from attempting to renounce contract on basis of fraud). Having received valuable consideration from Picker for its agreement to respect DSO2 as Picker’s trade secret and not use it without Picker’s authorization, it was improper — and indeed audacious — for Imaging to have employed DS02 to build and perform its business when Picker reasonably refused to authorize that expanded use. Defendants are estopped from asserting that DS02 and successive generations of diagnostic software are not trade secrets. Nevertheless, in the interest of completeness, and because Imaging’s conduct concerning DS02 and successive generations of Picker’s diagnostic software illuminates its state of mind concerning other Picker proprietary information, the court has also analyzed the merits of Imaging’s claim that Picker’s diagnostic software and the related documentation do not constitute protected trade secrets. This claim is incorrect. Generally, one is liable for misappropriation of a trade secret if he or she uses improper means to acquire it, or knowingly exploits the improper acquisition or dissemination of a trade secret by a third-party. Restatement of Torts § 757; Data General Corp., 36 F.3d at 1165. In essence, to establish its claim for misappropriation of a trade secret, a plaintiff must prove that: (1) the matter in question is a trade secret; (2) it took reasonable steps to preserve that matter’s confidentiality; and (3) the defendant utilized improper means, or participated in his own or another’s breach of a confidential relationship, to acquire and use the trade secret. Id. DSO2 and successive generations of Picker software are classic trade secrets. They were developed by Picker as result of the investment of years of effort and great expense. As a practical matter, Picker’s diagnostic software is vital to diagnosing quickly and precisely the problem with a Synerview CT Scanner. These qualities are very important to customers who want to minimize “downtime” and the cost of repairs. Thus, the diagnostic software is of great competitive value. The diagnostic software has been made available to Picker employees who have a need for it, subject to their written agreements to respect its confidentiality during their employment with Picker, and to return it to Picker upon their departure. The only authorized disclosure of Picker’s diagnostic software to individuals Picker did not employ was to some of its customers’ in-house service engineers, who received copies with proprietary legends prohibiting unauthorized copying, disclosure and use, and subject to restrictions imposed by Picker’s standard conditions of sale. Beginning in 1985, customer employees trained by Picker also executed individual confidentiality agreements. Thus, Picker’s diagnostic software constitutes a trade secret. See Data General v. Grumman, 825 F.Supp. at 359 and 36 F.3d at 1165 (software is a trade secret); ISC-Bunker Ramo Corp. v. Altech, Inc., 765 F.Supp. 1310, 1323 (N.D.Ill.1990) (computer program is a trade secret). Picker at all times took reasonable security precautions to protect the trade secret that its diagnostic software represents. What is reasonable depends on the circumstances. See Data General Corp., 825 F.Supp. at 359; USM Corporation, 379 Mass, at 101, 393 N.E.2d at 902. As the foreseeable threat to the confidentiality of DSO2 and its successors escalated, Picker’s security measures grew. DSO2 was developed before Picker was faced with competition from any ISO. While DSO2 did not have a proprietary legend on the computer screen or a lockout mechanism, the software documentation which had to be consulted to run the various DSO2 tests described the information contained as proprietary and prohibited copying, disclosure or use without Picker’s authorization. This was reasonable in the circumstances and sufficient to put Quinn and Imaging, among others, on notice that Picker regarded its diagnostic software as a trade secret, which they could not properly appropriate for their own, unauthorized use. See Data General Corp., 825 F.Supp. at 359; ISC-Bunker Ramo Corp., 765 F.Supp. at 1323. By the time DSO3 was developed, the ISO industry had begun to emerge. Thus, Picker added proprietary legends to its computer screen and a mechanism intended to lockout unauthorized users. These security measures were reasonable in the circumstances. Id. At no time did Picker publicly disclose the information essential to its diagnostic software by publishing papers, giving lectures, or providing proprietary information to the government in reports available to the public. Thus, this case is distinguishable in material respects from CVD, Inc. v. Raytheon Co., 769 F.2d 842, 852 (1st Cir.1985), which defendants incorrectly contend is analogous. More specifically, in CVD, there was sufficient evidence to conclude that no trade secrets existed because the material in question was regularly made available to the public. Id. Those facts stand in direct contrast to Picker’s conduct in the instant case. The means by which Quinn acquired DSO2 and its successors reinforces the conclusion that Picker’s diagnostic software deserves protection as a trade secret. Quinn’s claim that he was given DSO2 when trained by Picker is not credible. DSO2 was not