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WineDirect Sues Former Employees for Allegedly Misappropriating Trade Secrets

Defendants work for Commerce7
by Kerana Todorov
February 11, 2019

WineDirect Inc. is suing two former employees for allegedly misappropriating trade secrets to benefit their e-commerce platform, according to the complaint.

The lawsuit alleges Andrew Kamphuis, WineDirect’s former president and Kevin Williams, a former sales director, improperly used confidential information and trade secrets to steer business from WineDirect to Commerce7 Platform Ltd, according to the complaint filed Feb. 5 in Riverside County, where Williams lives. WineDirect’s headquarters are in American Canyon in south Napa County.

Kamphuis, of Vancouver, Canada, resigned from WineDirect in 2016. He then founded Commerce7 to provide e-commerce solutions and point-of-sale solutions to wineries, according to the court document. The lawsuit alleges Kamphuis solicited WineDirect clients and prospective customers he had met while at WineDirect, according to the complaint.

Kamphuis “solicited WineDirect customers using confidential information about those customers and about WineDirect’s software, pricing, and marketing strategies for those customers,” according to the complaint.

Kamphuis also allegedly tried to poach WineDirect customers by falsely representing that “Commerce7’s offerings will integrate with software licensed exclusively to WineDirect by Tock, Inc.,” according to the court document. “To extract cooperation from Tock and induce Tock to breach its contract with WineDirect, Kamphuis has threatened Tock with the loss of WineDirect’s customers’ business.”

At least one of WineDirect’s major customers terminated its contract with the company and moved its business to Commerce7, according to the lawsuit.

WineDirect on Nov.12 sent a cease-and-desist letter to Kamphuis in part to demand that Kamphuis cease his communications with WineDirect’s customers, according to the lawsuit. Kamphuis never responded, according to the court filing.

Kamphuis also allegedly solicited at least one WineDirect employee to join Commerce7 less than a year after he resigned from the company in violation of an agreement with WineDirect, according to the lawsuit.
Kamphuis in 2012 sold K1 Technology Corp., an e-commerce software company, and, an e-commerce platform that provides point-of-sale services to wineries, to WD Canada, a subsidiary of WineDirect, according to court records. WineDirect then incorporated K1’s e-commerce and point-of-sale technology into its business, according to the court filing.

Kamphuis’ LinkedIn profile indicates he then served as WineDirect’s chief operations officer before becoming president of the company in 2014.

Williams, of Corona in Riverside County, on Nov. 8 resigned from WineDirect after signing a document stating he would keep all trade secrets, data and other information confidential, according to court records.
WineDirect then learned Williams had joined Commerce7. On Jan. 9, WineDirect retained a computer forensics expert who found that Williams, on Nov. 7, allegedly moved 92 documents containing WineDirect’s confidential information to his personal Google Drive, according to the complaint. Williams’ Google Docs account contained another 15 documents containing “WineDirect’s confidential information, including customer leads and a list of all of WineDirect’s e-commerce clients, including the essential terms of WineDirect’s contracts with each of them,” according to the lawsuit.

The lawsuit’s allegations against Kamphuis and Williams include breach of contract, misappropriation of trade secrets and unfair competition, according to the court filing which lists Commerce7 as a defendant.
WineDirect seeks unspecified compensatory and punitive damages as well as attorneys’ fees and other costs, according to the lawsuit.

A WineDirect representative on Friday declined to comment on the lawsuit as did Commerce7’s Kamphuis.

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