Labor & Employment Law Daily Wrap Up, TORT CLAIMS—E.D. Va.: Issue preclusion barred trade secret misappropriation suit, (Aug 13, 2025)

By Linda O’Brien, J.D., LL.M.

The issue in the case had been litigated and resolved in prior litigation and the plaintiff was collaterally estopped from raising the same issue in another lawsuit.

A software developer who assigned his interests in regulatory compliance computer software he created during his employment for a government contractor lacked standing to pursue a trade secret misappropriation claim because he no longer possessed any interest in the software, the federal district court in Richmond, Virginia has ruled. Since the developer no longer had any interest in the software, he was collaterally estopped from bringing suit against another government contractor regarding any iteration of the software. Thus, the motion to dismiss was granted (Zaccari v. Discover Technologies LLC, No. 3:18-cv-00453-HEH (E.D. Va. Aug. 11, 2025)).

The Defense Contract Management Agency (DCMA) hired government contractor Apprio, Inc. to develop a management system to improve government contract oversight. Neil Zaccari, an Apprio employee, developed the CRR Software that automated the DCMA’s manual contract receipt and review process. The CRR Software was incorporated into the management oversight solution that Apprio offered DCMA. Zaccari disputed ownership of the CRR Software, telling Apprio that he developed it before he began working there. The dispute led to his dismissal in May 2017. While employed, Zaccari was sent, as all employees were, an electronic document called Proprietary Information and Assignment of Inventions Agreement, which established that Apprio would own all inventions made while the employee was employed by Apprio. He clicked the button acknowledging receipt of the document.

Following his termination, Zaccari registered a copyright in his software. Apprio continued to use the software in its work with the government and another government contractor, Discover Technologies LLC (DT), collaborated with DCMA to develop an alternative software.

In June 2018, Zaccari filed a three-count complaint against DT, alleging claims for copyright infringement, business conspiracy, and misappropriation of trade secret. In December 2018, the court dismissed the copyright infringement and business conspiracy claims. Concurrently with the present lawsuit, Zaccari brought a lawsuit against Apprio in the district court for the District of Columbia, alleging Apprio infringed his copyright by continuing to use the CRR software. Apprio filed its own separate action against Zaccari, asserting its ownership rights over the CRR software and the two cases were consolidated. The D.C. district court held that Zaccari’s acknowledgement of the invention agreement created a valid contract with Apprio, which required him to assign all of his rights in the CRR software and he breached three provisions of the agreement and that none of the exceptions in the Prior Invention or Unassigned Inventions provisions exempt Zaccari’s creations from the assignment as he did not disclose any previous inventions on the disclosure form. The rulings were affirmed by the U.S. Court of Appeals for the D.C. Circuit in June 2024. Before the court was DT’s motion to dismiss the remaining claim of the complaint – misappropriation of trade secret - for lack of subject matter jurisdiction.

Subject matter jurisdiction. The court found that Zaccari was precluded from proceeding in the case because he did not have standing and he was collaterally estopped from relitigating the software ownership issue since the D.C. court already decided that he did not have right, title or interest in the CRR software. Because the decision in question was rendered in the D.C. district court sitting in diversity jurisdiction, the rules of issue preclusion applied and required that the issue was actually litigated and determined by a valid, final judgment on the merits after a full and fair opportunity for litigation by the parties where the determination was essential to the judgment, the court explained.

The issue at the heart of the case has been previously litigated and resolved by the D.C. litigation. Zaccari alleged that DT misappropriated the trade secrets regarding the CRR software. However, the D.C. court determined that he plainly assigned to Apprio all “right, title and interest in and to any and all Inventions,” specifically regarding the CRR software. The ruling was essential to the judgment in the D.C. litigation because the court ultimately held that Zaccari had a valid agreement with Apprio and he breached that agreement by refusing to execute a confirmatory assignment for the updated software. The D.C. court further held that the Prior Inventions provision and assignment of inventions agreement did not exempt the initial version of the software. Therefore, Zaccari was collaterally estopped from bringing suit against DT. Moreover, since he indisputably assigned his right, title, and interest to Apprio, he possessed no interest in any iteration of the CRR software and had no standing to sue DT or anyone else regarding any iteration of the CRR software, the court concluded.

The Case is No. 3:18-cv-00453-HEH.

Judge: Hudson, H.

Attorneys: James Broome Thorsen (Thorsenallen) for Neil Zaccari. David James Sensenig (Park Sensenig) for Discover Technologies LLC.

Companies: Discover Technologies LLC

Cases: TortClaims Procedure VirginiaNews