A Connecticut judge ruled yesterday that Arch Capital Group Ltd. had taken Gen Re trade secrets, and he issued an injunction barring Arch from further divulging of the company's proprietary information.

Gen Re said it expects a trial over the damages it is seeking to take place sometime next year.

Connecticut Superior Court Judge Taggart D. Adams temporarily enjoined Arch from "disclosing, divulging, using or making accessible to anyone, any knowledge or information of confidential or proprietary nature with respect to Gen Re's trade secrets, proprietary business or marketing strategies, plans, client requirements, or other proprietary client information..."

The judge after a four-day hearing wrote that he had concluded "there has been misappropriation of Gen Re trade secrets" and was granting an injunction against Arch Capital Group and each of four individual defendants.

The injunction will remain in place indefinitely and will "prohibit Arch or Arch's employees from continuing to divulge or misappropriate Gen Re's proprietary and confidential information."

Gen Re's next step will be to present claims for monetary damages to the court sometime in 2008, a spokesperson said, adding he is "confident that we will again prevail."

The court's decision and injunction followed an evidentiary hearing in September. During the hearing, the court heard testimony from 11 witnesses and received a voluminous amount of evidence.

To obtain the injunction, Gen Re argued to the court that it was likely to prevail at trial and faced immediate and irreparable harm.

According to a memorandum, the court found that "a significant amount of credible evidence shows the defendants and others intended to use as much information about Gen Re's price and risk assessment process as possible absent physically taking the Underwriting Desktop...."

The judge found "there was a concerted effort among the individual defendants and other former GPF employees at Arch to remember and apply specific loss cost statistics used at Gen Re in the underwriting process at Arch Re Facultative."

According to the document, the defendants "vehemently denied any violations of law or otherwise wrongful activity. They have alleged from the outset that they have not taken or used any Gen Re proprietary information or trade secrets and have claimed they are free to establish a competing business."

In addition, the document said, "they have asserted several counterclaims including tortuous interference with business expectancies and trade libel and defamation based on the actions of Gen Re in obtaining an ex parte restraining order and the allegations of wrongdoing in the complaint."

Arch did not immediately respond to a request for comment.

Special Reports /

Judge Rules Arch Misappropriated Gen Re's Trade Secrets

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