Articles Posted in Trade Secrets

Indianapolis, Indiana – Eli Lilly and Company (“Lilly”) filed suit on November 13, 2019 in the Southern District of Indiana against Defendant SensorRx seeking a declaratory judgment that it had not misappropriated trade secrets among other things. SensorRx in turn, on November 22, 2019 filed a lawsuit in the Western District of North Carolina seeking injunctive relief and monetary damages. SensorRx then filed a Motion to Dismiss or to Transfer Lilly’s declaratory action suit to North Carolina.

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The Southern District found Lilly’s declaratory action was an “improper anticipatory filing” as there was a clear threat of litigation prior to the filing of the declaratory action. As such, the Court declined to exercise its discretion to hear the declaratory judgment action. The Court further found that the balance of factors under 28 U.S.C. § 1404(a) weighed in favor of transferring the action to the Western District of North Carolina where SensorRx filed its suit. Therefore, SensorRx’s Motion to Transfer was granted and the case was transferred to the Western District of North Carolina. Continue reading

South Bend, Indiana – The United States District Court for the Northern District of Indiana entered a Temporary Restraining Order against Darkhorse Cargo, Inc. (“Darkhorse”) and its employees (collectively “Defendants”) regarding trade secrets and confidential information of Plaintiff, RC Trailers, Inc. (“RC”).

RC manufacturLogo-1-300x85es and distributes cargo and specialty trailers throughout the United States. According to RC, it expends a lot of time, effort, and expense to maintain dealer and vendor relationship using trade secrets and confidential business information. RC claims it uses confidentiality provisions in its employee handbooks, passwords, disclaimers on confidential communications, and o

RC’s former president, Defendant Bryan Johnson (“Johnson”), ended his employment with RC in September 2018 and signed an agreement that contained non-solicitation and non-recruitment covenants that expired one year later. After Johnson’s departure, he claims many RC employees were unhappy to see him leave and wanted to work for him elsewhere. In the spring of 2019, RC promoted Defendant Joseph Kiefer (“Kiefer”) from CFO to acting General Manager. Kiefer claims that RC employees were talking about wanting Johnson to open his own trailer company prior to Kiefer terminating his employment with RC in June 2019. Prior to his leaving RC, Kiefer allegedly tried to recruit RC’s sales professional to join Darkhorse, indicating the business would be started by Kiefer and Johnson in the near future. RC claims that unbeknownst to it, Kiefer deleted the post-employment restrictions in his non-compete agreement before signing and returning it to RC upon his departure.

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LillyBlogPhotoIndianapolis, Indiana – Attorneys for Plaintiff, Eli Lilly and Company (“Lilly”) of Indianapolis, Indiana, filed suit in the Southern District of Indiana seeking a declaratory judgment that Lilly did not misappropriate any trade secrets of Defendant, SensorRx, Inc. (“SensorRx”) of Charlotte, North Carolina, or breach a contract with SensorRx. Lilly is seeking declaratory judgment, costs, attorneys’ fees, litigation expenses, and any other relief the court deems proper.

According to the complaint, Lilly has developed an app to help manage migraines called Vega™ Migraine. Lilly claims it created the app over the course of two years, it released the app on the Apple App Store on November 5, 2019, and the app is currently available for a free download, on a limited basis. Previously, Lilly has allegedly developed other mobile apps including “Go Dose,” a diabetes management and insulin dosing app, which helped Lilly gain experience to create and develop Vega™ Migraine. Lilly claims there are over fifty migraine management and other migraine related apps available to the public and many other health apps directed to various health conditions.

Lilly alleges it began having non-confidential discussions regarding SensorRx’s app, MigrnX™, in mid to late 2018 during which SensorRx discussed the capabilities of the app and demonstrated the app’s usage to Lilly. During the parties’ second in-person meeting in January 2019, they allegedly entered into a Mutual Confidentiality Agreement (“MCA”). Per the complaint, the MCA noted any information already known, becomes known to the public, has been lawfully received without restriction, or has been independently developed without use of confidential information, is not confidential information. Lilly claims due diligence was performed by both parties subsequent the signing of the MCA. After being concerned throughout the process and disappointed after the due diligence was conducted in the level of quality and capability of MigrnX™, Lilly alleges it contacted a representative of SensorRx on or about May 28, 2019 to terminate the due diligence. Continue reading

Indianapolis, Indiana – Attorneys for Plaintiffs, Dow AgroSciences LLC (“Dow”) of Indianapolis, Indiana and Phytogen-BlogPhotoPhytogen Seed Company, LLC (“Phytogen”), a Delaware limited liability company, filed suit in the Southern District of Indiana alleging that Defendants, Robert Lemon and Sotero Ramirez, both residents of Texas, infringed their rights under the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1831, et seq. Plaintiffs are seeking permanent injunctions, judgment, compensatory damages, attorney’s fees, costs, and other relief the Court deems proper.

Dow claims to be an industry-leading agricultural chemical and seed company working on innovative ways to increase farm yield and create productive seeds while emphasizing sustainability. Phytogen claims to sell cottonseed under the trade name PhytoGen®, primarily in the southern United States. According to the Complaint, Dow and Phytogen have a mutual controlling member, Mycogen LLC, that allows Dow to provide services to Phytogen via a Service Agreement. Those services allegedly include allowing Dow’s employees to sell PhytoGen® cottonseed.

According to the Complaint, Lemon and Ramirez were both employed by Dow until September 5, 2019. At some point during or before Lemon and Ramirez terminated their employment with Dow, they allegedly both signed Loyalty and Confidentiality Agreements with Plaintiffs (“Agreements”) which included non-compete and non-disclosure agreements. Ramirez allegedly worked for Dow as a Territory Manager and Lemon was a PhytoGen® Cotton Development Specialist, supporting Ramirez and three other Territory Managers.

Prior to giving their two weeks’ notice and resignation from Dow to work for a direct competitor, Americot, Plaintiffs allege Lemon and Ramirez knew of and planned their departure for weeks. Lemon and Ramirez also allegedly lied about the positions they were taking with Americot and told Dow Representatives that they would not be working in similar positions for their new company. Following the resignations, Dow claims it took possession of the Defendants’ company property including their laptops and cell phones.

After an investigation took place, Dow claims it found evidence that the Defendants had attended important, proprietary, strategy meetings after they had received their job offers. Dow further claims the Defendants had deleted and/or transferred information, including proprietary and confidential information, from their company laptops and phones to other devices, including USBs, which were not turned in to Dow. Finally, Dow claims it has text message evidence that shows Lemon planning to utilize training materials developed by Dow in his employment at Americot and shows the Defendants planning to take and utilize contact information for their current clients.

As such, Dow and Phytogen are seeking judgment and damages for the misappropriation of trade secrets against both Defendants pursuant to the Defend Trade Secrets Act of 2016, 18 U.S.C. § 1831, et seq., the Texas Uniform Trade Secrets Act, Tex. Civ. Code § 134A.001 et seq., and the Indiana Code § 24-2-3-1, et seq. Dow and Phytogen are also seeking damages from Lemon and Ramirez for breaching their Agreements.

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Hammond, Indiana – Attorneys for Plaintiff, New Berry, Inc., d/b/a Berry Metal Company (“New Berry”) of Harmony, Pennsylvania filed suit in the Northern District of Indiana alleging that Defendants, Todd G. Smith (“Smith”) of Grove City, Pennsylvania, and Allan J. MacRae (“MacRae”), and MacRae Technologies, Inc. blogphoto-194x300(“MacRae Technologies”), both of Hayward, California, infringed its rights in United States Patent No. 10,222,124 (the “‘124 Patent”) for “Stave with External Manifold” and United States Patent No. 9,121,076 (the “‘076 Patent”) for “Stave and Brick Constrictions Having Refactory Wear Monitors and in Process Thermocouples.” New Berry is seeking actual, compensatory, exemplary, and punitive damages, pre and post judgment interest, and attorneys’ fees.

According to the complaint, New Berry is the owner and assignee of both the ‘124 Patent, which was filed February 1, 2013 and issued on March 5, 2019, and the ‘076 Patent, which issued on September 1, 2015. New Berry claims that Smith signed an Employment Agreement with New Berry in 1996, which among other things assigned all of Smith’s inventions during his employment to New Berry and prohibited Smith from using or disclosing any trade secrets that pertain to New Berry’s products and services. Smith is listed as the inventor of the ‘124 Patent and a co-inventor of the ‘076 Patent.

New Berry claims that Smith, who left New Berry in 2015, is collaborating with MacRae and MacRae Technologies and has shared New Berry’s trade secrets with them. MacRae filed a patent application November 16, 2017 that issued as U.S. Patent No. 9,963,754 (the “’754 Patent”) on May 8, 2018. The complaint alleges MacRae assigned the ‘754 Patent to MacRae Technologies on March 6, 2019. New Berry claims that the “‘124 Patent reads on the staves comprising center manifold technology described and claimed in the ‘754 Patent.”

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HerffJones-BlogPhoto-300x114Indianapolis, IndianaHerff Jones, based in Indianapolis, Indiana won a multimillion-dollar case against its largest competitor, Jostens Inc., headquartered in Minneapolis, Minnesota. Herff Jones also won significant judgments against John Wiggins and Chris Urnis, former employees of Herff Jones distributor, Brent Gilbert of GradPro Recognition Products in the same case.

Jostens began negotiating employment agreements with Wiggins and Urnis prior to their leaving GradPro, despite their having strict noncompete agreements with GradPro, according to the lawsuit. The lawsuit further claimed one of Jostens authorized representatives took at least five employees from GradPro in an effort to take away business from Herff Jones.

Jostens lost the suit as the jury found it conspired and stole confidential and trade secret information and interfered with Herff Jones’ employment contracts. The jury awarded nearly $1.9 million in compensatory damages against Jostens, Wiggins, and Urnis to Herff Jones, and another $580,000 to Brent Gilbert of GradPro. Punitive damages in the amounts of $650,000, $25,000, and $10,000 were also assessed against Jostens, Wiggins, and Urnis, respectively.

Indianapolis, Indiana – Attorneys for Plaintiff, National Federation of Professional Trainers, Inc. (“NFPT”) of Lafayette, Indiana, filedBlogPhoto-300x105 suit in the Northern District of Indiana alleging that Defendant, Carrington College, Inc. (“Carrington”) of Sacramento, California, infringed its rights in United States Copyright Registration No. TX 8-515-798 (“NFPT 0241 Exam”). Plaintiff further alleges misappropriation of trade secrets, breach of contract, and fraud. Plaintiff is seeking damages, profits received from unauthorized copying and distribution of the copyrighted work, attorney’s fees, costs, and injunctive relief.

NFPT creates and administers examinations for the certification of personal trainers. Their certification programs have been accredited by the National Commission for Certifying Agencies since 2005. Carrington has utilized NFPT’s examinations and educational materials as a part of its Physical Therapy Technology Program. At the end of the course, students were able to sit for the NFPT certification exam for the opportunity to become a certified personal trainer upon obtaining a “passing” score.

Carrington administered an NFPT examination December 10, 2015 via their proctor, Mr. Phillip Schauer (“Schauer”). As proctor, Schauer had to sign a confidential disclosure agreement, which included maintaining the confidentiality of the exams and not duplicating any of the testing materials. The December 10, 2015 exam produced extremely abnormal results for the students’ test scores. Of the twenty-six candidates, fifteen had identical or similar response strings while the remaining candidates response strings differed by a maximum of four responses out of 120. All of the candidates obtained a “passing” score. Due to the abnormalities in the results, NFPT voided the results and required all candidates to retake the examination with new questions on August 26, 2016. Only six candidates chose to retake the exam and of those, only two obtained a passing score.

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Indianapolis, Indiana – Attorneys for Plaintiff, Re-Bath, LLC, of Phoenix, Arizona originally filed suit in the Marion Superior Court alleging that Defendants, Alternative Construction Concepts, LTD. d/b/a Re-Bath Designs of Indianapolis, of Indianapolis, Indiana, Steven O’Reilley of Indianapolis, Indiana, and DeboBlogPhoto-300x249rah O’Reilley of Indianapolis, Indiana of infringing trademark rights. Plaintiff is seeking a temporary restraining order, preliminary and permanent injunction and all other just and proper relief.

Defendant is a franchisee of Plaintiff’s Phoenix-based business. As part of the franchise agreement, Plaintiff allowed Defendant to use its trademarks, goodwill, concepts, operating systems, confidential information, method of operation and technical expertise and know-how to operate a bathroom remodeling business.

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Indianapolis, Indiana – Plaintiff Heartland Consumer Products LLC of Carmel, Indiana filed an intellectual property lawsuit in the Southern District of Indiana alleging trademark and trade dress infringement, trademark dilution and unfair competition under the Lanham Act, as well as related wrongdoing under the Indiana State Trademark Act, the common law of the State of Indiana and the Indiana Crime Victims Act.  The intellectual property at issue pertains to Splenda®, a Heartland trademark under which it offers sucralose, a low-calorie sweetener.

Defendants in the litigation are Dunkin’ Brands, Inc. and Dunkin’ Donuts Franchised Restaurants LLC Untitled-1-300x102of Canton, Massachusetts.  They are accused of “deceiving customers into believing the Dunkin’ Donuts restaurants carry Splenda® Brand Sweetener,” by both tacitly and affirmatively misrepresenting that the non-Splenda sucralose product that the Dunkin’ Defendants offer is, in fact, Heartland’s Splenda.  Plaintiff contends that consumers were confused about whether the sweetener that the Dunkin’ Defendants offered was Splenda and that some have complained that adding the other sweetener to their Dunkin’ Donuts products imparted a “funny taste.”

Defendants discontinued their agreement to purchase and offer Heartland’s Splenda in April 2016.  According to the Indiana complaint, following that decision, Defendants began offering sweetener in yellow packets similar to the single-serving packets in which Splenda is offered to the public.  Plaintiff contends that, when asked, Defendants in a “clear majority of stores affirmatively represented, through their agents or employees, that non-Splenda® sucralose sweetener was instead Splenda® Brand Sweetener.”  Plaintiff further contends that Dunkin’ Defendants are misappropriating Plaintiff’s trademarked “Sweet Swaps®” by the use of a similar term “Smart Swaps.”

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Earlier this month, the Defend Trade Secrets Act (“DTSA”) became federal law. The DTSA grants the owners of trade secrets the right to sue in federal court for misappropriation of a trade secret that is “related to a product or service used in, or intended for use in, interstate or foreign commerce.” Previously, protection of trade secrets was offered only under state law, with most states having adopted a version of the Uniform Trade Secrets Act (“UTSA”). The new federal law will supplement, not replace, those state laws.

The DTSA, while it mirrors the UTSA in many respects, adds several notable elements. In addition to creating original jurisdiction in federal district court over civil actions brought under the law, the DTSA also provides for the ex parte seizure of property where necessary to prevent the disclosure of the trade secret at issue in the lawsuit. This seizure is permitted only in “extraordinary circumstances,” including those situations where immediate and irreparable injury to the plaintiff will result if the seizure is not ordered. The party requesting an ex parte seizure must post security and, in cases where such a seizure is obtained wrongfully, the DTSA makes damages available to the defendant. Moreover, the Act recognizes the problem of international trade secret theft. The provision allowing for ex parte seizure of property is “expected to be used in instances in which a defendant is seeking to flee the country.”

The DTSA also includes a provision permitting the entry of an injunction prohibiting a person from accepting employment if there is a sufficient threat of misappropriation of a trade secret. In lesser cases, the individual may begin employment but will be subject to conditions enunciated by the court.

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