IP Law Daily, TRADE SECRETS—3rd Cir.: Attorney fee award, denial of motion to vacate jury award affirmed in fudge recipe trade secret dispute, (Jul 30, 2026)

By Linda O’Brien, J.D., LL.M.

Jury award for trade secret misappropriation in favor of a specialty candy business stands after the denial of a motion to vacate, however, business must pay attorney fees after dismissal of copyright and trademark infringement claims.

In a suit by a Pennsylvania maker of gourmet chocolate and fudge candies against a competing specialty candy business for trade secret misappropriation, copyright infringement, and trademark infringement, the district court’s award of attorney fees to the competitor following the dismissal of the copyright and trademark infringement claims was not an abuse of discretion as the dismissed trademark claims were “exceptional” due to misrepresentations as to trademark ownership and the copyright claims were objectively unreasonable; the U.S. Court of Appeals for the Third Circuit has ruled. Further, the denial of the defendants’ motion to vacate the jury award that they had misappropriated the plaintiff’s trade secret fudge recipe was upheld because there was sufficient evidence from which the jury could reasonably find that fudge recipe derived independent economic value from being kept secret. Thus, the award of attorney fees to the defendants and denial of their motion for judgment as a matter of law were affirmed (Warman v. Local Yokels Fudge, LLC, Nos. 25-1935, 25-1969 (3d Cir. Jul. 29, 2026)).

Christopher Warman, owner of Chocolate Moonshine, LLC, developed his recipe and sold fudge under the CHOCOLATE MOONSHINE mark. He licensed the recipe to his then-wife Christine Falvo, who subsequently gave the recipe to Local Yokels Fudge, owned by Donald Konieczny. In 2014, Warman allowed his and Falvo’s son, Christopher Warman Jr., to use the CHOCOLATE MOONSHINE mark in his business, CM Chocolatier, LLC, which he co-owned with Charles Griffin. Warman Jr. applied to register CHOCOLATE MOONSHINE CO. in July 2014 misrepresenting that he was the owner to conceal that Warman was the true owner. In May 2016, with Falvo’s assistance, Warman Jr. arranged for a photo shoot of fudge pieces for use on a website. The finished photos were sent to both Warman Jr. and Falvo and were used on websites related to CM Chocolatier.

In September 2019, Warman, the Trust for Family of Christopher Warman, and Chocolate Moonshine, LLC brought suit against Local Yokels Fudge, Falvo, Konieczny, and CM Chocolatier for misappropriation of trade secrets, trademark and copyright infringement, and related state law violations. Specifically, Warman alleged that Falvo and her associates misappropriated his trade secret fudge recipe and used it in their business and that he owns the copyright to the photos and that the copyright was infringed by the defendants.

Local Yokels, Falvo, Griffin, Konieczny, and CM Chocolatier filed a motion for summary judgement on all claims. In December 2022, the district court allowed the trade secret misappropriation claims to proceed but dismissed the trademark and copyright infringement claims. At trial, a jury found for Warman and awarded royalties for using the trade secret. In October 2024, the district court denied the defendants’ motion to vacate the jury award. In April 2025, the district court ruled that, since the defendants successfully defended against the trademark and copyright infringement claims, they were entitled to recover attorney fees under the Lanham Act and the Copyright Act. Before the court was Warman’s appeal of the award of attorney fees and the defendants’ appeal of the denial of their motion for judgment as a matter of law after the jury verdict.

Award of attorney fees. The district court did not abuse its discretion by awarding fees on either the trademark or copyright claim, the court found. Under the Lanham Act, attorney fees to the prevailing party may be awarded in “exceptional cases.” The finding that Warman engaged in unreasonable litigation by fraudulently procuring the trademark with Warman Jr.’s application and continuing to litigate the trademark claim after learning that the trademark was void was consistent with the sound exercise of discretion. When determining whether to award fees under the Copyright Act, the factors courts consider include “frivolousness, motivation, objective unreasonableness and the need in particular circumstances to advance considerations.” Warman’s contention that fees may not be awarded when there was a “proper, factual basis for concluding that the filing of the suit was objectively reasonable,” was rejected as inconsistent with existing law. In this case, the district court considered the relevant factors and found the “plaintiffs had no support for their copyright infringement claims but pursued them anyway,” noting how Warman had an “apparent improper motivation in bringing the copyright infringement claims,” the court explained.

Motion for judgment as a matter of law. There was sufficient evidence from which a jury could reasonably find that Warman’s fudge recipe – the alleged trade secret at issue – derived independent economic value from being kept secret. Warman asserted trade secret misappropriation claims under the Defend Trade Secrets Act and Pennsylvania Uniform Trade Secrets Act, which define a “trade secret” as information that (1) the owner has taken reasonable measures to keep secret and (2) derives independent economic value from not being generally known to and not being readily ascertainable by other persons who can obtain economic value from the information’s disclosure or use. The trial record included Warman’s testimony that his recipe was superior to that of his competitors in terms of health, taste, and durability, and had significant commercial success. The defendants’ assertion that Warman’s self-serving testimony was insufficient to support a finding that the recipe had independent economic value was rejected as it was up to the jury to evaluate Warman’s credibility and determine whether that testimony established that the recipe derived economic value from its continued secrecy, the court concluded.

Partial dissent. Circuit judge Jane Richards Roth dissented in part, asserting that the plaintiffs failed to submit evidence that they derived independent economic value from the recipe’s secrecy and would reverse the denial of the defendants’ motion for judgment as a matter of law. While agreeing that there was ample evidence concerning the recipe’s value, the testimony was insufficient for the jury to conclude that the recipe derived value from its secrecy because the recipe had economic value. However, Judge Roth agreed with affirming the award of attorney fees.

The Case is Nos. 25-1935, 25-1969.

Judge: Chagares, M.

Attorneys: Gwendolyn R. Acker Wood (Acker Wood Intellectual Property Law) for Christopher M. Warman. Matthew R. Mazgaj (Marcus & Shapira) for Local Yokels Fudge LLC.

Companies: Local Yokels Fudge LLC

Cases: Copyright Trademark TradeSecrets DelawareNews NewJerseyNews PennsylvaniaNews GCNNews