IP Law Daily, TRADE SECRETS—E.D. Ky.: Court issues TRO against competing fertilizer startup over fiduciary breach and Lanham Act violations, (Mar 17, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

A former executive allegedly launched a competing venture using the company’s technology, marketing materials, and customer relationships, creating likely consumer confusion.

A federal district court in Kentucky granted a temporary restraining order (TRO) partly in favor of a fertilizer technology company and its affiliates after finding a likely breach of fiduciary duties and probable Lanham Act violations by a competing startup formed by the company’s former executive. The court held that the plaintiffs demonstrated a likelihood of success on their claims for breach of fiduciary duty, trademark infringement, unfair competition, and false advertising, and that they would suffer irreparable harm without injunctive relief. However, the court declined to grant relief on the plaintiffs’ patent infringement and trade secret misappropriation claims because the present record did not establish a sufficient likelihood of success on those theories. The TRO temporarily barred the defendants from competing with the plaintiff company, soliciting its customers, using its marketing materials, or employing certain personnel in violation of contractual restrictions (Altrus Capital - Eco, LP v. Firewater AG, LLC, No. 5:26-cv-00049-CHB-MAS (E.D. Ky. Mar. 13, 2026)).

Background. The plaintiffs—Altrus Capital–Eco, LP; Altrus Capital–Green Lightning, LP; Joseph E. Lewis III; and Green Lightning Solutions, LLC—operate a business focused on developing and commercializing plasma-based fertilizer technology. The principal defendant, Firewater AG, LLC, is a competing venture formed by Travis Potter, who had previously served as a member, manager, and chief executive officer of Green Lightning. According to the complaint, Potter established Firewater while still affiliated with Green Lightning and allegedly used Green Lightning’s technology, business relationships, and marketing materials to launch the competing enterprise.

The dispute also involved a patent covering plasma fertilizer technology. The plaintiffs asserted infringement of U.S. Patent No. 12,338,803 B2 (the ’803 patent), which relates to a modular plasma reactor apparatus for generating nitrogen-rich solutions for plant growth. The plaintiffs alleged that Firewater’s “7 Thunders” system infringed the patent by using substantially similar plasma-reactor technology to produce plasma-activated water for agricultural use. The plaintiffs further asserted that their proprietary customer data and technical information constituted protectable trade secrets.

The litigation began on February 13, 2026, when the plaintiffs filed a multi-count complaint alleging breach of fiduciary duty, trade secret misappropriation under the Defend Trade Secrets Act and Kentucky Uniform Trade Secrets Act, patent infringement, trademark infringement, unfair competition, false advertising under the Lanham Act, and related state-law claims. On the same day, the plaintiffs moved for a temporary restraining order, preliminary injunction, and expedited discovery, asserting that the defendants were using Green Lightning’s technology, marketing materials, and customer relationships to promote Firewater’s competing products. After briefing and oral argument, the court addressed the plaintiffs’ request for emergency injunctive relief.

Fiduciary duties. The court first examined the plaintiffs’ claim that Potter breached fiduciary duties owed to Green Lightning as a manager and chief executive officer. Under Kentucky law, a manager of a limited liability company owes duties of loyalty and care to the company and must account for profits derived from the use of company property or opportunities. Citing GenCanna Acquisition Corp. v. 101 Enterprises, LLC, No. 5:23-cv-00305-GFVT, 2024 WL 4333679 (E.D. Ky. Sept. 25, 2024), and Insight Kentucky Partners II, L.P. v. Preferred Automotive Services, Inc., 514 S.W.3d 537 (Ky. Ct. App. 2016), the court noted that a plaintiff must show the existence of a fiduciary duty, a breach of that duty, and resulting damages.

Applying those principles, the court found a strong likelihood that Potter breached his fiduciary obligations. The evidence indicated that he formed Firewater to compete directly with Green Lightning, used Green Lightning’s technology to develop a competing product, copied marketing videos and crop-testing results, and solicited the company’s customers. Citing Patmon v. Hobbs, 280 S.W.3d 589 (Ky. Ct. App. 2009), the court noted that such conduct—particularly diverting corporate opportunities to a competing business—can constitute a breach of fiduciary duty.

The court rejected the defendants’ argument that disputes regarding Potter’s conduct had to be arbitrated under the company’s operating agreement. The agreement expressly allowed equitable relief in court for breaches of the agreement, including injunctions and specific performance.

Trade secrets. The plaintiffs also alleged that former employees downloaded confidential customer relationship management (CRM) datasets before leaving the company and later used them to benefit Firewater. While the court accepted that the CRM data could qualify as trade secrets, it concluded that the plaintiffs had not yet shown a likelihood of success on their misappropriation claims.

The court relied on the elements articulated in C-Ville Fabricating, Inc. v. Tarter, 2019 WL 1368621 (E.D. Ky. Mar. 26, 2019), which require proof of a trade secret and its misappropriation through improper acquisition, disclosure, or use. Although there was evidence that employees downloaded the data before departing the company, the plaintiffs had not yet produced sufficient evidence that the information had been disclosed to or used by Firewater.

Patent infringement. The court likewise declined to grant emergency relief on the patent infringement claim. Determining infringement requires first construing the patent claims and then comparing them with the accused product, as described in Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995).

Applying that framework, the court concluded that the plaintiffs had not shown that Firewater’s system satisfied every limitation of Claim 1 of the ’803 patent. In particular, the claim required a condenser physically positioned between the electric discharge and a plant growth medium. The evidence indicated that the defendants’ system generated plasma-activated water for later use rather than applying it directly to a growth medium within the apparatus. Because the accused system lacked at least one claim limitation, literal infringement was unlikely. The court also rejected the plaintiffs’ infringement theory under the doctrine of equivalents at this stage.

Lanham Act claims. The plaintiffs had stronger prospects on their Lanham Act claims. The court held that the plaintiffs demonstrated a likelihood of success on trademark infringement and unfair competition theories under 15 U.S.C. §§1114 and 1125(a).

Applying the Sixth Circuit’s “Frisch factors,” derived from Frisch’s Restaurants v. Elby’s Big Boy, 670 F.2d 642 (6th Cir. 1982), the court found a substantial likelihood of consumer confusion. The parties’ products were closely related, their marketing channels overlapped, and the defendants had copied the plaintiffs’ marketing videos and crop-trial data while replacing the plaintiffs’ logo with their own. The evidence suggested that Firewater deliberately attempted to market the plaintiffs’ technology as its own and to persuade customers that Green Lightning’s international operations had been transferred to Firewater.

The court also found a viable false advertising claim under the Lanham Act, citing Wysong Corp. v. APN, Inc., 889 F.3d 267 (6th Cir. 2018), because the defendants’ advertising materials allegedly misrepresented the origin and performance of the technology.

Conclusion. Having determined that the plaintiffs were likely to succeed on several claims and faced irreparable harm, the court issued a temporary restraining order. The order bars the defendants from competing against Green Lightning, soliciting its customers, using its marketing materials or trademarks, and employing certain individuals in violation of contractual restrictions. The court also ordered the defendants to return certain materials and provide an accounting of competing products produced or sold. The TRO will remain in effect pending further proceedings on the plaintiffs’ request for a preliminary injunction.

The Case is No. 5:26-cv-00049-CHB-MAS.

Judge: Boom, C.

Attorneys: Bryan Hanks (Greenberg Traurig, LLP) for Altrus Capital - Eco, LP. Joshua Stephen Harp (Baughman Harp, PLLC) for Firewater AG, LLC.

Companies: Altrus Capital - Eco, LP; Firewater AG, LLC

Cases: TradeSecrets KentuckyNews GCNNews