IP Law Daily, TRADE SECRETS—N.D.N.Y.: Summary judgment largely denied in food additive dispute, (Sep 30, 2024)

By Kevin M. Finson

Claims related to solutions for preventing browning of cut fruit survived summary judgment because the parties’ testimony showed genuine disputes about whether the claimed information was reasonably protected and whether it was actually used by the defendants.

A food solutions company largely showed the existence of genuine disputes of material facts in its allegations of trade secret misappropriation by a contractor hired to blend products to prevent browning of fruit, the U.S. District Court in Syracuse has held. Trial would be needed to determine whether the claimed information was reasonably protected and whether it was actually used by the defendants. Claims for common law torts related to the trade secrets were preempted by an Illinois trade secret statute, however (Henessey Food Consulting LLC v. Prinova Solutions, LLC, No. 5:20-cv-00806-TWD (N.D.N.Y. Sept. 24, 2024)).

Hennessey Food Consulting, LLC (Hennessey) was in the business of selling solutions to prevent the browning of fresh-cut produce such as apples. Hennessey contracted with Prinova Solutions, LLC (Prinova) for Prinova to mix and produce products according to Hennesey’s formula, and the parties signed mutual confidentiality agreements. Hennessey brought suit against Prinova for breach of the agreement and misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA) and New York law, as well as for related common law torts, alleging that Prinova had used Hennessey’s confidential information to begin producing its own competing products. Both sides filed motions for summary judgment.

Defendant’s motion. Prinova first argued that Hennessey failed to identify its purported trade secrets with sufficient particularity. The court held that describing the secret as the chemical formulas of various products identified by product codes used by the parties was sufficient to put Prinova on notice of the extent of the claimed secret. Conflicting deposition testimony presented genuine questions of material fact as to the misappropriation of trade secrets and breach of contract claims, so summary judgment was denied as to them. The court did find, however, that there was nothing in the record to support a claim for breach of implied covenant, and several common law tort claims were preempted by Illinois’s trade secrets statute. According to the parties’ 2018 supply agreement, Illinois law governed the preempted claims. Summary judgment was granted as to those claims.

Plaintiff’s motion. Hennessey moved for summary judgment on Prinova’s defense of reverse engineering, essentially that Prinova’s products were developed independently from publicly available information and did not actually use Hennessey’s claimed trade secrets. The court held that issues of material fact existed as to how exactly Prinova’s products were developed, so summary judgment was inappropriate.

Daubert motions. The court found it did not need to resolve the parties respective Daubert motions because expert testimony would not alter the summary judgment analysis. The court noted that the parties could renew the motions as motions in limine.

The court granted Prinova’s motion for summary judgment in part and denied Hennessey’s motion.

The Case is No. 5:20-cv-00806-TWD.

Judge: Dancks, T.

Attorneys: James R. Muldoon (Harris, Beach Law Firm PLLC) for Henessey Food Consulting LLC. Daniel Hoffman (Moses, Singer Law Firm LLP) for Prinova Solutions, LLC and Prinoval US LLC.

Companies: Henessey Food Consulting LLC; Prinova Solutions, LLC; Prinoval US LLC

Cases: TradeSecrets NewYorkNews