Case 3:13-cv-00082-CRS-CHL Document 530 Filed 06/09/20 Page 1 of 55 PageID #: 25898
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`UNITED STATES DISTRICT COURT
`WESTERN DISTRICT OF KENTUCKY
`AT LOUISVILLE
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`CAUDILL SEED AND WAREHOUSE COMPANY, INC.
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`PLAINTIFF
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`vs.
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`CIVIL ACTION NO. 3:13-CV-082-CRS
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`JARROW FORMULAS, INC.
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`DEFENDANT
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`CORRECTED MEMORANDUM OPINION
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`This matter is before the court on motion of the defendant, Jarrow Formulas, Inc., for
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`judgment as a matter of law or, in the alternative, for a new trial (DN 492).
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`This action, alleging violation of the the Kentucky Uniform Trade Secrets Act
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`(“KUTSA”), KRS 365.880, et seq., was tried to a jury over a 3 ½ week period and resulted in a
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`verdict in favor of Caudill Seed, a damage award totaling $2,427.605.00, and a finding of willful
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`and malicious misappropriation by Jarrow Formulas. Jarrow Formulas contends that there was
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`insufficient evidence to support the jury’s finding of misappropriation of Trade Secret 1, willful
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`and malicious conduct, or damages.1
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`For the reasons set forth below, we reject Jarrow Formulas’ arguments. The court
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`will deny Jarrow Formulas' motion for judgment as a matter of law or new trial and will affirm
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`the award of compensatory damages in the sum determined by the jury.
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`1 More particularly, the jury found that Caudill Seed possessed a trade secret with respect to research
`and development, the specific process for spray-drying myrosinase, vendor information, customer
`information, the laboratory notebook and hard drive. The jury found misappropriation of research and
`development, the specific process for spray-drying myrosinase, vendor and customer information, but not
`the laboratory notebook and hard drive. The jury awarded damages and found malicious and willful
`misappropriation only with respect to Caudill Seed’s research and development.
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`

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`I. General Background
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`Caudill Seed is a 65-year-old family-owned business located in Louisville, Kentucky
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`which produces and supplies agricultural products including seeds, sprouts, and the like to
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`commercial producers and distributors. It also sells ingredients for nutritional supplements, food
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`and cosmetics, and sells some of its own nutritional supplements.
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`From 2002 until his resignation on May 2, 2011, Kean Ashurst (“Ashurst”) was
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`employed by Caudill Seed, holding a number of positions during that time. Pertinent to this
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`litigation was his employment as Director of Research at Caudill Seed, with the responsibility for
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`research and development of new products and processes in the area of the extraction, isolation,
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`and development of compounds from broccoli seed including glucoraphanin, the myrosinase
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`enzyme, and the production of sulforaphane. In that role, Ashurst had access to, worked with,
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`and maintained as proprietary and confidential the body of research, data and information related
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`to the development, production and marketing of broccoli seed extract and other related
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`products.
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`Caudill Seed engaged in research and development related to seed and seed sprout
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`production as well as processes for extracting, isolating and developing compounds from those
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`products before, during, and after the period of Ashurst’s employment with Caudill Seed. A
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`significant body of research and development relating to seeds and seed extraction processes had
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`been developed by Caudill Seed prior to Ashurst’s arrival at Caudill Seed and was available to
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`and utilized by Ashurst in his work for Caudill Seed.
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`During the years of his employment at Caudill Seed, Ashurst maintained crucial notes
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`and formulas in stenographer’s notebooks, a composition notebook, and on an external computer
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`hard drive. He carefully guarded these items as they were the principal repositories for his task
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`2
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`Case 3:13-cv-00082-CRS-CHL Document 530 Filed 06/09/20 Page 3 of 55 PageID #: 25900
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`lists, thought processes and research results in his work for Caudill Seed. He kept the lab locked
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`and generally inaccessible. The steno pads were locked in a file cabinet and the lab notebook
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`and hard drive were either kept with Ashurst or were locked in the lab. To Caudill Seed’s great
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`regret, it entrusted most of the memorialization of its science solely to Ashurst.
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`Broccoli extract proved to be valuable to Caudill Seed. Due to its high concentration of
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`glucoraphanin, the consumption of which is thought to have positive health effects in humans, it
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`was sought after by nutritional supplement manufacturers, and specifically Jarrow Formulas.
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`Preceding his departure from Caudill Seed, Ashurst was working to develop a process to produce
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`a glucoraphanin product that offered better release of sulforaphane, the beneficial compound
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`yielded in the human body from the ingestion of glucoraphanin-rich material. The ability to
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`produce a higher sulforaphane yield has been referred to as an “activated formula.” Prior to
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`Ashurst’s resignation, Caudill Seed was preparing for commercial production of an activated
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`formula broccoli extract product.
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`Jarrow Formulas was formerly a customer of Caudill Seed that purchased bulk quantities
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`of Broccoraphanin, Caudill Seed’s broccoli extract powder which Jarrow Formulas used in
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`formulating its BroccoMax and other nutritional supplement products. Caudill Seed marketed its
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`own broccoli extract nutritional supplement, Vitalica, and so competed with Jarrow Formulas in
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`this aspect of its business. Jarrow Formulas was Caudill Seed’s largest bulk purchaser of
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`Broccoraphanin until Jarrow Formulas decided to cut out the middleman and become a broccoli
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`extract manufacturer in 2011.
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`Jarrow Formulas had never before engaged
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`in research and development or
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`manufacturing of broccoli extract and in 2011 it had no scientists on staff capable of doing it.
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`Jarrow Formulas was interested in producing an activated formula of its BroccoMax and other
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`3
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`products. To that end, and in order to itself become a manufacturer of broccoli extract, it hired
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`Ashurst away from Caudill Seed. The process of negotiation and transition began before Ashurst
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`left Caudill Seed. Ashurst signed a consulting agreement with Jarrow Formulas the day before
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`his resignation. When he left, the lab notebook and external hard drive containing Caudill
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`Seed’s critical formulas and research data disappeared. With its Director of Research gone and
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`its laboratory in disarray, Caudill Seed was forced to essentially reverse engineer its own
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`processes with the assistance of the testing facilities with which it worked. It took many months
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`to get its house back in order, not in insignificant part due to the fact that it had permitted
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`Ashurst to maintain and control all of its most critical information.
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`Caudill Seed also discovered that Ashurst provided numerous documents containing
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`Caudill Seed’s confidential and proprietary information in response to requests from Jarrow
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`Formulas employees and agents. Ashurst acknowledged providing Caudill Seed documents to
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`Jarrow Formulas.
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`Despite having no research and development of its own or any experience in the area of
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`broccoli extract production, Jarrow Formulas created a successful manufacturing process and
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`began producing a profitable activated formula mere months after hiring Ashurst as its
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`consultant. Ashurst admitted that it was Jarrow Formulas’ intention to “beat Caudill Seed to the
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`punch” in bringing to market an activated formula broccoli extract product. Jarrow Formulas
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`admitted and it was further proven at trial that Ashurst provided numerous confidential and
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`proprietary Caudill Seed documents to Jarrow Formulas at Jarrow Formulas’ request. Jarrow
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`Formulas accomplished its goal of becoming a broccoli seed extract manufacturer and bringing
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`an activated formula broccoli product to commercial production in four months' time, and
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`subsequently succeeded in patenting its process for producing its activated formula.
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`4
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`
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`II. Legal Standard
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` In this case, the court, sitting in diversity, “must apply the standard for judgment as a
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`matter of law of the state whose substantive law governs.” Lindberg v. Jackson Nat’l Life Ins.
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`Co., 912 F.3d 348, 360 (6th Cir. 2018)(quoting DXS, Inc. v. Siemens Med.Sys., Inc., 100 F.3d
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`462, 468 (6th Cir. 1996)). Under Kentucky law, “a motion for directed verdict…should be
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`granted only if there is a complete absence of proof on a material issue in the action, or if no
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`disputed issue of fact exists upon which reasonable minds could differ. In deciding such a
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`question, every favorable inference which may reasonably be drawn from the evidence should be
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`accorded the party against whom the motion is made.” Ventas, Inc. v. HCP, Inc., 647 F.3d 291,
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`314 (6th Cir. 2011)(quoting Morales v. Am. Honda Motor Co., 151 F.3d 500, 506 (6th Cir.
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`1998))(quoting Washington v. Goodman, 830 S.W.2d 398, 400; Baylis v. Lourdes Hosp., Inc.,
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`805 S.W.2d 122, 125 (Ky. 1991)).
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`
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`However, federal law governs the district court's decision whether to grant a new trial on
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`the basis of the weight of the evidence, even in a case brought under our diversity jurisdiction.
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`See Conte v. Gen. Housewares Corp., 215 F.3d 628, 637–38 (6th Cir. 2000); J.C. Wyckoff &
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`Assocs., Inc. v. Standard Fire Ins. Co., 936 F.2d 1474, 1487 & n. 20 (6th Cir.1991).
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`Pursuant to Federal Rule of Civil Procedure 59(a) a new trial may be granted “in
`an action in which there has been a trial by jury, for any of the reasons for which
`new trials have heretofore been granted in actions at law in the courts of the
`United States.” Fed.R.Civ.P. 59(a). Generally courts have interpreted this
`language to mean that a new trial is warranted when a jury has reached a
`“seriously erroneous result” as evidenced by: (1) the verdict being against the
`weight of the evidence; (2) the damages being excessive; or (3) the trial being
`unfair to the moving party in some fashion, i.e., the proceedings being influenced
`by prejudice or bias. See Montgomery Ward & Co. v. Duncan, 311 U.S. 243, 251,
`61 S.Ct. 189, 194, 85 L.Ed. 147 (1940); Cygnar v. City of Chicago, 865 F.2d 827,
`835 (7th Cir.1989); Mallis v. Bankers Trust Co., 717 F.2d 683, 691 (2d Cir.1983).
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`5
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`Case 3:13-cv-00082-CRS-CHL Document 530 Filed 06/09/20 Page 6 of 55 PageID #: 25903
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`Holmes v. City of Massillon, Ohio, 78 F.3d 1041, 1045–46 (6th Cir. 1996). The district court
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`“may compare the opposing proofs and weigh the evidence” when considering a new trial
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`motion, Toth v. Yoder Co., 749 F.2d 1190, 1197 (6th Cir.1984), but “the jury's verdict should be
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`accepted if it is one which could reasonably have been reached.” Id. (quoting Bruner v.
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`Dunaway, 684 F.2d 422 (6th Cir.1982), cert. denied, 459 U.S. 1171, 103 S.Ct. 816, 74 L.Ed.2d
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`1014 (1983)).
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`Jarrow Formulas does not make separate arguments concerning the application of these
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`standards.
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`The jury found that Caudill Seed possessed certain trade secrets, that Jarrow Formulas
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`III. Jury Verdict
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`misappropriated some of those trade secrets, that Jarrow Formulas acted willfully and
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`maliciously, and awarded $2,427,605.00 for Caudill’s actual loss and Jarrow Formulas’ unjust
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`enrichment. The present motion focuses on the misappropriation of Trade Secret 1, the only
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`trade secret for which the jury awarded damages and found willful misappropriation.
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`A. Misappropriation of Trade Secret 1
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` Jarrow Formulas urges that the jury could not reasonably find misappropriation of Trade
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`Secret 1 because (1) Trade Secret 1 was not sufficiently defined; (2) the jury could not find that
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`the entire compilation of Trade Secret 1 was misappropriated by Jarrow Formulas; and (3)
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`Caudill failed to prove a combination of elements in Trade Secret 1 that was unique and not
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`publicly known. We address these arguments in turn.
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`6
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`Before we opine on the sufficiency of the evidence to support the verdicts in this case, a
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`comment on the briefing is in order. The court is aware of the suit filed in Connecticut against
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`Jarrow Formulas seeking redress for its failure to pay its legal bills. Jarrow Formulas
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`counterclaims in that action that its counsel failed to adequately defend in this misappropriation
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`action.
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`This was a hard-fought case from its inception not in small part due to highly unusual
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`facts and a clash of large personalities. As in most complicated trade secret litigation, many
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`thousands of pieces of evidence were exchanged, claims were refined, theories of recovery and
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`defense were formulated and tested, and evidence vetted, all before the case was ready to be tried
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`to a jury.
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`In its response brief to the JMOL/new trial motion, Caudill Seed refers repeatedly to
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`filings in the Connecticut action in which Jarrow Formulas criticizes its counsel’s performance
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`and alleged mismanagement of the case. This court’s responsibility in considering the present
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`motions is to focus on the sufficiency of the evidence adduced at trial in deciding whether the
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`verdicts are properly supported. The court will not, therefore, engage in a “woulda, coulda,
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`shoulda” analysis of what was not presented to the jury or what could have been presented
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`differently. We thus disregard Caudill Seed’s references to Jarrow Formulas’ assertions of
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`malpractice in the Connecticut action. Nothing in this opinion is meant to suggest a view as to
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`the adequacy of Jarrow Formulas’ counsel’s performance in this case. As the court has noted,
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`the case was hard-fought and well-tried by both sides, and a more attentive and committed jury
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`this court has not seen in its many years on the bench.
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`Additionally, the wisdom (or lack thereof) of pretrial rulings which laid the groundwork
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`for the issues presented at trial will be addressed by the Court of Appeals should the parties
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`7
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`appeal. What the Sixth Circuit may make of the long and winding road down which this case
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`has traveled is unknown. However, the court was early on convinced that Caudill Seed had a
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`legally viable cause of action for the alleged misappropriation in this case and remains of that
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`opinion today.
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`With respect to the motion for JMOL/new trial, the sole objective at this juncture is to
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`determine whether evidence exists in the record to support the verdicts. The court may not
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`compare the opposing proofs on JMOL review or reweigh the evidence, but rather must draw
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`every favorable inference in favor of Caudill Seed and grant a motion for JMOL only if the court
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`finds there is a complete absence of proof on a material issue in the action. Ventas, Inc., supra.
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`The court may compare the opposing proofs in considering a motion for new trial, but such a
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`motion may only be granted if the court determines that the jury has reached a seriously
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`erroneous result. As with JMOL, a new trial motion must be denied if the verdicts could
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`reasonably have been reached by the jury. Toth, supra. It is within the confines of this legal
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`rubric that we render this decision.
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`Jarrow Formulas’ consistent theme has been that Caudill Seed failed to sufficiently define
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`Trade Secret 1. It pressed repeatedly pretrial for additional specificity and Caudill Seed, over
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`time, refined its specification to the description which was ultimately provided to the jury. The
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`court noted that “[i]t is not enough in effect to say, “the trade secrets you took are the ones we
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`say you took,” without further identification. DN 253, p. 7. Caudill Seed did provide evidence at
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`trial of (1) specific times, temperatures, and pressures used in its process, (2) testing data, (3)
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`discoveries concerning viable and non-viable processes, (4) a compilation of relevant scientific
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`literature, and (5) its vendor, cost, and customer information the synthesis all of which
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`constituted what it termed its “seed to shelf” process for producing glucoraphanin and activated
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`8
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`Case 3:13-cv-00082-CRS-CHL Document 530 Filed 06/09/20 Page 9 of 55 PageID #: 25906
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`glucoraphanin as well as finished products Vitalica and Vitalica+. There were no surprises for
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`Jarrow Formulas at trial. Jarrow Formulas clearly understood, prior to trial, the parameters of the
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`“body of knowledge” Caudill Seed claimed was its misappropriated Trade Secret 1. Thus to the
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`extent Jarrow Formulas again argues that Trade Secret 1 was insufficiently defined pretrial, we
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`reject that argument.
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`Caudill Seed sufficiently circumscribed and defined Trade Secret 1, its “entire body of
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`knowledge developed over the course of many years,” for the jury through the evidence it
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`adduced at trial. Trade Secret 1 was then fulsomely described in the jury instructions. In this
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`motion, Jarrow Formulas has not asserted any error in the instructions given to the jury. Caudill
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`Seed’s witnesses testified to the research and development work with seeds and sprouts which
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`began well before Ashurst became its Director of Research. Ashurst testified concerning the
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`research and development conducted under his directorship in seed extraction processes, focused
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`particularly on broccoli actives. He testified that he gave Jarrow Formulas a “body of
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`knowledge.” Vol. 2B (Ashurst), p. 66, ln. 11. Caudill testified that Ashurst was hired originally
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`as an equipment engineer and was then moved into research, becoming the Director of Research,
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`but having no prior knowledge or experience with broccoli seeds or extracts or the work Caudill
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`Seed was doing in the lab. He learned the foundations and then continued to build the Caudill
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`Seed know-how. Vol. 2 (Caudill), pp. 8-23. Caudill testified that its research put Caudill Seed
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`on the road to product development. Vol. 1B (Caudill), 84:21-85:1. Caudill Seed adduced
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`evidence from which the jury could reasonably have concluded that the confidential and
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`proprietary materials which Ashurst undisputedly provided to Jarrow Formulas contained Caudill
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`Seed’s extensive and complete instruction on the process for successfully and profitably
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`9
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`Case 3:13-cv-00082-CRS-CHL Document 530 Filed 06/09/20 Page 10 of 55 PageID #: 25907
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`producing the Caudill Seed products from “seed to shelf”, enabling Jarrow Formulas to launch
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`its own manufacturing operation in just a few months.
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`Jarrow Formulas complains that Caudill Seed’s claim to trade secret protection for all of
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`its research and development over a 17-year period is untenable. However, Jarrow Formulas has
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`not shown, as it must, that Caudill Seed’s contention is devoid of support in the record. Caudill
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`Seed has made this case about more than a mere formula landing in the hands of a competitor.
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`This case is about the misappropriation of an entire body of knowledge and know-how, built
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`brick-by-brick on a broad foundation. See, e.g., PX6. This includes its precise and refined
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`method for producing its products, the knowledge of which provided Jarrow Formulas the ability
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`to entirely bypass any independent research and development in which it would necessarily have
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`had to engage to become a manufacturer of such a raw ingredient. Jarrow Formulas was not a
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`manufacturer of broccoli extracts until four months after Ashurst’s arrival. Before that, it did not
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`possess the knowledge, the science, or the personnel for such an endeavor.
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`Further, although fiercely disputed by Jarrow Formulas, Caudill Seed offered evidence
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`that its process, founded in its research and development work and culminating in its
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`commercially produced and profitably marketed product, was not publicly known or readily
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`ascertainable by experienced scientists such that one could achieve what Jarrow Formulas
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`achieved in four months. Jarrow Formulas achieved in four months what it took Caudill Seed a
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`decade to discover, develop, and fine tune. Richie Sullivan, a salesman who worked closely with
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`Ashurst, testified that as Ashurst worked for Caudill Seed, he was continually using and building
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`on prior Caudill Seed discoveries, and that he had great concern when Ashurst abruptly resigned
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`since Ashurst was the guy who knew everything. Vol. 3A (Sullivan), p. 24, ln. 13-15; p. 33, ln.
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`18-20. Darrell Smith, a process engineer, hired by Caudill Seed in 2012 in the aftermath of the
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`10
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`Ashurst departure, testified that its product could be reverse engineered by an outsider, but it
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`would take a great deal of time and money. He testified that even an experienced scientist in the
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`field could not have read the patents, journal articles, manuals, and research materials and come
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`up with a reproducible marketable product in four months as Jarrow Formulas did. He testified
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`that you had “to be there, see it, and do it.” He testified that Caudill Seed was set back
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`approximately nine months. Smith, DN 396, p. 7; accord, Vol. 2 (Caudill) p. 50-53.
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`Ashurst protested at trial that, for a knowledgeable scientist, this was not “rocket
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`science,” and that all the bits and pieces of the process were available in the public domain for
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`anyone to use. He testified that although he provided documents to Jarrow Formulas that he
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`admittedly should not have, Jarrow Formulas did not use them. He testified he was hired to be
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`“a leader, not a follower,” in developing an activated formula for Jarrow Formulas. See also,
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`Rogovin, DN 428, p. 18 in which he testified that he intended for Ashurst to “build on”
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`knowledge and know-how from Caudill Seed in bringing a mysrosinase-activated glucorophanin
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`product to Jarrow. Ashurst, remarkably, had an epiphany about a new and ultimately patentable
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`process for increasing the myrosinase within the broccoli seed within weeks of beginning his
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`work for Jarrow Formulas.
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`
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`Jarrow Formulas’ expert, Leslie West, a medicinal chemist and former scientist at Kraft
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`Foods for 34 years, similarly testified that Jarrow Formulas did not use any information that was
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`not in the public domain, that Jarrow Formulas’ process for producing its activated BroccoMax
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`differs from the process used by Caudill Seed to produce Vitalica+, and that nothing Ashurst
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`learned at Caudill Seed jump started Ashurst’s work at Jarrow Formulas. Vol. 13 (West), 64:42-
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`43; 48-50.
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`11
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`
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`However, there was plenty of evidence offered by Caudill Seed that painted a very
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`different picture, illustrating that the new process utilized by Jarrow Formulas to produce its
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`activated formula broccoli extract could only have been achieved in four months’ time with the
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`research and know-how that came from Caudill Seed. John Minitelli from Valensa Lab testified
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`that Ashurst had all of the parameters for testing on the very first phone call to Valensa one
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`month after Ashurst’s arrival at Jarrow Formulas. Vinitelli, DN 429, p. 7. Valensa performed its
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`first large sale commercial run for Jarrow Formulas in October, 2011. Ibid. Caudill Seed
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`adduced evidence that Ashurst provided, at Jarrow Formulas’ request, a “roadmap” of the
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`Caudill Seed processes (PX 277) as well as detailed customer order information, vendor
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`information, test results on an activated formula, and a timeline for achieving its manufacturing
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`goals. PX 43; PX 59; PX 240; Smith, DN 396, pp. 122-128. Ultimately, the jury did not credit
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`Ashurst’s story, and there was ample evidence from which the jury could reasonably find
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`misappropriation of Trade Secret 1 by Jarrow Formulas.
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`Caudill Seed’s theory of the case has been that Trade Secret 1 consists of its particular
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`knowledge base built over many years and from which it developed its precise process for
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`successfully manufacturing and competitively marketing its Vitalica, and later Vitalica+
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`products. Trade Secret 1 was described at trial as its method and know-how “seed to shelf”
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`which provided Jarrow Formulas the ability to almost immediately begin successful and
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`profitable commercial production of an activated formula broccoli extract product at the
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`direction of Ashurst.
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`Ashurst had been working since 2009 on an activated formula at Caudill Seed and was
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`on the verge of a breakthrough in early 2011. Caudill testified that they were getting ready to
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`launch an activated formula product in March, 2011, and that Ashurst went to FONA, its vendor,
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`12
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`for that prupose. Ashurst went to FONA, then out to California to meet secretly with Jarrow
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`Formulas. Vol. 2 (Caudill) 34:16-23; pp. 39-41. In late March/early April, he passed that wealth
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`of knowledge and know-how and the refined process developed from years of testing and
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`research on to Jarrow Formulas as a condition of his employment that he “deliver on the
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`activated formula.” See, e.g. PX 240; Vol. 2B (Ashurst) 68:5-7. Ashurst provided Jarrow
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`Formulas test results from McCoy Labs on a myrosinase activated product. Caudill Seed
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`established that in April 2011 Dallas Clouatre, on behalf of Jarrow Formulas, requested that
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`Ashurst provide Caudill Seed’s full research files on broccoli actives and that Ashurst did so. PX
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`35. Among other items, Jarrow Formulas received documents containing specific times,
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`temperatures and pressures, blending specifics, vendor information, new product cost
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`information, and a list of Caudill Seed’s Broccoraphanin customers identifying what each
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`ordered and its specific blend information.
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`The specificity required in a trade secrets case is wholly fact-dependent, thus no single
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`case is controlling. However, we find a number of cases offer helpful guideposts in addressing
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`the issues here.
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`In GlobeRanger Corp. v. Software AG USA, Inc., No. 3:11-CV-0403-B, 2015 WL
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`3648577 (N.D.Tx. June 11, 2015) where the trial court was similarly addressing JMOL and new
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`trial motions, the defendant, AG, argued that liability for misrepresentation could not attach
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`without Globe Ranger providing greater specificity in identifying its trade secrets than it had at
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`trial. The court noted that plaintiff GlobeRanger’s evidence identified what materials AG
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`misappropriated and what aspects of those materials made them trade secrets, allowing the jury
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`to distinguish between the trade secret and non-trade secret portions of these materials. Id. at
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`*12. Here, the jury verdict evidences that Caudill Seed successfully did the same. It offered
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`13
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`Case 3:13-cv-00082-CRS-CHL Document 530 Filed 06/09/20 Page 14 of 55 PageID #: 25911
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`evidence of the research and development in which it engaged culminating in its confidential and
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`proprietary process by which it successfully and profitably manufactures and markets its broccoli
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`extract and broccoli extract-containing products. Caudill Seed provided significant evidence
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`from which the jury could reasonably conclude that the entirety of the know-how which could be
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`derived from Trade Secret 1 provided Jarrow Formulas the building blocks from which it jump
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`started its own manufacturing process for producing broccoli extract and broccoli extract
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`products.
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`Citing Wellogix, Inc. v. Accenture, L.L.P., 716 F.3d 867, 875 (5th Cir. 2013), the court in
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`GlobeRanger noted that it need only determine that Globe Ranger presented “enough evidence
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`for a jury to legitimately conclude that the misappropriated information/materials contained at
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`least some trade secrets.” GlobeRanger, supra. at *12.
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`In GlobeRanger, AG argued that GlobeRanger failed to prove that its and GlobeRanger’s
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`products were similar or that GlobeRanger’s claimed trade secrets included an “innovative
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`feature” or “secret idea.” Id. Here, Jarrow Formulas urges that Caudill Seed’s and Jarrow
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`Formulas’ processes for their activated formulas differ, as evidenced by Jarrow Formulas’ patent
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`on its method, and that no aspect of Caudill Seed’s process was unknown. In fact, Caudill Seed
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`does not deny that Jarrow Formulas’ method for making its activated formula differs from its
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`own. However, Caudill Seed adduced evidence at trial that its know-how and precise “seed to
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`shelf” method, the synthesis of the information and the precise method to achieve its results
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`which were thus refined and employed by Caudill Seed, was well-guarded knowledge and not
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`publicly known or readily ascertainable by proper means by others. Ashurst was subject to
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`confidentiality agreements with Caudill Seed during his employment and he closely guarded the
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`research and development knowledge for the company. Both Sullivan and Caudill testified
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`14
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`Case 3:13-cv-00082-CRS-CHL Document 530 Filed 06/09/20 Page 15 of 55 PageID #: 25912
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`concerning the secrecy with which the Caudill Seed research and development was kept and
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`Ashurst’s possession and treatment of the notebook and hard drive. Vol. 2 (Caudill) pp. 24-26;
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`Vol. 3A (Sullivan) 34: 9, 12. Again referring to Wellogix, the court in GlobeRanger explained:
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`Software AG argues that “like the plaintiff in Spear Marketing, GlobeRanger only
`could rely on circumstantial evidence of use,” and that like in that case, the
`circumstantial evidence at trial “failed to show that any of Software AG's
`products or the ‘Rave Solution’ were similar to the ‘Navy RFID Solution,’ let
`alone that any of Software AG's products or the ‘RAVE Solution’ included an
`‘innovative feature[ ]’ or a ‘secret idea’ comprising one of GlobeRanger's
`unspecified trade secrets.” Id. at 18–19 (quoting Spear Marketing, 2014 WL
`2608485, at *13) (brackets in original). Therefore, Software AG contends that
`GlobeRanger's claim should, likewise, be dismissed for failure to establish “use”
`of any trade secrets. See id. at 20. The Court, once again, disagrees.
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`“Use” for purposes of trade secret misappropriation is broadly defined as “any
`exploitation of the trade secret that is likely to result in injury to the trade secret
`owner or enrichment to the defendant,” including “marketing goods that embody
`the trade secret, employing the trade secret in manufacturing or production,
`relying on the trade secret to assist or accelerate research or development, or
`soliciting customers through the use of information that is a trade secret.” Gen.
`Universal Sys., Inc. v. HAL, Inc., 500 F.3d 444, 451 (5th Cir.2007) (quoting
`Restatement Third of Unfair Competition, § 40). In Wellogix, for example, the
`Fifth Circuit found sufficient evidence “to support the jury's finding that
`Accenture used [Wellogix's] trade secrets,” including “that Accenture joined with
`SAP to develop a complex services component,” during which time “they were
`able to access Wellogix's dynamic templates source code,” and that Accenture's
`documents suggested they were using Wellogix's content. 716 F.3d at 877. The
`Fifth Circuit also found insignificant the differences that existed between
`Accenture's “complex services templates” and Wellogix's, reasoning that “the
`standard for finding ‘use’ is not whether Accenture's templates contained
`Wellogix trade secrets, but whether Accenture ‘relied on the trade secrets to assist
`or accelerate research or development’ of its templates.” Id. (quoting HAL, 500
`F.3d at 451) (internal brackets omitted). And since there was enough evidence for
`a jury to “legitimately infer ... that Accenture relied on Wellogix's templates to
`develop its own,” the Fifth Circuit rejected Accenture's request for judgment as a
`matter of law on this basis. Id. at 877–78 (citations and quotation marks omitted).
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`Likewise, here, GlobeRanger produced sufficient evidence at trial to support the
`jury's conclusion that Software AG used its trade secrets in the development of
`the RAVE solution. Specifically, GlobeRanger showed that Software AG, like
`Accenture in Wellogix, “was hired to develop an RFID solution,” and that during
`the RAVE pro