IP Law Daily Jury's allocation of fault between defendants in trade secrets case was appropriate
Tuesday, December 11, 2018

Jury's allocation of fault between defendants in trade secrets case was appropriate

By Edward L. Puzzo, J.D.

Plaintiff Bimbo Bakeries was not required to present expert testimony calculating the amount of damages caused solely by one of the defendants because the allocation of fault between defendants in a trade secret misappropriation case was quintessentially a jury question and appropriate as long as supported by non-arbitrary evidence, the federal district court in Salt Lake City has ruled (Bimbo Bakeries USA v. Sycamore, December 10, 2018, Nuffer, D.).

In August 2013, Bimbo Bakeries had alleged that Wild Grains Bakery, a company owned by Tyler Sycamore, had misappropriated Bimbo’s trade secrets for making a bread product called Grandma Sycamore’s Home-Maid Bread. The product had originally been developed by Tyler Sycamore's father, defendant Leland Sycamore, who had sold the rights to the product to Bimbo's predecessor-in-interest. As part of that transaction, Leland Sycamore executed a nondisclosure agreement, which required him to, among other things, keep confidential and refrain from using Grandma Sycamore’s production formulations, manufacturing processes, and trade secrets. Wild Grains Bakery was a contract baker for defendant U.S. Bakery hired to bake a bread called Grandma Emilie’s, and later a bread called BreadLover’s White, both of which, Bimbo alleged, used Bimbo's Grandma Sycamore’s trade secrets in their recipes.

U.S. Bakery moved for dismissal, arguing that there was no trade secret protection because the steps claimed as a compilation comprising the production process of Grandma Sycamore’s bread were well known. On April 28, 2017 (unsealed July 20, 2017), the federal district court in Salt Lake City ruled that Bimbo’s was entitled to assert trade secret protection in the overall recipe and process used for making its bread as a compilation, even if the individual elements were known, and that U.S. Bakery could not avoid trade secret liability by using additional ingredients and a different process in making its bread.

On October 6, 2017, a jury returned a verdict in favor of Bimbo Bakeries, finding that they suffered $2,105,256 in damages as a result of trade secret misappropriation and found U.S. Bakery responsible for $1,578,942 (75 percent of the damages) and Leland Sycamore responsible for $526,314 (25 percent of the damages).

Judgment as matter of law motion. Leland Sycamore now moved for a second renewed motion for judgment as a matter of law. He did not dispute that Bimbo suffered $2,105,256 in total damages for trade secret misappropriation, but argued that there was insufficient evidence to attribute any of the damages to him.

The court responded that Bimbo was not required to present expert testimony calculating the amount of damages caused solely by Sycamore’s misappropriation. The allocation of fault was quintessentially a jury question, the court stated. Although the jury must have a reasonable basis for apportioning damages, the court continued, evidence supporting a finding of some level of responsibility is sufficient to uphold a jury’s apportionment of fault.

Here, the court stated, the jury had a non-arbitrary evidentiary basis, including evidence regarding each defendant's conduct, to apportion damages to Sycamore. A reasonable jury could find that Sycamore and U.S. Bakeries each misappropriated the trade secret. Once that finding was made, the jury was capable of allocating fault accordingly based upon the evidence received. The court therefore denied Leland Sycamore's renewed motion for judgment.

This case is No. 2:13-cv-00749-DN.

Attorneys: Charles A. Burke (Womble Bond Dickinson [US] LLP) and Raymond J. Etcheverry (Parsons Behle & Latimer) for Bimbo Bakeries USA. Sean N. Egan (Sean N. Egan, Attorney at Law) for Leland Sycamore. Christopher S. Hill (Kirton McConkie PC) and Eric C. Beach (Tonkon Torp LLP) for United States Bakery.

Companies: Bimbo Bakeries USA; United States Bakery

MainStory: TopStory TradeSecrets UtahNews

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