Syntel Sterling Best Shores Mauritius Ltd. v. TriZetto Grp., Inc., Case No. 1:15-CV-00211, Dkt. Nos. 1567 (S.D.N.Y. June 30, 2025) and 1155 (S.D.N.Y. Oct. 23, 2024)
Damages retrial results in $70 million compensatory damages award for trade secret misappropriation following Second Circuit's vacatur of previous $285 million award.
A jury in the Southern District of New York awarded the TriZetto Group, a healthcare software company, nearly $70 million in compensatory damages resulting from Syntel Sterling's trade secret misappropriation and copyright infringement. The litigation arose from a January 2010 agreement in which Syntel agreed to provide TriZetto with software development and related customer support services. When the parties' agreement expired in 2014, TriZetto accused Syntel of misappropriating TriZetto's trade secrets related to its "Facets core administration platform"—a "modular system integrating consumer, care, claims and revenue management" for processing insurance claims.
As we previously covered, after an October 2020 trial, a jury found Syntel liable for misappropriating more than 100 TriZetto trade secrets and awarded TriZetto $285 million in compensatory damages for avoided development costs under the Defend Trade Secrets Act (DTSA) plus $570 million in punitive damages—an over $850 million total damages award. The district court later decreased punitive damages to $285 million while maintaining the compensatory damages award. The Second Circuit affirmed Syntel's liability but vacated the $285 million compensatory damages award, holding that "avoided costs are not available under the DTSA as a matter of law in a case like this one where Syntel's misappropriation did not injure TriZetto beyond its $8.5 million in lost profits." On remand, the district court granted TriZetto's motion for a new trial on compensatory damages, ruling that "TriZetto's original presentation relied on a fair understanding of the available damages theories, which later was determined to be an error of law" thus "[a] new trial on damages is warranted based on a manifest error of law." The damages retrial resulted in the June 2025 compensatory damages award to TriZetto of $70 million.
Plaintiff ImageKeeper developed software that it called the "Flood Claim Service System" to process flood insurance claims. In 2016, co-defendant Wright Insurance began using ImageKeeper's Flood Claim Service System to process Wright Insurance flood claims. ImageKeeper alleged that in late 2019, days before the parties renegotiated a new software services agreement, Wright Insurance created unauthorized user accounts on the Flood Claim Service System to provide access to co-defendant Evoke—a software development company—with the intent of hiring Evoke to develop a competing application.
In October 2020, ImageKeeper sued Wright Insurance and Evoke for misappropriation of ImageKeeper's trade secrets under the Defend Trade Secrets Act (DTSA) and Nevada Uniform Trade Secrets Act (NUTSA). In October 2024, defendants moved for summary judgment as to ImageKeeper's two surviving alleged trade secrets, including "API documentation" "defining the endpoints available to adjusting firm APIs, the endpoints to request access tokens used to communicate with the [Flood Claim Service System], and APIs defining endpoints available for insurance carriers[.]"
Defendants argued that the API documents lacked independent economic value because they "broadly contain public or generic information that any homeowner making a flood claim might share, or FEMA-requested information." The court agreed with defendants, finding that "there is no way to conclude that [ImageKeeper's] APIs and the associated documents are independently valuable because ImageKeeper has not provided any documentation to that effect." The court noted that it understood "the thrust of the Supreme Court's [Google v. Oracle] analysis" to be "that declaring code for APIs do[es] not house the same sort of secret information as most computer programs (such as the implementing code)." Accordingly, ImageKeeper "did not sufficiently explain the value of the APIs and corresponding documentation beyond the fact that it kept them under lock and key[,]" and thus could not pursue its DTSA and NUTSA claims as to its alleged API trade secret.
Crabar/GBF, Inc. v. Wright, No. 23-3335, 2025 WL 1740313 (8th Cir. June 24, 2025)
Eighth Circuit affirms use of general verdict form that did not require jury to determine whether individual alleged trade secrets qualify as trade secrets.
Plaintiff Crabar/GBF, Inc. ("Crabar") and Defendant Wright Printing Co. ("WPCO") are in the printed business products space. In 2013, Crabar purchased WPCO's folder manufacturing business through an Asset Purchase and Sale Agreement (APA) that included transfer of title to "all customer lists, customer and prospect databases, customer sales information," and "any Intellectual Property owned by WPCO." Without Crabar's knowledge, WPCO's owner (co-defendant Mark Wright) retained a personal laptop containing "hundreds, maybe thousands" of Excel spreadsheets showing design specifications, sales data, and customer lists belonging to Crabar. WPCO allegedly used this data in 2016 to start a new folder business to compete with Crabar. WPCO also relied on information exfiltrated to WPCO by two former Crabar employees, co-defendants Kohlhaas and Frederickson.
In December 2016, Crabar sued defendants for trade secret misappropriation under the Defend Trade Secrets Act (DTSA). At trial, Crabar argued defendants misappropriated six trade secrets—three of which (a "die inquiry spreadsheet," "die template files," and "die boards") were known as the "folder information" secrets. The jury found each defendant liable for each count. However, the general verdict form did not ask the jury to separately determine whether each alleged trade secret independently qualified as a trade secret. Instead, the jury was instructed only to decide whether each defendant was liable on Crabar's "misappropriation of trade secrets claim." Defendants appealed the district court's denial of their motion for a new trial on Crabar's trade secrets claims.
On appeal, defendants invoked the "general verdict rule," arguing a new trial was appropriate because it was unknown whether the jury based its trade secret verdict on the folder information secrets (which defendants asserted were not trade secrets), or on the other three alleged trade secrets (which defendants did not contest were trade secrets). The Eighth Circuit found sufficient evidence in the record for the jury to conclude that the folder information secrets were trade secrets protectable under the DTSA, pointing to Crabar's internal controls including IT policies and non-disclosure agreements and WPCO's own treatment of the alleged trade secret information as proprietary in pre-sale negotiations. The appellate court also noted its skepticism over whether defendants had properly preserved their objection to the use of the general verdict form since they had not protested its use at trial. Accordingly, the Eight Circuit ruled that the district court did not err in denying defendants' motion for a new trial because they (a) had not expressly requested a special verdict form and (b) did not object "at any point" to use of the general verdict form at trial.
Hayden v. International Business Machines Corp., No. 21-CV-2485, 2025 WL 1697021 (S.D.N.Y. June 17, 2025)
Southern District of New York court grants summary judgment to defendant IBM, finding that plaintiff did not define alleged trade secret with requisite specificity to identify a protectable trade secret.
Plaintiff Gerald Hayden, whom IBM employed as a financial services industry consultant from November 2015 to October 2018, alleged IBM stole his "methodology to construct an architecture for a digital platform" called "Awareness to Execution ('A2E')." Hayden described A2E as a "business decision-making, analytic, and marketing methodology ... that construct[s] an architecture for a digital platform for the hybrid cloud" and enables "a bank or other company to access data its workflows rely upon wherever it resides without copying and to apply analytics to that data to make predictions and decisions in real time."
After Hayden's employment with IBM ended in October 2018, he suspected IBM had misappropriated A2E to incorporate it into "Cloud Paks"—an IBM line of AI-powered software solutions. Hayden claimed IBM deliberately excluded him from workflows involving Cloud Paks and thus he had not realized A2E was allegedly misappropriated until Cloud Paks launched in 2019. Hayden filed a complaint against IBM in March 2021 alleging misappropriation of his A2E trade secret, among other related claims. In September 2024, IBM moved for summary judgment arguing that "after three years of litigation and voluminous discovery ... the identity of Hayden's alleged trade secret remains inscrutable."
The court agreed with IBM, finding that "[f]ar from satisfying his burden to describe his alleged trade secret with precision, plaintiff instead equivocates in nearly every respect when discussing his alleged secret." Specifically, the court noted Hayden (a) "equivocates as to whether one or multiple of his trade secrets were allegedly misappropriated by defendants," and (b) "is not consistent in referring to []his purported trade secret. At different times, he describes his trade secret as 'an architecture,' 'a combination of software, hardware and other elements,' and 'a methodology to construct an architecture for a digital platform.'" The court also rejected Hayden's attempt to identify "the complete documentation" of his purported trade secret "without identifying exactly which pieces of information are the trade secrets" because this tactic "impermissibly shifts [his] burden onto defendants and the Court to comb through his papers and attempt to find it."
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