On February 25, 2020, Plaintiff Mustard Girl LLC ("Mustard Girl"), an award-winning mustard manufacturer, filed a lawsuit in the Circuit Court of Cook County for damages against its former co-packing partner, Olds Products Co. of Illinois, LLC ("Olds"), for misappropriation of trade secrets and other derivative claims. According to Mustard Girl, Olds engaged in a multi-year scheme to steal Mustard Girl's recipes and then use those recipes to sell its own mustard products at lower cost to Mustard Girl's largest accounts.
This mustard dispute presents a common trade secrets misappropriation scenario—the alleged misappropriator had lawful access to the trade secrets but then misused its access for an improper purpose. An additional wrinkle in this case is that Mustard Girl provided the mustard recipes to Olds under a confidentiality agreement, but admittedly lacks a counter-signed copy. Proving that reasonable measures were taken to keep trade secrets protected is necessary to prevail on a claim for misappropriation. If Mustard Girl is unable to prove that the recipes were provided to Olds under a confidentiality agreement, it may face a significant hurdle in proving that its recipes are, in fact, trade secrets.
What is uncommon about this case is that Mustard Girl is not seeking any injunctive or equitable relief; only money damages. Typically, trade secret owners are encouraged to seek immediate injunctive relief when misappropriation occurs, including an order preventing any continued use of the trade secrets and requiring that all copies of the trade secrets be returned to the owner. Such relief is available under both the Uniform Trade Secrets Act as well as the federal Defend Trade Secrets Act. Curiously, Mustard Girl is not seeking any such relief.
While we can only speculate why Mustard Girl is not seeking an injunction against Olds, part of the reason may be that Olds' alleged scheme began in 2012. While Mustard Girl allegedly only discovered Olds' scheme recently, it may recognize that proving irreparable harm or a lack of an adequate remedy at law—both of which are required elements to obtain injunctive relief—may be an uphill battle because Olds allegedly took Mustard Girl's largest accounts away several years ago.
The important lessons from this mustard dispute are that trade secret owners must vet who is provided access to their trade secrets and ensure appropriate protections are in place once access has been provided. In addition, trade secret owners must be diligent in protecting their secrets. Mustard Girl alleges facts that may have put a more diligent plaintiff on notice that something was awry, including Olds' "quizz[ing]" Mustard Girl about its largest accounts back in 2013 and the subsequent loss of the accounts. When suspicious behavior arises, action must be taken to protect the business. Mustard Girl's apparent failure to do so may create unnecessary challenges in obtaining appropriate relief in court.
We will be monitoring this case going forward and provide any relevant updates.
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