SAKG Achieves Unanimous Defense Verdict in $4 Million Trade Secrets Trial in Oregon Federal Court

On August 9, 2019, partner Scott Ast won a unanimous defense verdict in Oregon federal court in a case involving claims of misappropriated trade secrets and tortious interference.

The plaintiff, a loan servicing company and subsidiary of a large debt collection firm, alleged that SAKG’s client misappropriated trade secrets related to student loan servicing software that he and his former employer developed for plaintiff beginning in 2006. SAKG’s client, a well-respected lead programmer on the project, resigned from his employment in December 2017. After his departure, plaintiff alleged that he and his former employer, which was also a defendant at trial, misappropriated client data and confidential information acquired during the long relationship with plaintiff.  The plaintiff sought to recover $4 million in damages.

Plaintiff alleged that SAKG’s client not only misappropriated plaintiff’s trade secrets during his employment, but that he continued to do so after his resignation such that he had a competing loan servicing software system well underway within months of his departure. Plaintiff claimed that both defendants destroyed evidence of misappropriated trade secrets while litigation was pending for which sanctions were appropriate. The court agreed that sanctions were necessary and instructed the jury as to permissive adverse inferences against both defendants. The court also instructed the jury that the former employer could be held liable for misappropriation of trade secrets based on its former employee’s conduct if plaintiff proved that the co-defendant acted in concert with SAKG’s client to misappropriate trade secrets, or gave substantial assistance or encouragement to SAKG’s client to misappropriate trade secrets.

SAKG’s client and his former employer ardently denied the allegations but were forced to defend against the claims through highly contentious litigation that included a motion for temporary restraining order, a preliminary injunction proceeding, motions for sanctions and extensive discovery involving computer forensics. Plaintiff employed aggressive litigation tactics using lawyers from a national law firm and sought punitive damages, attorney’s fees and costs at trial.

On August 9, 2019, SAKG’s client and his former employer prevailed with a unanimous defense verdict on all counts after a two-week jury trial. The verdict vindicated SAKG’s client who had his reputation tarnished by plaintiff’s unfounded claims of misappropriation.

Scott Ast