At the end of July, I posted a video discussing why I thought SharkNinja's approach in defending Keurig's initial application for a TRO in this Defend Trade Secrets Act claim was particularly smart, noting that they were wisely picking their battles, showing the Court, effectively, they really had nothing to hide, making their executives' electronic devices available for forensic inspection without a battle royale.
The Two Most Important Issues Raised by SharkNinja in Opposition to Keurig's Application
Now, about a month and a half later, SharkNinja has filed its response to Keurig's initial papers, and they raise what appears, at least at first blush, to be some rather strong points that Keurig will have to deal with, the two (2) most important (at least in my view) being:
(1) The Non-Compete Agreement Keurig is Suing Over Didn't Contain a "Garden Leave" Provision, and is Therefore Unenforceable as a Matter of Massachusetts Law. The Massachusetts Noncompetition Agreement Act, or "MNAA," states that in order to be enforceable, noncompete agreements must include a "garden leave" clause, whereby the employee is given additional compensation in exchange for their agreement to forego working for a competitor post-employment.
(2) The Complaint Fails to Identify any Specific Trade Secret that was Purportedly Misappropriated. Both Federal and Massachusetts state law on this issue are fairly clear that the parties and the court cannot accurately decide the question of whether a trade secret exists without first understanding what precisely is asserted as a secret.” Sutra, Inc. v. Ice Express, 2008 U.S. Dist. LEXIS 52849, at *3 (D. Mass. July 10, 2008) (citation omitted) (granting motion to dismiss trade secret claim). Under both the DTSA and MTSA, insufficient particularity as to the purported trade secrets allegedly misappropriated is fatal to establishing trade secret protection. Lithero, LLC v. Astrazeneca Pharm. LP, 2020 WL 4699041, at *1 (D. Del. Aug. 13, 2020).
The Danger to Keurig if They Don't Have the Goods to Prove Actual Trade Secrets Were Stolen
If it later turns out that Keurig does not, in fact, have any proof that the defendants misappropriated any materials that could legitmately be deemed trade secrets, and the Court determines that Keurig, at the end of the day, had no good faith basis for bringing these claims, they do run the risk that the Court could require them to reimburse the defendants for the legal fees they expended in defending those claims under the DTSA, which permits a court to “award reasonable attorneys’ fees to the prevailing party” when a claim of misappropriation is “made in bad faith,” which “may be established by circumstantial evidence.” 18 U.S.C. § 1836(b)(3)(D).
