On appeal from the U.S. District Court for the District of Nebraska, the U.S. Court of Appeals for the Eighth Circuit affirmed a denial of summary judgment holding that there was no misappropriation of trade secrets.
The conflict arose when three former employees of Crop Ventures, Inc., left to co-found Farmobile, LLC. Farmers Edge Inc. (the successor in interest of Crop Ventures) subsequently sued the three former employees and Farmobile for breach of contract, breach of duty of loyalty, and misappropriation of trade secrets. Farmers Edge filed a motion for summary judgment on all claims in its First Amended Complaint, which was denied in full by the district court. Farmers Edge appealed.
Farmers Edge alleged that Farmobile and the three former employees misappropriated trade secrets under the Nebraska Trade Secrets Act and the federal Defend Trade Secrets Act. The district court held that Crop Ventures did not take reasonable efforts to maintain the secrecy of the information it alleged was a trade secret. The information that Crop Ventures alleged was a trade secret was information Crop Ventures shared with a third-party contractor without a confidentiality agreement and without other policies for safeguarding the information. Therefore, the district court denied summary judgment.
On appeal, Farmers Edge did not challenge the factual finding that it shared the relevant information with a third party who had no obligation to keep the relevant information confidential. The Eighth Circuit therefore affirmed denial, holding that the disclosure without a confidentiality obligation meant the alleged trade secret was not subject to reasonable efforts to protect the information.
The Eighth Circuit also affirmed denial of summary judgment on the other contract and breach of duty of loyalty claims.
The case is Farmers Edge Inc. v. Farmobile, LLC, 970 F.3d 1027 (8th Cir. 2020).