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US District Court orders Walmart to pay $115 Million for misappropriation of Trade Secrets

By Nancy Goyal      Jun 14, 2021      0 Comments      1,422 Views
US District Court orders Walmart to pay $115 Million for misappropriation of Trade Secrets

A US District Court asked Walmart to pay agricultural technology company Ecoark $115 million after it was found to have misappropriated trade secrets. 

Ecoark, which owns Zest Labs, sued Walmart in August 2018, claiming that the supermarket chain had wrongfully used and disclosed Zest's trade secrets concerning technology for reducing food waste.

A jury at the US District Court for the Eastern District of Arkansas found that Walmart was liable for three claims, including trade secrets misappropriation and failure to comply with a written contract.

Therefore, the jury awarded $65 million in compensatory damages, as well as $50 million in punitive damages for Walmart’s “willful and malicious” conduct.

Zest CEO Peter Mehring stated that,

“We are grateful that the jury understood and acknowledged the evidence that supported Zest’s claims..”

Zest CEO also added that, “This outcome further validates the unique and valuable solutions that Zest Labs built, and underscores the strength of our IP.”

The suit concerned Walmart’s Eden, a technology system that tracks the freshness of food along the supply chain to Walmart’s retail stores. “We were surprised and concerned by how similar Walmart’s Eden description was to Zest Fresh,” said Mehring in 2018, after Ecoark filed the suit. Zest Fresh is the company’s flagship product, which monitors food supplies in real-time as they are transported.

Zest Labs said it had a multi-year business relationship with Walmart until 2017, through which the retail chain acquired information from Zest Fresh which it was bound by contract to keep confidential.

Ecoark CEO Randy May said that,

“We are happy that we had our day in court and the jury found that Walmart misappropriated our trade secrets and breached the agreement between the parties. The damages awarded were strongly supported by the evidence,”

CEO Randy May further added that, “The jury verdict also allows us to file motions seeking attorneys’ fees and costs. We do not believe Walmart has any basis to appeal the verdict and doing so will only confirm that the judgment was proper.”

On the other hand, Walmart is already planning an appeal, quoting a spokesperson as saying:

“Walmart values its business relationships and respects the IP rights of others. We have policies in place to prevent the inappropriate use of third-party assets. We believe the jury’s verdict is excessive, not supported by the facts, and should be set aside. We plan to file post-trial motions and are considering our next steps.”

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