April 29, 2011

St. Jude wins $2.3 billion trade-secret verdict

Posted in Confidential Information, Employee Handbooks, Trade Secrets tagged , , , at 10:13 am by Tom Jacobson

A California jury has awarded Minnesota-based St. Jude Medical $2.3 billion in a trade secrets case brought against a former employee and the company he founded.

According to reports published in the Star Tribune and elsewhere, the former employee, Yongning Zou, was accused of stealing St. Jude’s trade secrets in order to set up a rival medical device company, Nervicon (St. Jude wins $2.3B in trade secrets suit, http://bit.ly/hCyquH; see also St. Jude Wins $2.3B in Trade Secrets Trial, http://bit.ly/imGBnw).   Zou had been a principal hardware design engineer for St. Jude’s cardiac rhythm management division, Pacesetter, Inc.  He had access to company documents and had signed a nondisclosure agreement.

A month after Zou left Pacesetter, Nerivcon asked one of Pacesetter’s manufacturers to make a product which was unique to St. Jude.  Nervicon also gave the manufacturer the St. Jude product specifications and a document that had a “SJM” part number. 

St. Jude accused Zou and Nervicon of stealing its trade secrets.  A California jury agreed and awarded the company $2.3 billion for past damages, future economic loss and punitive damages.

In today’s business world a company’s greatest asset is sometimes the confidential information it and no one else has.  For example, a company’s customer lists, marketing plans, business strategies, formulas, and information of all types can be extremely valuable when it is not known to the public.  It becomes valuable because it is a secret. 

The Minnesota Uniform Trade Secrets Act, http://bit.ly/h5oN6l, is one helpful tool for protecting confidential information.  To take advantage of its protections, employers must, among other things take steps that are reasonable under the circumstances to protect the secrecy of the information.  Confidentiality agreements, computer passwords, limiting access and keeping sensitive information under lock and key are just a few examples of steps an employer can take to maintain that secrecy.

For more information about this article, please contact me at taj@alexandriamnlaw.com.

The comments posted in this blog are for general informational purposes only. They are not to be considered as legal advice, and they do not establish an attorney-client relationship. For legal advice regarding your specific situation, please consult your attorney.

Copyright 2011 Swenson Lervick Syverson Trosvig Jacobson, PA

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2 Comments »

  1. Joni Jacobson said,

    Could this ruling apply to a wife who’s husband reveals that the delicious dinner on which she was complimented was, in fact, his “sister’s recipe”? Seems only fitting. 🙂

    • Tom Jacobson said,

      Most definitely, but the statute of limitations has expired on that one, dear!


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