Wellbeing Genomics prevails in DNA test trade secret jury trial
Clients Wellbeing Genomics Pty Ltd.
Following a two week trial, a jury in Austin, Texas returned a verdict in favor of Jones Day client Wellbeing Genomics Pty Ltd. in a trade secret case involving technology related to the use of individuals' genetic variations to determine risk in five skin health categories and to make recommendations of skin care product ingredients and treatments based on chemical compositions.
Wellbeing Genomics developed a DNA-based laboratory test to identify the skin's propensity to five key aging pathways: collagen breakdown; photo aging; wrinkling; oxidation; and tolerance for environmental pollutants. The test is based on 15 single nucleotide polymorphisms or "SNPs," which are genetic variations that occur in 1 percent or more of the population. Wellbeing Genomics claims a trade secret in its specific grouping of SNPs into one or more skin-related categories.
Wellbeing Genomics disclosed its trade secret to PLLG, LLC, a company founded by Dr. Ruthie Harper, pursuant to the confidentiality provision of an exclusive distributor agreement. Wellbeing Genomics also disclosed the trade secret to David Urman, a consultant to PLLG, pursuant to a non-disclosure agreement.
Wellbeing Genomics alleged that Harper disclosed the trade secret in a patent application, that Harper and PLLG used the trade secret to develop a competing test, and that Harper, PLLG, and Urman disclosed the trade secret to Qivana LLC. Wellbeing Genomics further alleged that Qivana acquired and used the trade secret and disclosed the trade secret to another lab with actual or constructive knowledge that the information in question was a trade secret.
The jury returned a verdict awarding damages to Wellbeing Genomics on its claims for breach of contract, misappropriation of trade secrets, violation of Texas Theft Liability Act, and unfair competition. On appeal, the court of appeals affirmed the decision against the principal and affirmed the distributor's liability but remanded for Wellbeing to select a different measure of damages.
The trial court entered judgment for and awarded damages to Wellbeing on its claims against Harper and Qivana LLC for misappropriation of trade secrets and against David Urman and PLLG for breach of confidentiality agreements.
Harper and PLLG appealed. The court of appeals affirmed the judgment as to Harper in all respects. The court of appeals also held that Wellbeing should recover against PLLG but do so on a different claim for damages.
Harper then filed a petition for review with the Supreme Court of Texas, which denied her petition.
Dr. Ruthie Harper and PLLG, LLC v. Wellbeing Genomics Pty Ltd., No. 3-17-cv-00035 (Tex. App.); Wellbeing Genomics Pty Ltd. v. PLLG, LLC, et al., No. D-1-GN-14-002452 (98th District Court Travis County, Texas)