By: Aaron Kim, ITMG Insider Threat Analyst
The U.S District Court has thrown out a lawsuit by pharmaceutical software company Medidata Solution that alleged Veeva Systems stole trade secrets worth “hundreds of millions of dollars”, according to the company’s representative. The lawsuit was originally filed in 2017 for allegedly stealing secrets about Medidata’s products, customers and business strategy by poaching several of its employees. The lawsuit states that the stolen information was used to develop a completing software managing clinical drug trials.
Medidata had asked for as much as $450 million in damages during the trial. U.S District Judge Jed Rakoff concluded that Medidata was unable to prove its claims against Veeva. The ruling is an important move in the protection of employees and customer rights as the case represented an attempt to limit competition and the free flow of talent with unfounded trade secret claims.
“To the extent that [Medidata’s] case rests on allegations regarding specific trade secrets that were misappropriated, they have failed to make their case.” Rakoff went on to state, “I think a more general problem with Medidata’s case is they seem to think that just about anything in the world can be a trade secret. And that, of course, would mean that you could never hire away an employee from another company because anything they said — one word out of their mouth — would indirectly reveal something they had learned at their prior employment…and both the statutes here involved, and also legislative history make clear that that was not the intent of the legislators.”
In a press statement, Veeva said that Medidata filed the trade secret case despite lack of evidence to support the lawsuit and is an attempt to hinder the former’s efforts to innovate in the clinical data management market and to intimidate employees of Medidata from joining Veeva. The case is claimed to have confused customers of both companies, harmed employees and cost a combined sum of $40m. Veeva CEO Peter Gassner added: “We are pleased the court dismissed Medidata’s suit and stood up for the rights of employees and customers in the face of an abuse of the legal system, intimidation of employees, and an attempt to limit companies’ access to innovation. Baseless lawsuits like Medidata’s harm individuals, customers, and the industry overall. I hope this ruling encourages others to focus their energy on innovation and employee success rather than unnecessary and harmful litigation.”
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