September 29, 2020
Walmart has a certain reputation regarding the manner in which it deals with its suppliers and service providers. Therefore, no one was particularly surprised when the facts came out at trial about a fixed fee agreement and Walmart’s almost instantaneous demands that additional work be done outside the scope of the contract for no additional charge. Walmart Inc. v. Cuker Interactive, LLC, 949 F.3d 1101, 1107 (8th Cir. 2020). Nor was anyone shocked that Walmart started pressuring its e-commerce consultant (Cuker Interactive) to give them the Adobe Source Files, which ended up being the only alleged trade secret to pass muster. Id. at 1109-11.
That Cuker Interactive failed to carry its ultimate burden to establish trade secret status for three out of four alleged trade secrets is not surprising. When a claim of trade secret misappropriation is asserted in litigation, the plaintiff will normally identify everything that was ever disclosed to the defendant in the hopes that some of that information will be found to have achieved trade secret status at the end of the day. Trade secret litigation is often characterized by a struggle between the plaintiff, who does not want to articulate its trade secrets (i.e., indefinite trade secrets are difficult to attack), and the defendant, who understandably demands to know what trade secrets it is alleged to have misappropriated.
In the end, Cuker Interactive almost certainly regretted ever getting mixed up with Walmart. In fact, it seems likely that the Walmart contract led to the destruction of the company. It appears that after Walmart failed to pay Cuker, Cuker failed to pay its lawyers over the course of five years of litigation, leading to at least one lawsuit over attorneys’ fees that were owed by Cuker’s president, who had provided a personal guarantee for legal services rendered. The enforceability of this agreement became of great importance because Cuker filed for bankruptcy in December 2018.
Mike Regitz focuses his practice on intellectual property and technology disputes, counseling, and licensing.
RegitzMauck PLLC is an intellectual property boutique based in Dallas, Texas. The firm focuses on providing value-based legal services to cost-conscious clients seeking high quality legal representation in intellectual property, cybersecurity, and data privacy matters and disputes.