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Food Companies Spar Over Stolen Trade Secrets Claim

by Chris Brook on Thursday June 4, 2020

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In a new lawsuit, a candy bar company is alleging a former employee downloaded more than 6,000 files involving its trade secrets, strategies, and market insights, before leaving to join a competitor.

Two major food manufacturers are pointing fingers, contending one former employee of a company took thousands of valuable corporate documents before jumping ship for the other company.

Two weeks ago, in a trade secrets lawsuit filed in the District of Columbia, Mars, the $35 billion confectionery manufacturer, alleged one of its former employees, Jacek Szarzynski, took files and documents on acquisitions and products before joining coffee and sandwich company JAB Holding Co.

Mars, Inc., of course, owns a slew of gum, candy, and mint brands - M&M's, Skittles, Snickers, and Twix to name a few - but does business in life sciences, petcare, and soft drinks, too. JAB's subsidiaries include companies Krispy Kreme, Caribou Coffee, Au Bon Pain, and Pret A Manger.

In the suit (.PDF) Mars alleges that in 2018, before Szarzynski joined JAB as an operating partner for Pret Panera Holding Company - a company that put Panera Breads, Pret A Manger, and a handful of bagel companies like Brugger's and Einstein Brothers, under one roof, he uploaded proprietary business information to a company-issued laptop, then downloaded it to a personal hard drive.

The complaint alleges that Szarzynski, who worked at Mars for 24 years, first as a business planning analyst before eventually working his way up to a Global CFO for several of its brands, stole 6,166 documents from the company.

According to the complaint, Szarzsynski took “valuable trade secrets and competitively-sensitive information” including the company’s product-by-product, country-by-country, and global level financial results, financial projection data, forward-looking strategic business planning for the company’s businesses on a country-by-country basis, and acquisition opportunities.

The employee stored some data on two personal USB drives but also forwarded an email involving candidates for a job search from his work email to his personal email.

“Szarzynski’s downloading was massive and included a broad range of confidential and proprietary Mars documents about multiple global business sectors,” Mars said in the May 20 complaint. “The forensic evidence shows that Szarzynski carefully targeted the Mars documents he unlawfully downloaded.”

A spokesperson for JAB told Bloomberg in a statement last month that the lawsuit is “completely without legal merit” and that “neither JAB nor Pret Panera has used or benefited in any way from any Mars information.”

According to the complaint, some of the documents he accessed had nothing to do with his job scope at Mars but that didn’t stop him from downloading them and even sharing them with colleagues at his new job at JAB and Pret Panera. The fact that Szarzynski was bound by confidentiality agreements legally barring him from using Mars' trade secrets and information didn't stop him either, the complaint suggests.

While Mars claims that it had safeguards in place - it encrypts and password-protects confidential information, shreds hard copies of documents after use, and requires two-factor authentication when logging in to systems remotely - the company claims it only became aware of Szarzynski’s downloading after he left the company, something that makes it unclear whether it had mechanisms in place to detect and prevent data theft.

Mars is asking JAB and Pret Panera to remove the files from their possession, to stop using or sharing the information, and for the court to find that the parties “willfully and maliciously misappropriated Mars’ trade secrets.” It's also asking for an award of damages as measured by the losses caused by the misappropriation of Mars' trade secrets.

Tags:  IP theft Industry Insights

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