Farmers Edge Inc. v. Farmobile, LLC, No. 18-2900 (8th Cir. 2020)
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FEI, Crop Venture's successor-in-interest, filed suit alleging that the individual defendants took proprietary information they developed at Crop Ventures after they left the company and co-founded Farmobile (the corporate defendant). Specifically, FEI alleges that the individual defendants' behavior constituted a breach of explicit or implicit contracts with the company; defendants were obligated to assign to their employer the ownership rights of products they worked to develop; the individual defendants breached their duty of loyalty to their employer; and the individual defendants misappropriated trade secrets. The district court denied in full FEI's motion, and granted in part and denied in part Farmobile's motion.
The Eighth Circuit affirmed and held that because no contract bound the parties during Defendant Nuss' term of employment, Nuss was not in breach of an explicit contract; FEI has not shown that any of the individual defendants was similarly "specifically directed" during their product-development process, so no implied contracts were created under the hired-to-invent doctrine; FEI failed to show the individual defendants breached their duty of loyalty to their employer; FEI cannot maintain a trade secret claim under the Nebraska Trade Secrets Act (NTSA) or the federal Defend Trade Secrets Act (DTSA); and the remaining claims are unpersuasive.
Court Description: [Kelly, Author, with Loken and Benton, Circuit Judges] Civil Case - Diversity. Three individuals left Crop Ventures to form Farmobile. Crop Venture's successor-in-interest, Farmers Edge sued the individuals for breach of explicit or implicit contract, breach of duty of loyalty, and misappropriated trade secrets. The district court did not err in denying Farmers Edge relief, as Randy Nuss did not have an explicit contract with Crop Ventures and neither of the three individuals were hired to invent and thus did not breach an implied contract. Farmers Edge failed to show the individuals breached their duty of loyalty. The district court did not err in concluding Crop Ventures did not take reasonable efforts to maintain the secrecy of the information it alleges was a trade secret and thus the information was not protected.
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