Oakwood convinces third circuit to reopen TS suit
Oakwood Laboratories has convinced third circuit judges to revive a trade secrets dispute with its former vice president of product developments over microsphere drugs.
The laboratory alleged that Bagavathikanun Thanoo misappropriated trade secrets related to injectable microsphere systems which he had developed at Oakwood before moving to Aurobindo Pharma.
Oakwood had reportedly invested more than $130 million into the treatment's development over two decades.
In 2013, Oakwood entered into discussions with pharma company Aurobindo to collaborate on the microsphere project. Aurobindo’s CEO visited Oakwood’s headquarters to discuss Aurobindo’s USA capabilities with Thanoo.
Aurobindo ultimately declined the microsphere partnership but hired Thanoo within six months of their meeting, said the complaint. Following the hire, Oakwood claimed Aurobindo formed a US-based division to develop microsphere technology.
The complaint alleging misappropriation of trade secrets was thrown out of the US District Court for the District of New Jersey after three amendments and four dismissals. The third circuit vacated the district court's final order of dismissal on Tuesday and remanded for further proceedings.
Claim breakdown
The third circuit claimed that Oakwood needed to sufficiently identify its trade secrets in order to support its assertion of misappropriation. While the district court found Oakwoood had identified the existence of trade secrets, but “failed to identify which of them had been misappropriated.
Circuit judges Jordan Krause and Luis Restrepo identified documents cited in the third amended complaint which, according to Oakwood, disclosed trade secrets.
The filing said: “While we agree with the District Court that care must be taken to not allow a plaintiff in a trade secret misappropriation case to make generalised claims that leave a defendant wondering what the secrets at issue might be, there was no risk of that here, given the specificity of the allegations in the Third Amended Complaint.”
Whilst the district court claimed that the “critical missing component” of Oakwood’s complaint was how exactly Arubindo misappropriated trade secrets, the circuit claimed that the district court erroneously applied a “heightened pleading standard” to Oakwood and “suggested a heightened evidentiary burden”.
Also, the circuit disagreed with the district court’s ruling that Oakwood had not demonstrated harm, saying that Oakwood had “lost the exclusive use of trade secret information, which is a real and redressable harm”.
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