Articles Posted in trade secrets

A Boston business litigation lawsuit has been filed against the maker of a new shoe that promises a host of health benefits that some say are overinflated.

Our Boston business attorneys understand that the class action civil suit is asking for $5 million in damages.

This case illustrates how crucial it is for a company to work with an experienced attorney on any marketing campaigns, or when dealing with protecting trade secrets, to help ensure that these type of issues aren’t going to crop up later.

Of course, business owners believe in the products they are selling and are excited about sharing them with consumers. However, businesses need to be careful not to make over-arching claims. Most businesses see the sole purpose of advertising as to sell products. But a carefully-worded marketing campaign can help to ensure that you will avoid costly business litigation in the future.

According to The Boston Globe, Vibram USA Inc. and Vibram FiveFingers LLC, which is based in Concord, is accused of claiming health benefits that weren’t really true.

The shoes have become a nationwide phenomenon. They feature a snug covering for each of the five toes, as opposed to the full closed-toe of most running shoes. They are marketed as “natural,” “minimalist” or “barefoot” shoes, designed for a running experience that is supposed to feel more as if you are running with no shoes at all. As a result, the company says, not only will your running performance improve, the claim is that it is better for your body – your joints and feet – as well.

Plaintiffs are alleging that not only do the shoes not provide the health benefits claimed, but that they may even increase the risk of injury, as compared to the more standard running shoe.

The lawsuit stems from a study that was recently published by the American Council on Exercise. Essentially, the researchers set out to look at how the five-toed running shoes compared with the more traditional running shoes, which are designed as closed from heel-to-toe. What they found was this: The five-toed shoes have resulted in a number of high-impact injuries for a large number of runners. Researchers did note that runners who changed the way they ran, or their form, were less likely to suffer from injuries.

Those who filed the lawsuit did concede that the marketing campaign for the shoemaker advises runners who are using the shoes for the first time to take it slowly, and ease into their use. The company’s website offers training tips on how to do this. The website also says that it may take up to a year to become fully accustomed to this new style of running.

However, the plaintiffs allege that not only were they prone to injuries while running in the shoes, but that the company’s claim that using the shoe was essentially akin to running barefoot is false.

The suit indicates it represents some 100 people, through five different law firms.
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A New England intellectual property trial has resulted in a $919 million jury verdict for DuPont, believed to be the largest such verdict ever awarded.

In today’s global economy, moving to protect your product rights is critical. Our General Counsel on Call services can assist startups as well as established businesses that are dealing with a wide variety of legal issues — including employment law and business formation in Boston. For its part, South Korea-based Kolon is claiming that DuPont has violated antitrust law by using its size and market share to force out competition.

Bloomberg Businessweek reports jurors in a federal court in Virginia deliberated for two days before finding Kolon guilty of wrongfully obtaining proprietary information about Kevlar. 860421_police_search.jpg

DuPont began making Kevlar in the 1960s; initially it was used in racing tires. Today, DuPont sells about $1.5 billion of the fiber annually, primarily for use in body armor, bullet-proof vests and other military applications. The company accused Kolon of hiring former DuPont employees and of stealing proprietary information. A former DuPont engineer and marketing director, who went to work for Kolon, was sentenced to 18 months in prison after pleading guilty to theft of trade secrets and obstruction of justice.

Kolon began marketing its own bullet-proof fiber in 2005. The company was sued by DuPont in 2009 after DuPont notified the Federal Bureau of Investigation and the U.S. Department of Justice over what it believed was a theft of trade secrets and other proprietary information by a former employee. A raid of the employee’s home allegedly turned up computer files and other product information belonging to DuPont.

DuPont is also seeking punitive damages for the theft of 149 trade secrets as well as reimbursement of more than $30 million in attorney fees and other secrets. It is also seeking an injunction preventing Kolon from marketing its products using DuPont information.

Kolon’s rival product is called Heracron. The company claims DuPont has violated antitrust laws by forcing customers to purchase at least 80 percent of their Kevlar fibers from them. Kolon also claims it did not solicit trade secrets or use proprietary information. Rather, it claims the allegedly “secret” information is “public knowledge.” While the theft of trade secrets can be devastating, so can being forced out of the marketplace by a larger competitor pushing an unfair advantage.

Court watchers say the large verdict suggests jurors thought the case was particularly egregious. It’s the second such verdict this year; Mattel was ordered to pay $310 million to MGA over the Bratz Doll case.

Both cases involved former employees who went to work for the competition. A properly fashioned employment agreement in Boston is another critical tool in protecting trade secrets and other competitive advantages from falling into the hands of the competition.
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