Jonathan Pollard, a competition lawyer with extensive experience litigating trade secret cases, says this is part of America’s current “epidemic of frivolous trade secret litigation.” According to Pollard, “The new corporate America playbook involves squashing ordinary competition at any cost.
If a rival poses a competitive threat to your market share, you sue them for theft of trade secrets — no matter how weak the case.” Pollard explains that big companies with deep pockets use litigation as a weapon. Protracted litigation can cost millions.
Beyond the financial cost, there is also the intrusive discovery process through which the parties in a case obtain information and evidence form the other side. And corporations have more money to throw at the issue.
As is the case in many suits, in the Medo case — her company has been sued for theft of trade secrets. In an ironic twist, this ended up making her the victim of trade secret theft. As is often the case, the plaintiff used the discovery process to obtain exclusive intelligence on its rival. Pollard calls this the “chilling effect” in the market.
Clients, lenders, and other market actors are hesitant to do business with
someone who is being sued for theft of trade secrets.
Many of Pollard’s concerns seem to be playing out in the Prolacta litigation. After five years, four amended complaints, more than twenty depositions, many thousands of documents, and hundreds of thousands of dollars in legal fees, Medo and her company are fighting just to survive. Corporate America stealing an edge over a founder of a small company — for gain.
Medolac has developed a 48,000 square foot processing facility that claims it can provide for 100% of the domestic market— at a fraction of Prolacta’s cost.
The dream for these desperately sick infants can only happen if Medolac can ever make it through the current litigation.
As for the merits of the case, Pollard is not impressed by Prolacta’s allegations against Medo.
“Take customer information. This is one of the most commonly asserted trade secrets. But in the year 2020, it’s also one of the most absurd. In this case, it seems obvious that any hospital in the United States serving newborn babies is a potential customer. All you have to do is call the neonatal
Courts have to catch up with reality and recognize that the emergence of resources like Google has fundamentally changed the landscape of competition. Just because something was a trade secret in 1995 doesn’t mean it’s a trade secret today.”
For now, all that Elana Medo and her daughter can do is plead their case to a jury. The case goes to trial this month.