Sam Brusco, Associate Editor07.19.22
The U.S. District Court for the Southern District of New York dismissed Medidata’s trade secret misappropriation lawsuit against Veeva Systems.
The judge ended proceedings midway through the jury trial and rejected the suit, finding Medidata wasn’t able to substantiate claims against Veeva. According to Veeva, the ruling is important for protection of employee and customer rights because the case represented an attempt to stifle competition and free flow of talent with “unfounded trade secret claims.”
The Honorable Jed Rakoff, federal district judge since 1996 and adjunct professor at Columbia Law School and NYU Law School, noted in his July 15 ruling: “…to the extent that [Medidata’s] case rests on allegations regarding specific trade secrets that were misappropriated, they have failed to make their case.” He went on to state, “I think a more general problem with [Medidata’s] case is they seem to think that just about anything in the world can be a trade secret. And that, of course, would mean that you could never hire away an employee from another company because anything they said — one word out of their mouth — would indirectly reveal something they had learned at their prior employment…and both the statutes here involved, and also legislative history make clear that that was not the intent of the legislators…”
Medidata had filed the trade secret suit in 2017 against Veeva and five previous Medidata employees. Veeva claims the attempt was to block them from innovating in the clinical data management market and intimidate Medidata employees to prevent them from joining Veeva.
Veeva also claims the case caused confusion to mutual customers, harmed employees on both sides, and cost the two sides combined about $40 million.
“We are pleased the court dismissed Medidata’s suit and stood up for the rights of employees and customers in the face of an abuse of the legal system, intimidation of employees, and an attempt to limit companies’ access to innovation,” Peter Gassner, Veeva’s CEO told the press. “Baseless lawsuits like Medidata’s harm individuals, customers, and the industry overall. I hope this ruling encourages others to focus their energy on innovation and employee success rather than unnecessary and harmful litigation.”
The judge ended proceedings midway through the jury trial and rejected the suit, finding Medidata wasn’t able to substantiate claims against Veeva. According to Veeva, the ruling is important for protection of employee and customer rights because the case represented an attempt to stifle competition and free flow of talent with “unfounded trade secret claims.”
The Honorable Jed Rakoff, federal district judge since 1996 and adjunct professor at Columbia Law School and NYU Law School, noted in his July 15 ruling: “…to the extent that [Medidata’s] case rests on allegations regarding specific trade secrets that were misappropriated, they have failed to make their case.” He went on to state, “I think a more general problem with [Medidata’s] case is they seem to think that just about anything in the world can be a trade secret. And that, of course, would mean that you could never hire away an employee from another company because anything they said — one word out of their mouth — would indirectly reveal something they had learned at their prior employment…and both the statutes here involved, and also legislative history make clear that that was not the intent of the legislators…”
Medidata had filed the trade secret suit in 2017 against Veeva and five previous Medidata employees. Veeva claims the attempt was to block them from innovating in the clinical data management market and intimidate Medidata employees to prevent them from joining Veeva.
Veeva also claims the case caused confusion to mutual customers, harmed employees on both sides, and cost the two sides combined about $40 million.
“We are pleased the court dismissed Medidata’s suit and stood up for the rights of employees and customers in the face of an abuse of the legal system, intimidation of employees, and an attempt to limit companies’ access to innovation,” Peter Gassner, Veeva’s CEO told the press. “Baseless lawsuits like Medidata’s harm individuals, customers, and the industry overall. I hope this ruling encourages others to focus their energy on innovation and employee success rather than unnecessary and harmful litigation.”