Niitakaya sued Nishimoto alleging unfair business competition and misappropriation of Niitakaya’s recipes, which were alleged to be trade secrets.
Retained by Lewis Brisbois Bisgaard & Smith
Five employees from Niitakaya, U.S.A., a manufacturer of specialty Asian foods, left and formed a new company, Nishimoto Trading Co., Ltd., that competed with Niitakaya by selling to one of its key distributors. Niitakaya sued Nishimoto alleging unfair business competition and misappropriation of Niitakaya’s recipes, which were alleged to be trade secrets. Nishimoto’s counsel retained George Strong, a managing director of Cornerstone Research, to provide expert testimony regarding the plaintiff’s claim that Nishimoto was unjustly enriched. Mr. Strong also estimated any economic harm suffered by Niitakaya.
The plaintiff’s expert calculated Nishimoto’s unjust enrichment and testified that all of Nishimoto’s sales to the distributor were caused by use of Niitakaya’s recipes. Mr. Strong analyzed this claim and opined that there were other case-specific factors, including price and personal relationships, that could have influenced the distributor’s purchasing decision, and it was not proper to attribute all sales to use of the recipes. Further, Mr. Strong analyzed the industry and demand trends and testified that Niitakaya suffered de minimus lost profits as it had recovered any lost market share.
The court found that there was a failure of proof as to the trade secret status of Niitakaya’s recipes. Consequently, Mr. Strong testified that the opposing expert’s opinions regarding Nishimoto’s unjust enrichment were no longer relevant, as use of the recipes, and sales that flowed therefrom, were no longer an issue in the case. Following this finding, the matter ended in favor of Nishimoto.