A federal district court recently issued summary judgment in favor of a retail defendant in a trade secret misappropriation case involving the alleged misappropriation of a CBD cream formula. On September 3, 2020, Healthcare Resources Management Group, LLC (“HRMG”) filed suit in the Southern District of Florida against several parties, including hemp products retailer Medterra CBD, LLC (“Medterra”), alleging that Medterra misappropriated its proprietary trade secret formula for a CBD cooling cream by selling a product similar to HRMG’s cream. On May 14, 2021, Medterra filed an amended motion for summary judgment against HRMG, arguing that HRMG’s claims for trade secret misappropriation could not stand, as the partial list of HRMG’s ingredients disclosed to it did not constitute a protectable trade secret formula, nor did Medterra “use” or “disclose” any secret formula owned or controlled by HRMG. The court agreed with Medterra, granting its summary judgment motion in full on October 27, 2021. This case serves as an important reminder that trade secret misappropriation claims require proof that a trade secret was either wrongfully acquired, used, or disclosed by the alleged wrongdoer—mere similarity of products is insufficient to succeed on a claim absent these additional elements.
Continue Reading Federal Court Issues Summary Judgment in Favor of Retail Defendant in Alleged Trade Secret Misappropriation of a CBD Cream Formula

As we previously reported, CBD company Healthcare Resources Management Group, LLC (Healthcare Resources) filed an action in the US District Court for the Southern District of Florida claiming trade secret misappropriation by Medterra CBD and EcoNatura, and alleging that Medterra CBD and EcoNatura worked together to manufacture and sell a CBD cream using Healthcare Resources’ proprietary formula. On February 18, 2020, the defendants moved to dismiss the case on the grounds that Healthcare Resource failed to allege that it had provided or that Medterra had otherwise acquired any proprietary information. Healthcare Resources responded arguing that its trade secret claim is legitimate so long as (1) there was improper use of proprietary information; and (2) that use was enabled by a party who had a duty to guard and limit the use of such proprietary information.  The case has now been dismissed, but not for any of the reasons the parties briefed. Rather, in a May 21, 2020, order, Judge Donald Middlebrooks dismissed the suit without prejudice for failing to secure counsel to represent it in the case and denied Healthcare Resources’ pro se request for additional time to obtain new counsel.
Continue Reading No Counsel, No Lawsuit: Federal Court Tosses CBD Trade Secret Case

As we previously reported, on February 18, 2020, Medterra CBD (“Medterra”) filed a motion to dismiss a lawsuit alleging that it had misappropriated Healthcare Resources Management Group LLC’s (“Healthcare Resources”) proprietary formula for a CBD cream aimed at treating pain. In its motion, Medterra argued that Healthcare Resources failed to allege that it had provided or that Medterra had otherwise acquired any proprietary information. Additionally, Medterra claims that even if Healthcare Resources could establish that it had provided its propriety CBD cream formula to Medterra, Healthcare Resources did not take adequate steps to protect its trade secret by mandating Medterra sign a non-disclosure agreement.
Continue Reading CBD Cream Manufacturer Responds to Motion to Dismiss in Trade Secret Litigation

On February 18, 2020, Medterra CBD filed a motion to dismiss a lawsuit alleging that it had misappropriated Healthcare Resources Management Group LLC’s (“Healthcare Resource”) proprietary formula for a CBD cream aimed at treating pain. In its motion, Medterra argued that Healthcare Resource failed to allege that it had provided or that Medterra had otherwise acquired any proprietary information. Additionally, Medterra claims that even if Healthcare Resource could establish that it had provided its propriety CBD cream formula to Medterra, Healthcare Resource did not take adequate steps to protect its trade secret by mandating Medterra sign a non-disclosure agreement.
Continue Reading CBD Company Files Motion to Dismiss in Trade Secret Dispute