Trade Secret Law

timer Asked: Nov 28th, 2016

Question description

Essay Question

Christian Dior is a luxury goods company that earns over $50 billion in sales annually. The company employs over 10,000 people worldwide. Dior’s Cleveland-based research and development (R&D) team, comprised of a dozen chemists and perfume experts, spent approximately one year developing the “Desire” fragrance. The fragrance, which was released in September 2014, has already earned the company over $175 million in sales and is currently the top-seller in the fragrance market.

Given the popularity of Desire, Cincinnati-based imitation fragrance maker, ScentsRUs, hired a chemist and perfumer who spent three months trying to reverse engineer and copy the fragrance. When those efforts failed, ScentsRUs tried to lure one of the chemists who had helped to create Desire to come to ScentsRUs. However, that individual informed ScentsRUs that the formula was a trade secret, and that he was bound by non-disclosure and non-competition agreements.

Undeterred, ScentsRUs hired former Dior employee, Debbie Shane, who had access to the Desire formula through her job on Dior’s mixing staff. Dior’s Cleveland- based mixing staff, which consists of over 200 employees, is responsible for combining ingredients to prepare all of the Dior fragrances pursuant to the formulas created by the R&D teams. Despite the lack of any pre-employment background checks, every member of Dior’s mixing staff is trusted with access to all of the company’s fragrance formulas.

Debbie had only worked in Dior’s mixing staff for five months before she left to take the job at ScentsRUs. She is neither a chemist nor a perfumist. In fact, she did not attend college. However, Debbie’s first assignment at ScentsRUs was to duplicate the Desire fragrance, which she did on her first day at ScentsRUs using the formula provided to her. Although she had not signed a confidentiality agreement, Debbie was aware that Dior’s formulas, which were marked “CONFIDENTIAL,” were not supposed to be shared.

In March 2015, ScentsRUs began offering an imitation fragrance in its stores, which immediately caught the attention of Dior. After conducting an investigation as to how ScentsRUs was able to create a perfect duplicate of Desire, Dior traced the disclosure back to Debbie.

Dior immediately filed a complaint in Montgomery County, Ohio Court of Common Pleas against ScentsRUs and Debbie for misappropriation of its trade secret.

You work for the judge who was assigned to rule on this case. Please provide an objective analysis of the law and the relevant facts, in addition to a recommended outcome under Ohio law.

* If you need additional facts, or need to make assumptions, state so. You should refer to the appropriate sections of the Uniform Trade Secrets Act, as adopted by Ohio law, where applicable.

* The essay should be type-written in Microsoft Word. Please use 1” margins, double-spacing and 12-point font (Georgia; Palotino Linotype; or Times New Roman). The Essay should be 9 pages.

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