Wellbeing Genomics prevails in DNA test trade secret trial

By David Yates | Aug 29, 2016

AUSTIN – A Texas jury recently found in favor of plaintiff Wellbeing Genomics Pty in a trade secret lawsuit.

AUSTIN – A Texas jury recently found in favor of plaintiff Wellbeing Genomics Pty in a trade secret lawsuit.

Wellbeing Genomics filed the suit in Travis County District Court in July 2014. The defendants in the case include Qivana LLC, Armitage LLC and PLLG LLC, court records show.

At the center of the trade secret case is technology related to the use of individuals' genetic variations to determine risk in five skin health categories and to make recommendations of skin care product ingredients and treatments based on chemical compositions.

Genomics’ attorney, Robert Kantner, a partner at Jones Day, said he and his client we’re “very pleased” with the outcome.

“Stefan Mazy of Genomics and I are very pleased the jury recognized the jury recognized the company’s principal trade secret and its SkinDNA genetic test and awarded damages for breach of contract and misappropriation of trade secrets against all defendants,” Kantner told the Record.

In a 2013 interview, Mazy is quoted as saying: “SkinDNA is (revolutionizing) the way we take care of our skin, this is the future of an industry and the key to combating skin aging before the signs even appear. All this information found inside us buried in our unique DNA blueprint.”

According to a Jones Day news release, Genomics developed the DNA-based laboratory test to identify the skin’s propensity to five key aging pathways: collagen breakdown; photo aging; wrinkling; oxidation; and tolerance for environmental pollutants.

The test is based on 15 single nucleotide polymorphisms or “SNPs,” which are genetic variations that occur in 1 percent or more of the population. Genomics claims a trade secret in its specific grouping of SNPs into one or more skin-related categories.

Genomics disclosed its trade secret to PLLG, a company founded by Dr. Ruthie Harper, pursuant to the confidentiality provision of an Exclusive Distributor Agreement. Genomics also disclosed the trade secret to David Urman, a consultant to PLLG, pursuant to a Non-Disclosure Agreement.

In its suit, Genomics alleged that Harper disclosed the trade secret in a patent application, that Harper and PLLG used the trade secret to develop a competing test, and that Harper, PLLG, and Urman disclosed the trade secret to Qivana LLC.

Genomics further alleged that Qivana acquired and used the trade secret and disclosed the trade secret to another lab with actual or constructive knowledge that the information in question was a trade secret.

The jury returned a verdict awarding damages to Genomics on its claims for breach of contract, misappropriation of trade secrets, violation of Texas Theft Liability Act, and unfair competition.

The amount of damages to be awarded in the final judgment will be based on Wellbeing Genomics' choice of claims, which do not overlap. Genomics will be entitled to recover attorneys' fees on some of its claims, and may also be entitled to some injunctive and declaratory relief, according to the news release.

Court records show a jury charge was filed Aug. 5. A motion for final judgment was filed Aug. 23.

Cause No. D-1-GN-14-002452

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