Too Little, Too Late for Swiss Fragrance Giant

(CN) - The world's largest flavoring and fragrance manufacturer cannot accuse a competitor of stealing hundreds of ingredient formulas the owner failed to cough up, a federal judge ruled.

Months after perfumer James Krivda resigned from Givaudan Fragrances Corp. in May 2008, the Swiss company sued him and his new employer, Mane USA Inc., in Trenton, N.J.

The federal complaint alleges that, before leaving Givaudan, Krivda had downloaded 616 fragrance formulas, which he then gave to the American division of French competitor Mane.

So-called 'head-space' analyses prepared by a world famous Givaudan perfumer and other commercialized fragrances worth millions of dollars individually were allegedly included in the horde.

Krivda allegedly insisted, however, that he shredded the documents.

Givaudan asserted claims for Computer Fraud and Abuse Act violations, breach of contract, misappropriation of trade secrets, conversion, and replevin.

After U.S. District Judge Peter Sheridan dismissed Krivda's counterclaim for defamation of character in September 2009, the defendants moved to limit discovery to only the allegedly misappropriated formulas, and to order Givaudan to produce any information to be used at trial.

U.S. Magistrate Judge Douglas Arpert denied the motions this past March, holding that Mane ignored Givaudan's invitation to inspect the allegedly stolen formulas.

Judge Sheridan awarded Krivda partial summary judgment on the computer fraud claim Sept. 26, however, finding that the perfumer was authorized to access Givaudan's database.

Mane later moved for summary judgment, arguing that nearly five years after filing its complaint, the Swiss company still has not produced the allegedly stolen formulas.

Sheridan partially granted the motion Friday, holding that Givaudan has coughed up only 34 formulas thus far.

"The laws of misappropriation require prior disclosure and none except for the 34 formulas has occurred here in a substantive manner," Sheridan wrote. "In addition, at this late date in a trial process (the case is nearly five years old), the time allotted for discovery has expired, and full disclosure should have occurred by now." (Parentheses in original.)

The "print lists" containing the names of 40 allegedly pinched formulas that Givaudan sent to Mane in October 2011 do not constitute sufficient notice, the unpublished ruling states.

"The print lists lack specificity as to the exact trade secrets that Givaudan purports to have been misappropriated," Sheridan wrote. "For example, the print list does not disclose any ingredients or amounts thereof; and the name of the product is not sufficient to determine the specific formulation about a trade secret."

The judge threw out Givaudan's "speculative and remote" assertions that a jury could infer that the 34 formulas imply circumstantially that Mane stole all 616 formulas.

"Givaudan could have disclosed the specification of each formula, and then appropriate discovery procedures could have precisely identified whether Mane had received any or all of the allegedly purloined formulas," Sheridan wrote. "Circumstantial evidence is inappropriate where the outcome is remote, and it would have been largely avoided by the proper disclosure."

Though trial was scheduled to begin on Nov. 1, it has now has been delayed until Jan. 2, 2014, according to the ruling.

"Since Givaudan has never produced the ingredient list for these 582 formulas and this case is five years old and scheduled for trial, the court finds that Givaudan has failed to provide Mane with timely and sufficient notice as to these allegedly misappropriated trade secrets," Sheridan wrote.

With 3,500 employees across 30 countries, Mane reported $841 million in sales in 2012, while Givaudan 's 9,000 workers in more than 40 nations made about $4.7 billion in revenue last year.

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