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Bimbo Bakeries USA, Inc. v. Sycamore

United States District Court, D. Utah, Central Division

March 29, 2018

BIMBO BAKERIES USA, INC., Plaintiff,
v.
LELAND SYCAMORE and UNITED STATES BAKERY, INC., Defendants.

          MEMORANDUM DECISION AND ORDER: • GRANTING IN PART [481] PLAINTIFF'S MOTION FOR ENHANCED DAMAGES AND ATTORNEYS' FEES and • GRANTING [483] PLAINTIFF'S MOTION FOR PERMANENT INJUNCTION

          David Nuffer United States District Judge

         Plaintiff Bimbo Bakeries USA, Inc. (“Bimbo Bakeries”) brought a claim for trade secret misappropriation against defendants Leland Sycamore (“Sycamore”) and United States Bakery, Inc. (“U.S. Bakery”), as well as a claim for false advertising against U.S. Bakery. At trial, Bimbo Bakeries asserted in support of its trade secret claim that Sycamore revealed Bimbo Bakeries' secret recipe for Grandma Sycamore's brand “granny” style white bread, which U.S. Bakery obtained and used in the production of its own granny bread. Bimbo Bakeries asserted in support of its false advertising claim that U.S. Bakery's use of the word “local” in the tagline “Fresh. Local. Quality.” was misleading in markets, including Utah, where U.S. Bakery's bread was baked out of state. The jury returned a verdict in favor of Bimbo Bakeries on both claims.[1]

         This order resolves two post-trial motions. The parties were ordered to submit briefing on how the court should apply the statutes governing remedies for trade secret and false advertising claims to the jury verdict to arrive at a judgment.[2] In response, Bimbo Bakeries filed a Motion for Enhanced Damages and Attorneys' Fees (the “Damages Motion”).[3] Both U.S. Bakery[4] and Sycamore[5] opposed the Damages Motion and argued to reduce the jury award and argued against an award of attorneys' fees.

         The Damages Motion is granted in part. Judgment on the false advertising claim will be limited to the disgorgement of U.S. Bakery's profits resulting from false advertising, as found by the jury. That figure, which does not reflect Bimbo Bakeries' actual damages, will not be enhanced. Judgment on the trade secret claim will be enhanced to include some exemplary damages against U.S. Bakery and attorneys' fees against both defendants based on the jury's finding of willful and malicious misappropriation. The judgment is summarized as follows:

Trade Secret (U.S. Bakery)

Trade Secret (Sycamore)

False Advertising (U.S. Bakery)

Compensatory Damages

$1, 578, 942

$526, 314

$8, 027, 720

Exemplary Damages

$789, 471

None

None

Attorneys' Fees

Awarded subject to motion

Awarded subject to motion

None

         Bimbo Bakeries also filed a Motion for Permanent Injunction (the “Injunction Motion”).[6]Bimbo Bakeries is entitled to a permanent injunction, enjoining the defendants from any further misappropriation of Bimbo Bakeries' trade secret. Bimbo Bakeries has shown actual success on the merits of its trade secret claim, irreparable harm, and a balance of injury in its favor. The injunction will not adversely affect the public interest. The permanent injunction can be tailored in scope to address the cognizable danger of a recurrent violation of Bimbo Bakeries' rights in the trade secret. Therefore, the Injunction Motion is granted.

         Table of Contents

         Background ..................................................................................................................................... 3

         Discussion ....................................................................................................................................... 4

         Judgment on the False Advertising Claim Is Limited to Disgorged Profits. . ..................... 4

         Judgment on the Trade Secret Claim Will Include Exemplary Damages and Fees. . ......... 7

         A Permanent Injunction Will Be Entered on the Trade Secret Claim. . .............................. 9

         Bimbo Bakeries Has Succeeded on the Merits. . ..................................................... 9

         Bimbo Bakeries Will Suffer Irreparable Harm Without a Permanent Injunction. . 9

         The Balance of Hardships Favors the Injunction .................................................. 10

         Public Interest Favors the Injunction. . .................................................................. 11

         The Injunction Can Be Tailored to the Threat of Recurrent Violation. . ............... 11

         Order ........................................................................................................................................... 12

         BACKGROUND

         The jury returned a verdict in favor of plaintiff Bimbo Bakeries on the claim for trade secret misappropriation and on the claim for false advertising.

         On the trade secret misappropriation claim, the jury found:[7]

• Bimbo Bakeries has a protectable trade secret.
• U.S. Bakery misappropriated the trade secret and is responsible for damages in the amount of $1, 578, 942.
• By clear and convincing evidence, U.S. Bakery's misappropriation was willful and malicious.
• Sycamore also misappropriated the trade secret and is responsible for damages totaling $526, 314.
• By the preponderance of the evidence, but not clear and convincing evidence, Sycamore's misappropriation was willful and malicious.

         On the false advertising claim, the jury found:[8]

• U.S. Bakery engaged in false advertising by using the word “local” in the tagline “Fresh. Local. Quality.” in advertising or promoting its products.
• Bimbo Bakeries suffered actual damages as a result of the false advertising.
• U.S. Bakery's false advertising was willful.
• U.S. Bakery received $8, 027, 720 in profits as a result of its ...

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