Dalmatia Import Group wins landmark jury verdict in first test of new Defend Trade Secrets Act
Specialty food manufacturer could receive more than $5 million from former distributor and manufacturer
A federal jury issued a verdict on behalf of Dalmatia Import Group, Inc., which includes the first verdict rendered under a new federal law aimed at protecting trade secrets. The jury’s award, which is subject to enhancements for trademark counterfeiting, could reach $5.2 million in total damages, plus attorneys’ fees.
The verdict came after Dalmatia sued its former distributor, FoodMatch, Inc., and its former manufacturer, Lancaster Fine Foods, Inc., on counts of misappropriation of trade secrets, trademark infringement, and counterfeiting. The jury found that the Defendants stole Dalmatia’s proprietary recipe to make fig spread under their own Divina label. Dalmatia argued that these actions were in violation of the Defend Trade Secrets Act, a new federal law signed by President Obama in 2016. The verdict opens a new chapter in American intellectual property law.
FoodMatch and Lancaster also flooded the market with a counterfeit product under the Dalmatia brand name and packaging in violation of federal trademark law, the jury found.
“For more than 20 years, Dalmatia has worked to establish a reputation with its customers for high-quality, specialty products,” said Dalmatia co-founder and President Maia Magee. “By offering counterfeit products under our company’s name, our former partners have done considerable damage to our brand and undermined consumer confidence in the quality of our products. We are grateful that the jury upheld our rights against these unscrupulous companies. We hope that we can restore our customers’ trust in Dalmatia products.”
In 2015, after Dalmatia ended its relationship with distributor FoodMatch, the distribution company illegally used Dalmatia’s fig spread recipe to sell the same product under its own Divina brand. In addition to this theft of trade secrets, FoodMatch and Lancaster also used Dalmatia’s brand and packaging without permission to sell fig spread that Dalmatia found to be of inferior quality.
Dalmatia’s suit against FoodMatch included a claim under the new Defend Trade Secrets Act, a measure introduced by Republican Senator Orrin Hatch and signed by President Obama in 2016. The law bolsters the nation’s intellectual property laws, and was created to protect companies like Dalmatia from predatory and unethical actors like FoodMatch and Lancaster Fine Foods.
About Dalmatia®: Founded in 1995, Dalmatia® invented Fig Spread in America and pioneered the category in cheese departments. Dalmatia® is dedicated to creating and selling unique spreads and condiments for cheeses. It supports local and regional farming in Croatia and the Mediterranean. Dalmatia® uses only first-class fruit and every fig is inspected by hand for quality. For more information visit www.figspread.com.
The case is Dalmatia Import Group, Inc. v. FoodMatch, Inc. et al. in the U.S. District Court for the Eastern District of Pennsylvania (Case No. 16-cv-02767).