United States. A U.S. federal court has imposed a permanent injunction and upheld an $11 million settlement after finding that a former executive used confidential information to create a competing business.
Walker Products announced that the U.S. District Court for the Central District of California issued a permanent injunction in its favor, after a jury found its former employee Yue Frank Cong liable for misappropriation of trade secrets, intentional interference with contracts, interference with future business relationships, and breach of contract.
As a result of the process, the jury awarded Walker Products $10 million in damages and $1 million in punitive damages. The court subsequently upheld the verdict and imposed permanent measures to prevent the misuse of the company's intellectual property.
According to the court decision, the company demonstrated that it suffered significant competitive damage, including the loss of business opportunities and impacts on its relationships with customers and suppliers. The court also recognized that the development of Walker's oxygen sensor program represented years of research, engineering, testing, and investment.
The order states that Yue Frank Cong and companies under his control will not be allowed to use Walker's trade secrets or source oxygen sensors through the company's exclusive supplier for a period of five years. It also prohibits them from interfering with the exclusivity agreements that Walker has with its suppliers. The restrictions also extend to several companies controlled by the former executive.
The tribunal concluded that financial compensation was not sufficient to repair the ongoing harm caused by the misappropriation of confidential information, finding that Cong gained a competitive advantage by establishing a rival oxygen sensor business almost immediately after leaving Walker Products.
In addition to maintaining the award, the court ordered more than $2 million in pretrial legal fees, costs and interest, finding that the trade secret appropriation was deliberate and malicious. In contrast, it rejected a request for fees filed by All Automotive Megahub Inc., considering that the legal actions taken by Walker were not in bad faith.
Following the decision, Walker Products reiterated its commitment to intellectual property protection, technological innovation and ethical competition within the automotive aftermarket. The company said it will continue to invest in the development of sensor technologies and in the defense of the intellectual assets that support its products and business relationships.
