Judges Rule in Favor of Farmobile in Contract and Trade Secrets Case

The Eighth Circuit ruled on Monday that three former employees, who developed agricultural data tool Farmobile, are not liable after being accused of breaching their loyalty to Farmers Edge and using the company’s trade secrets. The case, which was an appeal from the District Court of Nebraska, was heard before Judges Loken, Benton, and Kelly. The judges affirmed the previous decision, ruling in favor of the defendants and appellees.

Jason Tatge, Heath Gerlock, and Randy Nuss left their positions at Crop Ventures, a company whose successor-in-interest is Farmers Edge, in July 2013. They went on to found Farmobile later that year. Both companies work with precision agriculture, which is “the use of specialized data in farming.”

“It goes without saying that Heath, Randy and everyone who works at Farmobile is elated,” Jason Tatge said in a press release, “This has been a long, hard-fought battle, but we always knew we were in the right. The U.S. justice system worked, it just took us a bit longer than anticipated to reach this final result. We are thankful to our legal team for their persistence.”

The lawsuit originated because Farmers Edge believed that the defendants used proprietary information they helped to develop at Crop Ventures when forming their company. They claimed this was a breach of contract because “the defendants were obligated to assign to their employer the ownership rights of products they worked to develop.” The plaintiffs further alleged a breach of their loyalty duty to the company and misappropriation of trade secrets.

The Eighth Circuit, after considering one contract signed by Nuss, ruled that there was no evidence supporting that the contract was meant to apply after the employment was terminated or apply to future employment. Gerlock and Tatge were allegedly working “under an implied contract while at Crop Ventures.” The contract, according to Farmers Edge’s argument was that “each individual defendant was hired to invent the products they worked on, which created an implied contract to assign ownership of the products to the employer.” The court decided that these implied contracts were not created.

The judges further agreed with the district court that the defendants did not breach any loyalty with their former employer and that the “alleged trade secret was not protectable” within the statutes considered. The judgment said that Crop Ventures did not make “reasonable efforts to maintain the secrecy of the information” because it shared the information with a contractor without a confidentiality agreement.

Farmers Edge was represented by McGrath & North. Farmobile and the individual defendants were represented by Husch Blackwell.