Top Plaintiffs' Verdicts by Impact -- Allergan Inc. v. Merz Pharmaceuticals LLC

Forensics have long been a critical tool in criminal investigations but have also become an increasingly valuable way of unearthing electronically transmitted information in civil disputes.

In 2010, Allergan Inc., which makes Botox, filed suit after discovering that one of its European competitors, Merz Pharmaceuticals, had targeted and hired more than a dozen Allergan sales representatives in preparation for Merz' launch of a competing product, Xeomin, in the United States. Allergan Inc. v. Merz Pharmaceuticals LLC, CV11-446 (C.D. Cal., filed March 18, 2011).

"We were able to demonstrate through forensic analysis of laptops and electronic devices that employees used thumb drives and downloaded reams of information that they took with them to their new employer," said Daniel Petrocelli, a partner at O'Melveny & Myers LLP, who served as lead plaintiff's attorney.

After a three-week trial, Judge Andrew J. Guilford found that Allergan had introduced evidence of misappropriation. He issued an oral injunction from the bench prohibiting Merz from, among other things, providing, selling or soliciting purchases of its Xeomin product in the facial aesthetics market for 10 months or until the company proved that it had rid its files of any confidential information.

"Merz agreed to sanitize its files to make sure there were no Allergan trade secrets," said Frederick McKnight, lead defense attorney from Jones Day.

He added that all of the employees identified in the lawsuit "have been separated from the company" for a variety of reasons, including the trade secrets breach.

As for the impact of the verdict, Petrocelli said, "We leveled the playing field and sent a very strong message that robust competition is more than welcome, but it has to be fair and it has to be legal."

- PAT BRODERICK

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