IDEXX, Covetrus announce settlement in high-stakes ‘trade secrets’ lawsuit
Covetrus Inc. and IDEXX Laboratories Inc. announced Wednesday they had settled the lawsuit IDEXX filed last August alleging “actual and/or threatened misappropriation of trade secrets” by two former employees and Portland-based Vets First Choice, which had hired them.
The lawsuit, filed in U.S. District Court for the District of Maine, had sought an unspecified amount of monetary damages, including punitive damages and legal fees.
Covetrus is the publicly traded company headquartered in Portland (Nasdaq: CVET) that was formed from a merger between Vets First Choice and Henry Schein Health, which was announced last December and became official when Covetrus began trading on Nasdaq on Feb. 8. The merger united two companies that had a combined $4 billion in 2018 revenues and have a workforce of 5,000 in 25 countries. Customers include 90% of U.S. veterinary practices, 45,000 customers in Europe and more than 3,000 customers in Australia and New Zealand.
Late Wednesday morning IDEXX and Covetrus issued a news release saying they had reached an agreement to resolve and dismiss IDEXX’s claims against Vets First Choice, a Covetrus company, and its two employees, Daniel Leach and Agostino Scicchitano. They issued this joint statement:
“Covetrus and IDEXX acknowledge their respective obligations to their customers and employees to take appropriate measures to safeguard and ensure proper handling of confidential information.
“All parties, including the Covetrus employees named in the complaint, cooperated to bring this matter to an amicable resolution.
“Covetrus and IDEXX appreciate that this matter is resolved. There will be no further comment from any of the parties on this matter.”
High-stakes legal battle avoided
In settling the lawsuit, Maine’s two largest publicly traded companies avoided a high-stakes legal battle that had the potential to be quite costly for Covetrus and its two employees if IDEXX prevailed in a jury trial, which is what it requested in the 32-page lawsuit filed last August.
The lawsuit alleged that Leach and Scicchitano were among at least nine IDEXX employees hired by Vets First Choice since 2017.
“As a result of the aggressive hiring practices that Vets First Choice was utilizing, and given IDEXX’s particularized concern that its former employees possessed and would use its confidential and trade secret information against IDEXX, IDEXX sent various letters to Vets First Choice informing Vets First Choice about its former employees’ ongoing obligations owed to IDEXX,” the lawsuit stated.
The lawsuit detailed IDEXX’s investigation that led it to the conclusion that “both Leach and Scicchitano improperly accessed and downloaded and/or highly confidential IDEXX information, including proprietary planning documents and internal training manuals.”
“Such information is highly confidential to IDEXX, is not known generally within IDEXX — or by IDEXX’s outside competitors — and would give Leach, Scicchitano and Vets First Choice an unfair competitive advantage,” the lawsuit stated.
The lawsuit had asserted that IDEXX stood "to lose millions of dollars of intellectual property, and the loss of value of its trade secrets and confidential and proprietary information, which cannot be adequately addressed at law.”
According to Wednesday’s court filing, IDEXX voluntarily dismissed its action against Leach, Scicchitano and Vets First Choice “with prejudice, with each party to bear its or his own attorney’s fees and costs.”
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