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3 September 2020Sarah Morgan

Kaplan drops trade secret suit against rival

US education provider Kaplan has settled its trade secret theft suit against competitor Dalton Education, following the sacking of certain employees.

The settlement was announced yesterday, September 2, with the two companies presenting different public versions of the outcome.

In June last year, Kaplan took Dalton Education to court, accusing its rival and two former employees of conspiring to steal trade secrets and confidential information about the company.

Kaplan had claimed that Dalton Education had a policy of recruiting its employees with the aim of acquiring confidential information about Kaplan’s business strategy, revenues and 2018 product lines.

Dalton had reportedly recruited a sales manager and wealth manager from Kaplan and, according to the claim, both former employees had forwarded confidential documents containing company trade secrets to their personal email addresses.

“Additionally, Kaplan discovered that a third Kaplan employee, a senior executive who joined Dalton last summer, emailed extensive Kaplan trade secrets related to its Chartered Financial Analyst (CFA) business to an executive at a Dalton affiliate and met with Dalton owners to discuss starting a competing CFA business, all while still employed by Kaplan,” said yesterday’s announcement.

The former Kaplan executive who allegedly shared Kaplan’s CFA trade secrets is still employed at Dalton and agreed to be personally bound by the settlement terms. He will be required to “provide affirmations assuring, under penalty of perjury, that he no longer has, and has not used, any such Kaplan confidential or proprietary information to support Dalton”.

Kaplan previously settled with the two former Kaplan employees who were also named as defendants in the lawsuit.

Andrew Temte, president and global head of corporate learning for Kaplan North America, said: “Our goal was to stop Dalton from using confidential Kaplan information to compete unfairly in the marketplace. I wish it was not necessary to file a lawsuit but we are satisfied with the results and that Dalton agreed to our terms.”

Kaplan's 'blatant attempt to snatch victory'

However, Dalton has dismissed Kaplan's version of events. In a press release shared with WIPR, Dalton noted that Judge James Peterson had previously granted the company’s motion for summary judgment on nearly every issue raised in its defence.

In August, Peterson dismissed the vast majority of claims asserted against Dalton. Later that same month, the parties moved to dismiss all claims (including the trade secret misappropriation claims as they relate to a sales report and spreadsheet) that hadn’t been resolved by the summary judgment.

The judge then entered a judgment in favour of Dalton on Tuesday, September 1, on all of the remaining claims asserted against Dalton in the case.

Joseph Gillice, Dalton's president, said he was disappointed that Kaplan’s latest press announcement touts the parties’ settlement, but makes no reference to the summary judgment decision.

“We hoped the court’s sweeping summary judgment decision against Kaplan would cause it to be more cautious. Unfortunately, that was not the case. Indeed, Kaplan’s latest press release represents nothing more than a blatant attempt to try to snatch victory from the jaws of defeat,” said Gillice.

He added that the commitments Dalton had made in the settlement document were commitments it had already made voluntarily over a year ago.

“More importantly, the settlement document that Kaplan touts actually helped us secure a complete victory over Kaplan, leading to the voluntary dismissal, with prejudice, of the few remaining claims Kaplan had in the case and a waiver of Kaplan’s right to appeal the court’s summary judgment decision,” said Gillice.

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