Case Spotlight: Five-year fintech fight ends in trade secrets settlement

January 26, 2024

IAM Media

Jim Pooley was quoted in an edition of IAM Media on January 26, 2024. His comments are presented below, and you can read the full text of the article by clicking the "Read Article" button.

SRS' complaint alleged that PNC employed Tsarnas, formerly its managing director for global business development and head of sales, and Kelly, senior vice president and relationship manager who reported to Tsarnas to break into this market. Both had "intimate knowledge" of how SRS' innovative platforms operated and were subject to strict confidentiality agreements, the plaintiff said.

The company initially sought a preliminary and permanent injunctive relief, a jury trial, exemplary and punitive damages, and attorney fees.

But PNC fought back hard. By 5 January this year, when the parties informed the court that they had reached a settlement, there were almost 700 docket entries recorded. During the rocky course of the case, decisions differed as to which party they favoured. Trade secret expert James Pooley says that a high level of uncertainty, like that seen in SRS v PNC is a "classical driver" of settlement.

When parties find themselves facing an imminent jury trial, it is a moment of realisation that the hard facts need to be looked at. "And rather than having a third party, particularly a jury - that does not know the business - decide on what the outcome of the trial should be, the parties have a dawning awareness that this is the last chance for them to control their own destiny in fashioning the outcome in a way that they can live with,'' Pooley notes.

According to Pooley, that must have been exactly one of those moments when parties to the conflict feel responsibility to take sober decisions about their respective companies. "If they are thinking clearly as rational actors, then what they should be doing is minimising the uncertainty and risk, addressing it and moving on where they can control things,'' he said.

SRS commented that "trade secrets are central to its competitive advantage, and we will always do what we must to protect them". SRS declined to comment on how the case was funded.

Pooley notes that "a really good settlement is one in which both sides can interpret it for themselves as a form of victory because they have withdrawn from a very risky situation." However, given the high cost of litigation, Pooley suggests it might have been wiser for the parties to settle earlier.

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