Beverage Developer Sanctioned for Failing to Produce Flavor Formulas

Refresco Beverages US, Inc. v. Califormulations, LLC et al, Civil Action No. 4:20-cv-00181-CDL (M.D. Ga., Dec. 12, 2022)

Judge Clay Land in the Middle District of Georgia ordered sanctions against a Defendant for disobeying a previous hearing’s ruling.

The case at hand involves a trade secret dispute between competing beverage concentrate manufacturing companies and former employees. Plaintiff Refresco Beverages US, Inc., maintains a product development, research, and concentrate manufacturing facility in Columbus, Georgia. According to the Complaint, Defendant Symrise Inc. develops and produces fragrances and flavorings, and began directly competing with the Plaintiff after launching a beverage incubator, Califormulations, LLC, in November 2017. Complaint, Civil Action No. 4:20-cv-00181-CDL, at 11–13 (M.D. Ga. Aug. 3, 2020).

According to the Order, the October 11, 2022, motion to compel hearing produced clear instructions that the Defendant failed to follow. In particular, at the previous hearing, the Court ordered Symrise, Inc., to produce certain misappropriated beverage formulas with the “abundantly clear” “intent” of allowing Refresco the opportunity to compare its formulas against their own secret formulas. Order Granting Plaintiff’s Motion for Sanctions, Civil Action No. 4:20-cv-00181-CDL, at 1 (M.D. Ga. Dec. 12, 2022).

The apparent “goal” was to allow the Plaintiff to determine whether the secret formulas at issue were substantially similar. Order at 2. Despite what Judge Land believed was a clear order, Symrise produced only “beverage specifications” without the underlying formulas, based on their misguided belief that the order asked for “beverage formulas,” and not “flavor formulas.” Id.

Relying on the obvious intent of the previous order, Judge Land ordered sanctions against the Defendant for failure to obey the ruling. The sanctions require Defendant Symrise to cover the reasonable expenses, including attorneys’ fees, for the Plaintiff’s motion.

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