Lexington County, SC (05/16/2021 Paul Kirby) – Lexington County based Nephron Pharmaceuticals has been awarded a multi-million-dollar settlement from an Arkansas-based pharmaceutical company. Nephron Pharmaceuticals will receive $7.9 million from U.S. Compounding Inc. and its parent company, Adamis Pharmaceuticals to settle several federal court cases claiming it stole trade secrets when it hired former employees of Nephron’s.
According to an article that was first released in The Post and Courier of Charleston, SC, this is the cumulation of a three-year court battle that began when two former employees of Nephron left to go to work for U.S. Compounding. Nephron’s management said those employees shared confidential customer and pricing information with their new employer who is a direct competitor of Nephron’s.
One of the former Nephron employees was a sales representative who worked the Midwest. She had been employed by Nephron for over 15 years. The other employee was also in sales and marketed Nephron’s products in New Jersey, according to The Post and Courier's story.
On her last day with Nephron, one of the former employees used a hard drive to download proprietary records from Nephron’s computers. That information included contacts for current and prospective customers, the order history and purchasing records of Nephron customers, and pricing information for customers of Nephron’s.
Like other employees, that sales representatives had signed a non-disclosure agreement with Nephron when she went to work for them.
According to The Post and Courier’s article, Nephron found out about the downloads after it was forwarded an email written by the former employee which she sent in her new role with U.S. Compounding. It had been mailed to an existing Nephron customer. In that email, the sales representative said that U.S. Compounding could offer the same drugs at a better price, according to Lou Kennedy, Nephron’s CEO.
The Post and Courier’s article went on to say that Nephron’s attorneys argued that this information did fall within the legal definition of trade secrets. Ultimately, the settlement amount was based on testimony by an expert witness for Nephron who explained the monetary value of the stolen information.
In federal filings, Admis said that Nephron’s claims were without merit, but they opted to settle after losing several pre-trial motions, citing the legal expenses and uncertainty of ongoing litigation and trial. Included in the settlement was a permanent injunction against the companies and employees, forbidding any future use or sharing of the data.
The Post and Courier’s story quoted Nephron’s CEO Lou Kennedy as saying, “We are pleased with the outcome of this matter. This represents a win for the good guys – and serves as a reminder that there is a right way and wrong way to do business, that people should conduct themselves with integrity, and that there is no substitute for hard work.”
