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Farmobile wins final judgment in ongoing US legal dispute over trade secret misappropriation

August 20, 2020

The ongoing legal battle between Farmers Edge and Farmobile over which company owns the rights to a technology that gathers data from farm machinery has reached a final resolution in the US court system.

The two companies have been embroiled in an ongoing legal battle since April 29, 2016, when Farmers Edge filed a lawsuit against Farmobile alleging that the startup misappropriated trade secrets under Nebraska law and violated certain contract terms. The suit named Farmobile founder Jason Tatge, Farmobile CEO, Heath Gerlock, and Randy Nuss, in the U.S. District Court for the District of Nebraska. 

In May 2018, the court granted summary judgment in favor of defendant Farmobile finding that Farmers Edge provided no evidence showing that the startup used or disclosed the alleged trade secrets. In that ruling, the court stated that “none of the trade secrets identified by FEI (Farmers Edge) are actual trade secrets under Nebraska law because the allegedly protected information was at least readily ascertainable by proper means.”

After the summary judgment ruling, the parties settled certain remaining counterclaims except for Farmobile’s claims seeking payment of attorney’s fees under certain provisions of the Defend Trade Secrets Act. 

The May 2018 summary judgment ruling from the court still stands, but the decision states that “this Court’s finding that the allegedly misappropriated information was not secret and was known in the industry will undoubtedly be challenged and could well be reversed.” 

Farmers Edge appealed the outcome, leading to the newest legal turn of events.

The 8th Circuit Court of Appeals issued a ruling last week in favor of Farmobile in the appeal proceeding brought by Farmers Edge. The appellate court concluded that the Nebraska Court did not err in denying Farmers Edge relief. Specifically, the court affirmed that the facts did not support Farmers Edge’s remaining claims on appeal of trade secret theft, breach of contract, and breach of duty of loyalty.

“It goes without saying that Heath, Randy, and everyone who works at Farmobile is elated,” said Jason Tatge in a statement from the startup commenting on the outcome. 

“This has been a long, hard-fought battle, but we always knew we were in the right. The U.S. justice system worked, it just took us a bit longer than anticipated to reach this final result. We are thankful to our legal team for their persistence.”

The legal battle between the two startups is still ongoing in Canada, however. The trial is currently set for April 19, 2021, in Vancouver, B.C.

Farmers Edge did not respond to a request for comment at the time of publication.

Technology Comparison

The technologies giving rise to this dispute are Farmers Edge’s CanPlug device and Farmobile’s PUC device. Both pieces of equipment serve similar functions, plugging into farm machinery, and aggregating data regarding machine use and function. Crop Ventures claims it started developing the CanPlug in 2012, under the leadership of Ron Osborne, now chief strategy officer at Farmers Edge.

Farmobile disputed this claim, advancing facts to support that the original invention was the idea of Farmobile founder Heath Gerlock and his brother, Clarke Gerlock, who is an Iowa farmer. They claim their idea had evolved from other then-available technologies that also plugged into farm equipment and collected data, such as data loggers and products like JDLink.

In July 2013, when the company was experiencing financial difficulty, three Crop Ventures employees who were working on the commercialization of the technology – Jason Tatge, Heath Gerlock, and Randall Nuss – left. They founded Farmobile later that year, while Osborne continued to develop the CanPlug at Farmers Edge after the Canadian startup acquired Crop Ventures in 2014.

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