Trade secrets dispute for Miami Beach manufacturer
By Pankaj Ladhar of Manos • Alwine P.L.
Beyond the bricks, mortar, machines and other physical assets of a company, many businesses have tremendous value in their trade secrets and proprietary information. Whether it is literally a ‘secret sauce’ or a manufacturing process, owners often make large investments to create these assets and rely upon their exclusive right to make use of or license this property. Because of the substantial value in this intellectual property, it is often the subject of commercial disputes.
In an ongoing dispute, a Miami Beach organization is involved in a dispute over what constitutes trade secrets, and who owns them. The company, InnoVida, had apparently developed a secret formula for manufacturing lightweight resin panels for use in housing construction. The formula for the resin that is used to create the panels was acquired by another company, Millport Associates, as part of a bankruptcy proceeding. But now the Innovida would like to be resurrected under a new name and resume its operations. Millport objects because it believes that the new venture intends to use the intellectual property it had already sold away.
Initially Innovida had intended that their panels could be used to quickly and cheaply build low cost housing, particularly in response to regional catastrophic events. The first project was to take place in Haiti, to help rebuild from the 2010 Earthquake. There were plans to build a factory in Haiti to begin production, but as finances ran out the company filed for bankruptcy. It is then that the intellectual property was sold to Millport.
Millport had been one of many creditors who were seeking to get their money out of the bankrupt company. Millport acquired the secret formula, along with lists of vendors, customers and manufacturers. The same was approved by the bankruptcy court. But the new venture, the proceeds of which could be used in part to pay other creditors is in question because Millport now owns the trade secrets that the new company would presumably use to get off the ground.
Source: Miami Herald “Brazilian firm buys trade secrets to build low-cost homes,” Dec. 6, 2011