Former Teva Pharmaceuticals employee sued for selling trade secrets

A drug manufacturer has filed a civil action against a former employee, alleging the man

violated a separation agreement after he encouraged other employees to resign from the company and join the plaintiff at his new place of employment, a competing drug company.

Teva Pharmaceuticals, which is headquartered in Delaware but has a principal place of business in North Wales, Pa., is seeking injunctive relief and damages against Kevin Middleton, a former Teva employee who now works for Genzyme Corporation.

Genzyme, the lawsuit states, is a competitor of Teva’s with respect to pharmaceutical products designed to treat Relapsing Remitting Multiple Sclerosis (RRMS).

Teva is the largest developer, manufacturer, marketer and seller of generic drugs in the United States.

The suit, which was filed July 27 at the U.S. District Court in Philadelphia by King of Prussia, Pa. attorneys Larry J. Rappoport and Julie E. Ravis, claims that Middleton, of Tennessee, breached the terms of his separation agreement when he lured fellow Teva employees to Genzyme.

Middleton, who spent most of his time at Teva managing those responsible for promoting the drug Copaxone, which treats Relapsing Remitting Multiple Sclerosis, and also worked as head of sales for the entire Teva specialty sales force for a period of time, successfully solicited at least 11 Teva employees to join him at Genzyme.

The lawsuit claims that Genzyme has benefitted and continues to benefit from Middleton’s disclosure and use of Teva’s confidential information and trade secrets.

“Notwithstanding the lucrative severance benefits that Middleton received in exchange for his execution of that Separation Agreement, Middleton disregarded his legal obligations to Teva by directly and indirectly contacting numerous Teva employees to induce and encourage them to resign from Teva and join his new employer, Genzyme,” the lawsuit states.

According to the complaint, Massachusetts-based Genzyme is a part of Sanofi-Aventis and is preparing to become a direct competitor of Teva with respect to Genzyme’s newly developed RRMS drugs, which are currently under FDA review for approval.

“In anticipation of such approval,” the lawsuit states, “Genzyme is in the process of hiring and developing sales and medical organizations to promote and scientifically support its RRMS drugs and to compete with Teva.”

The lawsuit says that Middleton, who began his employment with Teva in 2003, had access to the company’s confidential employee information, as well as Teva’s trade secrets and confidential business information, which is not publicly known outside of the pharmaceutical company.

“Indeed, Teva takes steps to ensure that its Trade Secrets and Confidential Business Information remains confidential, including, among other things, requiring all of its employees to execute confidentiality agreements as was the case with Middleton upon his hire,” the lawsuit states.

The suit claims that through his confidentiality agreement, Middleton agreed to never disclose, either during employment or after termination, any company secret or confidential information.

The suit states that Middleton’s April 23, 2012, separation agreement provided that Teva would pay the plaintiff a lump sum payment of $134,207, a pro-rated bonus and would provide continuing health insurance benefits in exchange for Middleton’s execution of the agreement, which among other things would be to adhere to “several covenants” that are designed to protect and safeguard Teva’s trade secrets and confidential information.

The complaint alleges that unless he is enjoined by the court, Middleton will continue to violate the separation and confidentiality agreement.

An injunction is necessary, the suit claims, to prevent “immediate and irreparable harm to Teva that cannot be fully compensated by damages.”

Middleton, the lawsuit states, “is expressly aware that any breach of the Confidential Information Agreement will result in irreparable damage to Teva.”

The complaint goes on to allege that Teva sent Middleton a letter reminding him of his obligations under the separation agreement prior to the filing of this lawsuit, but that Middleton never responded.

A similar letter was sent to Genzyme.

The lawsuit contains counts of breach of contract, misappropriation of trade secrets, tortious interference with business relations, tortious interference with contractual relations and unjust enrichment.

Teva seeks to have a court compel Genzyme to return Teva’s trade secrets in their possession, forfeit to Teva all profits and monetary benefits obtained from the use of Teva’s trade secrets, and pay to Teva compensatory damages at an amount to be determined at trial.

Other relief sought by Teva includes preliminarily and permanently enjoining Genzyme from using or disclosing Teva’s trade secrets and confidential business information.

Both Middleton and Genzyme Corp. are named as co-defendants in the litigation.

 

The federal case number is 2:12-cv-04298-JHS.