On November 1, 2023, a jury in the U.S. District Court for the Central District of California awarded damages to Skye Orthobiologics, LLC (“Skye”) and Human Regenerative Technologies, LLC (“HRT”) for breach of contract, breach of fiduciary duty, and breach of duty of loyalty by Skye’s former employee (“Defendant”). While Plaintiffs Skye and HRT did not succeed on their claim of trade secret misappropriation, they were able to succeed in showing Defendant misappropriated confidential information in breach of his employment agreements.
HRT manufactures tissue biologic products under various trade names, which are used in both surgical and non-surgical contexts for wound care, plastics, cosmetics, and other medical care. HRT manufactures exclusively for Skye, which sells the products through independent contractors. In 2012, Defendant began working for Skye as an independent contractor, during which time he worked closely with HRT products and signed a consulting contract with HRT in 2014 that included confidentiality clauses. In April 2018, Defendant was promoted to Vice President of Business Development, at which time he signed an employment agreement stating that Skye was his “sole job and focus,” and another confidentiality agreement that contained a covenant not to solicit or compete.