On February 24, 2017, after a 4-week trial in federal court, Handel Food Law obtained a favorable jury verdict for our client, Dalmatia Import Group, Inc., on claims of misappropriation of trade secrets, trademark infringement and counterfeiting. Dalmatia is the brand and recipe owner of the award-winning Dalmatia® Fig Spread, the leading fig jam sold in cheese departments across the United States.
In October 2015, Dalmatia notified its distributor, FoodMatch, Inc., that it was ending their relationship and switching to a new distributor. FoodMatch immediately set out to create replacement fig spread products to be sold under its Divina brand. To do so, it went to Dalmatia’s co-packer, Lancaster Fine Foods, Inc. The jury found that FoodMatch and Lancaster Fine Foods used Dalmatia’s trade secret recipe to create Divina fig spreads. We believe this is the first jury verdict obtained under the federal Defend Trade Secrets Act, which was enacted in 2016.
The trademark infringement and counterfeiting claims were based on the defendants’ sale of Dalmatia-branded fig spread, using Dalmatia’s trademarks, without Dalmatia’s consent. Some of this product had been rejected by Dalmatia for quality reasons. Some of it was made by Lancaster Fine Foods after Dalmatia instructed it to cease production. Dalmatia did not know that the rejected and unauthorized product had been sold until after the lawsuit for misappropriation of trade secrets had already commenced.
The jury awarded damages to Dalmatia which will reach about $5 million after the court applies the trebling of damages required by law for trademark counterfeiting.
Handel Food Law LLC partnered with co-counsel from McDermott Will & Emery LLP and local counsel from Gross McGinley LLP. The case involved a year of litigation in federal courts in New York and Pennsylvania.
The case is Dalmatia Import Group, Inc. v. FoodMatch, Inc. et al. in the United States District Court for the Eastern District of Pennsylvania (Docket No. 16-2767).