Walmart to pay tech company $222M over trade secret misappropriation

Dive Brief:

An Arkansas federal jury found on Wednesday that Walmart owes technology company Zest Labs more than $222 million over claims that the mass retailer stole Zest Labs’ technology that extends the shelf life of produce. 
The jury concluded that Zest Labs proved its claim of “trade secret misappropriation” and found Walmart’s misappropriation was “willful and malicious,” according to court documents.
Walmart vowed to appeal the verdict, which nearly doubles the amount the retailer was ordered to pay Zest Labs following a previous trial.

Dive Insight:

Walmart owes Zest Labs $72.7 million in compensation for damages caused by Walmart’s trade secret misappropriation and $150 million for exemplary damages, the jury decided.

“We strongly disagree with the verdict and believe it’s not supported by the facts. Zest Lab’s unethical behavior has compromised the integrity of this case from the start. We expect our suppliers to uphold the highest ethical standards and will continue to advocate for fairness and justice,” a Walmart spokesperson said in an emailed statement. 

Zest Labs originally filed a civil lawsuit against Walmart in 2018, with a jury awarding Zest Labs $115 million in a verdict delivered three years later. An Arkansas federal judge granted Walmart’s request for a new trial in late 2023 after finding that Zest Labs withheld relevant evidence in the original trial. 

Zest Labs first claimed seven years ago Walmart stole its cold-chain management technology that extends produce shelf life. The company said it demonstrated the technology to Walmart executives in early 2014 and then entered into a confidentiality agreement a few months later. In early 2018, Zest Labs claimed the retailer released a solution called Eden that the company stated “looks, sounds, and functions” like its own produce shelf life solution. 

The jury’s decision on Wednesday was unanimous and is “one of the largest verdicts in Arkansas history and likely the highest trade secret verdict in the history of the state,” according to a press release from Bartko Pavia LLP, the firm that represented Zest Labs. 

“This legal victory is a small but crucial triumph for small businesses that often face exploitation by larger corporations, robbing them of the opportunity to bring their innovative solutions to the market,” Zest Labs Manager Gary Metzger said in a statement.