Bizarre dispute between AI-Biotech startup and former CEO ends for the time being in trade secrets

With a factual backdrop that resembles a bad Hollywood script, the latest chapter in the ongoing dispute between former Trilobio co-founder Keoni Gandall (defendant) and Trilobio and its two former partners and co-founders Roya Amini-Naieni and Maximilian Schommer (plaintiffs) ended on October 17, 2024, with the court banning Gandall and his new company from using Trilobio’s trade secrets. While at first glance this case may seem like a run-of-the-mill case of trade secret misappropriation, peeling back the layers, even just a little bit, identifies a host of questions that seem to have no answers, and which may have a would have necessitated a different outcome.

First, there are questions about the timing of the lawsuit, when the plaintiffs discovered or should have discovered Gandall’s alleged misappropriation of trade secrets, and whether the plaintiffs therefore adequately protected their trade secrets.

To that end, plaintiffs allege that Gandall was fired in February 2023 and allege that Gandall misappropriated Trilobio’s trade secrets immediately after and several months before his dismissal. And the plaintiffs also claim that they did not discover Gandall’s misappropriation of trade secrets until September 2024. Now, for most practitioners, it can happen that the misappropriation of trade secrets is discovered 18 months after the employee’s departure, but this is not common.

What makes this all the stranger, however, is that Gandall has sued the plaintiffs for employment-related claims and breach of contract claims in December 2023. And Gandall further made demands from the plaintiffs for shares he claimed were owed to him months earlier. Gandall also claimed, somewhat salaciously, that his dismissal was the result of a secret affair between him and Amini-Naieni, while Amini-Naieni was engaged to Schommer. In the same plea, Gandall alleges that Amini-Naieni defamed him by claiming to third parties, including Gandall’s family, that Gandall sexually assaulted Amini-Naieni. Plaintiffs’ pleadings respond almost silently to these points.

To add to the confusion, no explanation is given as to why, despite these allegations, the plaintiffs did nothing to forensically document or investigate his conduct in the aftermath of Gandall’s termination, especially after they were charged.

And that conduct becomes even more questionable when you start examining other allegations that plaintiffs make in their complaint and motion before TRO, including that Trilobio received an email intended for Gandall in April 2023suggesting that Gandall approached Trilobio’s investors within six weeks of his departure. Or that in May 2023, Gandall began conducting business allegedly related to Trilobio’s business with another Trilobio investor. Or that Gandall would have posted on his personal web page in May 2023 what Trilobio claims is the trade secret source code. Or that in that same month, Gandall hosted and posted on his YouTube channel a video discussing his work on oligopool technology, something that Trilobio claims is its trade secret and that Gandall has misappropriated. Despite all this public activity that took place within months of Gandall’s departure from Trilobio, Trilobio did not discover this until September 2024.

Even stranger, Trilobio’s moving papers—despite claiming the source code was a trade secret—published the code in an unsealed document even after publicly filing redacted versions of his pleadings.

These are just a few of the examples the plaintiffs provide in their papers, but the central theme behind almost all of this is that Gandall was exceptionally open about what he did after the termination, while the plaintiffs, who were embroiled in a lawsuit with Gandall , were exceptionally open about what he did. nothing discovered since December 2023.

Any professional who has brought trade secret misappropriation claims knows that the hallmark of a trade secret is taking sufficient steps to protect the confidentiality of the information. But beyond identifying its use of a confidentiality agreement with Gandall, Trilobio’s papers are virtually silent on the steps it took during Gandall’s employment to protect its information and absolutely silent on the reasons why – despite Gandall’s very public ‘use’ of the alleged trade secrets – they did not discover the misappropriation until September 2024. The court’s decision granting the TRO did not address these questions, nor how the information continued to constitute a trade secret.

Then there are questions about Gandall’s claims that he was given permission to download certain information. This is especially true when one considers the curious circumstances underlying Gandall’s departure from Trilobio. The evidence of this suggests that there is a question of fact about Gandall’s claims that he had permission to download what he did. In Gandall’s California state court, he claims that Amini-Naieni and Schommer were in a romantic relationship before his termination. He also claims that Gandall and Amini-Naieni began their own sexual relationship in January 2023, while Amini-Naieni and Schommer remained engaged. When the relationship ended in February 2023, Amini-Naieni reportedly offered Gandall $100,000 to leave Trilobio, but Gandall declined, as he was about two months away from fully vesting 675,000 shares in Trilobio. Interestingly enough, however, the court did not take this into account.

Gandall, who made his allegations in his case in state court (and attached these pleadings to his answer in opposing plaintiffs’ motion for TRO) nearly a year before Trilobio filed the present case, claims that Amini-Naieni allowed him had given to download certain files. documents, all before the alleged embezzlement occurred and long before he was fired. Furthermore, according to Gandall, he publicly uploaded the oligopool files to his website as of November 3, 2022. (Dkt. 21-1 at ¶ 35.) While plaintiffs do not expressly state the date the assessment was provided to Gandall, the document does show that Gandall responded and commented on November 29, 2022, more than three weeks after Gandall submitted the oligopool files on his personal web page, allegedly with Amini-Naieni’s permission. (Dkt. 15-8.) Nevertheless, the court found that: “It is simply not credible that Amini-Naieni would have allowed him to download the company’s confidential information that same month.” (Dkt. 31 on p. 5.) However, it is worth noting that this is not what Gandall claimed. Instead, Gandall claimed: “It was only after Trilobio halted its research into oligopool technology in early 2022 and the oligopool files had been inactive for almost a year that I asked Ms. Amini-Naieni for permission to upload the oligopool files to my website. . She gave her consent and on November 3, 2022 I uploaded them to my website.” (Dkt. 21-1 at ¶ 35.) In other words, Gandall does not allege that there was a specific date on which Amini-Naieni gave permission, but instead alleges a specific date on which Gandall uploaded the files to his website.

However, instead of addressing these discrepancies, the court found that it would be unbelievable for the plaintiff to give Gandall this type of consent at a time when he was also receiving a negative performance review. It reached this finding despite Gandall providing the court with his allegations about his intimate relationship with Amini-Naieni. It also reached this conclusion despite the text exchange that plaintiffs included in their complaint, which included the following exchange:

Amini-Naieni: It’s over. (February 21, 2024, 7:57 PM)

Gandall: Wait, what?

Amini-Naieni: You’re fired. I’ll handle the paperwork tomorrow. (21/2/24, 8:00 PM)

Gandall: You don’t even want to talk to our investors about it? Or try to listen to me, non-emotionally, with an improvement plan?

Amini-Naieni: My decision is final.

(Trilobio, Inc. against GandallCase No. 4:24-cv-06337-JST, Dkt. 15-4.) This text exchange appears to at least confirm Gandall’s claim that he was involved in an intimate relationship with Amini-Naieni, and may also explain why, despite perceptions such as Gandall’s appearance of Schommer in November 2022, Amini-Naieni may have given Gandall permission to download certain information to Gandall’s personal website. The documentation also shows that Amini-Naieni blocked Gandall from messaging her afterward. (Identity cardThe circumstances behind Gandall’s departure and Amini-Naieni’s main text certainly suggested that there would be some level of follow-up, especially in terms of weighing the credibility and statements of the different parties. However, none of this happened.

Third, there are questions about whether the information in question constitutes a trade secret. This was another issue that was not really addressed by the court, despite very different views of the parties as to whether the information (particularly the oligopool documents) actually constituted a trade secret. Here too, a trade secret must have economic value for the company to remain secret. Here, however, Gandall presented a host of well-known facts about how Trilobio had abandoned its commercial efforts around oligopool technology; to which the plaintiffs’ public filing effectively responds, “not.” (It is of course impossible to know what exactly Trilobio provided to the court for consideration, but it is worth noting that Amini-Naieni’s additional statement provides no evidence that Trilobio was considering this technology after November 17, 2022.) (Dkt. 26 – 1¶ 12.)

What these few contradictions alone reveal is that this case is much more complicated than a simple misappropriation of trade secrets. But it also underlines how important the arguments made at the trial level are and how discussing and explaining the standard and where claimants have failed to meet that standard are essential. Naturally, this case is now headed for expedited discovery. And the plaintiffs will have to answer questions about when and how they became aware of certain facts, why they didn’t take action sooner, despite Gandall’s public use of this information, even during his employment at Trilobio.cf. Dkt. 15-15 at ¶ 6 (Sun. Dec, discusses his research of publicly available files on Gandall’s web page) of Dkt. 21-1 at ¶ 35 (Gandall Decl., indicating that he uploaded oligopool information to his public website on November 3, 2022)), and whether it actually treated the oligopool technology as a trade secret. Furthermore, because plaintiffs filed this as a DTSA claim, they also exposed themselves to rate shifts if the court later finds that they filed a trade secret misappropriation claim in bad faith. This will certainly be an interesting case to follow as further facts develop.