Federal Court In Pennsylvania Allows Jury Trial On Candymaker’s Trade-Secret Claims Against His Ex-Wife And A Competitor For Alleged Fudge Recipe Theft

By: Carl L. Engel

On December 27, 2022, the U.S. District Court for the Western District of Pennsylvania, in the case Warman v. Local Yokels Fudge, LLC, refused to dismiss a candymaker’s lawsuit in which he claims that his ex-wife licensed his secret fudge recipe to a competitor without his authorization. The ex-wife and the competitor asked the court to dismiss his claims, arguing that the recipe had been disclosed to the public in an old patent, and that the candymaker had learned it from a former employer who used to teach it to anyone who worked for her. The court refused, however, finding that there was evidence that the candymaker had modified the recipe to make it his own. Therefore, he is allowed to present his case to a jury at trial.

According to his complaint, candymaker Christopher M. Warman developed a fudge recipe that he sells under the “Chocolate Moonshine” brand. He licensed the recipe to his ex-wife, Christine Falvo, and alleges that she gave the recipe to competitor Local Yokels Fudge without his permission. Local Yokels Fudge and Ms. Falvo asked the court to enter summary judgment in their favor, because the ingredients and process for making fudge “have been well-known for some time,” and were disclosed to the public in an expired patent that had been issued to another confectioner in 1968. The defendants also argued that Mr. Warman had learned the recipe from his former employer in 1988, and that she used to teach the recipe to every one of her employees. Therefore, they argued, the recipe is not a secret at all, and was already known to the confection industry.

The court refused to enter judgment for defendants, however. To reach its decision, the court observed that Mr. Warman had testified that he had made significant changes to the recipe that he learned in 1988, and that he had observed Local Yokels Fudge using his version of the recipe, and not the recipe in the 1968 patent or the 1988 recipe. The court also found evidence that he had taken measures to maintain the secrecy of his recipe and to keep it from public knowledge. Therefore, the court reasoned, there were genuine issues of material fact that prohibited the entry of judgment in favor of the defendants. As a result of the court’s decision, Mr. Warman will be allowed to present his trade-secret claims to a jury at trial.

Conspicuously absent from the court’s opinion is a discussion of damages. In other words, there does not appear to be evidence that Mr. Warman lost customers to Local Yokels Fudge, or that the competition has impacted his sales. Rather, it appears that the key fact driving this case is that Mr. Warman’s ex-wife is profiting directly or indirectly from a fudge recipe that he taught her before their divorce. If this lawsuit is being driven by personal animus, it is much less likely that the defendants will be offered a reasonable settlement. In such a case, the defendants would be well advised to focus on preparing for trial.