Trade secret battle between Cuker and Walmart takes another turn

The U.S. Appeals Court denied approving the request of a web design company, Cuker Interactive to initiate contempt proceedings against world-renowned Walmart Inc. alleging Walmart of violating a court order prohibiting it from using its trade secrets. A trade secret is a kind of intellectual property where the confidential information behind your trade is granted protection that cannot be used by any other person without taking permission.

An Arkansas Federal Court rightly rejected the contempt bid of Cuker, which the 8th U.S. Circuit Court of Appeals said required more than an expert's hunch to prove Walmart’s continuous usage of its secrets to date even after receiving a permanent injunction and $3 million fine.

San Diego-based Cuker once worked with Walmart in establishing an online presence by making its grocery websites in a way to is accessible from different devices. Everything started when Walmart sued Cuker for breaching their terms of contract shortly after their work started in the year 2014, and in response, Cuker countersued for trade-secret misappropriation.

A federal judge eventually directed Walmart the following in the ear 2018:

  • Pay $745,000 in damages and $2.6 million in fee of attorney and other sanctions
  • Delete Cuker’s trade secrets from its system permanently.

Cuker approached the Arkansas court requesting it to hold Walmart in contempt case in 2020, arguing it was continuously disregarding the order. However, the court shunned Cuker’s request and said, “Giving Easttom access to Walmart's databases could lead to either a fishing expedition or a hunt for buried treasure.” Consequently, the 8th Circuit agreed with the trial judge and rejected Cuker’s appeal on the same observations that the company miserably failed to make its case that Walmart was violating the court’s order. Walmart was represented by Neal Manne of Susman Godfrey whereas Cuke by Stephen Larson of Larson LLP before the court.

The cases can be reached with the names Wal-Mart Stores Inc v. Cuker Interactive LLC, 8th U.S. Circuit Court of Appeals bearing case no. 20-3308.