Idexx sues Vets First Choice, alleging trade-secret theft

Ex-employees accused of taking data just before leaving

August 8, 2018 (published)
By Edie Lau

Idexx Laboratories Inc. is suing Vets First Choice and two of its employees, alleging that the employees, who previously worked for Idexx, took confidential company information from their computers within days of resigning their Idexx jobs.

In a suit filed Friday in U.S. District Court for the District of Maine, Idexx states that Dan Leach and Agostino Scicchitano accessed “highly confidential” documents related to proprietary planning and internal training.

The men’s roles at Idexx and the information they took was so sensitive that the loss could damage Idexx’s “reputation as an industry leader and its ability to successfully market its goods and services,” the suit states. “Money alone cannot make IDEXX whole.”

Further, Leach and Scicchitano “hid the fact that they were taking employment with VFC,” the suit says. The men resigned from Idexx in December and April, respectively, according to the suit. Since 2017, VFC has hired at least nine Idexx employees, the suit says.

The series of activities “signals that VFC is attempting to jumpstart its business with IDEXX information and trade secrets,” the suit charges.

Established in 1984, Idexx is one of the largest veterinary diagnostic laboratories in the country. It also sells practice-information-management software. VFC, founded in 2010 as an online pharmacy working with veterinarians in private practice, is a relative upstart with large ambitions: It announced in April plans to merge with distribution giant Henry Schein Animal Health, creating a new entity to be called Vets First Corp.

The business interests of Idexx and VFC overlap in their goals “to create data-driven solutions to help veterinarians close patient care gaps and drive better customer communication,” the suit states. The companies use digital technology to gather, analyze and repackage for sale information drawn from veterinary customers.

As the suit describes it: “… one of IDEXX’s areas of focus is in creating customized software to better help veterinary clinics to manage their businesses. In so doing, IDEXX is able to aggregate large swaths of data pertaining to buying trends, purchasing history, treatment history, and customer engagement with various product manufacturers and product types.”

VFC also capitalizes on data collection and data crunching. On the home page of its website, its pitch to veterinarians includes “Powerful analytics — using your practice data — [that] identifies gaps in care and opportunities you’d otherwise be blind to.”

Idexx and VFC share origins, as well: Idexx founder David Shaw co-founded Direct Vet Marketing with his son, Ben Shaw. That company acquired VFC in 2010. Today, David Shaw is board chair of VFC and is slated to assume the same position at Vets First Corp following the merger with Henry Schein. Idexx headquarters and VFC are located in Maine within seven miles of each other.

Shaw was CEO of Idexx until 2002. He no longer has formal ties there. A company spokesperson said by email, “David Shaw has no involvement in any capacity with IDEXX and has not been involved since he left the company.”

Shaw did not respond to a request for comment emailed Tuesday to Black Point Group, an investment group in which he is a managing partner.

Shaw reportedly told the Bangor Daily News by email: “Acting with integrity, including protection of intellectual property, data privacy, and information security, is a core value at Vets First Choice. We are not able to comment on pending litigation.”

The suit lays out the following narrative:

Leach worked for Idexx from August 2015 to December 2017. In his position as a business analyst, he met with customers to identify their software needs and worked with the engineers who developed custom programming for the customers.

“Based on his role and responsibilities, Leach also had direct knowledge of the software that would run IDEXX’s next generation veterinary product portfolio,” the suit states. “This information is highly confidential and is neither generally known within IDEXX nor is it publicly available.”

Scicchitano worked for Idexx from May 2010 to April 2018. He was responsible for training Idexx employees and designing proprietary in-house training programs.

“Through his IDEXX employment, Scicchitano acquired and helped develop IDEXX confidential and trade secret information relating to its training programs, strategy pertaining to its training programs, learned detailed information pertaining to IDEXX’s software development plans and deliverables, details about its upcoming chemical analyzer, hematology, and other product developments, and detailed information pertaining to IDEXX’s sales force employees’ strength and weaknesses that is not known to the public or IDEXX’s competitors, including VFC,” the suit states.

Both men had signed non-disclosure and non-compete agreements. The suit alleges that “in recruiting IDEXX employees, VFC is telling [them] … that the … agreements are ‘not an issue.’ Simply put, it appears that VFC is incentivizing IDEXX employees to not only violate their non-compete agreements, but also to misappropriate IDEXX’s trade secrets.”

Idexx says that in inspecting Leach’s work computer, it found that several times during the seven weeks before he left the company, he “accessed a series of confidential IDEXX documents,” including files that did not pertain to his duties or responsibilities at Idexx. He also connected a thumb drive, which was something he’d never done before with the company computer.

The company said it found similar computer activity by Scicchitano during the four weeks before he left: He installed Dropbox, placed files in the Dropbox and connected two external media devices to the computer, which was not his habit.

Idexx said it “repeatedly wrote to VFC (and its former employees, including Leach and Scicchitano), demanding return of its information and requesting compliance with its agreements, but receiv[ed] no substantive response in return.”

Idexx is seeking a court injunction to stop the defendants from using or disclosing any of its confidential and/or proprietary information; return of their documents, whether originals or copies; and unspecified monetary damages, among other things.

The defendants — Leach, Scicchitano and Direct Marketing Inc., doing business as Vets First Choice — have not yet filed responses.

Correction: This article has been revised to correct information about the origins of Vets First Choice. Although the company maintains that David and Ben Shaw cofounded Vets First Choice in 2010, the launch of the business predates their involvement. For details, click here. 

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