Ajuba Int'l v. Saharia

Summarized by:

  • Court: Intellectual Property Archives
  • Area(s) of Law: Trade Secrets, Misappropriation of Trade Secrets
  • Date Filed: 07-14-2014
  • Case #: 2:11-cv-12936
  • Judge(s)/Court Below: United States District Court for the Eastern District of Michigan, Southern Division
  • LexisNexis Citation: 2014 U.S. Dist. LEXIS 94972
  • Westlaw Citation: 2014 WL 3420524
  • Full Text Opinion

In a Misappropriation of Trade Secrets claim, the Plaintiff bears the burden of proving the specific nature of the trade secrets. Trade secret law does not protect an idea which is well known or easily ascertainable; the secret information must afford the owner a competitive advantage by having value to the owner and potential competitors; and the plaintiff must identify the trade secrets with specificity.

Opinion (Battani): Plaintiff Ajuba (comprised of Michigan LLC Ajuba International, Ajuba India, and Michigan company MiraMed Global Services, Inc.), provides revenue cycle outsourcing to medical centers, hospitals, and healthcare systems, where companies enter data into third-party billing applications to generate and send bills to patients and insurance companies; the industry is uniform, with many companies performing services for the same clients. Defendants include Devendra Kumar Saharia (a former Michigan resident), who is a citizen and current resident of India and co-founder/former president of Ajuba; and AGS Health, Inc. (“AGS Health”), all collectively referred to as “AGS”. In 2000, Saharia co-founded Ajuba International’s predecessor company with Tony Mira; in 2005, Saharia sold his ownership stake in that company to MiraMed. However, MiraMed required that Saharia sign a non-compete agreement with Ajuba International before purchasing Saharia’s stake. Saharia also subsequently signed multiple Noncompetition Agreements and Employment Agreements with both Ajuba International and Ajuba India. In 2011, Saharia and multiple other executives resigned and negotiated the purchase of their company laptops from Ajuba. Later that year, Saharia purchased AGS and hired the former executives, as well as several other former Ajuba employees, and began working with customers and eventually signed one of Ajuba’s former clients. Plaintiffs filed a ten-count complaint against defendants that same year, both in the United States and in India, including misappropriation of trade secrets. Plaintiffs claim that the Defendants misappropriated proprietary training programs; confidential information regarding Ajuba’s revenue cycle management services; proprietary software and automation tools; confidential personnel information; and client relationship information. Plaintiffs argued that most of this information is not generally known to the public and most of it was developed by them; defendants argued that the Plaintiffs failed to establish the existence of any trade secrets, instead relying on generic terms and overly broad references. Noting that the plaintiff in a trade secret case bears the burden of proving the specific nature of the trade secrets, the Court found that the plaintiffs failed to meet that burden by specifically identifying at least one trade secret upon which they could recover for misappropriation, and failed to produce any evidence of misappropriation. The Court stated that, “generally, trade secret law does not protect an idea which is well known or easily ascertainable . . . the secret information must afford the owner a competitive advantage by having value to the owner and potential competitors . . . [and] importantly, the plaintiff must identify the trade secrets with specificity.” Accordingly, Defendant’s motion for summary judgment on the count of misappropriation of trade secrets was GRANTED.

Advanced Search