Prudential Financial has prevailed in federal court after being accused of misappropriating trade secrets regarding an annuity product, reports Think Advisor.
The U.S. Court of Appeals for the Sixth Circuit affirmed a lower court ruling that sided with Prudential in its dispute with Novus Group. The case centers around a variable annuity rider created by Novus that aimed to provide a lifetime source of income for a child, a grandchild or another party other than a spouse.
Novus pitched the product to two employees of Nationwide Mutual Insurance, who left that company and took the idea to Prudential in 2015 and 2016. After Prudential launched what appeared to be a similar annuity rider, Novus claimed its concept had been stolen and filed a lawsuit against Prudential in 2019, claiming a violation of Ohio’s Uniform Trade Secrets Act. Novus lost its case in district court in August 2022 and then filed an appeal that November.
In siding with Prudential, the three-judge court of appeals found that Novus had not demonstrated that Prudential misappropriated its trade secrets. The court found that the two employees who moved to Nationwide and Prudential had signed a nondisclosure agreement with two firms that advised Novus about the product, Annexus and Genesis Financial Development, but that agreement did not apply to the Novus product pitch to Nationwide or to Prudential. Nationwide was not a party to those contracts and thus was not bound by them, the ruling pointed out.
“Simply put, the agreements Novus points to show that Novus knew how to create a confidential relationship, yet did not form one with Nationwide which, remember, had at one point explicitly declined to do so,” Circuit Judge Chad Readler said in writing the court’s opinion in the case. The court also rejected Novus’s assertion that Prudential had acquired the confidential information through “improper means.”
Readler added that Prudential employees who received the information about the annuity product were under no obligation to keep it confidential.
There was no immediate comment in the report from representatives for Prudential and Novus.
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