Court Opinion

ID: 4235468
Source: CourtListenerOpinion
Date Created: 2018-01-10 05:26:03.171547+00
Date Added: 2024-06-11T14:42:38.206462
License: Public Domain

ACCEPTED
                                                                                      03-17-00035-CV
                                                                                            21631643
                                                                            THIRD COURT OF APPEALS
                                                                                      AUSTIN, TEXAS
                                                                                    1/5/2018 11:20 AM
                                                                                    JEFFREY D. KYLE
                                                                                               CLERK
                                 No. 03-17-00035-CV

                                                                       FILED IN
                           IN THE THIRD COURT OF APPEALS        3rd COURT OF APPEALS
                                                                    AUSTIN, TEXAS
                                   AUSTIN, TEXAS
                                                                1/5/2018 11:20:33 AM
                                                                  JEFFREY D. KYLE
                                                                        Clerk
                         DR. RUTHIE HARPER AND PLLG, LLC,
                                     Appellants,

                                           v.

                           WELLBEING GENOMICS PTY LTD.,
                                    Appellee.

                      On Appeal from the 98th Judicial District Court
                   Travis County, Texas, Cause No. D-1-GN-14-002452

       SUPPLEMENTAL BRIEF OF APPELLEE WELLBEING GENOMICS PTY LTD.
        FILED IN RESPONSE TO THE COURT’S REQUEST AT ORAL ARGUMENT

                                                Robert W. Kantner
                                                State Bar No. 11093900
                                                JONES DAY
                                                2727 North Harwood Street
                                                Dallas, Texas 75201-1515
                                                Telephone: (214) 969-3737
                                                Facsimile: (214) 969-5100
                                                rwkantner@jonesday.com

                               ATTORNEY FOR APPELLEE

NAI-1503303499v1
                                              TABLE OF CONTENTS

                                                                                                                    PAGE

Record References ...................................................................................................iv
Introduction ...............................................................................................................1
Factual Background ..................................................................................................1
         A.        Defendants’ Access to Trade Secret No. 1...........................................1
         B.        Defendants’ Misappropriation of Trade Secret No. 1 and
                   PLLG’s Breach of Confidentiality Agreement ....................................4
Argument...................................................................................................................6
         A.        Proof of Access to Trade Secret No. 1 by Harper and PLLG .............. 6
                   1.        Standard of Proof of Access to Trade Secrets ...........................6
                   2.        Wellbeing’s Evidence of Access to Trade Secret No. 1 by
                             Harper and PLLG .....................................................................13
         B.        Proof of Use or Disclosure of Trade Secret No. 1 by Harper and
                   by PLLG .............................................................................................16
                   1.        Standard of Proof of Use or Disclosure of a Trade Secret ......16
                   2.        Wellbeing’s Evidence of Use of Trade Secret No. 1 by
                             Harper and PLLG .....................................................................22
         C.        This Court Should Not Reverse the Judgment Based on Either
                   Harper’s or PLLG’s Allegation of No Evidence or Insufficient
                   Evidence of their Access to and Use/Disclosure of Trade Secret
                   No. 1 ...................................................................................................25
Conclusion and Prayer ............................................................................................26
Certificate of Service ..............................................................................................28

NAI-1503303499v1                                             -i-
                                     TABLE OF AUTHORITIES

                                                                                                                Page

CASES

Bishop v. Miller,
   412 S.W.3d 758 (Tex. App. – Houston [14th Dist.] 2013, no pet.) .......19, 20, 21

Cain v. Bain,
  709 S.W.2d 175 (Tex. 1986) ..............................................................................25

Electro-Miniatures Corp. v. Wendon Co., Inc.,
   771 F.2d 23 (2nd Cir. 1985) .........................................................................11, 12

GlobeRanger Corp. v. Software AG United States of America, Inc.,
   836 F.3d 477 (5th Cir. 2016) ........................................................................17, 21

Leggett & Platt, Incorporated v. Hickory Springs Manufacturing
   Company,
   285 F.3d 1353 (Fed. Cir. 2002) ....................................................................10, 12

Pioneer Hi-Bred Inc. v. Holden Foundation Seeds,
   35 F.3d 1226 (8th Cir. 1994) ........................................................................11, 12

Sokol Crystal Products v. DSC Communications Corp.,
   15 F.3d 1427 (7th Cir. 1994) ........................................................................11, 12

Spear Marketing, Inc. v. Bancorpsouth Bank,
   2014 WL 2608485 (N.D. Tex. June 11, 2014), aff’d. 791 F.3d 586
   (5th Cir. 2015).................................................................................................8, 10

Stratienko v. Cordis Corp.,
   429 F.2d 592 (6th Cir. 2005) ..............................................................................10

SW Energy Production Co. v. Berry-Helfand,
  491 S.W.3d 699 (Tex. 2016) ..............................................................................16

NAI-1503303499v1                                         -ii-
                                      TABLE OF AUTHORITIES
                                           (continued)
                                                                                                     PAGE

Transp. Ins. Co. v. Moriel,
   879 S.W.2d 10 (Tex. 1994).................................................................................25

Wellogix, Inc. v. Accenture, L.L.P.,
  716 F.3d 867 (5th Cir. 2013) ............................................... 6, 7, 8, 10, 12, 18, 21

NAI-1503303499v1                                     -iii-
                                RECORD REFERENCES
        Appellee will use the same record reference designations as it did in its Brief

of Appellee.

NAI-1503303499v1                          -iv-
                                  INTRODUCTION
        At the conclusion of the two week trial of this case, the jury found that

Wellbeing Genomics Pty Ltd. (“Wellbeing”) had proven that it had a trade secret

in a grouping of DNA sequence variants (also called “SNPs”) into one or more

skin-related categories (“Trade Secret No. 1”). The jury also found that Dr. Ruthie

Harper and PLLG, LLC (“PLLG”) had misappropriated Trade Secret No. 1 and

that PLLG had breached the confidentiality provision of its Exclusive Distributor

Agreement with Wellbeing (PX019-0003-4) by misusing the information in Trade

Secret No. 1. 1CR2975, 2978-9 and 2980. Wellbeing elected to recover against

PLLG based on the contract claim. 1CR3267-8

        This Supplemental Brief is provided – at the Court’s invitation – to address

questions posed by the Court during oral argument, namely what standard the

Court should use to evaluate whether there is any evidence or sufficient evidence

to support the jury’s conclusion that Harper and PLLG had access to Trade Secret

No. 1 and used or disclosed Trade Secret No. 1 without Wellbeing’s permission.

                              FACTUAL BACKGROUND

A.      Defendants’ Access to Trade Secret No. 1
        On appeal, Harper and PLLG assert that there is no evidence or insufficient

evidence they ever received or had access to Trade Secret No. 1. For example, in

their opening brief, Harper and PLLG asserted: “The record is crystal clear that

Dr. Harper had never been provided anything like Slide 17 until trial.” App.

NAI-1503303499v1                         -1-
Br. 31.       The slide 17 to which Harper and PLLG refer was one of the

demonstrative slides that Wellbeing’s technical expert, Dr. Michael Metzker,

presented to the jury to illustrate Trade Secret No. 1:

STIP00073 (Metzger Slide No. 17) (App. 2).

        What is an rs number? The National Center for Biotechnology Information

(“NCBI”) assigns to each SNP that is identified a unique identifier called an rs

number. Rs stands for “reference SNP.” Basically, the rs number provides the

address of a particular SNP in the human genome. 4RR 111; 7RR 31. Therefore

the rs numbers in Metzker Slide No. 17 disclose the SNPs Wellbeing used in its

test. At a time when PLLG was selling Wellbeing’s DNA test under the tradename

NAI-1503303499v1                          -2-
SKINSHIFT (6RR11), David Urman – who worked for Harper and PLLG – wrote

to a potential new distributor as follows:

                   SKINSHIFT is the first company to identify 16 SNPs that are
                   relevant to skin health categories. Additional SNPs are being
                   discovered as we speak. The location of all of these SNPs will
                   not be disclosed and will be treated as a trade secret.
PX 46 (Emphasis added).

        In response to Harper’s and PLLG’s contention that there is no evidence that

they had access to Trade Secret No. 1, Wellbeing has cited the factual testimony of

Stefan Mazy, the founder of Wellbeing and developer of Trade Secret No. 1, and

the expert testimony of Dr. Metzker. Both Mazy and Metzker testified that the

data cards Wellbeing provided to Harper and PLLG confidentially for each of the

genes in Trade Secret No. 1 cited a small number of scientific articles (or

references) that provided the rs numbers in Trade Secret No. 1. See, e.g., citations

to articles on the data cards at PX21-006, 9, 12 and 25, articles at PX2-448 and

525-7, Mazy’s testimony at 5RR7-11 and Metzker’s testimony at 7RR21 and 42-

45.

        The number of DNA variants in Wellbeing’s Trade Secret No. 1 (fifteen)

(one is used twice) is a very small percentage of the DNA variants found in

humans on average (3.5 million). 7RR32. The average number of SNPs – DNA

variants that appear in 1% or more of the population (7RR23-24) – is smaller than

3.5 million; but it is far larger than the number of SNPs in Trade Secret No. 1.

NAI-1503303499v1                             -3-
After all, Mazy testified that he considered 6,000 genes, each of which contain

500-1,000 SNPs, and closely evaluated 200 of them before selecting twelve for

Trade Secret No. 1.     As a result, Mazy analyzed thousands of SNPs before

selecting fifteen (one to be used twice) for Trade Secret No. 1. PX26; 4RR83-86.

Moreover, Mazy showed the jury a huge stack of the articles he read and still had

at trial (20% of the total) that he relied upon to evaluate whether particular SNPs

were associated with the skin health categories he had chosen. PX2; 4RR117-119.

The number of articles cited on the data cards Wellbeing provided to Harper and

PLLG is a very small fraction of the articles Mazy read. PX2.

        Harper and PLLG had a test panel of SNPs by April 22, 2014 (PX 112) –

about three months after Dr. Linda DiBella started work on the panel for them.

(9RR 70-71). In contrast, looking for SNPs for a panel from scratch is like looking

for proverbial needles in a haystack. That is why it took Mazy three years to

develop Trade Secret No. 1. 4RR77.

B.      Defendants’ Misappropriation of Trade Secret No. 1 and PLLG’s
        Breach of Confidentiality Agreement.
        On appeal, Harper and PLLG also argue that there is no evidence or

insufficient evidence that either of them used or disclosed Wellbeing’s Trade

Secret No. 1. Harper argues that she did not use Trade Secret No. 1 to prepare

patent applications on “Methods of Skin Analysis and Uses Thereof.” PX153 and

149. PLLG argues that it developed its DNA test independently.

NAI-1503303499v1                        -4-
        Wellbeing has responded to Harper’s contention by citing Dr. Metzker’s

testimony that Harper used Trade Secret No. 1 to prepare her patent applications

and that Harper’s PCT application, which was published, disclosed Trade Secret

No. 1. 7RR71, 143. Metker’s conclusions are supported by the fact that David

Urman, who worked for Harper and PLLG, sent Wellbeing data cards and

“extended” data cards to Harper’s patent attorney. PX291 and 295. Indeed, one of

the Wellbeing extended data cards that Urman sent to Harper’s patent attorney was

copied into the PCT application. PX22, 153-0065-72. Metzker’s opinions are also

supported by the facts that the PCT application disclosed eleven of the twelve

genes and eight of the fifteen SNPs in Trade Secret No. 1. 1 PX159; 7RR-51, 143

and 147. Harper did not object to Metzker’s testimony.

        Wellbeing has responded to PLLG’s argument about the development of its

SNP panel by citing the fact that Harper emailed to DiBella, whom PLLG hired to

develop the SNP panel, Wellbeing data cards (one modified to add the rs number)

and Wellbeing’s list of its SNP functions. PX83. Wellbeing also relies on Dr.

Metzker’s testimony that DiBella, who had never previously created a DNA test,

used Wellbeing’s Trade Secret No. 1 to develop PLLG’s DNA test. 7RR21-22.

Metzker cited the fact that the original test panel Harper sent to Qivana, LLC to

give to the new lab, Sorenson Genomics, had eight of Wellbeing’s fifteen SNPs

and Wellbeing had used one of those SNPs twice. PX112; 7RR64. Some of the

NAI-1503303499v1                       -5-
Wellbeing SNPs were dropped – but only because Sorenson could not quickly

obtain the reagents needed to test for those SNPs. 7RR147-148; see also PX141.

Again, no objection was made to Metzker’s testimony.

                                        ARGUMENT

A.      Proof of Access to Trade Secret No. 1 by Harper and PLLG.
        1.         Standard of Proof of Access to Trade Secrets.
        No one decision provides one specific standard for proof of access to a trade

secret; but several courts have addressed the issue of the sufficiency of the

plaintiff’s proof of a defendant’s access to trade secrets in issue under Texas law.

        In Wellogix, Inc. v. Accenture, L.L.P., 716 F.3d 867 (5th Cir. 2013), Plaintiff

Wellogix, Inc. (“Wellogix”) developed software that allowed oil companies to

“plan, procure, and pay for complex services” online. The software included

“dynamic templates” that adjusted cost and supply estimates based on “intelligence

built into” the underlying source code.           Id., at 873.   The Court of Appeals

concluded that Wellogix had presented sufficient evidence to support the jury’s

finding that Defendant Accenture, LLP (“Accenture”) had improperly acquired

Wellogix’s trade secrets, based on the following evidence:

                   Wellogix showed:      that it entered into six confidential
                   agreements with Accenture; that through the marketing
                   agreements, Accenture had access to Wellogix trade secrets;
                   that Accenture also had access to Wellogix trade secrets
                   uploaded to the confidential eTrans portal; and that an
                   Accenture email referenced ‘harvesting IP from Wellogix.’

NAI-1503303499v1                            -6-
Id., at 876.         The Court of Appeals rejected Accenture’s argument that the

testimony of Kendyl Roman, Wellogix’s expert, was insufficient evidence that

Wellogix’s trade secrets were available on Wellogix’s eTrans portal – to which

Accenture had access. Roman had testified that – based on his experience in the

software industry – he believed it likely that companies working together on a pilot

project – like Wellogix and Accenture – would share documents containing trade

secrets on an online portal.          Roman also relied on a contractor’s deposition

testimony that information “resembling” Wellogix’s trade secrets was on the

eTrans portal. The Court of Appeals concluded that Roman’s testimony was

sufficient evidence of access:

                   Given that ‘an expert is permitted wide latitude to offer
                   opinions,’ Daubert, 509 U.S. at 592, 113 S. Ct. 2786, and that,
                   as discussed below, Roman’s testimony was sufficiently
                   ‘reliable’ and “relevant,’ the jury was reasonable in crediting
                   his testimony.

Id.

        The Court of Appeals also rejected two other contentions by Accenture

based on the testimony of Wellogix CEO Ike Epley. First, Accenture contended

that Epley’s testimony that one of Wellogix’s pilot project partners, Trade Rangers,

“had access” to Wellogix’s source code did not support the “inferential leap” that

Accenture had such access. Second, Accenture contended that Epley’s testimony

that the code was behind a firewall showed that it was not possible for Accenture

NAI-1503303499v1                             -7-
to access the trade secrets in the software. The Court of Appeals concluded that

Accenture’s involvement in the Trade Ranger pilot project as a consultant and

implementer supported the inference that Accenture could have accessed

Wellogix’s source code through the pilot project. As for the firewall, the Court of

Appeals stated that the jury could have inferred that Accenture “otherwise had

access to” the code – for example by entering into confidentiality agreements.

        Finally, the Court of Appeals rejected Accenture’s reliance on the testimony

of Wellogix’s corporate representative, John Chisholm, that Wellogix never gave

Accenture access to source code, stating: “we decline to assume ‘jury functions’

by weighing Chisholm’s credibility against Epley’s.” Id., at 876-877.

        In Spear Marketing, Inc. v. Bancorpsouth Bank, 2014 WL 2608485 (N.D.

Tex. June 11, 2014), aff’d. 791 F.3d 586 (5th Cir. 2015), the District Court found

sufficient evidence of access but granted summary judgment to the defendants

because there was insufficient evidence of use. Like Wellogix, Spear involved

trade secrets in software – a program called VaultWorks that Plaintiff Spear

Marketing, Inc. (“SMI”) designed to help banks reduce the amount of cash – a

nonearning asset – they hold in bank branches, ATMs and central vaults. SMI had

licensed VaultWorks to Defendant BancorpSouth Bank (“BancorpSouth”). On

April 6, 2010, SMI’s President, Bill Spear contacted co-Defendant Argo Data

Resource Corporation (“ARGO”) to see if ARGO wanted to purchase SMI or enter

NAI-1503303499v1                         -8-
into a partnership with SMI. Subject to an agreement to treat SMI’s disclosure to

ARGO confidentially, SMI presented a demonstration of its technology to ARGO

via an internet-telephone conference call involving Bill Spear and Todd Robertson,

ARGO’s Vice President and other representatives of ARGO.

        Defendants BancorpSouth and ARGO moved for summary judgment. They

contended that there was no evidence that they had used SMI’s trade secrets in

connection with ARGO’s development of a competing program referred to as CIO.

SMI responded by arguing that the motion should be denied because there was

evidence of defendants’ access to VaultWorks and because there were similarities

between CIO and VaultWorks. The District Court found there was a genuine issue

of material fact as to access.       The evidence the District Court cited may be

summarized as follows:

                   1.   Defendants’ implementation    of   ARGO’s     CIO    at
                        BancorpSouth, including:
                        a.    Emails between Defendants with VaultWorks’
                        screen-shots displaying cash data from certain
                        BancorpSouth branches;

                        b.    ARGO’s Project Status Reports detailing the
                        progress of CIO’s implementation at BancorpSouth; and

                        c.     An agenda for the CIO Kick-Off Meeting with
                        slide containing screen-shots of VaultWorks.

                   2.   Discussions between Bill Spear and Todd Robertson:

NAI-1503303499v1                           -9-
                         a.    Robertson’s internal email summarizing what he
                         learned from Spear’s demonstration on April 6, 2010;
                         and

                         b.   Spear’s declaration about information conveyed to
                         Robertson.

Id., at 8.

        Based on this evidence, the District Court decided that SMI had raised a

genuine dispute regarding whether Defendants accessed “at least some” of SMI’s

trade secrets:

                   A reasonable juror could find that ARGO had access to certain
                   trade secrets connected to VaultWorks through BancorpSouth’s
                   somewhat detailed demonstration at the CIO Kickoff Meeting
                   and Spear’s declaration concerning his unrecorded
                   demonstration of VaultWorks. The VaultWorks screen-shots
                   also arguably gave ARGO access to certain trade secrets
                   identified by SMI. Admittedly, the evidence of Defendants’
                   access to SMI’s specific trade secrets is hardly clear or
                   concrete. But it seems sufficient at this point, given the
                   somewhat relaxed evidentiary standard courts employ when
                   analyzing the access element of this test.
Id.

        Courts applying the trade secret law of other states agree with Wellogix and

Spear Marketing that circumstantial proof of access to trade secrets is sufficient.

See, e.g. Stratienko v. Cordis Corp., 429 F.2d 592, 601 (6th Cir. 2005). (“In the

case at bar, we assume that Dr. Stratienko produced sufficient evidence of access:

Cordis’ declarations demonstrate that Cordis, the entity that developed the Vista

Brite 1G Catheter, had access to the information.”); Leggett & Platt, Incorporated

NAI-1503303499v1                            -10-
v. Hickory Springs Manufacturing Company, 285 F.3d 1353, 1361 (Fed. Cir. 2002)

(“L&P’s evidence indicates that Hickory too had access to L&P’s trade secrets

through L&P’s former employee Robert Hagemeister . . . . Hagemeister is a

veritable repository of information on L&P products and designs. When hired by

Hickory to design directly competing products, Hagemeister would be hard pressed

to avoid disclosing such information.”); Sokol Crystal Products v. DSC

Communications Corp., 15 F.3d 1427, 1430 (7th Cir. 1994). (“ . . . [T]he simple

fact that Sokol shipped its product to DSC would likely be sufficient evidence to

sustain the jury’s verdict” [that DSC had access to Sokol’s trade secret]); Pioneer

Hi-Bred Inc. v. Holden Foundation Seeds, 35 F.3d 1226, 1233 (8th Cir. 1994)

(“Pioneer presented no direct evidence regarding how Holden obtained

H3H/H43527.        However, ‘direct evidence of industrial espionage are rarely

available and not required.”); and Electro-Miniatures Corp. v. Wendon Co., Inc.,

771 F.2d 23, 26 (2nd Cir. 1985) (“It is true, as [Defendant] Wendon emphasizes,

that [Plaintiff] EMC failed to establish the precise nature of the drawings Wendon

acquired…. However, from the evidence, the jury might reasonably have inferred

that Wendon had access to other drawings besides those it admitted receiving or to

other sources of information about EMC’s trade secrets.”)

        The cases cited above support at least the following standards for evaluation

of the sufficiency of evidence of a defendant’s access to trade secrets:

NAI-1503303499v1                         -11-
                   1.   The plaintiff does not have to provide direct evidence
                        that it delivered or made available all of the elements of a
                        combination trade secret to the defendant in one
                        document. See Wellogix, Speer and Pioneer Hi-Bred.

                   2.   A finding of access may be based on circumstantial
                        evidence such as the defendant’s inability to develop the
                        technology in question without access to plaintiff’s trade
                        secret(s) and/or a defendant’s development of the
                        technology in question after gaining access to the
                        plaintiff’s trade secrets. See Speer Marketing.

                   3.   It is sufficient that the plaintiff proves the defendant
                        likely had access to some of the trade secret information
                        by virtue of the parties working together on a project.
                        See Wellogix, Speer and Electro-Miniatures.
                   4.   A defendant’s use of data and documents generated by or
                        relating to the trade secret(s) while working on a similar,
                        competitive product will support a finding that the
                        defendant had access to the trade secret(s). See Speer
                        Marketing.
                   5.   Indeed, a defendant’s hiring of a former employee of the
                        plaintiff who knows the trade secret(s) is sufficient. See
                        Leggett & Platt.

                   6.   Or the defendant’s receipt of the plaintiff’s product may
                        be sufficient. See Sokol.

                   7.   The court should not assume the jury’s function of
                        weighing the credibility of witnesses. See Wellogix.

                   8.   An expert who has reviewed the file and whose opinion
                        is deemed reliable should be given great latitude to testify
                        about access. See Wellogix.

NAI-1503303499v1                             -12-
        2.         Wellbeing’s Evidence of Access to Trade Secret No. 1 by Harper
                   and PLLG
        Wellbeing presented evidence of access to Trade Secret No. 1 by Harper and

PLLG, including the following.

                   1.   Mazy provided data cards for each of the genes in Trade
                        Secret No. 1 to Harper and PLLG. Each of the twelve
                        data cards cited a small number of references that
                        provided the rs numbers in Trade Secret No. 1. Indeed,
                        one reference cited two rs numbers in its title. PX21;
                        5RR7-11. The rs numbers identify particular SNPs.
                        7RR31
                   2.   PLLG included eight of Wellbeing’s SNPs in the SNP
                        panel if sent to Qivana to give to its lab, Sorenson. PX
                        112. The title of the first reference on Wellbeing’s data
                        card for the GPX1 gene was “The Mn-superoxide
                        dismutase single nuecleotide polymorphism rs 4880 and
                        the glutathione peroxidase 1 single nucleotide
                        polymorphism rs 1050450 are associated with aging and
                        longevity in the oldest old.” PX21-0006. (App. 4)
                        Wellbeing uses the SNP represented by rs 1050450 with
                        regard to the GPX1 gene in two skin health categories:
                        Firmness and Elasticity and Free Radical Damage.
                        Wellbeing uses the SNP represented by rs4880 with
                        regard to the SOD2 gene. Therefore, the article was also
                        listed by Wellbeing as a reference on Wellbeing’s data
                        card for the SOD2 gene. PX-0025 Both of these SNPs
                        were included in the panel of SNPs PLLG submitted to
                        Qivana to give to Sorenson.           PX112     The SNP
                        represented by rs 1050450 was eliminated from Harper’s
                        “new” test, but only because Sorenson could not find a
                        reagent needed to test for it. PX141
                   3.   Mazy also cited references in Wellbeing’s data cards that
                        did not state the rs number in question in the title but did
                        provide the rs number in the body of the article. For
                        example, Mazy cited an article titled: “Leptin-Receptor
                        Polymorphisms Relate to Obesity through Blunted

NAI-1503303499v1                             -13-
                        Leptin-Mediated Sympathetic Nerve Activation in a
                        Caucasian Male Population.” PX 2-0448; 5RR8; App. 5
                        This article is a reference in the data card for the LEPR
                        gene. PX 21-00009 The article refers to three SNPs –
                        represented by rs 1137100, rs 115701 and rs 179183.
                        PX2-0450       The first SNP is used by Wellbeing.
                        STIP00073 The second SNP was included in PLLG’s
                        “new” test. PX112

                   4.   Another article Mazy cited was titled: “Two newly
                        identified genetic determinants of pigmentation in
                        Europeans.” PX2-0505-7 (App. 6) It is a reference cited
                        on Wellbeing’s data card for the ASIP gene. PX2-0012
                        The article is only two and a half pages long. In a table
                        on page 2, the article cites two and only two SNPs with
                        respect to the ASIP gene – SNPs represented by rs
                        1015362 and rs 4911414. PX2-0506 These are the two
                        SNPs Wellbeing uses with respect to the ASIP gene.
                        PLLG included both SNPs in the SNP panel it sent to
                        Qivana to give to Sorenson. PX112

                   5.   Mazy cited additional examples of disclosures in the
                        references of rs numbers for SNPs used in Wellbeing
                        SkinDNA™ Test (5RR9-11) and further examples can be
                        found in other articles. PX 2.

                   6.   In at least one instance, there is direct evidence Harper or
                        DiBella obtained an rs number for a Wellbeing SNP from
                        a data card provided by Wellbeing.                 Plaintiff’s
                        Exhibit 178 was a screen shot of SNP information for the
                        MMP-1 gene taken from the NCBI database that Mazy
                        provided to Harper. It highlighted rs 1799750, a SNP
                        Wellbeing used in its test. When Harper sent the
                        extended data card for the MMP-1 to DiBella, who
                        prepared a SNP panel for PLLG, Harper added this rs
                        number to it. PX83

                   7.   Moreover, Harper asked for Mazy’s scientific references.
                        On November 7, 2012, Harper wrote to Urman: “When
                        we get the info from Stefan on SNPs, we want to
                        complete journal articles so we are more informed about

NAI-1503303499v1                             -14-
                         them than anyone else . . . .” PX73 Urman understood
                         that Harper was referring to the articles cited in
                         Wellbeing’s data cards. 6RR20 One day later, Urman
                         wrote to Mazy: “Good morning! Can you get us the
                         article for all of the SNPs that support the data cards?”
                         PX99
                   8.    On average a human has 3.5 million DNA variants.
                         SNPs are DNA variants that occur in 1% or more of the
                         population. 7RR23-24. Each gene has between 500 and
                         1,000 SNPs. PX26. Mazy testified that he considered
                         6,000 genes and closely evaluated 200 of them before
                         choosing twelve genes for Trade Secret No. 1. 4RR83-
                         86. Therefore, Mazy considered thousands of SNPs.
                         Moreover, Mazy showed the jury a huge stack of articles
                         he read and still had at trial (20% of the total he read) that
                         he relied upon to evaluate whether particular SNPs were
                         associated with the skin health categories he had chosen.
                         PX2; 4RR 117-119.
                   9.    The number of articles cited in the data cards was far
                         smaller than the number of articles Mazy had read to
                         develop his test. PX2; 4RR117-119. Moreover the data
                         cards grouped the articles by gene. PX21 The fact that
                         the DNA panel PLLG sent to Qivana contained eight of
                         Wellbeing’s SNPs is not a coincidence.
                   10.   Harper and DiBella prepared a test panel of SNPs in
                         three months. 9RR70-71. It took Mazy three years to
                         develop Trade Secret No. 1. 4RR77

        Dr. Metzker testified that Harper misappropriated Trade Secret No. 1 –

based not only on the above-cited evidence (7RR21, 49-52, 57-61, 64-65, and 70-

72), but also his opinions that neither Harper nor DiBella was qualified to develop

a DNA test and certainly would not have been able to develop a DNA test in three

NAI-1503303499v1                              -15-
months without Trade Secret No. 1. 7RR53-57 and 65-69. Harper and PLLG did

not object to the admission of Metzker’s opinions at trial.

B.      Proof of Use or Disclosure of Trade Secret No. 1 by Harper and by
        PLLG.

        1.         Standard of Proof of Use or Disclosure of a Trade Secret.
        The District Court charged the jury on “use” of a trade secret as follows:

                   “Use” means a commercial use by which a person seeks to
                   profit from the trade secret. Merely receiving trade secret
                   information does not constitute “use” of a trade secret.
                   Misappropriation does not require that the person use the trade
                   secret in exactly the form in which the person received it;
                   however, it must be substantially derived therefrom. There is
                   no misappropriation when the contribution of the trade secret is
                   slight and the person’s process can be said to have been derived
                   from other sources.
(ICR2980)

        This instruction was correct – and is not challenged on appeal by Harper or

PLLG. In SW Energy Production Co. v. Berry-Helfand, 491 S.W.3d 699 (Tex.

2016), the Supreme Court stated that “use” of a trade secret means “’commercial

use by which the offending party seeks to profit from the use of the trade secret.’”

Id., at 722 (quoting Global Water One, Inc. v. Atchley, 244 S.W.3d 924, 930 (Tex.

App. – Dallas 2008, pet. denied). The Supreme Court added that “use” of a trade

secret includes relying on the trade secret “’to assist or accelerate research or

development.’” Id. (quoting RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 40

comt. c)

NAI-1503303499v1                             -16-
        In GlobeRanger Corp. v. Software AG United States of America, Inc., 836
F.3d 477 (5th Cir. 2016) (applying Texas law), the Court of Appeals commented on

the above statements by the Texas Supreme Court in Southwestern Energy as

follows:

                   Southwestern Energy thus removes any doubt that Texas
                   follows this principle of “traditional trade secret law,” which
                   recognizes that if the concept of use “were not flexible enough
                   to encompass modified or even new products that are
                   substantially derived from the trade secret of another, the
                   protections the law provides would be hollow indeed.”
Id., at 498-499.

        In GlobeRanger, the Court of Appeals held that GlobeRanger Corp.

(“GlobeRanger”) had provided sufficient evidence to show that Software AG US

of America, Inc. (“Software AG”) had used GlobeRanger’s Navy Solution, a radio

frequency identification (“RFID”) technology, to develop its own product. The

Court of Appeals cited the following evidence:

                   Software AG accessed implementations of the Navy Solution;
                   received confidential system keys under the pretense of
                   maintenance; acknowledged trying to replicate GlobeRanger’s
                   functionality and obtained confidential source code from a
                   former GlobeRanger employee in order to figure out how the
                   technology worked, all while it was in the process of making its
                   own product to perform similar functions.
Id., at 499. In short, the Court of Appeals accepted evidence of defendant’s access

to plaintiff’s trade secrets while developing a competing product to perform similar

NAI-1503303499v1                             -17-
functions. It did not require evidence that defendant’s product was the same as or

even substantially similar to plaintiff’s product.

        Moreover, in GlobeRanger, the Court of Appeals cited its prior decision on

this point in Wellogix, Inc. v. Accenture, L.L.P., supra (applying Texas law).

Wellogix presented evidence that Accenture and its partner, SAP, had been able to

access Wellogix’s dynamic templates source code that had been uploaded to a

confidential eTrans portal. The Court of Appeals cited that evidence and an

Accenture document stating that its software had to have similar or better

technology than Wellogix and other Accenture documents referencing Wellogix’s

templates as supporting the jury’s conclusion that Accenture used Wellogix’s trade

secrets. Id., at 877.

        In Wellogix, the Court of Appeals also addressed Accenture’s arguments

that: (1) its templates lacked “dynamic” features and therefore were “nothing like

Wellogix’s;” and (2) “Wellogix doesn’t own the concept of templates.” Similarly,

PLLG has argued that its DNA test looks different than Wellbeing’s DNA test,

which utilizes Trade Secret No. 1, and that Wellbeing does not own the concept of

DNA testing to determine skin treatments. In Wellogix, the Court of Appeals

rejected these arguments:

                   However, the standard for finding “use” is not whether
                   Accenture’s templates contained Wellogix trade secrets, but
                   whether Accenture “rel[ied] on the trade secret[s] to assist or
                   accelerate research or development of its templates. HAL, 500

NAI-1503303499v1                             -18-
                   F.3d at 451 (quoting RESTATEMENT (THIRD) OF UNFAIR
                   COMPETITION § 40). A jury could “legitimate[ly] infer[,]”
                   Reeves, 530 U.S. at 150, 120 S. Ct. 2097, on the basis of, for
                   example, the Accenture email suggesting that the company
                   should “[u]se Wellogix for content,” that Accenture “rel[ied]”
                   on Wellogix’s templates to develop its own. See HAL, 500
F.3d at 451.

Id., at 877-8.

        A Texas Court of Appeals has also considered this sufficiency of evidence

of use of a trade secret question. In Bishop v. Miller, 412 S.W.3d 758 (Tex. App. –

Houston [14th Dist.] 2013, no pet.), Plaintiffs William Bishop and Pinnacle Potash

International, Ltd. (“Pinnacle”) asserted that thirteen pieces of information on a list

of Bishop’s technical plans for mining for potassium in a region of Utah known as

The Ten Mile Area were trade secrets. Bishop and Pinnacle further asserted that a

compilation of one or more of those items was also a trade secret. The jury found

that three of the items and a compilation of them were trade secrets and that those

trade secrets were misappropriated by Defendants E. Barger Miller and Reunion

Potash Company (“Reunion”).

        Regarding use, the Court of Appeals found there was evidence that Reunion

had “used” Bishop’s trade secrets in two ways. First, Miller used the trade secrets

to attempt to entice a third party into investing money in Reunion to develop the

subject mining leases. Second, Reunion used the trade secrets to develop an

NAI-1503303499v1                            -19-
Operating Plan for the development of the one acre. The Court of Appeals’

comments on the latter finding are most relevant to Wellbeing’s case.

        Bishop conceded that Reunion’s Operating Plan did not copy his plan, which

was based on his trade secrets, “in toto”; but Bishop asserted that Reunion’s

Operating Plan was “very similar” to his and used “major pieces of his plan.” Id.,

at 773. Bishop’s technical expert witness, Kenneth Mills, broke Bishop’s plan into

twenty-one component parts and concluded that Reunion’s Operating Plan

incorporated fifteen of those components, and either modified or discarded the

remaining six components. Mills further testified that without the “Bishop Plan”

Reunion’s modifications would never have been done. Id., at 774.

        Regarding Bishop’s testimony, the Court of Appeals observed that the

unauthorized use of a trade secret “need not extend to every aspect or feature of the

trade secret; use of any substantial portion of the secret is sufficient to subject the

actor to liability.” Id. (quoting RESTATEMENT (THIRD)           OF   UNFAIR COMPETITION

§ 40 comt. c) Regarding Mills’ testimony, the Court of Appeals stated:

                   (“[T]he actor need not use the trade secret in its original form.
                   Thus, an actor is liable for using the trade secret with
                   independently created improvements or modifications if the
                   result is substantially derived from the trade secret.”).
Id. (again quoting comment c.)

        The Court of Appeals noted that the three trade secrets found by the jury

were among the components of the Bishop Plan that Reunion had modified, but the

NAI-1503303499v1                              -20-
Court cited Mills’ testimony that the modifications in Reunion’s Operating Plan

would never have been made if not for Reunion’s use of Bishop’s trade secrets as

supporting the jury’s finding of misappropriation. Id., n. 20.

        In the end, the Court of Appeals concluded that the similarities between

Bishop’s and Reunion’s plans and Mills’ testimony regarding Reunion’s

modifications was sufficient evidence to support the jury’s finding of

misappropriation stating: “The evidence was such that reasonable and fair minded

people could reach the verdict the jury reached in this case.” Id., at 775.

        In conclusion, with regard to evaluating a defendant’s alleged use of a trade

secret GlobeRanger, Wellogix, and Bishop offer the following standards:

                   1.   “Use” of a trade secret means any commercial use by
                        which a person seeks to profit from the trade secret. See
                        GlobeRanger. See also Southwestern.

                   2.   A plaintiff need not introduce direct evidence of a
                        defendant’s use of a trade secret. Evidence, even
                        circumstantial evidence, of a defendant’s access to the
                        alleged trade secret and intention to develop similar
                        technology will suffice. See GlobeRanger.
                   3.   A defendant’s product need not contain the trade secret.
                        If the defendant relied upon the trade secret to assist or
                        accelerate its research, that is a use that supports a
                        finding of misappropriation. See Wellogix.

                   4.   Unauthorized use need not extend to every aspect, feature
                        or component of a trade secret. It is sufficient if the
                        defendant’s technology or product is substantially
                        derived from the plaintiff’s trade secret(s). See Miller.

NAI-1503303499v1                            -21-
        The District Court’s charge to the jury on the definition of “use” of a trade

secret conforms to these standards.

        2.         Wellbeing’s Evidence of Use of Trade Secret No. 1 by Harper and
                   PLLG.

                   a.   Evidence of Use of Trade Secret No. 1 by Harper
        Wellbeing presented evidence Harper used Trade Secret No. 1 to prepare her

patent applications, including the following:

                        1.    Harper had access to Trade Secret No. 1. See above.
                        2.    David Urman, who worked for Harper and PLLG, sent
                              Wellbeing data cards and “extended” data cards to
                              Harper’s patent prosecution counsel. PX291 and 295.
                        3.    Wellbeing’s “extended” data card for the MMP-1 gene
                              was inserted into Harper’s provisional patent application
                              and Harper’s PCT application (minus Mazy’s citations to
                              scientific articles.) PX22 and 153-0065-72, 159-0041.
                        4.    Harper’s PCT patent application disclosed eleven of the
                              twelve genes in Trade Secret No. 1 PX159; 7RR51.

                        5.    Harper’s PCT application disclosed twelve of the fifteen
                              SNPs in Trade Secret No. 1. 7RR143. Table 2 alone
                              disclosed eight of the SNPs in Wellbeing’s test.
                        6.    Harper’s PCT application disclosed the Wellbeing SNPs
                              it disclosed in the same skin health categories as Trade
                              Secret No. 1. 7RR146. There were many other skin
                              health categories that Wellbeing or Harper and PLLG
                              could have used. 4RR109; 7 RR 33-34.

        Based upon these facts and his review of all of the documents produced in

the case and all of the testimony in the case, Dr. Metzker testified that Harper’s

patent applications contained and disclosed Wellbeing’s Trade Secret No. 1 and

NAI-1503303499v1                           -22-
that the publication of Harper’s PCT application destroyed Trade Secret No. 1.

7RR71, 143. Harper and PLLG did not object to the admission of this testimony

by Metzker.

        Moreover Harper and PLLG used Harper’s provisional patent application to

obtain an Exclusive Distribution Agreement with Qivana. At the outset of the

parties’ negotiations, Urman sent Harper’s provisional patent application to

Qivana. PX57; 8RR127. Justin Banner, a founder of and key decision-maker for

Qivana testified he was looking for a unique skin care product for Qivana to

distribute. Banner further testified that in order to obtain a patent one has to have

something that is unique. Therefore, Banner concluded that PLLG likely had a

unique skin care product line – exactly what Qivana was looking for. 8RR127.

Ultimately, Qivana licensed Harper’s patent-pending technology as part of its

agreement with PLLG. PX128-002 and 3-5.

                   b.   Evidence of Use of Trade Secret No. 1 by PLLG.
        Wellbeing presented evidence of PLLG’s use of Trade Secret No. 1 to

develop its SNP panel for a DNA test, including the following:

                        1.   PLLG had access to Trade Secret No. 1. See above.
                        2.   PLLG hired Dr. Linda DiBella to help develop a SNP
                             panel for its DNA test. 10RR25. Harper sent Wellbeing
                             data cards and a list of each gene in Trade Secret No. 1
                             and its function to DiBella. PX83.

                        3.   DiBella had no prior experience developing a DNA test.
                             9RR70.

NAI-1503303499v1                          -23-
                   4.    DiBella started work on an SNP panel on January 18,
                         2014. 9RR70-71. By April 22, 2014, DiBella had
                         prepared a SNP panel. PX112.

                   5.    PLLG sent the SNP panel DiBella prepared to Qivana to
                         give to the new testing laboratory run by Sorenson
                         Genomics, LLC. PX112.
                   6.    The SNP panel that PLLG sent to Qivana to give to
                         Sorenson included eight of the fifteen SNPs in Trade
                         Secret No. 1. STIP00073; PX112.
                   7.    The reason some of those SNPs did not end up in the
                         SNP panel Sorenson used is that Sorenson found many of
                         the reagents it needed to use to identify the SNPs were
                         not readily available. 7RR147-148. For example, in one
                         email Lars Mouritsen, the Chief Scientific Officer of
                         Sorenson, sent to Harper and Urman shortly after
                         receiving PLLG’s proposed SNP panel, Mouritsen listed
                         three Wellbeing SNPs for which reagents were not
                         immediately available. PX141.
                   8.    In total, DiBella spent about 100 hours on PLLG’s SNP
                         panel. 9RR71. In contrast, Mazy spent thousands of
                         hours over three years to develop Wellbeing’s SNP panel
                         which is Trade Secret No. 1. 4RR77-78.
                   9.    Harper, PLLG and DiBella did not produce detailed work
                         papers like Mazy did. PX1, 2, 4 and 7.
        Based on this evidence, Dr. Metzker testified that PLLG had used Trade

Secret No. 1 to develop its SNP panel. Specifically, Metzker testified that PLLG

used Trade Secret No. 1 as the “starting point” to develop its test panel. 7RR149.

PLLG did not object to this testimony by Metzker.

NAI-1503303499v1                      -24-
C.      This Court Should Not Reverse the Judgment Based on Either Harper’s
        or PLLG’s Allegation of No Evidence or Insufficient Evidence of their
        Access to and Use/Disclosure of Trade Secret No. 1.
        Per the standards established by the above-cited cases, there is plenty of

evidence to support the jury’s findings that Harper and PLLG misappropriated

Wellbeing’s Trade Secret No. 1. The evidence summarized above, including the

opinion testimony of Wellbeing’s technical expert, Dr. Metzker, was admitted

without objection by Harper and PLLG.         The evidence is far more than the

proverbial scintilla of evidence because it was sufficient to enable reasonable and

fair minded people to conclude Harper and PLLG misappropriated Trade Secret

No. 1. Transp. Ins. Co. v. Moriel, 879 S.W.2d 10, 25 (Tex. 1994). During oral

argument, Harper’s and PLLG’s counsel argued that in addition to their no

evidence contentions they also asserted that the evidence was insufficient. As this

Court well knows, it “must consider and weigh all the evidence, and should set

aside the verdict only if it is so contrary to the overwhelming weight of the

evidence as to be clearly wrong and unjust. Cain v. Bain, 709 S.W.2d 175, 176

(Tex. 1986). That is not the case here. Indeed, while Harper’s and PLLG’s expert,

Dr. Carlos Bustamante, contested Wellbeing’s contention that Trade Secret No. 1

was in fact a trade secret, he did not contest Wellbeing’s contentions that Harper

and PLLG had access to and used and disclosed Trade Secret No. 1.

NAI-1503303499v1                       -25-
                            CONCLUSION AND PRAYER
        For the above reasons, and for the reasons stated in Wellbeing’s Brief of

Appellee, this Court should affirm the Judgment of the District Court.

NAI-1503303499v1                       -26-
                    Respectfully submitted,

                    /s/ Robert W. Kantner
                    State Bar No. 11093900
                    rwkantner@jonesday.com
                    JONES DAY
                    2727 North Harwood Street
                    Dallas, Texas 75201-1515
                    Telephone: (214) 220-3737
                    Facsimile: (214) 969-5100

                    ATTORNEY FOR APPELLEE
                    WELLBEING GENOMICS PTY LTD.

NAI-1503303499v1   -27-
                             CERTIFICATE OF SERVICE
        On January 5, 2018, I electronically filed this brief with the Clerk of the

Court using the eFile.TXCourts.gov electronic filing system which will send

notification of such filing to the following (unless otherwise noted below).

Marcy Hogan Greer                          William T. (“Tommy”) Jacks
State Bar No. 08417650                     State Bar No. 10452000
mgreer@adjtlaw.com                         jacks@fr.com
ALEXANDER DUBOSE JEFFERSON &               David S. Morris
TOWNSEND LLP                               State Bar No. 24032877
515 Congress Avenue, Suite 2350            dmorris@fr.com
Austin, Texas 78701-3562                   FISH & RICHARDSON P.C.
Telephone: (512) 482-9300                  111 Congress Avenue, Suite 810
Facsimile: (512) 482-9303                  Austin, Texas 78701
                                           Telephone: (512) 472-5070
                                           Facsimile: (512) 320-8935

                              Attorneys for Appellants

                                          /s/ Robert W. Kantner
                                          Robert W. Kantner

NAI-1503303499v1                        -28-