Proofpoint Wins IP Theft Lawsuit Against Vade Secure

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Proofpoint has been granted $13.5 million in damages by a former executive and their new employer for intellectual property theft.

A U.S. federal jury unanimously found that Vade Secure, a French email security company also known as Vade, and its Cloudmark subsidiary had “willfully and maliciously misappropriated over a dozen trade secrets and infringed copyrights belonging to Proofpoint.”

The lawsuit, filed in California in 2019 and culminating in a three-week trial, stemmed from a Proofpoint complaint in which former Cloudmark VP of Gateway Technology Olivier Lemarié was accused of sharing trade secrets with Vade when he joined the company in 2017.

According to Proofpoint, Vade used the company’s IP rights in products including anti-spear phishing software and Vade MTA Builder.

In April, Proofpoint claimed that evidence had been discovered that Lemarié had “took and used” IP and source code when he began acting as Vade’s CTO, “including by literally copying Cloudmark source code into Vade Secure code.”

Proofpoint alleged that Vade had used a total of 20 trade secrets in its favor, and the jury supported 15 of the points in its final verdict, including elements of Cloudmark’s MTA/CSP and Trident source codes such as heuristic rules, classifiers and statistical models.

The $13.5 million penalty was issued to compensate for “unjust enrichment” and breach of contract, but no punitive damages have yet been awarded, with a decision on punitive damages set for October.

The technology company said it was seeking an injunction to remedy “address ongoing and future harm” caused by the loss of IP.

Vade is now considering its next steps in light of the ruling.

For more information, read the original story in ZDNet.

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