Novus Group, LLC v. Prudential Financial Inc. et al
ORDER granting 102 104 Motion for Summary Judgment. Signed by Judge Edmund A. Sargus on 8/1/2022. (cmw)
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UNITED STATES DISRICT COURT
SOUTHERN DISTRICT OF OHIO
NOVUS GROUP, LLC,
Case No.: 2:19-cv-208
JUDGE EDMUND A. SARGUS, JR.
Chief Magistrate Judge Elizabeth P. Deavers
PRUDENTIAL FINANCIAL INC., et al.,
OPINION AND ORDER
This matter arises on Defendants’ 1 (“Prudential”) Motion for Summary Judgment on
Plaintiff Novus Group, LLC’s (“Novus”) sole remaining claim for trade secret misappropriation.
(ECF No. 102.) For the reasons stated herein, Prudential’s motion is GRANTED. (Id.)
Sometime in 2012, Mark McCanney and Eric Seyboldt—two financial advisors with years
of experience selling insurance products—had a business idea. In their view, no then-existing
annuity product sufficiently addressed, among other trends, a growing demand from older
individuals for a wealth transfer vehicle that could “guarantee” their descendants a steady stream
of retirement income. To fill this gap, McCanney and Seyboldt began to conceptualize a
contractual addendum (or “rider”) that, once added to a standard annuity agreement, did just that.
And over the next two years, McCanney and Seyboldt—with the assistance of various third
parties—developed their concept into a product: the “Transitions Beneficiary Income Rider”
Defendants consist of the following affiliated entities: Prudential Financial Inc.; Prudential Insurance Company of
America; PRUCO Life Insurance Company of New Jersey; Prudential Annuities Inc.; Prudential Annuities Life
Assurance Corporation; and Prudential Annuities Distributors, Inc.
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(“TBIR”). They also formed a company—Novus—to sell or license the TBIR to insurance
companies (or “carriers”).
By 2014, Novus had a particular carrier for the TBIR in mind: Nationwide Life Insurance
Company (“Nationwide”). Thus, with some additional third-party assistance, Novus brought its
concept to several Nationwide employees, including Michael Morrone, a leader of Nationwide’s
annuity product development wing. Ultimately, however, Morrone rebuffed Novus’ pitch. Months
thereafter, two members of Morrone’s team—Rodney Branch and Lisa Ferris—departed for roles
at Prudential. And shortly after that, Prudential brought to market its own annuity-based, wealthtransfer-themed product, the “Legacy Protection Plus” rider (“LPP”).
Novus contends that the LPP’s core mechanisms and marketing plan effectively mimic
those of the TBIR. This, it asserts, is a consequence of Prudential’s unlawful use of numerous
TBIR-related trade secrets—secrets which, according to Novus, Branch and/or Ferris brought with
them when they left Nationwide. On that basis, Novus now brings a single, state-law trade secret
misappropriation claim against Prudential.
A. Undisputed Facts
1. McCanney and Seyboldt Form Novus
In 2001, Seyboldt joined Nationwide Financial Services, Inc. as a product developer
focusing on individual annuities. Deposition of Eric Seyboldt (“Seyboldt Dep.”), Pl.’s Ex. B, ECF
No. 110-2, at 21:9-25. After several years, he became a Nationwide-sponsored financial advisor,
where he would sell a variety of the company’s insurance and securities products. Deposition of
Mark McCanney (“McCanney Dep.”), Pl.’s Ex. A, ECF No. 110-1, at 25:7-26:9, 118:18-119:25;
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Affidavit of Mark McCanney (“McCanney Aff.”), ECF No. 109-2, at ¶ 6; Seyboldt Dep. at 24:2425. There, he befriended McCanney, who had the same job. McCanney Dep. at 119:13-20.
Not long after 2008, McCanney and Seyboldt began to encounter a growing client
demographic: retirement-aged individuals who, in the face of a market “plagued” with low interest
rates, sought new ways to maximize and “responsibly transfer their wealth to the next generation.”
Expert Report of Terry Long (“Long Report”), ECF No 109-1, at ¶ 37; McCanney Dep. at 115:14121:6. Simultaneously, the two men came to recognize that the adult members of this “next
generation” (i.e., modern-day workers) lacked the same retirement income security as their parents
and grandparents. Long Report at ¶ 37; McCanney Dep. at 115:19-116:13. And they attributed this
shortfall, in the main, to a downturn in the availability of traditional retirement income vehicles,
such as defined-benefit pensions or 401k profit-sharing plans. McCanney Dep. at 116:1-13.
In 2012, McCanney and Seyboldt concluded that no single financial product capably
addressed these intersecting needs. Id. at 112:24-25. So, they set out to create one. By the end of
2013, the two had fleshed out a general concept: an annuity rider that enabled older individuals to
provide non-spouse beneficiaries with a guaranteed, “pension-style” stream of retirement income.
(Def.’s Ex. 2, ECF No. 102-4 at PageID #1124.) They also created an Ohio-based limited liability
company—Novus—to market their final product.
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2. Novus Approaches Michael Morrone
Sometime in 2013, McCanney and Seyboldt brought their idea to Michael Morrone—then
an Associate Vice President of Business Development in Nationwide’s annuity sector—to discuss
a potential Novus-Nationwide partnership. McCanney Dep. at 125:5-12. Prior to this meeting,
Morrone cautioned Seyboldt “that Nationwide would not sign an NDA and they should not
disclose any confidential information about their design.” Deposition of Michael Morrone
(“Morrone Dep.”), Def.’s Ex. 6, ECF No. 102-8 at 74:9-19; 76:11-13.
Throughout their hour-long consultation in Morrone’s office, McCanney and Seyboldt
engaged in a “high level” discussion surrounding a concept for “an income guarantee . . . that
would be passed to beneficiaries.” Id. At some point, the two brought out a “marketing piece” that
was held in a rolled-up container. Id. Ultimately, nothing concrete resulted from the meeting,
though Morrone noted he would “see if [Novus’ concept] . . . fit into the direction Nationwide was
going.” Id. at 79:12-14.
3. Novus Partners with Annexus and Genesis
After the Morrone meeting, McCanney and Seyboldt, as Novus, sought out two
companies—Genesis Financial Development Company, Inc. (“Genesis”) and Annexus
Management Company (“Annexus”)—to help develop and/or market their annuity rider concept.
Deposition of Mark McCanney (“McCanney Dep. II”), Def.’s Ex. 10, ECF No. 102-12 at 166:2167:5. Genesis, in particular, was known for its actuarial services, specifically in relation to the
pricing of new financial products. Morrone Dep. at 11:24-12:18, 53:21-22. Annexus focused on
the development, distribution, and marketing of the same. Morrone Dep. at 11:24-12:18, 53:2122.
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At the time, Genesis and Annexus had established a joint venture: AnnGen Development
LLC (“AnnGen”). And as Novus was at least somewhat aware, AnnGen was actively working
with Nationwide to jointly develop a new, fixed indexed annuity (“FIA”) product. Morrone Dep.
at 13:4-7; Seyboldt Dep. at 100:2-9. Part of AnnGen and Nationwide’s partnership, as Novus
would later learn, entailed an agreement by the two companies not to disclose one another’s
“confidential” or “proprietary” information (or that of their affiliated entities) (the “AnnGenNationwide Agreement”). (Pl.’s Ex. 3, ECF No. 110-11.)
a. The “Product Development” and “Marketing & Training” Agreements
In July 2013, Novus entered into a preliminary confidentiality agreement with Genesis.
McCanney Dep. II at 162:17-20. By the end of February 2014, Novus entered into two more
agreements (collectively, the “Agreements”): one with Annexus and Genesis (the “Product
Development Agreement”) (Pl.’s Ex. 1, ECF No. 110-9), and another with Annexus solely (the
“Marketing and Training Agreement”) (Pl.’s Ex. 2, ECF No. 110-10).
Across both Agreements, Annexus pledged to pitch Novus’ “Marketing Idea”—defined as
“Novus’ packaging and marketing, including but not limited to the supporting sales strategy, for a
Beneficiary Lifetime Income Provision”—to certain insurance companies, including Nationwide.
(Pl.’s Ex. 1, ECF No. 110-9 at PageID #2896); (Pl.’s Ex. 2, ECF No. 110-10 at PageID #2902.)
Genesis, for its part, vowed to “use its intellectual property to design a new annuity product or
modify an existing annuity product”—defined as the “Initiative Annuity”—that would be “issued
and underwritten by one of more Carriers and . . . marketed in connection with the Marketing
Idea.” (Pl.’s Ex. 1, ECF No. 110-9 at PageID #2896.) Throughout these endeavors, all three parties
vowed not to publicly disclose any of the “Confidential Information” they exchanged with one
another, including “any and all . . . information relating to a Party or its affiliates and licensors that
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is unique, secret, proprietary or not generally known to the public.” (Id. at PageID #2898); (Pl.’s
Ex. 2, ECF No. 110-10.)
4. Novus and Annexus Approach Nationwide
Sometime around March 2014, Nationwide employee Ramona Neal reached out to
McCanney with a stated interest in the “Annexus/Novus project.” 2 (See Def.’s Ex. 33, ECF No.
102-35.) To McCanney, this represented “a possible opportunity” for someone at Nationwide “to
begin sharing some high-level conceptual information, internally, within the product group.” (Id.)
Thus, on March 18, 2014, McCanney emailed two Annexus executives—Eric Denham and Don
Dady—to ask whether they thought Neal should be “[brought] into the loop.” (Id.) Denham, in
response, solely remarked that he and Dady had an impending call with Morrone. (Id.) Once that
occurred, he promised to contact McCanney and Seyboldt with “feedback on next steps.” (Id.)
On March 20, 2014, Morrone, Denham, and Dady had their discussion. Morrone Dep. at
81:5-12. Therein, Morrone explicitly conveyed to Denham and Dady that Nationwide had no
interest in carrying their annuity rider concept. Id.
5. Genesis Provides Novus its Actuarial Analysis
By April 2014, the “Annexus/Novus Project” had a name: the “Transitions Estate Rider,”
or “TER.” (Pl.’s Ex. A, ECF No. 21-1.) That month, Genesis sent Novus a “preliminary pricing
analysis” of the TER (the “Genesis Memo” or “Memo”), which noted Genesis’ belief that it “may
not be possible” to create Novus’ proposed contract structure using a guaranteed lifetime
Neal’s role at the time is somewhat unsettled. In his email to Annexus, McCanney refers to Neal as “a director in the
product development.” (Def.’s Ex. 33, ECF No. 102-35.) But multiple Nationwide employees—namely, Michael
Morrone and Lisa Ferris—suggest she worked in much different capacity within Nationwide’s life insurance unit.
Morrone Dep. at 70:19-20; Deposition of Lisa Ferris, ECF No. 102-9 at 37:17-18.
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withdrawal benefit (“GLWB”) rider (Id.) And as it had done once before, Genesis “proposed to
design TER as a GMDB rider.” (Id. at PageID #95.)
Despite its desire to reframe the TER as a GMDB, Genesis believed that insurance agents
would, “in practice,” only feel incentivized “to sell TER if it performs better than a GLWB rider.”
(Id.) Thus, to determine whether the TER was commercially feasible, Genesis opted to assess
whether “a ‘typical’ carrier could afford to offer higher income rates under TER than under a
GLWB rider.” (Id. at PageID #96.) Ultimately, Genesis found that it could. (Id. at PageID #97.)
6. Novus Finalizes the TBIR’s Design and Associated Marketing Scheme
After it received the Genesis Memo, Novus relabeled the TER as the “TBIR.” It also
finalized the rider’s essential design, which consisted of (1) a fully compatible 3 GMDB rider that
(2) solely grew at a competitive “roll-up” rate during (3) the life of a single, natural person contract
owner (e.g., a retiree) who (4) could not access the accumulated benefit “to fund guaranteed
lifetime withdrawals.” Long Report at ¶¶ 45-49. Said owner was also given the option to select (5)
a non-spouse beneficiary (e.g., a child or grandchild) who, upon the owner’s death, could (6) be
paid out through a “predetermined, life-expectancy based” number of installments. Id. at ¶ 52.
As Novus explained in various carrier-oriented “marketing materials,” the TBIR, when
coupled with Novus’ “positive” branding strategy, offered retirees the unique ability to “protect,”
“grow,” and “control” the financial “legacy” they intended to leave behind. Id. at ¶¶ 51-57; (Pl.’s
Ex. 19, ECF No. 110-27); (Pl.’s Ex. 25, ECF No. 110-33.) And for a variety of reasons, the
materials asserted, carriers and financial advisors alike stood to benefit from providing such an
arrangement. Id. at ¶¶ 45-61; (Pl.’s Ex. 19, ECF No. 110-27); (Pl.’s Ex. 25, ECF No. 110-33.)
That is, the rider could be used to modify “qualified . . . and non-qualified annuity contracts.” (ECF No. 21 at ¶ 20.)
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7. Novus Reapproaches Nationwide
On May 30, 2014, Seyboldt notified Denham that Chuck Bremer—a Nationwide actuary—
had, like Neal, expressed an interest in Novus’ annuity concept. (Pl.’s Ex. 4, ECF No. 110-12 at
PageID #2920.) According to Seyboldt, Bremer sought “more information regarding the tax
implications and pricing of the rider,” and thought “it would make sense for [Novus/Annexus] to
eventually pitch the business case to the [Nationwide] Leadership Group.” (Id.) He also
acknowledged that Morrone would be the “gatekeeper” of any prospective Novus-Nationwide
On the morning of June 2, 2014, Denham responded. (Pl.’s Ex. 4, ECF No. 110-12 at
PageID #2919.) He noted that he had spoken to Morrone, who had “reiterated his position” that
the TER likely “would [not] make it up the [Nationwide] priority list.” (Id.); see Morrone Dep. at
98:12-18. At the same time, Denham added, Morrone remained “open to the dialogue.” (Pl.’s Ex.
4, ECF No. 110-12 at PageID #2919.) So, he gave McCanney and Seyboldt the go-ahead to contact
him. (Id.) In the interim, Denham vowed to send Morrone a copy of the Genesis Memo himself.
(Pl.’s Ex. 4, ECF No. 110-12 at PageID #2919.) Within the hour, he followed up on his word. (Id.);
Morrone Dep. at 120:9-12.
a. Bremer Emails Nate Wilbanks
That same day, Bremer confirmed with McCanney and Seyboldt that he was “not the
appropriate [Nationwide] contact” for their inquiry. (Pl.’s Ex. 7, ECF No. 110-15 at PageID
#2940.) Instead, Bremer noted, they “would need to work through” Nate Wilbanks—another
Nationwide actuary—and Morrone. (Id.) Later that day, Bremer sent Wilbanks an email which (1)
summarized Novus’ concept and relationship with Annexus/Genesis and (2) offered to provide
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Wilbanks “any of the [Novus] information” then in his possession, which included the Genesis
Memo. (Id.) Copied to the message were McCanney, Seyboldt, and Morrone. (Id.)
The next morning, Seyboldt reached out to Wilbanks and Morrone. (Id. at PageID #2939.)
After summarizing the TER concept and its “first of its kind, built-in, marketing system,” Seyboldt
inquired whether the two men had any availability to meet. (Id.) Ultimately, no meeting occurred.
Morrone Dep. at 123:15-23.
8. Rodney Branch and Lisa Ferris Depart Nationwide for Prudential
As Novus and Annexus pitched the TBIR to Morrone throughout 2014, he directly reported
to Rodney Branch, who was then the Vice President of Nationwide’s annuities wing. Deposition
of Rodney Branch (“Branch Dep.”), Def.’s Ex. 14, ECF No. 102-16 at 27:12-21. At the same time,
Lisa Ferris—a business development director who led the “strategy of a subset of [Nationwide’s]
annuities business”—reported to Morrone. Deposition of Lisa Ferris (“Ferris Dep.”), Def.’s Ex. 7,
ECF No. 102-9 at 22:14-24.
In June 2015, Branch left Nationwide to become the Chief Marketing Officer of
Prudential’s annuities department. Branch Dep. at 25:10-13, 27:12-21. Several months later,
Prudential folded its annuities product development team into Branch’s wing. Id. at 111:14-114:3.
It also vested Branch with an additional title: “Head of Product.” Id.; Ferris Dep. at 61:8-18. At
that point, Branch found himself responsible for guiding the strategy of Prudential’s annuity
product development—“a pretty big business within Prudential”—while also “solv[ing]” issues on
the “marketing side[.]” Id. at 111:19-112:11.
Branch understood that his new responsibilities would be tough to juggle without
restructuring his supporting cast. Id. at 112:5-11. That meant he needed more “talent” (and
“quickly”) to keep things running smoothly. Id. at 120:20-24. Thus, in February 2016, Branch
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began to recruit Ferris to join Prudential to work as a “liaison” between the two divisions he then
led. Ferris Dep. at 62:2-63:17; Branch Dep. at 122:1-21. And by June 2016, she did. Ferris Dep.
9. Prudential Launches the LPP
Sometime in August 2016, Branch’s product development team—then led by Mike Guido
and Jason Uberti—"set [its] sights” on developing Prudential’s first FIA product. Branch Dep. at
156:14. To flesh out a concept, it hosted several group sessions involving members of various
cross-functional departments (e.g., marketing and sales), some of which Ferris attended. Ferris
Dep. 115:16-18. Soon thereafter, however, the Branch’s team dropped the FIA idea altogether.
Branch Dep. at 148:8-17; Deposition of Ray Sbrega, Def.’s Ex. 12, ECF No. 102-14 at 77:5-9.
This, by necessity, required it to come up with a new project. Branch Dep. at 148:8-17, 152:4-6.
Ultimately, after kicking around various ideas, Branch’s team fixated itself on, and eventually
chose to develop, an “enhanced,” stand-alone death benefit rider that would be compatible with
Prudential’s existing variable annuity products. 4 Id.; Sbrega Dep. at 24:14-19.
Between August and September 2016, Branch’s team conducted a multi-day “scrum
session” to work out a baseline design for its annuity rider concept. 5 Branch Dep. at 148:8-17,
157:4-6; Ferris Dep. at 124:1-4. At some point therein, the group settled on imbuing the rider with
Branch, while ultimately unsure, “think[s] it was [Guido]” who first mentioned the idea to pursue a death benefit
product during a brainstorming meeting. Branch Dep. at 146:16-19, 148:14-17.
Attendees of the full “scrum session” included Uberti, Guido, Ray Sbrega (who, as a product development director,
reported to Uberti), and a number of Prudential sales, pricing, and marketing employees. Branch Dep. at 146:19-24;
Sbrega Dep. at 36:4-18, 67:21-68:5. Branch, as the head of the product team, “kicked off” the session’s initial meeting
with some general strategic remarks, but left the room thereafter. Branch Dep. at 146:22-24; Sbrega Dep. at 68:1869:13. He did not return. Sbrega Dep. at 68:18-69:13. Ferris, while invited, did not attend the session. Ferris Dep. at
122:8-9, 123:18-19. She did, however, help several members of Branch’s product development team prepare for the
session—namely, by “peer reviewing” their list of design options. Sbrega Dep. at 72:9-18.
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a “roll-up” feature. Sbrega Dep. 78:4-14. It also discussed other structural elements—e.g., the use
of a higher-than-normal “roll-up” rate, or a feature that prevented the contract owner from
accessing the benefit to fund lifetime withdrawals—that could distinguish the final product from
the rest of the market. (See Def.’s Ex. 17, ECF No. 102-19.)
By October 2016, Branch’s team had a better (albeit unsettled) picture of its rider concept’s
design. (Id.) At that point, Uberti left his job at Prudential. Ferris Dep. at 95:4-5. To fill the void,
Branch reassigned Ferris—who, at the time, operated on the marketing side of his department—
as the interim leader of his department’s “product strategy team.” Id. at 95:4-96:8; 104:8-9. This
rendered her responsible for the “finalization . . . [internal] approval . . . and market launch” of the
team’s yet-to-be-titled death benefit concept. Id. at 95:4-96:8, 126:11-22. It also made her a
primary point of contact for the marketing team that, ultimately, would pitch the finished product
to “outside financial advisors.” Ferris Dep. at 146:2-157:24, 161:19-22, 185:15-18.
b. Finalization and Launch
By February 2017, Branch’s department locked in both the design of, and marketing
strategy for, its death benefit concept—which, at that point, was titled “the LPP.” Sbrega Dep. at
112:22-113:12; (Pl.’s Ex. 26, ECF No. 110-34 at PageID #3567-77.) On the design side, the LPP—
like the TBIR—offered (1) a fully compatible GMDB which (2) solely grew at a predetermined,
simple-interest roll-up rate that (3) accrued over the life of a single, natural-person owner who (4)
could not access the benefit to “fund guaranteed lifetime withdrawals.” Sbrega Dep. at 21:16-22:7.
So too did it (5) allow the contract owner to select a non-spouse a beneficiary, who, at the owner’s
selection, could (6) receive a predetermined, lifetime-based payout. Id. Simultaneously, Branch’s
department developed, among other things, promotional materials which emphasized the LPP’s
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ability to help older individuals “protect,” “grow,” “control,” and “efficiently pass” their
“legacy” to their descendants. (Pl.’s Ex. 26, ECF No. 110-34 at PageID #3567-77, 3587-98.)
In May 2017, Prudential officially brought the LPP to market. Branch Dep. at 12:12-16.
B. The (Alleged) 2015 McCanney-Ferris Meeting
Sometime in 2015, McCanney alleges he gave a one-hour, solo presentation regarding the
TBIR to various Nationwide employees, including Lisa Ferris. (Def.’s Ex. 3, ECF No. 102-5 at
PageID #1142.) Therein, McCanney allegedly shared four hardcopy, TBIR-related documents,
which consisted of: (1) a TBIR “FAQ,” (2) the Genesis Memo, (3) a TBIR “Feasibility Study,”
and (4) a wealth-transfer oriented “case study.” McCanney Dep. at 175:6-177:7. Ferris, according
to McCanney, took notes and asked questions. Id. at 185:9-186:4. McCanney does not remember
whether Ferris took any documents with her. Id at 185:5-7.
Ferris, for her part, essentially denies that any such meeting occurred. See Ferris Dep. at
26:22-27:2, 43:21-53:22 (denying any awareness “of the Novus product or the TBIR” or
“involve[ment] in the review of product ideas brought to Nationwide’s attention by Annexus”
while at Nationwide). And for various reasons, Prudential argues that this Court should essentially
ignore McCanney’s story. 6
C. Novus’ Trade Secret Misappropriation Claim
By creating and marketing the LPP, Novus contends Prudential “willfully and maliciously
misappropriated” its trade secrets, which it identifies as: (1) “[t]he combined features of the TBIR,”
Prudential characterizes McCanney’s allegation—which came two years after Novus initially averred in discovery
that it “[did] not know what documents or other information was provided to Lisa Ferris or Rodney Branch Concerning
the TBIR or any Trade Secret in the course and scope of their employment with Nationwide”—as an “eleventh-hour
attempt to manufacture evidence about Novus’ direct disclosure” of TBIR-related information to Ferris. (Def.’s Mot.,
ECF No. 102-1 at PageID #1079-82.) And it argues that various doctrines of judicial estoppel warrant striking it from
this Court’s analysis altogether. (Id.) The Court, however, need not wade into that issue, as it finds summary judgment
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(2) “[t]he marketing strategy to promote the sale of the TBIR, which . . . was addressed to both
financial planners and their clients,” 7 and (3) “[t]he combination of the TBIR design and the
accompanying marketing strategy described above,” all in violation of the Ohio Uniform Trade
Secrets Act (the “Act”), Ohio Rev. Code. (“O.R.C.”) §§ 1333.61, et seq. According to Novus, all
of this information reached Prudential’s doors by way of Rodney Branch and/or Lisa Ferris, whom
it alleges received several confidential, TBIR-related documents through various channels while
Prudential rejects virtually every premise of Novus’ misappropriation claim. It argues, as
an initial matter, that Novus has failed to establish that the TBIR and its associated “marketing
strategy” even were protectable trade secrets. And even assuming Branch or Ferris were apprised
of those secrets—which both individuals flatly deny—Prudential asserts there is simply no
evidence either person “misappropriated” them. On these grounds, among others, Prudential
asserts it is entitled to summary judgment as a matter of law.
For at least two reasons, the Court agrees.
Summary judgment is appropriate “if the movant shows that there is no genuine issue as to
any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a).
The Court may therefore grant a motion for summary judgment if the nonmoving party who has
the burden of proof at trial fails to make a showing sufficient to establish the existence of an
element that is essential to that party’s case. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
By this, Novus generally refers to a marketing plan which presented the TBIR as a revolutionary “wealth transfer”
vehicle—one that enabled older individuals to “control” the “legacy” they left their children or grandchildren. (Pl’s
Resp., ECF No. 109 at PageID #2671.) This plan, according to Novus, also contained a “unique strategy” of using
“positive” language that would ease prospective customers into the wealth-transfer discussion “without disparaging”
their intended beneficiaries. (Id. at PageID #2672.)
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The “party seeking summary judgment always bears the initial responsibility of informing the
district court of the basis for its motion and identifying those portions” of the record which
demonstrate “the absence of a genuine issue of material fact.” Id. at 323. The burden then shifts to
the nonmoving party who “must set forth specific facts showing that there is a genuine issue for
trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986) (quoting Fed. R. Civ. P. 56(e)).
To prevail in that endeavor, the non-movant must clearly identify “with enough specificity” the
parts of the record that enable the court to “readily identify the facts upon which the non-moving
party relies.” Siemer v. Comet N. Am., 467 F. Supp. 2d 781, 785 (S.D. Ohio 2006) (quoting
Guarino v. Brookfield Twp. Tr., 980 F.2d 399, 405 (6th Cir. 1992). “The evidence of the
nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor.” Id. at 255
(citing Adickes v. S. H. Kress & Co., 398 U.S. 144, 158–59 (1970)).
A genuine issue of material fact exists “if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.” Id. at 248; see also Matsushita Elec. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U.S. 574, 586 (1986) (“The requirement that a dispute be ‘genuine’ means
that there must be more than some metaphysical doubt as to the material facts.”). Consequently,
the central issue is “whether the evidence presents a sufficient disagreement to require submission
to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Hamad v.
Woodcrest Condo. Ass’n, 328 F.3d 224, 234–35 (6th Cir. 2003) (quoting Anderson, 477 U.S. at
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A. The Ohio Uniform Trade Secret Act
To prevail on an Ohio Uniform Trade Secret Act claim, a plaintiff must establish: (1) the
existence of a trade secret; (2) the acquisition of the trade secret as a result of a confidential
relationship; and (3) the unauthorized use of that trade secret. See, e.g., Heartland Home Fin., Inc.
v. Allied Home Mortg. Capital Corp., 258 F. App’x 860, 861 (6th Cir. 2008) (citation omitted).
Under the Act, a “trade secret” constitutes any
information, including the whole or any portion or phase of any scientific or technical
information, design, process, procedure, formula, pattern, compilation, program, device,
method, technique, or improvement, or any business information or plans, financial
information, or listing of names, addresses, or telephone numbers, that satisfies both of the
(1) It derives independent economic value, actual or potential, from not
being generally known to, and not being readily ascertainable by proper
means by, other persons who can obtain economic value from its disclosure
(2) It is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
O.R.C. § 1336.61(D). Channeling the Restatement (First) of Torts § 757, the Ohio Supreme Court
has set forth six distinct factors that “should be considered” in the standard trade secret analysis,
(1) The extent to which the information is known outside the business; (2) the extent
to which it is known to those inside the business, i.e., by the employees; (3) the
precautions taken by the holder of the trade secret to guard the secrecy of
information; (4) the savings effected and the value to the holder in having the
information as against competitors; (5) the amount of effort or money expended in
obtaining and developing the information; and (6) the amount of time and expense
it would take for others to acquire and duplicate the information.
State ex rel. The Plain Dealer v. Ohio Dep’t of Ins., 80 Ohio St. 3d 513, 524–25, 687 N.E.2d 661,
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“In analyzing whether information is disclosed within a confidential relationship, Ohio
courts have generally considered the facts of each case, looking for an agreement or understanding
of confidentiality.” SKF USA Inc. v. Zarwasch-Weiss, No. 1:10-cv-1548, 2011 WL 13362617, at
*16 (N.D. Ohio Feb. 3, 2011) (quoting R & R Plastics, Inc. v. F.E. Myers Co., 92 Ohio App. 3d
789, 805, 637 N.E.2d 332, 341 (Ohio App. Ct. 1993)).
“Independent Economic Value”
Prudential argues, on numerous grounds, that there is no “genuine dispute” the TBIR and
its associated marketing strategy fall outside the ambit of a “trade secret” insofar as the term is
defined by Ohio law. Among its numerous arguments is a simple point: that neither the TBIR nor
its consumer-facing “marketing strategy” constituted information that “derive[d] independent
economic value . . . from not being generally known to, and not being readily ascertainable by
proper means by, other persons who can obtain economic value from [their] disclosure or use.”
(Def.’s Mot., ECF No. 102-1 at PageID #1087-89.) This is so, Prudential asserts, given the fact
both pieces of information needed to be fully exposed to the public—and thus made instantly
replicable—for Novus to derive any “economic benefit” from their use. (Id.)
Novus does not dispute that its alleged trade secrets, once marketed to the public, would
be easily replicable. (Def.’s Ex. 3, ECF No. 102-5 at PageID #1140.) But that, it argues, does not
mean they bore no “independent economic value” before that point. (Id.) As Novus’ expert witness
Terry Long notes, Novus maintained an obvious “economic” advantage by keeping the TBIR a
secret: the exclusive ability to “shop” a first-of-its-kind wealth transfer solution to insurance
carriers. Long Report at ¶ 96; (see Pl.’s Resp., ECF No. at 109 at PageID #2698-70.)
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As Prudential sees it, the “independent economic value” Novus ascribes to its alleged trade
secrets does not comport with Ohio’s definition of the term. And it cites, among other cases,
Stromback v. New Line Cinema, 384 F.3d 283 (6th Cir. 2004) to support its view. There, the United
States Court of Appeals for the Sixth Circuit rejected an “aspiring screenwriter[’s]” claim that his
poem and screenplay qualified as “trade secrets” under Michigan law (which employs the same
“trade secret” definition as Ohio) “because he kept [those works] secret.” Stromback, 384 F.3d at
305. This was so despite the conceivable possibility that either work could be licensed or sold. See
id. As the court explicitly noted, “the essence of a trade secret is that it derives value from its
secrecy.” Id. And neither a screenplay nor poem, it determined, could “possibly” satisfy this
threshold, given that both works only generated “independent economic value” when their full
contents were “exploited publicly through broad dissemination.” Id. (internal quotation marks
“In essence, the [Stromback] court held that a product cannot constitute a trade secret when
it provides its creator with economic value only when disseminated [or sold] to third parties.”
Mainardi v. Prudential Ins. Co. of Am., No. 08-3605, 2009 WL 229757, at *8 (E.D. Pa. Jan. 30,
2009) (emphasis added). Prudential argues—and the Court is persuaded—that this principle
applies here. By all accounts, Novus’ only possible method of obtaining an “economic” benefit
from the TBIR and its associated “marketing strategy” was (and is) selling or “assigning” either
concept to a “carrier” (e.g., Nationwide) to “exploit publicly.” (See Def.’s Ex. 3, ECF No. 1025 at PageID #1139.) And again, there is no dispute that, once this occurred, either concept would
become almost instantly replicable. Deposition of Terry Long, Def.’s Ex. 5, ECF No. 102-7 at
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240:20-241:8. Such would disqualify either concept as a “trade secret” under Stromback. 384 F.3d
at 305; see Mainardi, 2009 WL 229757, at *8-9. 8
To be sure, Stromback—as an interpretation of Michigan law—is not controlling. And it is
clear enough that courts in other circuits have taken a different view. See, e.g., Learning Curve
Toys, Inc. v. Playwood Toys, Inc., 342 F.3d 714, 729 (7th Cir. 2003) (“The fact that a secret is easy
to duplicate after it becomes known does not militate against its being a trade secret prior to that
time.”) (citation omitted). Regardless, this Court finds the Sixth Circuit’s guidance in Stromback
“probative” of the proper way to interpret the Ohio Uniform Trade Secrets Act’s “independent
economic value” provision. See Niemi v. NHK Spring Co., LTD., 543 F.3d 294 (6th Cir. 2008)
(applying Illinois caselaw to an Ohio trade secret dispute because (1) “both the Illinois and Ohio
versions of the Uniform Trade Secrets Act include the same definition of ‘trade secret’” and (2)
the Ohio Uniform Trade Secrets Act specifically dictates that its provisions “shall be applied and
construed to effectuate their general purpose and to make uniform the law with respect to their
subject”); Mainardi, 2009 WL 229757 at *9 (applying Stromback to an interpretation of the
Pennsylania Uniform Trade Secret Act’s “trade secret” definition because Michigan’s trade secret
statute “contains identical language”).
Novus does not offer any persuasive reason to do otherwise. Instead, it points to three cases
to substantiate the notion that “sales and marketing strategies and other business information can
constitute ‘trade secrets’” under Ohio law, “so long as the [Act’s] other elements are satisfied.
(Pl.’s Resp., ECF No. 109 at PageID #2698) (collecting cases). And as a general proposition, that
Akin to the Mainardi plaintiff, here Novus “actively market[ed]” the TBIR to several employees of a potential
customer (i.e., Nationwide). 2009 WL 229757, at *9. And unlike the Mainardi plaintiff (and as discussed infra),
Novus did not itself have any confidentiality agreement with that customer. Id. (noting that “because Plaintiffs were
actively marketing their products, the products were ‘readily ascertainable’ by proper means by[ ] other persons who
[could] obtain economic value from [their] disclosure or use’”).
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is true. But as Prudential correctly observes, all of the cases Novus offers to support its contention
either do not apply to, or neglect to fully address, the specific type of information at issue—that
is, a product concept and “positive” marketing plan which, by design, must be fully “exposed for
the world to see and for competitors to legally imitate” in order to confer an “economic benefit”
to their holder. 9 Richter v. Westab, Inc., 529 F.2d 896, 900 (6th Cir. 1976).
Thus, the Court will defer to the Sixth Circuit’s interpretation in Stromback. To that extent,
it finds that Novus’ TBIR-related trade secrets lacked the type of “independent economic value”
necessary for them to obtain “trade secret” status. And even if they did possess such value, Novus’
misappropriation claim, as explained below, still fails as a matter of law.
To prevail on its claim, Novus must prove that Prudential “misappropriated” its trade
secrets. See O.R.C. § 1333.61(A)-(B). 10 As alleged, Novus’ theory of misappropriation stems
Novus cites to only one case decided by an Ohio court: Procter & Gamble Co. v. Stoneham, 140 Ohio App.3d 260,
273, 747 N.E.2d 268 (1st Dist. 2000). But the “marketing” information there, as opposed to Novus’ “marketing
strategy”—which essentially constituted a playbook for the TBIR’s public branding—had a much different character.
See id. (holding that that the plaintiff’s “analysis and interpretation” of “raw data that [it]received from [a] marketing
firm” constituted a trade secret because, among other things, it facilitated the plaintiff’s internal strategy for marketing
certain products). The other two cases that Novus cites—Kuvedina, LLC v. Conizant Tech. Solutions, 946 F. Supp. 2d
749, 755-56 (S.D. Ohio 2013) and Avery Dennison Corp. v. Kitsonas, 118 F. Supp. 2d 848, 854 (S.D. Ohio 2000)—
did not fully address the merits of the “marketing”-related information at issue. See Kuvedina, 946 F. Supp. 2d at 75556 (denying defendant’s motion to dismiss because it failed to “attack the factual basis” of the plaintiff’s complaint);
Kitsonas, 118 F. Supp. 2d at 854 (granting an employer’s motion to preliminarily enjoin an ex-employee from
disclosing, among other things, his ex-employer’s internal “business philosophy and sales strategies,” but focusing on
the defendant’s possession of “cost and price files,” “sales volume information,” and “customer” lists).
As defined by the Ohio Uniform Trade Secrets Act, a trade secret is “misappropriated” when it is:
Acqui[red] . . . by a person who knows or has reason to know the trade secret was acquired by improper
Disclos[ed] or use[d] without the express or implied consent . . . by a person who did any of the
Used improper means to acquire knowledge of the trade secret;
At the time of disclosure or use, knew or had reason to know that the knowledge of the trade
secret that the person acquired was derived from or through a person who had utilized
improper means to acquire it, was acquired under circumstances giving rise to a duty to
maintain its secrecy or limit its use, or was derived from or through a person who owed a duty
to the person seeking relief to maintain its secrecy or limit its use;
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entirely from its contention that Ferris and/or Branch violated their “duty to maintain [the] secrecy”
of Novus’ TBIR-related information by using it to develop the LPP. (First Amended Complaint
(“FAC”), ECF No. 21 at ¶¶ 44-46, 51); (Pl.’s Resp., ECF No. 109 at PageID #2705) (noting that
the “question is . . . whether a confidential relationship existed directly between Novus and
Prudential employees Mr. Branch and Ms. Ferris”).
Initially, Novus alleged that Ferris and Branch’s duty of confidentiality arose from either
(1) a non-disclosure agreement signed by Annexus and Nationwide or (2) Ferris and Branch’s
“own confidentiality agreements with Nationwide.” (FAC, ECF No. 21 at ¶¶ 34, 44.) But Novus,
simply put, has not substantiated the existence of either. 11 Nowhere does it point this Court to any
Nationwide-related confidentiality agreement specific to Branch or Ferris. Nor, crucially, does
Novus offer any evidence that Branch, Ferris, or Nationwide assured it—verbally or in writing—
that they would guard its proprietary information. 12
The AnnGen-Nationwide Agreement does not change the equation. As Prudential correctly
observes, that agreement, which was signed in 2012, is cabined to AnnGen, Nationwide, and their
affiliated entities. (See Pl.’s Ex. 3, ECF No. 110-11 at PageID #2912-14); (Def.’s Mot., ECF No.
Before a material change of their position, knew or had reason to know that it was a trade
secret and that knowledge of it had been acquired by accident or mistake.
O.R.C. § 1333.61(B). The Act further defines “improper means” to include: “theft, bribery, misrepresentation, breach
or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means.” Id. §
In its Response in Opposition to Prudential’s Motion for Summary Judgment, Novus solely focuses its
confidentiality-based arguments on whether or not it took “reasonable efforts” to protect its alleged trade secrets. (Pl.’s
Resp., ECF No. 109 at PageID #2697.) That might suffice if the only inquiry here was whether or not a trade secret
existed. See O.R.C. § 1331.61(D)(2). But it is not. Novus must still present evidence that its alleged trade secrets were
“misappropriated” in a manner prescribed by O.R.C. § 1333.61. See R.C. Olmstead, Inc. v. CU Interface, LLC, 657 F.
Supp. 878, 897 (2009 N.D. Ohio), aff’d, 606 F.3d 262 (6th Cir. 2010). It has not.
Indeed, Novus expressly or tacitly concedes that: (1) it never provided Branch with any TBIR-related information;
(2) Ferris did not sign any confidentiality agreement before McCanney allegedly disclosed Novus’ trade secrets to her
in 2015; and (3) it was explicitly warned in 2013 “not [to] disclose any confidential information about [the TBIR’s]
design” because “Nationwide would not sign an NDA.” See McCanney Dep. at 181:17-184:16; Morrone Dep. at 74:919; Seyboldt Dep. at 100:4-9.
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102-1 at PageID #1087); Morrone Dep. at 57: 19-59:8 (stating that the AnnGen-Nationwide
Agreement was “very narrow in scope and . . . specific to the Nationwide New Heights [FIA]
product that Annexus and Genesis brought to [Nationwide]”). It does not, on its face, bind
Nationwide (or its employees) to Novus in any material respect. 13 Nor is there any indication that
Branch, Ferris, or any other high-level Nationwide employee (such as Morrone) thought
differently. See Branch Dep. at 82:1-2; Ferris Dep. at 43:21-23; Morrone Dep. at 57:19-23.
Of course, a duty to keep certain information confidential may in some instances arise
implicitly. See R & R Plastics, Inc. 92 Ohio App. 3d at 805, 637 N.E.2d 332 (granting summary
judgment based in part on the plaintiff’s failure to present evidence of “an express or implied
agreement of confidentiality between the parties”). Novus appears to suggest that happened here.
(Pl.’s Resp., ECF No. 109 at PageID #2664-65, 2697.) It notes, specifically, that: (1) it was “aware”
Annexus and Genesis were parties to the AnnGen-Nationwide Agreement; (2) various Annexus
employees had assured it that “they had the proper agreements in place for [Novus] to freely
discuss [the TBIR]” with Nationwide; and (3) based on this information, it had a “reasonable
belief” that any TBIR-related information it shared with Nationwide would remain confidential.
But the mere fact Annexus—a third party—left Novus with the belief that the proprietary
information it shared with Nationwide would remain confidential says next to nothing about
Nationwide’s thoughts on the matter, let alone those of Branch or Ferris. Novus cannot fashion a
In his deposition, McCanney suggested that another basis for Novus’ belief that Nationwide would keep its
information confidential was that “there was more than one [confidentiality] agreement” between Nationwide and
Annexus. See McCanney Dep. at 160:24-25; Morrone Dep. at 59:9 (noting that it was his “understanding” that
Nationwide and Annexus had “entered into other mutual confidentiality and nondisclosure agreements related to
different products that Annexus was presenting to Nationwide”). Novus, however, does not elaborate as to when those
agreements were signed or what they entailed in its Response in Opposition to Prudential’s Motion for Summary
Judgment. (See Pl’s Resp., ECF No. 109.)
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bilateral “agreement or understanding of confidentiality” between it and Nationwide from a
unilateral impression that such an “agreement or understanding” existed. See Big Vision Priv. Ltd.
v. E.I. DuPont De Nemours & Co., 1 F. Supp. 3d 224, 262 (S.D.N.Y. 2014) (noting that the
plaintiff’s “belief in the confidentiality of its information, however fervent, does not transform that
information into trade secrets”). Some affirmative evidence of an assurance of secrecy from
Nationwide is needed. See Niemi, 543 F.3d at 302-03 (finding that the plaintiff’s bare,
uncontroverted averment that he received an “assurance of confidentiality” from the defendant
was enough to create a genuine issue of material fact as to whether the plaintiff used “reasonable
efforts” to protect his trade secret); R.C. Olmstead, Inc. v. CU Interface, LLC, 657 F. Supp. 2d 878,
897 (N.D. Ohio 2009) aff’d, 606 F.3d 262 (holding that the defendant could not have
“misappropriated” the plaintiff’s trade secret by obtaining it from a third party because that third
party “was under no contractual duty” to maintain the secrecy of the plaintiff’s information); R &
R Plastics, Inc. at 341. And here, Novus effectively offers none.
Novus, in sum, has not established that the TBIR’s design and associated “marketing
strategy” derived the type of “independent economic value” contemplated by Ohio law when they
were allegedly misappropriated. See O.R.C. § 1333.61(D). Nor has it shown with “specific facts”
that Branch and/or Ferris had any “duty” to keep that information secret when they joined
Prudential. See O.R.C. § 1333.61(A)-(B); Anderson, 477 U.S. at 250. Both of these shortcomings
are fatal to its misappropriation claim. Thus, the Court GRANTS Prudential’s Motion for
Summary Judgment. (ECF No. 102.)
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This case shall be closed on the docket of this Court.
IT IS SO ORDERED.
August 1, 2022
/s/ Edmund A. Sargus, Jr.
EDMUND A. SARGUS, JR.
UNITED STATES DISTRICT JUDGE
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