Printing Company Sues Tervis For Violating NDA, Giving Out Trade Secrets
Trinity Graphic, the plaintiff in this case, had been supplying Tervis with plastic inserts it uses to personalize its tumblers since 2010, and claims that the company used a factory tour as an opportunity to provide larger, cheaper printers with information on Trinity's printing process
Tervis, on the other hand, denied any wrongdoing.
"Tervis does not comment specifically on pending litigation, but we hold ourselves to the highest ethical and legal standards, and will vigorously defend any claim to the contrary," Tervis president Rogan Donelly said, according to the Herald Tribune.
Trinity Graphic claims that, during a factory tour in 2011, a Tervis employee strayed from the tour to copy down model numbers of printers. Also, after Trinity gave information under the protection of a confidentiality and non-disclosure agreement, Tervis allegedly gave the information to Southern Graphics Inc. and SGS International LLC, which are also listed as defendants in the lawsuit.
It was Trinity that introduced the two-sided plastic wrap used for personalization in drinkware products. Before that, Tervis had used single-sided, embroidered patches between the items' two walls.
Tervis and Trinity came to a "handshake agreement" that Trinity would print all of the tumbler inserts. As the partnership flourished and Tervis' revenue increased substantially, it pressured Trinity to invest more in equipment, albeit with the same handshake agreement as before, rather than a real contract.
"While relying on Tervis' representations, Trinity invested several million dollars in facility space, equipment and employees," the lawsuit says.
In 2014, Tervis inked a contract—a real contract—with Southern Graphics, which would print wraps at a fraction of Trinity's cost. The problem was that Southern Graphics hadn't quite perfected the printing process at the level of precision that Trinity had.
"Southern could not figure out how to print perfectly registered images or substantially reduce static electricity when printing on transparent substrates," the lawsuit said. "The result was a tumbler insert that was blurry and misaligned."
Tervis worked for years to try to figure out how Trinity was printing its products, and eventually Trinity shared the information with Tervis after signing confidentiality and NDAs. (This is after allegedly threatening to cancel all remaining orders with Trinity if it didn't give up the information.)
"Less than a month later—and despite the years in which no printing company had replicated the Trinity Wrap—Southern "solved" its registration and static electricity issues," the lawsuit claims. "Southern began to print the Trinity Wrap for Tervis. There is no doubt: Southern acquired the trade secrets from Tervis, knowing that Tervis had acquired them through deception and while under a legal duty to maintain their secrecy."
In January of last year, Tervis terminated its relationship with Trinity, shifting the transferring of its orders to Southern.