Walmart hit with $222 million US verdict in food preservation trade secret case

By Blake Brittain

May 14 (Reuters) - A jury in Arkansas federal court found that Walmart WMT.N owes technology startup Zest Labs more than $222 million following a retrial on allegations that Walmart stole its trade secrets for reducing food waste, Zest said in a press release on Wednesday.

Zest said the jury on Tuesday awarded the company $72.7 million in compensatory damages and $150 million in punitive damages, finding that Walmart had misused its trade secrets after Zest shared its technology for improving food preservation with the retail giant.

Zest won $115 million from Walmart in a separate trial in 2021. An Arkansas federal judge ordered a new trial in 2023 after finding that Zest had withheld relevant evidence before the first trial.

Walmart said in a statement on Wednesday that it would appeal the new verdict and that Zest's "unethical behavior has compromised the integrity of this case from the start."

Zest Labs manager Gary Metzger said in a statement that the verdict was a "small but crucial triumph for small businesses that often face exploitation by larger corporations."

Zest Labs sued Walmart in 2018 for allegedly stealing its Zest Fresh technology, which tracks produce freshness from farms to stores. Zest said it worked with Walmart and shared proprietary information with the retail giant until 2017.

Walmart denied the allegations and argued that it developed its "Eden" produce-tracking technology independently.

The case is Zest Labs Inc v. Walmart Inc, U.S. District Court for the Eastern District of Arkansas, No. 4:18-cv-00500.

For Zest: Patrick Ryan, Adam Mitzner, Sean McTigue, and Andrew Ryan of Bartko Pavia

For Walmart: John Keville and Robert Green of Sheppard Mullin Richter & Hampton

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