## Facts

- Susquehanna International Group, LLP (SIG) employed Cal Fishkin and Igor Chernomzav as traders under contracts containing noncompetition and confidentiality provisions, with remedies including injunctive relief and liquidated damages.
- SIG developed a profitable Dow Futures trading operation, including a strategy created by another SIG trader and used on a desk that generated substantial profits.
- In 2003, Fishkin and Chernomzav left SIG, formed TABFG, LLC, and entered a joint venture with NT Prop Trading, LLC to trade Dow Futures and related products in competition with SIG.
- Fishkin had indicated to a prospective venture partner that SIG’s Dow Futures approach was profitable but did not disclose specific formulas, parameters, or proprietary rules.
- Fishkin, Chernomzav, and another trader sued for a declaration that the noncompetes were unenforceable; SIG counterclaimed for enforcement, contract damages (including disgorgement/restitution based on the venture’s profits), and trade-secret misappropriation under Pennsylvania law.
- The district court enjoined violation of the restrictive covenants, limited SIG to nominal contract damages (finding lost profits unproven), rejected restitution/disgorgement based on the venture’s profits, and rejected the trade-secret claim.

## Issues

1. Under Pennsylvania law, may an employer recover restitutionary disgorgement measured by a competing venture’s profits for breach of noncompetition and confidentiality obligations absent proof that those profits reflect a benefit conferred by the employer?
2. Does an employee’s disclosure that an employer’s trading approach is “profitable,” without disclosure of specific methodology, qualify as misappropriation of a protectable trade secret under Pennsylvania law?

## Decision

- The Third Circuit affirmed the denial of restitutionary disgorgement of TABFG/NT Prop’s profits.
- The court held SIG failed to show the required connection between any benefit conferred by SIG and the venture’s profits, which depended on independent inputs (capital, market conditions, and trading decisions).
- The Third Circuit affirmed rejection of the trade-secret misappropriation claim.
- The court agreed that generalized knowledge that a strategy is profitable, without specific secret details, is not a trade secret and that SIG did not prove use of a specific proprietary formula or rules.
- The injunction enforcing the restrictive covenants and the nominal-damages framework for breach of contract remained undisturbed.

## Legal Principles

- Under Pennsylvania law, restitution is aimed at preventing unjust enrichment and is measured by the value of the benefit the defendant obtained from the plaintiff, not by all profits earned in a separate enterprise.
- Disgorgement of a competing venture’s profits is unavailable absent proof that the profits are attributable to a benefit conferred by the plaintiff rather than independent factors.
- A protectable trade secret must have independent economic value from not being generally known or readily ascertainable and must be subject to reasonable secrecy measures.
- General statements about the profitability of a business or strategy, without disclosure of concrete proprietary methodology, are too indefinite to constitute a trade secret.
- Trade-secret liability requires proof of misappropriation of specific secret information, not merely use of an employee’s general skill and experience.

## Conclusion

The Third Circuit affirmed that SIG could enforce its restrictive covenants through injunctive relief but could not obtain disgorgement where the competing profits were not shown to be traceable to a benefit SIG conferred, and it could not recover for trade-secret misappropriation where the alleged “secret” was only generalized profitability rather than specific confidential methodology.


Fishkin v. Susquehanna Partners, G.P., 340 F. App’x 110 (3d Cir. 2009)