## Facts

- ScentSational Technologies, LLC developed a method for “scented” food and beverage packaging intended to affect consumers’ flavor perception by releasing aromas from packaging materials.
- For about a decade, ScentSational and PepsiCo discussed potential development and commercialization of the technology.
- The parties executed nondisclosure/confidentiality agreements, and during meetings and briefings ScentSational disclosed technical elements of its approach and provided information and materials to PepsiCo.
- PepsiCo later obtained patents that ScentSational contended incorporated key elements of what it had disclosed under confidentiality protections.
- ScentSational sued, asserting (among other claims) misappropriation of trade secrets, breach of confidentiality agreements, and correction of inventorship under 35 U.S.C. § 256 as to certain PepsiCo patent filings.
- To support misappropriation, ScentSational relied on circumstantial access evidence (including that listed PepsiCo inventors attended, or were connected to attendees of, ScentSational presentations) and opinion testimony asserting that the patents duplicated ScentSational’s confidential information in significant ways.
- PepsiCo responded that ScentSational overstated what it had disclosed, that PepsiCo’s patented work differed materially, and that ScentSational lacked direct proof that PepsiCo used any protectable trade secret.
- ScentSational’s principal damages theory centered on alleged lost profits tied to a potential business opportunity with Coca-Cola that ended after Coca-Cola learned of PepsiCo’s patent filings.
- On the eve of trial, the court granted Daubert motions excluding substantial portions of ScentSational’s technical witness testimony and also struck the damages testimony that depended on the excluded technical opinions; PepsiCo then renewed summary judgment.

## Issues

1. Whether, after the Daubert rulings, ScentSational had admissible evidence sufficient to create a genuine dispute that it possessed specific protectable trade secrets and that PepsiCo misappropriated them.
2. Whether ScentSational had admissible evidence of causation and non-speculative damages to support its trade secret and breach-of-contract claims, including claimed losses tied to the unrealized Coca-Cola project.
3. Whether ScentSational could prove, by clear and convincing evidence with independent corroboration, that its personnel should be added as inventors under 35 U.S.C. § 256.

## Decision

- The court granted PepsiCo’s renewed motion for summary judgment.
- After excluding key technical and damages testimony under Daubert, the court held ScentSational lacked admissible proof to support essential elements of trade secret misappropriation, including actionable use and resulting damages.
- For similar reasons, the court granted summary judgment on the breach-of-contract claims based on the confidentiality agreements because ScentSational could not show, with admissible evidence, a compensable breach causing non-speculative harm.
- The court also granted summary judgment on the § 256 inventorship-correction claim because ScentSational did not provide clear and convincing, corroborated evidence establishing inventorship; reliance on the putative inventor’s testimony without adequate independent support was insufficient.
- As a result, the ruling disposed of ScentSational’s remaining claims in PepsiCo’s favor.

## Legal Principles

- A court may exclude opinion testimony under Federal Rule of Evidence 702 and Daubert where the witness is not qualified to opine on the subjects offered, the opinions do not fit the issues for the factfinder, or the methodology and application are unreliable; opinion testimony that functions as a factual narrative or legal conclusion is improper.
- Summary judgment is appropriate when, after exclusion of inadmissible proof, the nonmovant lacks evidence from which a reasonable jury could find for it on elements on which it bears the burden of proof.
- Under New York trade secret law, a plaintiff must identify protectable trade secrets with sufficient specificity and prove misappropriation and resulting damages; allegations of similarity and access, without competent supporting proof on use and harm, do not carry the claim past summary judgment.
- Contract damages must be shown with reasonable certainty; lost-profit theories tied to uncertain, unrealized third-party projects may fail where causation is not supported by admissible evidence and the damages calculation is speculative.
- Correction of inventorship under 35 U.S.C. § 256 requires proof by clear and convincing evidence, and inventor testimony generally must be independently corroborated; uncorroborated assertions by a putative inventor are insufficient to establish inventorship.

## Conclusion

In ScentSational Technologies v. PepsiCo, the court excluded significant portions of ScentSational’s technical and damages testimony and then granted PepsiCo summary judgment, concluding that without admissible proof ScentSational could not show misappropriation or breach causing non-speculative damages and could not meet the clear-and-convincing, corroboration-backed standard required to correct inventorship under § 256.


ScentSational Technologies v. PepsiCo, 2017 WL 4403308 (2017)