Covington Secures Nearly Half-Billion Dollar Victory in Trade Secrets Trial

SAN FRANCISCO—After being retained just months before trial, Covington obtained a complete defense victory for a subsidiary of McKesson Corporation in a trade secrets bench trial in which plaintiff sought damages of nearly half a billion dollars. 

In a lawsuit commenced in 2007, plaintiff PSKW accused McKesson of using its “new payment method” to develop McKesson’s market-leading LoyaltyScript co-pay discount programs. PSKW sought the assignment of McKesson’s LoyaltyScript patents, $250 million in damages, and pre- and post-judgment interest. McKesson did not waver in denying all allegations and refuting the premises of PSKW’s damages theories.

The Supreme Court of the State of New York, Commercial Division, issued a decision ruling for McKesson on every issue and directing the dismissal of all of PSKW’s claims. The Court found that the credible evidence demonstrated that McKesson had separately and independently developed LoyaltyScript, and that the “new payment method” was neither novel nor proprietary to PSKW. Covington’s trial team was led by Clara Shin and Bob Haslam, and included partners Nate Shafroth and Christopher Y. L. Yeung, and associates Hyun Byun, Ethan Forrest, Wallace Lee, and Chris Zirpoli.