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D. Mass. Says Post-Termination Formula Use Could Support Chapter 93A Claim

Published
Score
13

Why it matters

A federal judge in the District of Massachusetts ruled that a former business partner's continued use of proprietary formulations after the relationship ended could constitute unfair or deceptive trade practices under Massachusetts Chapter 93A, rather than a simple contract breach. The decision allowed the plaintiff's unfair-deception claim to proceed past the pleading stage, finding that the alleged conduct—if proven—may satisfy the statute's requirement of bad-faith or commercially unfair behavior in business dealings.

The underlying dispute involves companies that shared proprietary product formulas, with one party alleging the other continued using confidential formulations after termination. The court has not yet ruled on the merits of the claim.

The ruling matters because Chapter 93A violations expose defendants to significantly greater liability than contract breaches alone, including mandatory attorneys' fees and multiple damages. The decision clarifies that post-termination misuse of proprietary information can survive dismissal motions, meaning companies that end business relationships involving trade secrets face elevated litigation risk if they continue using the other party's formulations. Attorneys representing either side in such disputes should expect Chapter 93A claims to be difficult to dismiss early in litigation.

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