I recently posted about another case where a company that developed a white-label software platform for a customer later sued that customer for trade secret misappropriation when the customer terminated the contract and then put out a competing software. Today, I came across another new complaint filed on a trade secret with nearly the same fact pattern. 

These cases highlight the great risk customers undertake when the same people who were the customer contacts with access to the secret development of the white-labeled product, terminate the contract, and turn around and put out a competing product. Without any adequate walls or shielding, it can be very difficult for the accused to prove that they were not tainted with the trade secret knowledge and information when they built the competing product. 

Whenever possible, I counsel companies looking to develop a competing product that they rely on a separate team to develop the competing product and ensure they do not have access to any of the supplier's materials or source code to minimize the risk of subsequent trade secret misappropriation allegations.

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Palmiter and Kniep signed licensing agreements with Estate Documents Pro with the stated intention of "white labeling" the company's software, or creating their own branded version of Estate Documents Pro's products, according to Monday's complaint. The agreements granted the duo access to the proprietary software platform.

By November 2025, all work for the white label had been completed, according to Estate Documents Pro. But Palmiter soon after said the Enduring Legacy Mentors team did not intend to move forward with Estate Documents Pro, sending an email that claimed Enduring Legacy Mentors had decided to build its own custom solution, according to the complaint.

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