Ag-Tech Firm Awarded $223 million for Walmart's Theft of Trade Secrets
- Jul 5, 2025
- 2 min read
Updated: Jul 29, 2025
Punitive damages send message about fair-play in business.
Walmart must pay $222.7 million to ag-tech firm Zest Labs for misappropriating their trade secrets. The award included $150 million in punitive damages for Walmart’s egregious and unfair conduct.
Novel Tech Reduces Food Waste
Zest Labs (now d/b/a Ecoark Holdings) developed a process for mitigating the problem of fresh food waste. (Which is a huge problem—with 33% of fresh produce and proteins typically going to waste.)
Algorithms or "Hackathon"
Walmart was testing Zest’s unique technology—to try to reduce the billions of dollars it loses annually to spoilage. Over the course of the relationship, many Walmart employees—including C-suite executives—had access to Zest’s proprietary processes and technology.
In 2017, after several years of testing Zest’s system, Walmart abruptly ended the pilot program.
Soon after, Walmart introduced its own, similar technology (dubbed, “Eden”) that it claims it develped in just six months, via a “hackathon” effort by its computer programmers.
Zest was incredulous and contended that Eden was built on Zest’s foundational technology, including multi-layer algorithms for tracking freshness and optimizing inventory—capabilities it says Walmart couldn’t have developed on its own in such a short time.
A Tale of Two Trial
Zest sued, and in 2021, a jury awarded them $115 million in damages. But the judge vacated the verdict, and ordered a re-trial, when it was found that Zest withheld certain critical evidence.
In the end, Zest came out ahead. In May this year, the jury for the second trial awarded Zest more damages—$72.7 million in compensatory damages. And because Walmart acted maliciously by using Zest’s confidential information to create Eden, the jury awarded Zest $150 million in punitive damages.
What Comes Next?
Walmart vows to appeal, and each side is seeking sanctions against the other. Zest claims that Walmart secretly—and inappropriately—submitted patent filings (based on Zest’s own technology) while the lawsuit was ongoing.
TBD how these post-verdict maneuvers play out. Stay tuned for updates.
Takeaways for Business Leaders and Innovators
Takeaway 1: Protect Your Tech—Even from the Start of the Relationship
What’s yours must stay yours. If you're sharing proprietary technology or know-how—even in early-stage conversations—you need a protective structure in place: NDAs, trade secret protocols, internal safeguards. Savvy companies plan ahead and cover their bases before sharing IP.
Takeaway 2: Smart Licensing Beats Costly Litigation.
Zest fought for years to reclaim value that could have been secured through a well-structured deal. Litigation is expensive, public, and unpredictable. Forward-thinking businesses bake monetization into their IP strategy from the start.
Takeaway 3: Own Your Story—Before Someone Else Does.
Walmart tried to frame their copycat tech as the product of a six-month “hackathon.” The jury didn’t buy it. Your innovation is only as powerful as the story and structure that supports it. Strategic brands define their narrative early—and defend it relentlessly.
At Meridian Cay, we help businesses treat their IP like the asset it is—strategically, proactively, and with the right protections in place.
