Ennis Announces Verdict in Lawsuit Against Wright Printing Company

Rhea-AI Summary

On April 12, 2023, a Nebraska jury ruled against Wright Printing Company and its executives, awarding $5 million for damages to Crabar/GBF, Inc., a subsidiary of Ennis (NYSE: EBF). The jury found that the defendants misappropriated trade secrets related to customer data and folder specifications to launch competing products. The verdict included over $3.75 million in actual damages and $1.25 million in punitive damages. The ruling underscores Ennis' commitment to protecting its intellectual property and shareholders' investments. CEO Keith Walters expressed satisfaction with the outcome, asserting it affirms the company's property rights and seeks to recapture losses incurred due to the defendants' actions.

Positive

• Jury verdict of $5 million awarded to Crabar/GBF, Inc., reinforcing Ennis' position against IP theft.
• The ruling helps safeguard shareholder investments by affirming Ennis' trade secret rights.

Negative

• None.

MIDLOTHIAN, Texas--(BUSINESS WIRE)-- (NYSE: EBF) On April 12, 2023, a Nebraska jury rendered a unanimous verdict against Wright Printing Company, its owner, Mark Wright, and CEO Mardra Sikora for a total of $5 million in actual and punitive damages. The lawsuit was filed by Crabar/GBF, Inc., a subsidiary of Ennis, Inc., which purchased Wright Printing Company’s Folder Express and Progress Publications folder businesses for $15 million in 2013.

The jury found that Wright Printing Company, Mark Wright and Mardra Sikora misappropriated confidential information and trade secrets regarding customer lists, customer sales data and specifications regarding Crabar’s entire Folder Express and Progress Publications custom folder line to launch competing folder brands called Pocket Folders Fast and Bandfolder Press. Wright Printing Company launched the competing business in the same facility that Crabar had recently vacated after Mark Wright told Crabar that he was selling the building and Crabar had to vacate.

Efforts to duplicate the Folder Express and Progress Publications product lines were assisted by the theft of detailed product specifications, manufacturing references and files, as well as folder templates. Former Folders Express employee Alexandra Kohlhaas took an external hard drive when she left Folders Express to go back to work for Wright Printing Company and its startup folder businesses in 2016. When Wright Printing Company’s prepress manager, Jamie Fredrickson, received a copy of a spreadsheet from Kohlhass containing the manufacturing specifications for every Folder Express and Progress Publications folder design, she forwarded it to Mark Wright and Mardra Sikora with her observation that the spreadsheet was “incredibly useful.” Ultimately, Wright Printing Company duplicated all of the Folder Express and Progress Publications top-selling products. They then launched a direct marketing campaign targeted at the top customers of Folder Express and Progress Publications that Mark Wright and Mardra Sikora culled from the confidential customer data that Wright Printing Company had sold to Crabar with a covenant never to use in the future.

After a two-week trial, the jury unanimously found in favor of the Ennis subsidiary on all counts as to all defendants. In addition to awarding Crabar more than $3.75 million in actual damages, the jury assessed more than $1.25 million in punitive damages among Mark Wright, Mardra Sikora, Jamie Fredrickson and Alexandra Kohlhass for what the jury found to be clear and convincing evidence of willful and malicious misappropriation of trade secrets. As requested by Ennis’ representative at trial, the jury apportioned only modest amounts against the employees Fredrickson and Kohlhass to impose accountability for their wrongdoing without imposing extreme hardship for actions taken for the benefit of Wright Printing Company and Mark Wright.

Ennis, Inc. CEO, Keith Walters, provided the following comment on the jury’s verdict.

The jury's verdict that defendants willfully and maliciously misappropriated our trade secret information affirms the importance of Ennis’ property rights. Ennis filed this lawsuit because it owes its shareholders a duty to protect their investment and to recapture the substantial losses caused by defendants' misappropriation of confidential information to gain an unfair advantage in the market. Ennis is satisfied that the jury’s verdict is a just outcome for it and its shareholders.

For a more detailed version of this press release, please visit https://www.ennis.com/2023/04/14/ennis-announces-verdict-in-lawsuit-against-wright-printing-company/

About Ennis

Founded in 1909, the Company is one of the largest private-label printed business product suppliers in the United States. Headquartered in Midlothian, Texas, Ennis has production and distribution facilities strategically located throughout the USA to serve the Company’s national network of distributors. Ennis manufactures and sells business forms, other printed business products, printed and electronic media, integrated forms and labels, presentation products, flex-o-graphic printing, advertising specialties and Post-it® Notes, internal bank forms, plastic cards, secure and negotiable documents, specialty packaging, direct mail, envelopes, tags and labels and other custom products. For more information, visit www.ennis.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230414005441/en/

Mr. Keith S. Walters, Chairman, Chief Executive Officer and President

Mr. Dan Gus, General Counsel and Secretary

Ennis, Inc.

Phone: (972) 775-9801

Fax: (972) 775-9820

www.ennis.com

Source: Ennis, Inc.

FAQ

What was the outcome of the jury verdict involving Ennis, Inc. (EBF) on April 12, 2023?

The jury unanimously awarded $5 million to Crabar/GBF, Inc., a subsidiary of Ennis, after finding Wright Printing Company and its executives guilty of misappropriating trade secrets.

How much in punitive damages was awarded in the Ennis lawsuit?

The jury awarded over $1.25 million in punitive damages against the defendants, including the executives of Wright Printing Company.

What actions led to the lawsuit against Wright Printing Company?

Wright Printing Company was found to have misappropriated confidential information such as customer lists and product specifications to launch competing folder businesses.

How does the jury's verdict affect Ennis shareholders?

The verdict supports Ennis' duty to protect shareholder investments and recover losses from unfair competition.

What did Ennis CEO Keith Walters say about the jury verdict?

Keith Walters stated that the jury's decision affirms the importance of Ennis' property rights and the company's commitment to protecting its investments.