Spartan v. Signature: $16M Trade Secret Verdict in Texas

Case Background

Spartan Composites, LLC and Spartan Mat, LLC filed a lawsuit against Signature Systems Group, LLC in the United States District Court for the Eastern District of Texas, Sherman Division. The case, centered on allegations that Signature misappropriated trade secrets related to composite trackout mats used in the construction industry.

The dispute emerged from business discussions in 2018 and 2021, when Signature explored acquiring FODS, LLC, a company that manufactured composite trackout solutions. During these negotiations, both parties signed confidentiality agreements to protect sensitive business information shared during due diligence. The lawsuit represented the latest chapter in an ongoing rivalry between two major players in the industrial matting industry.

Cause

The Plaintiffs claimed that Signature violated federal and state trade secret laws after gaining access to confidential information about FODS' trackout mat products. Spartan alleged that Signature used this protected information to develop and launch its competing DiamondTrack Mat in late 2023.

The story began in 2018 when Signature first approached FODS about a potential acquisition. The companies signed a confidentiality agreement, and FODS began sharing sensitive business information. The deal never materialized. In 2021, Signature renewed its interest. The companies executed a new mutual confidentiality agreement and engaged in more extensive discussions. This time, FODS provided login credentials to its accounting systems, inventory management software, and point-of-sale platforms. According to Spartan, this access remained unmonitored.

The allegations included claims that Signature deliberately designed its DiamondTrack Mat to be interoperable with FODS products, making it easier for customers to switch suppliers. Spartan also accused Signature of interfering with business relationships, particularly with major equipment rental company Sunbelt, using confidential customer information to target FODS' most valuable clients.

Injury

Spartan claimed it suffered significant financial harm from Signature's alleged misappropriation. The Plaintiffs argued that Signature's actions resulted in lost sales, damaged customer relationships, and diminished market position. They specifically pointed to Sunbelt, which began carrying Signature's DiamondTrack Mats in 2023 after previously doing business with FODS.

Damages Sought

The Plaintiffs requested actual damages for lost profits, awards for unjust enrichment and reasonable royalties, and exemplary damages based on claims that Signature acted willfully and maliciously. The complaint also sought permanent injunctive relief, attorneys' fees, costs, and interest.

Key Arguments and Proceedings

Legal Representation

Plaintiffs: Spartan Composites, LLC d/b/a FODS | Spartan Mat, LLC. FODS maintained its principal place of business in Rockledge, Florida, while Spartan Mat operated from Gilbert, Arizona.

·       Counsel for Plaintiffs: Christopher John Schwegmann | Jessica Cox | Kristopher M. Ruiz

·       Expert for Plaintiff: William Stamps Howard

Defendant: Signature Systems Group, LLC, a Delaware limited liability company with its principal place of business in Flower Mound, Texas.

·      Counsel for Defendants: David W. Morehan | Robert H. Reckers | B. Trent Webb | Evan Weidner | Brenna L. Kingyon | Kimberly Candace Priest-Johnson

Key Arguments or Remarks by Counsel

Claims

Spartan's legal team built its case around four allegations. The first two counts involved trade secret misappropriation under federal and state law. The Plaintiffs argued that specific categories qualified as trade secrets: manufacturing processes, marketing and advertising strategies, sales approaches, pricing structures, and vendor and customer lists.

The Plaintiffs emphasized that FODS took reasonable steps to protect information by requiring confidentiality agreements. However, they claimed Signature gained access to FODS' accounting systems, inventory records, and point-of-sale software without monitoring. Spartan also alleged that FODS sent its trackout mat mold to a third-party facility for inspection at Signature's request during 2021 discussions, giving Signature direct access to proprietary specifications.

The third count alleged breach of contract, claiming Spartan violated a 2019 settlement agreement that resolved a previous dispute. The fourth count alleged tortious interference with prospective business relations.

Defense

Signature mounted a vigorous defense challenging every aspect of Spartan's claims. The company filed both an answer denying the allegations and a counterclaim asserting that Spartan breached the 2019 settlement agreement.

Signature argued it developed the DiamondTrack Mat independently, without using any FODS information. The company pointed out that it ordered equipment to expand mat production capacity in 2018, before discussions with FODS began, and commissioned this equipment in 2019. Signature emphasized it built the DiamondTrack Mat using technology from its existing DuraDeck Mat, launched in 2007. The company started as a fencing products company in Manhattan in 1998 but quickly expanded into composite mat manufacturing.

Signature challenged whether the information Spartan claimed as trade secrets actually qualified for protection, arguing that FODS' manufacturing processes were publicly known. The defense pointed to specific failures by FODS to maintain secrecy, noting that FODS sent its trackout mat mold to a third-party facility without requiring a confidentiality agreement and admitted providing unmonitored access to its business systems.

Signature argued that when Spartan acquired FODS in early 2024, it began manufacturing and selling FODS trackout mats designed to interlock with Signature's DuraDeck Mats. FODS purchased DuraDeck Mats and connection hardware from Signature between June 2020 and August 2023, using these components with FODS trackout mats. The counterclaim also accused Spartan of manufacturing the Scout Ground Protection Mat with the same dimensions as the DuraDeck Mat and similar hole placement for compatibility.

Jury Verdict

After reviewing all evidence, the jury reached its verdict on November 20, 2025.

On whether Spartan owned trade secrets, the jury gave a mixed response. The jury found that Spartan owned trade secrets in its marketing, advertising, and pricing strategies related to the FODS trackout mat, as well as in its vendor and customer lists. The jury did not find trade secret protection for other categories, apparently agreeing that some manufacturing processes represented common industry knowledge.

On misappropriation, the jury found that Signature misappropriated some of Spartan's trade secrets, specifically the marketing strategies, pricing strategies, and customer lists.

The jury calculated compensatory damages for trade secret misappropriation. It awarded Spartan $2.3 million in disgorgement of Signature's past profits from using the stolen trade secrets, $570,000 for development costs that Signature avoided, and $5.5 million as a reasonable royalty.

On exemplary damages, the jury found that Signature willfully and maliciously misappropriated Spartan's trade secrets. The jury awarded $8 million in exemplary damages, reflecting its view that Signature's actions deserved significant punishment.

The jury also addressed Signature's counterclaim for breach of contract. It found that Signature proved Spartan breached Section 2.2 of the 2019 settlement agreement by manufacturing, marketing, advertising, or selling mats designed to interlock with mats manufactured by Spartan prior to December 19, 2026.

For breach of contract damages, the jury awarded Signature $1.2 million in actual lost profits and another $1.2 million in disgorgement of Spartan's past profits from the breach.

The verdict represented a partial victory for both sides. Spartan obtained substantial damage awards totaling over $16 million when combining compensatory and exemplary damages. However, Signature also prevailed on its counterclaim, winning $2.4 million in damages.

The mixed verdict reflected the jury's careful consideration of complex evidence about trade secrets, independent development, and contractual obligations. The case highlighted challenges companies face in protecting confidential information during merger and acquisition discussions. The verdict sent a message that companies exploring acquisitions must carefully track and limit their use of information gained during due diligence, even if the deal falls through.

Court documents are available upon request at jurimatic@exlitem.com