Halifax’s Milk Moovement is embroiled in a trade secrets and antitrust legal battle in the United States with one of its competitors, Texas-based Dairy LLC.

Milk Moovement, which last summer raised a US$20 million Series A funding round, was sued by Dairy LLC in California District Court in Dec. 2021 for allegedly basing parts of its supply chain management software for dairy farming cooperatives on trade secrets belonging to Dairy LLC. On Friday, Milk Moovement announced it is countersuing Dairy LLC for antitrust violations.

“While our company regrets being dragged into this frivolous lawsuit, we are committed to doing what is right for the dairy industry,” said Milk Moovement CEO Robert Forsythe in a statement.

“In our counterclaims … we allege that Dairy LLC has abused its monopoly power by, among other things, forcing milk producers to execute contracts that bar them from ever working with one of Dairy LLC’s competitors. This fundamentally works against the best interests of dairy producers.”

Co-founded by Forsythe and Chief Product Officer Jon King, Milk Moovement’s software is used in the production of about 14 percent of all milk produced by cooperatives in the United States, the company’s largest market. The company expects that figure to reach 20 percent by the end of this year and so far employs about 70 people.

Dairy LLC, which does business as Ever.Ag, was founded in the early 2000s and is led by CEO Scott Sexton. The company has around 250 employees, according to LinkedIn data.

Milk Moovement is being represented by global law firm Morgan Lewis & Bockius LLP and Dairy LLC is represented by New York’s Willkie Farr & Gallagher LLP.

In its original lawsuit, Dairy LLC alleged one of its former clients had inappropriately shared details with Milk Moovement of a system to help farmers decide whether to participate in a federal pool that sets prices for different types of milk.

Specifically, the suit claimed that the California Dairies cooperative gave printouts from Dairy LLC’s software to Milk Moovement employees, violating confidentiality rules in California Dairies' contract with Dairy LLC.

Milk Moovement’s countersuit claims Dairy LLC controls about 80 percent of the market for software for milk cooperatives and is using that advantage to engage in anti-competitive practices.

“(The countersuit) claims that Dairy LLC … is misusing its market power to lock up customers, including through contracts that purport to turn customers’ own data into Dairy LLC’s trade secrets and to preclude customers from using other providers’ software that is broadly similar to Dairy LLC’s software,” said Milk Moovement.

“According to the court filing, providing software service to the milk industry should not be a monopoly, yet Dairy LLC has obtained and maintained dominance through antitrust violations, despite providing inferior products and services.”

In April, Milk Moovement lost a bid to convince a federal judge to dismiss Dairy LLC’s original lawsuit.

Milk Moovement had claimed Dairy LLC’s lawsuit was too vague about the nature of the trade secrets and had not taken adequate steps to protect the secrets in any case. But the judge said Dairy LLC’s description of its trade secrets was specific enough for the litigation to proceed, and that contract clauses forbidding the sharing of trade secrets suggested Dairy LLC had been attempting to protect those same secrets.