Trade Secret Litigation Involving Ice Cream Machine Diagnostic Device

The manufacturer of McDonald’s ice cream machines is Taylor Company, and they have been sued by small startup, Kytch. Kytch became famous for inventing a device that hacked the ice cream machines Taylor produces for McDonald’s in order to diagnose them whenever the machines returned errors, as the ice cream machines are notorious for being down and in need of maintenance or servicing more often than not. 

Revealing Discovery in Trade Secret Litigation 

In May of this year, Kytch sued Taylor over allegations that Taylor secured a Kytch device through a McDonald’s franchisee in order to copy Kytch’s device and drive them out of the market. While Kytch claims that, in doing so, Taylor stole valuable trade secrets from Kytch, Taylor has denied such claims and stated that any of Kytch’s supposed trade secrets have been publicly marketed by Kytch itself, and as such, are not confidential at all. But last month, the trade secret lawsuit proceeded to the discovery stage of litigation, and as a result, Taylor was required to produce internal communications that have contradicted its previous claims of defense while simultaneously seeming to paint McDonald’s in a less than savory light.

For example, due to the constant breakdown of its ice cream machines, there have long been theories that McDonald’s purposely keeps their ice cream machines down to keep their franchisees locked in expensive maintenance and service contracts tied to Taylor, and as a result, subsequently to McDonald’s. Recent readings from Kytch devices have returned numbers that Taylor ice cream machines for McDonald’s were down between 20-40% of the time in one week alone in the same market. The complaints have been so constant that the Federal Trade Commission recently started investigating complaints regarding the machines.

Trade Secret Litigation Identifies Involvement by McDonald’s

In response to the popularity of Kytch’s device, McDonald’s prohibited franchisees from using the device by stating that the device voided all machine warranties and that it actually posed safety risks to its franchisees while simultaneously offering its own competing device in its stead. This device was arguably based on Kytch’s device and concept, and it appears that the recently produced discovery documents show that such allegations may be true as Taylor’s internal communications prove that Taylor sought to replicate Kytch’s features, including its interface, alerts, diagnostic tools, and wireless connectivity.

Key Takeaways on the Discovery Findings of Kytch’s Trade Secret Litigation

Recently produced documents by the Taylor Company in the discovery phase of the lawsuit brought against it by Kytch has revealed that:

• Taylor allegedly purposely sought out the Kytch device to evaluate and mimic;

• McDonald’s was more than passively aware of the war between Kytch and Taylor, taking action against the Kytch device; and

• McDonald’s franchisees were specifically warned away from using Kytch devices.

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