Contract analysis

I. INTRODUCTION AND PURPOSE OF THIS BRIEF This Confidential Mediation Brief is submitted on behalf of Plaintiff Lumos Analytics Inc. ("Lumos" or "Lumos AI") in advance of the mediation session scheduled for September 6, 2023, before the Honorable Eleanor Voss (Retired) of the Tidewater Mediation Group. Lumos submits this brief to provide Judge Voss with a comprehensive understanding of the factual record, the strengt

II. THE PARTIES A. Lumos Analytics Inc. Lumos Analytics Inc. is a Delaware-incorporated, California-headquartered software-as-a-service ("SaaS") company specializing in artificial-intelligence-driven financial analytics for institutional asset managers. The company was founded in approximately 2017 with a mission to apply cutting-edge machine learning to the challenge of financial signal generation and portfolio opti

1. Rajiv Anand Rajiv Anand, age 37, resides at 1482 Mariposa Avenue, Palo Alto, California 94306. Mr. Anand served as Principal Engineer — ML Infrastructure at Lumos from March 2019 through September 30, 2022 — a period of approximately three and a half years. During his tenure, Anand was one of the key architects of the LumosEdge signal-generation engine, the proprietary core of Lumos's flagship product. By virtue o

2. Serena Mallick Serena Mallick, age 34, resides at 578 Guerrero Street, Apartment 3B, San Francisco, California 94110. Ms. Mallick served as Senior Software Engineer — Data Pipelines at Lumos from June 2020 through October 14, 2022, a period of approximately two years and four months. In this role, Mallick was directly responsible for building and maintaining the proprietary ETL (extract, transform, load) pipelines

3. Derek Yun Derek Yun, age 31, resides at 2241 Cowper Street, Apartment 12, Palo Alto, California 94301. Mr. Yun served as Machine Learning Engineer II at Lumos from January 2021 through October 21, 2022, a period of approximately one year and ten months. In his role, Yun had direct access to proprietary training datasets, model hyperparameters, and feature-engineering libraries — the raw materials that give LumosEd

III. THE TRADE SECRETS AT ISSUE Lumos's trade secrets at issue in this case fall into five distinct categories, each of which independently qualifies for protection under the California Uniform Trade Secrets Act ("CUTSA"), California Civil Code sections 3426 through 3426.11. Each category derives independent economic value from not being generally known to or readily ascertainable by the public or by competitors, and

IV. FACTUAL BACKGROUND — THE COORDINATED DEPARTURE AND MISAPPROPRIATION A. Timeline of Events The following timeline sets forth the key events underlying this dispute. The dates and details are drawn from Lumos's internal IT security logs, the Brindoval Forensic Report, deposition testimony, and documentary evidence produced in discovery. • September 26, 2022: While still employed at Lumos, Defendant Rajiv Anand tran

V. PROCEDURAL HISTORY A. Complaint and Injunctive Relief On January 19, 2023, Lumos filed its Complaint in the Superior Court of the State of California, County of Santa Clara, initiating this action under Case No. 23-CV-004871. The Complaint asserts five causes of action against all defendants:

1. Misappropriation of Trade Secrets under the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11;

2. Breach of Contract (specifically, breach of the Proprietary Information and Inventions Assignment Agreement executed by each individual defendant);

3. Breach of the Duty of Loyalty owed by each individual defendant to Lumos during their employment;

4. Unfair Business Practices under California Business and Professions Code section 17200 et seq.; and

5. Conversion of Lumos's proprietary information. Simultaneously with the filing of the Complaint, on January 19, 2023, Lumos filed an ex parte application for a Temporary Restraining Order ("TRO") and Order to Show Cause re: Preliminary Injunction. The application was supported by detailed declarations of Priya Chandrasekaran, Chief Executive Officer of Lumos, and Rachel Fong, Vice President of Engineering of Lumos,

VI. THE EVIDENCE OVERWHELMINGLY SUPPORTS LUMOS'S CLAIMS A. Brindoval Forensic Report Findings The Preliminary Forensic Report issued by Brindoval Digital Forensics LLC on May 1, 2023, is the cornerstone of the evidentiary record in this case. The report was prepared by Dr. Irene Chow, Managing Director and Lead Forensic Examiner, and Kevin Barr, Senior Forensic Analyst, based on their comprehensive imaging and analys

1. Rajiv Anand (Deposed May 15, 2023) Defendant Anand's deposition yielded several critical admissions. He admitted that he transferred files from Lumos's internal systems to his personal Hollowell Health IT account on September 26, 2022, though he attempted to characterize the materials as "reference materials" and "general knowledge" rather than proprietary trade secrets. This characterization is contradicted by th

2. Serena Mallick (Deposed June 7, 2023) Defendant Mallick admitted at her deposition that she copied the entire DataStream ETL pipeline repository to her personal external USB drive, identified by serial number WD-4837291, on October 10, 2022 — four days before her resignation from Lumos. She claimed that she needed the materials as "personal reference" for her career development and that she did not intend to use t

3. Derek Yun (Deposed June 22, 2023) Defendant Yun admitted at his deposition that he downloaded 47 proprietary Jupyter notebooks to his personal Larkspur Technologies account on October 18, 2022. He acknowledged that the notebooks contained proprietary feature-engineering code and model-training scripts developed at Lumos. When asked about the purpose of the download, Yun offered inconsistent explanations, initially

VII. LEGAL ANALYSIS — STRENGTH OF LUMOS'S CLAIMS A. Trade Secret Misappropriation (Cal. Civ. Code §§ 3426–3426.11) Lumos's claim for trade secret misappropriation under the California Uniform Trade Secrets Act is supported by overwhelming evidence on each element of the claim. First, Lumos's proprietary technology in each of the five identified categories qualifies as a trade secret under CUTSA. Each category derives

VIII. DAMAGES ANALYSIS A. Unjust Enrichment Lumos's expert analysis, conducted in consultation with Naveen Kapoor of Meridian Cybersecurity Advisors Inc., estimates the unjust enrichment conferred upon NovaSpark by its access to and use of Lumos's trade secrets at a range of $8.7 million to $12.4 million. This estimate is grounded in a rigorous assessment of the economic value that NovaSpark derived from the misappro

IX. LUMOS'S SETTLEMENT OBJECTIVES Lumos is prepared to negotiate in good faith toward a resolution that addresses the full scope of the harm caused by Defendants' misappropriation. The following framework reflects Lumos's settlement objectives across six categories of relief. A. Monetary Relief Lumos seeks a lump-sum monetary payment reflecting a meaningful portion of the unjust enrichment range of $8.7 million to $1