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1008-00005 · Lumos Analytics Inc · Mediation & Settlement

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SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

Submitted to: Hon. Eleanor Voss (Ret.), Mediator Tidewater Mediation Group

Date of Brief: August 30, 2023

Prepared by:

CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, CA 94104

Marcus Delgado, Responsible Partner Catherine Bloom, Billing Partner Wendy Schultz, Lead Associate Omar Siddiqui, Working Associate

Attorneys for Plaintiff Lumos Analytics Inc. 4700 Orchard Parkway, Suite 300 San Jose, CA 95134

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 strength of Lumos's legal claims, the scope of damages at issue, and the framework within which Lumos is prepared to negotiate a resolution.

Through this mediation, Lumos seeks to resolve this trade-secret misappropriation dispute through a negotiated resolution that provides three essential elements: (1) meaningful monetary compensation reflecting the substantial unjust enrichment conferred upon Defendants by their coordinated theft of Lumos's proprietary technology; (2) permanent injunctive relief, entered as a court order, to ensure that Defendants permanently cease any use, possession, or exploitation of Lumos's trade secrets; and (3) comprehensive forensic remediation, independently verified, to undo the damage caused by Defendants' systematic misappropriation and to restore the confidentiality of Lumos's proprietary information to the fullest extent possible.

At its core, this case presents a straightforward set of facts. Three former senior engineers at Lumos — Rajiv Anand, Serena Mallick, and Derek Yun — departed the company in rapid, coordinated succession over a three-week period in late September and October 2022. Their departures were not spontaneous. Before and during their final weeks of employment, each defendant methodically transferred Lumos's most sensitive proprietary materials — including proprietary machine-learning algorithms, customer data pipelines, confidential product roadmap materials, and other trade secrets — to personal devices and cloud storage accounts outside Lumos's control. Within days of their respective resignations, each defendant joined NovaSpark Technologies Inc. ("NovaSpark"), a competing startup that Defendant Anand had incorporated just three days after his own resignation from Lumos. NovaSpark then immediately deployed those misappropriated trade secrets to build a competing product and to raise $12 million in seed funding from Blackpine Capital Partners LP — funding that was secured, at least in significant part, on the back of capabilities and timelines that are only explainable by NovaSpark's access to Lumos's stolen technology.

This case presents strong facts for Lumos on every claim. The forensic evidence, obtained through the court-appointed neutral forensic examiner, Brindoval Digital Forensics LLC, confirms the presence of Lumos proprietary materials on NovaSpark's systems and on the personal devices and cloud accounts of all three individual defendants. The deposition testimony of each individual defendant includes admissions regarding the specific exfiltration events, the pre-departure coordination among the defendants, and the use of Lumos materials at NovaSpark. The documentary evidence — including the executed Proprietary Information and Inventions Assignment Agreements ("PIIAAs"), IT security logs, NovaSpark's own internal documents produced in discovery, and the Blackpine Capital Partners pitch deck — further corroborates the coordinated nature and scope of the misappropriation.

Notwithstanding the strength of its position, Lumos recognizes the inherent value of an efficient, negotiated resolution. A mediated settlement offers both sides the benefits of certainty, confidentiality, and finality. It permits NovaSpark to continue operations — on a legitimate, independent basis — while providing Lumos with the monetary compensation, injunctive protection, and forensic remediation it requires. Lumos is prepared to negotiate in good faith at the September 6 mediation session, and respectfully asks that Judge Voss facilitate a productive discussion toward a fair resolution.

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 optimization. Lumos is led by Chief Executive Officer Priya Chandrasekaran, who co-founded the company and has served as CEO since its inception. Thomas Brightwell serves as General Counsel, and Rachel Fong serves as Vice President of Engineering, overseeing the engineering organization that developed the proprietary technology at issue in this case.

Lumos's flagship product is LumosEdge, a sophisticated analytics platform that employs proprietary ensemble machine-learning models to generate predictive signals for equity and fixed-income portfolio optimization. LumosEdge is used by some of the most prominent institutional asset managers, hedge funds, and proprietary trading desks in the United States and internationally. The platform's competitive advantage derives from its proprietary model architecture, its extensive library of engineered features, its proprietary data-ingestion pipelines, and its curated and labeled training datasets — all of which are at the center of this dispute.

As of the filing date, Lumos employed approximately 340 individuals across its engineering, data science, sales, operations, and corporate functions. In 2022, Lumos achieved annual recurring revenue ("ARR") of approximately $67 million, reflecting strong growth and market adoption of the LumosEdge platform. Lumos has raised a total of $185 million in venture capital funding through its Series D round, a testament to the strength of its technology, its market position, and the proprietary intellectual property that its investors expect to be protected. Notably, Lumos's Series B round of $40 million was led by Ridgeline Ventures (General Partner: Helen Trask, who serves as a board observer), and its Series D round of $72 million — closed in June 2022, just three months before the defendants' coordinated departure — was led by Northstar Growth Equity (Managing Director: Jonathan Holt, who serves as a board member). The Series D valuation reflected the market's assessment of Lumos's competitive moat, a moat that the defendants have now materially compromised.

B. NovaSpark Technologies Inc.

NovaSpark Technologies Inc. is a Delaware-incorporated startup, headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. NovaSpark was incorporated on October 3, 2022 — a date that is critical to this case, as it falls just three days after Defendant Rajiv Anand resigned from Lumos on September 30, 2022. The speed with which NovaSpark was formed after Anand's departure is itself compelling evidence of the premeditated nature of the scheme.

NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks. This market is not merely adjacent to Lumos's core offering — it directly overlaps with the customer base, use cases, and competitive landscape in which Lumos operates. NovaSpark is, in every meaningful sense, a direct competitor to Lumos, and it was built using Lumos's own technology.

On November 15, 2022 — just six weeks after its incorporation — NovaSpark closed a $12 million seed funding round from Blackpine Capital Partners LP (Managing Partner: Franklin Osei). The speed with which NovaSpark secured this level of funding is itself noteworthy, and as discussed below, the pitch deck that Defendant Anand prepared for the Blackpine fundraise references capabilities and development timelines that are only plausible if NovaSpark had access to Lumos's proprietary technology. Defendant Rajiv Anand serves as the CEO and co-founder of NovaSpark.

C. Individual Defendants

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 of his role, Anand had access to Lumos's most sensitive proprietary codebases, model architectures, hyperparameter configurations, and training data. He was entrusted with this access precisely because of the seniority and criticality of his position, and he repaid that trust by systematically exfiltrating these materials in the final days of his employment.

On September 30, 2022, Anand resigned from Lumos, effective immediately. Three days later, on October 3, 2022, he incorporated NovaSpark Technologies Inc. in the State of Delaware (Delaware File Number: 7294183). Anand now serves as CEO of NovaSpark.

Upon joining Lumos in March 2019, Anand executed Lumos's standard Proprietary Information and Inventions Assignment Agreement ("PIIAA"). The PIIAA contains restrictive covenant provisions including: (a) an invention assignment clause, assigning to Lumos all inventions, developments, and works conceived or created during Anand's employment; (b) a confidentiality and non-disclosure provision, surviving for a period of three years following termination of employment; (c) a non-solicitation of employees clause, operative for a period of 12 months following separation from the company; and (d) a covenant not to use or disclose Lumos trade secrets at any time, without any temporal limitation. The PIIAA also includes an obligation to return all company materials — including all copies, in any format — upon termination of employment. Anand breached each and every one of these obligations.

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 known internally as "DataStream." DataStream is the system that ingests alternative financial data from a network of 43 data vendors into the LumosEdge platform. Mallick's intimate knowledge of the DataStream architecture, codebase, and schema definitions made her a valuable engineer — and made her departure, and her theft of the DataStream codebase, particularly damaging to Lumos.

Mallick resigned from Lumos on October 14, 2022. Just three days later, on October 17, 2022, she began employment at NovaSpark Technologies Inc. in the role of Vice President of Engineering. The rapidity of this transition — and the absence of any meaningful gap between departure and re-employment — further confirms the coordinated and premeditated nature of the scheme.

Mallick executed the same form PIIAA upon joining Lumos in June 2020, containing identical restrictive covenant provisions to those in Anand's agreement. Like Anand, she breached each of these obligations.

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 LumosEdge its predictive power and competitive advantage.

Yun resigned from Lumos on October 21, 2022, and commenced employment at NovaSpark as a founding engineer on October 24, 2022 — again, just three days later. As with Mallick, the seamless transition from Lumos to NovaSpark reflects advance planning and coordination with Anand.

Yun executed the same form PIIAA upon joining Lumos in January 2021, containing identical restrictive covenant provisions. Like his co-defendants, he breached each of these obligations.

D. Counsel

Lumos Analytics Inc. is represented in this matter by Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California 94104. The Lumos legal team consists of Marcus Delgado (Responsible Partner), Catherine Bloom (Billing Partner), Wendy Schultz (Lead Associate), and Omar Siddiqui (Working Associate).

Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun are represented by Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, California 94104. The defense team is led by Patricia Whitfield (Lead Partner), with Samuel Gerber (Senior Associate) serving as co-counsel.

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 Lumos has taken reasonable measures to maintain the secrecy of each. The Court's granting of the preliminary injunction on all five categories — after full briefing and oral argument — confirms the strength of Lumos's identification and protection of these trade secrets.

A. LumosEdge Ensemble ML Model Architecture

The first category comprises Lumos's proprietary neural-network topology and hyperparameter configurations that form the core of LumosEdge's predictive signal-generation engine. This model architecture represents years of intensive research and development investment by Lumos's machine-learning engineering team. It encompasses the specific design of the ensemble of models — including the number and type of neural-network layers, the activation functions employed, the regularization techniques applied, the specific hyperparameter values tuned through thousands of iterations of experimentation, and the proprietary methods by which the ensemble's component models are weighted and combined to produce the final predictive signal.

This architecture is not publicly available, nor is it derivable from publicly available sources. It is the product of Lumos's substantial and sustained investment in proprietary R&D, and it constitutes the technological foundation upon which LumosEdge's competitive advantage rests. Defendant Anand, as Principal Engineer — ML Infrastructure, was one of the primary architects of this system, and he exploited that access to transfer model architecture specifications and hyperparameter configuration files to his personal Hollowell Health IT account on September 26, 2022.

B. Proprietary Feature-Engineering Libraries

The second category consists of Lumos's proprietary feature-engineering libraries, comprising 2,847 individually engineered features for financial signal generation. Feature engineering — the process of creating and selecting the specific input variables that feed into a machine-learning model — is widely recognized in the data science community as one of the most labor-intensive, expertise-dependent, and competitively valuable aspects of building a high-performing predictive model.

Each of the 2,847 features in Lumos's library represents a specific insight about the relationships between financial data points that Lumos's data scientists and machine-learning engineers identified, tested, refined, and validated through extensive experimentation. Collectively, these features represent the accumulated expertise, intuition, and iterative learning of Lumos's ML engineering team over multiple years. Recreating this library from scratch would require an enormous investment of time, talent, and computational resources. Defendant Yun had direct access to these libraries through his role as Machine Learning Engineer II, and he downloaded proprietary Jupyter notebooks containing feature-engineering code to his personal Larkspur Technologies account on October 18, 2022.

C. DataStream ETL Pipeline Codebase and Data-Schema Definitions

The third category encompasses the proprietary codebase and schema definitions for the "DataStream" ETL pipeline. DataStream is Lumos's proprietary system for extracting, transforming, and loading alternative financial data into the LumosEdge platform. It covers the ingestion of data from 43 alternative-data vendors, each with unique data formats, APIs, delivery schedules, and quality-assurance requirements. The DataStream system includes not only the code that performs the extraction, transformation, and loading operations, but also the proprietary data-schema definitions that structure how alternative data is organized, normalized, and made available for consumption by LumosEdge's machine-learning models.

DataStream was built and maintained primarily by Defendant Mallick during her tenure as Senior Software Engineer — Data Pipelines. The complexity of integrating 43 different data sources into a unified, reliable, and performant pipeline represents a significant engineering achievement and a substantial competitive advantage. Mallick cloned the entire DataStream ETL pipeline repository — approximately 780 megabytes of code, configuration files, and schema definitions — to a personal external USB drive (serial number WD-4837291) on October 10, 2022, just four days before her resignation.

D. Curated and Labeled Training Dataset

The fourth category consists of Lumos's curated and labeled training dataset, comprising approximately 14.6 terabytes of historical financial and alternative data. This dataset has been assembled, curated, cleaned, and labeled over years, at significant cost, by Lumos's data engineering and data science teams. The value of a machine-learning training dataset lies not merely in the raw data itself — much of which may be available from commercial data vendors — but in the substantial work of curation, cleaning, labeling, and quality assurance that transforms raw data into a training resource capable of producing high-performing predictive models.

Lumos estimates that recreating this dataset from scratch — including the labeling, curation, and quality-assurance processes — would require multiple years and millions of dollars in investment. The dataset represents one of Lumos's most significant competitive assets, as it directly determines the quality of the predictive signals generated by LumosEdge. Defendants had access to portions of this dataset through their respective roles, and forensic evidence confirms the presence of Lumos training data on NovaSpark's systems.

E. Confidential Product Roadmap — LumosEdge 3.0

The fifth category is the confidential product roadmap for LumosEdge 3.0, a 37-page PDF document containing detailed specifications and strategic plans for Lumos's unreleased next-generation product. The roadmap covers the 2023–2025 product development horizon and includes specific technical specifications, feature descriptions, market-positioning strategies, competitive analyses, pricing considerations, and go-to-market timelines. This document was prepared for internal use only and was shared on a strictly need-to-know basis within Lumos.

The competitive value of this roadmap is self-evident: it provides a competitor with advance knowledge of Lumos's strategic direction for the next two to three years. A competitor in possession of this roadmap can anticipate and preempt Lumos's planned product releases, adjust its own development priorities accordingly, and position its products to undercut Lumos in the market. Defendant Anand accessed and forwarded this document to his personal email address (r.anand.personal@vaultmail.com) on September 28, 2022, just two days before his resignation.

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 transfers approximately 3.2 gigabytes of files — including model architecture specifications, hyperparameter configuration files, and related proprietary documentation — from Lumos's internal systems to a personal Hollowell Health IT account. Lumos's IT security logs record the transfer, including the specific files, their sizes, and the destination account.

• September 28, 2022: Anand accesses the confidential 37-page "LumosEdge 3.0 Product Roadmap" PDF on Lumos's internal document-management system and forwards the document to his personal email address, r.anand.personal@vaultmail.com. This transfer is also recorded in Lumos's IT security logs.

• September 30, 2022: Anand submits his resignation from Lumos, effective immediately. He does not provide the standard two-week notice period. He does not return company materials or confirm deletion of Lumos proprietary information from personal devices and accounts, as required by the PIIAA.

• October 3, 2022: Anand incorporates NovaSpark Technologies Inc. in the State of Delaware, receiving Delaware File Number 7294183. The incorporation occurs just three days after his resignation from Lumos, confirming that the formation of NovaSpark was planned well in advance of his departure.

• October 10, 2022: While still employed at Lumos, Defendant Serena Mallick clones the entire DataStream ETL pipeline repository — approximately 780 megabytes of proprietary code, configuration files, and data-schema definitions — to a personal external USB drive, identified by serial number WD-4837291. The cloning event is recorded in Lumos's version-control system and IT security logs.

• October 14, 2022: Mallick submits her resignation from Lumos. Like Anand, she does not return company materials or confirm deletion of Lumos proprietary information upon departure.

• October 17, 2022: Mallick begins employment at NovaSpark Technologies Inc. in the role of Vice President of Engineering. The three-day gap between her resignation and her start date at NovaSpark further underscores the pre-arranged nature of the transition.

• October 18, 2022: While still employed at Lumos (his resignation would not come until three days later), Defendant Derek Yun downloads 47 proprietary Jupyter notebooks containing feature-engineering code, model-training scripts, and related proprietary materials to a personal Larkspur Technologies account. The download activity is recorded in Lumos's IT security logs.

• October 21, 2022: Yun submits his resignation from Lumos. As with Anand and Mallick, he does not return company materials or confirm deletion of proprietary information.

• October 24, 2022: Yun begins employment at NovaSpark Technologies Inc. as a founding engineer, again just three days after his resignation.

• November 15, 2022: NovaSpark closes a $12 million seed funding round from Blackpine Capital Partners LP (Managing Partner: Franklin Osei). The fundraise occurs approximately six weeks after NovaSpark's incorporation — an extraordinarily compressed timeline that, as discussed below, is only plausible if NovaSpark was able to demonstrate technical capabilities derived from Lumos's proprietary technology.

• December 12, 2022: Lumos's IT security team, conducting a routine review of access and transfer logs, identifies anomalous data-exfiltration activity from the final weeks of Anand's, Mallick's, and Yun's employment. The identified anomalies correspond precisely to the September 26, October 10, and October 18 exfiltration events described above.

• December 15, 2022: Lumos retains Calderwood & Harkness LLP to investigate the suspected misappropriation and to pursue all available legal remedies.

B. The Coordination Among Defendants

The evidence demonstrates unequivocally that the departures of Anand, Mallick, and Yun were coordinated in advance. The three departures occurred in rapid succession over a period of just 21 days — Anand on September 30, Mallick on October 14, and Yun on October 21. Each defendant resigned without providing standard notice, and each joined NovaSpark within three days of departing Lumos. The staggered timing — each departure separated by approximately one to two weeks — is consistent with a planned, sequential execution designed to minimize immediate suspicion while ensuring that each defendant completed the transfer of their respective area of proprietary expertise before departing.

Most critically, Anand incorporated NovaSpark on October 3, 2022 — before either Mallick or Yun had even resigned from Lumos. This fact alone demonstrates that the formation of NovaSpark was planned in advance, and that Anand had already secured the commitment of his co-conspirators to join the new venture before they departed Lumos. Deposition testimony, discussed in detail in Section VI below, further confirms this timeline: Anand acknowledged at his deposition that he communicated with both Mallick and Yun about joining NovaSpark prior to their resignations from Lumos, and Mallick confirmed communications with Anand about joining NovaSpark beginning in September 2022, while she was still employed at Lumos.

The division of labor among the three defendants is also telling. Each defendant took materials corresponding to their area of expertise at Lumos: Anand took the ML model architecture and product roadmap; Mallick took the DataStream ETL pipeline codebase; and Yun took the feature-engineering notebooks and model-training scripts. Together, the three defendants removed a comprehensive set of Lumos's core proprietary technology — the precise set of assets needed to build a competing product.

C. Breach of Contractual Obligations

Each of the three individual defendants executed Lumos's standard Proprietary Information and Inventions Assignment Agreement upon hire. The PIIAAs are identical in form and contain the same restrictive covenant provisions. Each defendant breached multiple provisions of their PIIAA, including but not limited to the following:

(a) Assignment of Inventions Clause. Each PIIAA contains a provision assigning to Lumos all inventions, developments, improvements, and works of authorship conceived, created, or reduced to practice during the term of employment. To the extent that any of the defendants contributed to the development of the trade secrets at issue during their employment at Lumos, those contributions are Lumos's property under the assignment clause. The defendants' transfer of these materials to NovaSpark constitutes a violation of this assignment.

(b) Confidentiality and Non-Disclosure Provision. Each PIIAA contains a confidentiality and non-disclosure provision that survives for a period of three years following termination of employment. This provision prohibits the disclosure of Lumos's proprietary and confidential information to any third party without Lumos's prior written consent. Each defendant violated this provision by transferring Lumos proprietary materials to personal devices and accounts and subsequently making those materials available to NovaSpark.

(c) Non-Solicitation of Employees Clause. Each PIIAA contains a non-solicitation of employees clause that is operative for a period of 12 months following separation from the company. The coordinated nature of the departures — in which Anand recruited Mallick and Yun to join NovaSpark while all three were still employed at Lumos — constitutes solicitation in violation of this provision.

(d) Covenant Not to Use or Disclose Trade Secrets. Each PIIAA contains a covenant not to use or disclose Lumos trade secrets at any time, without any temporal limitation. The defendants' use of Lumos's trade secrets to build NovaSpark's competing product is a direct violation of this covenant.

(e) Obligation to Return All Company Materials Upon Termination. Each PIIAA requires the departing employee to return all company materials — including all copies, in any format — upon termination of employment. None of the three defendants returned company materials or confirmed deletion of Lumos proprietary information from their personal devices and accounts upon departure.

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, each attesting to the nature and value of the trade secrets at issue, the circumstances of the defendants' departures, the evidence of exfiltration identified through Lumos's internal IT investigation, and the irreparable harm that Lumos would suffer absent immediate injunctive relief.

On January 23, 2023, the Honorable David Rutherford granted Lumos's application for a TRO. The TRO ordered all defendants to: (a) immediately cease all use, access to, and reliance upon Lumos proprietary information across all five categories of trade secrets; (b) preserve all electronic devices, storage media, and cloud storage accounts that may contain Lumos proprietary information; and (c) refrain from destroying, deleting, altering, or otherwise disposing of any documents, files, or data that may be relevant to this action.

On February 2, 2023, Defendants, through their counsel at Whitfield, Raines & Gerber LLP, filed an opposition to Lumos's motion for a preliminary injunction. The opposition argued, among other things, that the materials taken by defendants did not constitute trade secrets, that the defendants had independently developed NovaSpark's technology, and that Lumos could not demonstrate irreparable harm.

On February 10, 2023, the Court held a hearing on Lumos's motion for preliminary injunction. After considering the papers, declarations, and oral argument from both sides, the Court granted Lumos's motion in full, issuing a preliminary injunction covering all five categories of trade secrets identified by Lumos. The Court's decision to grant the preliminary injunction on all five categories — after adversarial briefing and argument — represents a significant judicial validation of the merits of Lumos's claims.

On February 17, 2023, the Court issued its formal Preliminary Injunction Order, which remains in effect.

B. Forensic Examination

On March 8, 2023, the parties stipulated to the appointment of Brindoval Digital Forensics LLC as the neutral forensic examiner in this case. Brindoval is led by Dr. Irene Chow, Managing Director and Lead Forensic Examiner, and Kevin Barr, Senior Forensic Analyst. Pursuant to the stipulation, the costs of the forensic examination were allocated 60% to Defendants and 40% to Lumos. It is Lumos's position, as discussed in the damages section below, that Defendants should bear 100% of forensic costs given the forensic findings.

Between March 22 and April 14, 2023, Brindoval conducted a comprehensive forensic examination, including the forensic imaging of NovaSpark's production and development servers, the personal devices of all three individual defendants (encompassing three laptops, two mobile phones, and two external storage drives), and the cloud storage accounts identified as repositories for exfiltrated materials (including the Hollowell Health IT account and Larkspur Technologies account used by Anand and Yun, respectively).

On May 1, 2023, Brindoval issued its Preliminary Forensic Report. The findings of that report are discussed in detail in Section VI below, but in summary, the report confirmed the presence of Lumos proprietary materials on NovaSpark's systems and on the personal devices of all three individual defendants. The report further confirmed that the metadata and timestamps associated with the identified files corroborated the specific exfiltration events that Lumos's internal IT investigation had identified.

C. Fact discovery

Fact discovery in this case has been extensive and has yielded significant evidence in support of Lumos's claims. The depositions of all three individual defendants have been completed:

• Rajiv Anand was deposed on May 15, 2023. His testimony is discussed in detail in Section VI.B below.

• Serena Mallick was deposed on June 7, 2023. Her testimony is discussed in detail in Section VI.B below.

• Derek Yun was deposed on June 22, 2023. His testimony is discussed in detail in Section VI.B below.

In addition to depositions, the parties have exchanged extensive written discovery, including Requests for Production of Documents and Special Interrogatories directed to each individual defendant and to NovaSpark Technologies Inc. The documents produced in response to these requests — including NovaSpark's own internal development documents and the Blackpine Capital Partners pitch deck — have provided critical evidence corroborating the use of Lumos's proprietary technology in NovaSpark's product development and fundraising activities.

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 analysis of NovaSpark's systems and the defendants' personal devices and cloud storage accounts. The report's key findings include the following:

Lumos Proprietary Files on NovaSpark Systems. Brindoval's forensic examination confirmed the presence of Lumos proprietary files on NovaSpark's production and development servers. These files included source code, configuration files, data-schema definitions, and other materials corresponding to multiple categories of Lumos's identified trade secrets. The presence of these files on NovaSpark's systems is direct evidence that the misappropriated materials were not merely taken from Lumos but were actively deployed in NovaSpark's product development.

File-Matching Analysis. Brindoval conducted a detailed file-matching analysis comparing the files found on NovaSpark's systems with Lumos's source files. The analysis confirmed that files on NovaSpark's systems were identical or near-identical to Lumos source files. In many cases, the files were byte-for-byte identical, conclusively establishing that they were copies of Lumos's originals rather than independently created works. In other cases, the files showed minor modifications — such as the renaming of variables, the removal of Lumos-identifying comments, or the addition of NovaSpark branding — that are consistent with a deliberate but superficial attempt to disguise the provenance of the code.

Metadata and Timestamp Corroboration. The metadata and timestamp evidence associated with the identified files on NovaSpark's systems and on the defendants' personal devices and cloud storage accounts corroborated the specific exfiltration events that Lumos's internal IT investigation had identified. Specifically, the metadata confirmed the September 26, 2022 transfer by Anand, the October 10, 2022 cloning by Mallick, and the October 18, 2022 download by Yun. This corroboration independently validates the accuracy and reliability of Lumos's internal IT logs.

Materials on Personal Devices and Cloud Accounts. Brindoval also confirmed the presence of Lumos proprietary materials on the defendants' personal devices and cloud storage accounts, including on Anand's personal laptop and Hollowell Health IT account, on Mallick's personal laptop and external USB drive (serial number WD-4837291), and on Yun's personal laptop and Larkspur Technologies account.

In addition to the Brindoval report, Meridian Cybersecurity Advisors Inc. (Senior Consultant: Naveen Kapoor) was retained by Lumos to independently verify Brindoval's findings and to assist in identifying the full scope of proprietary materials present on Defendants' systems. Meridian's independent analysis confirmed Brindoval's findings and further identified additional instances of Lumos-derived materials within NovaSpark's development environment that had not been cataloged in the initial Brindoval report. Meridian's work has also been instrumental in quantifying the scope of the misappropriation for purposes of the damages analysis discussed in Section VIII below.

B. Deposition Testimony

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 the forensic evidence, which confirms that the transferred files included model architecture specifications and hyperparameter configuration files — materials that are at the heart of Lumos's first category of identified trade secrets.

Anand further admitted that he accessed and forwarded the confidential 37-page LumosEdge 3.0 Product Roadmap to his personal email address (r.anand.personal@vaultmail.com) on September 28, 2022. He characterized this transfer as "inadvertent," claiming that he had been reviewing the document and accidentally forwarded it while managing his inbox. This explanation strains credulity given the deliberate and systematic nature of the other exfiltration activities occurring during the same time period.

Critically, Anand acknowledged during his deposition that he began planning NovaSpark before his departure from Lumos. While he attempted to minimize the extent of this pre-departure planning, he conceded that he had begun thinking about the concept for NovaSpark "in the weeks leading up to" his resignation. He also acknowledged communicating with both Mallick and Yun about joining NovaSpark prior to their respective resignations from Lumos. These admissions confirm the coordinated and premeditated nature of the scheme.

When questioned about NovaSpark's rapid product development and the speed with which it secured seed funding, Anand could not credibly explain how NovaSpark developed a competing product at the pace it did without reliance on Lumos's proprietary technology. His explanations — invoking "general industry expertise" and "publicly available research" — were unconvincing in light of the forensic evidence showing Lumos files on NovaSpark's servers.

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 them at NovaSpark. This explanation is directly contradicted by the forensic evidence, which shows DataStream-derived code on NovaSpark's production and development systems — the very systems that Mallick, in her capacity as VP of Engineering, was responsible for overseeing.

Mallick also confirmed during her deposition that she was in communication with Anand about joining NovaSpark beginning in September 2022, while she was still employed at Lumos. She acknowledged that Anand had described his plans for NovaSpark to her and had invited her to join as VP of Engineering before she resigned from Lumos. These admissions corroborate the coordinated nature of the departures and confirm that the formation of NovaSpark was a premeditated scheme rather than a coincidental sequence of independent career decisions.

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 claiming the notebooks were for "personal study" before acknowledging that he used "some" of the notebooks in his initial work at NovaSpark.

Yun later attempted to retract this admission, claiming that he had subsequently "re-created" the work independently and was no longer relying on the Lumos notebooks. This claim of independent re-creation is belied by the forensic evidence, which shows that the files found on NovaSpark's systems bear clear hallmarks of derivation from the Lumos originals, including identical variable names, identical commenting patterns, and identical algorithmic structures.

Yun's testimony further confirms the coordinated nature of the departures: he acknowledged that he was aware of Anand's plans for NovaSpark before his own resignation, and that he had communicated with Anand about joining the new venture.

C. Documentary Evidence

In addition to the forensic and testimonial evidence, the documentary record provides compelling corroboration of Lumos's claims. The key categories of documentary evidence include:

PIIAAs Executed by All Three Defendants. The executed PIIAAs are in the record and contain clear, unambiguous restrictive covenant obligations — including the confidentiality/non-disclosure provision, the non-solicitation clause, the covenant not to use or disclose trade secrets, and the obligation to return all company materials upon termination. These agreements define the contractual duties that each defendant breached.

IT Security Logs. Lumos's IT security logs document the specific exfiltration events with precision, recording the dates, times, files transferred, file sizes, and destination accounts or devices for each of the identified data transfers. The logs for the September 26, October 10, and October 18 events are consistent with and corroborated by the Brindoval forensic findings.

NovaSpark Internal Documents. NovaSpark's own internal documents, produced in response to Lumos's Requests for Production, reflect the use of Lumos-derived technology in NovaSpark's product development. These documents include internal development plans, code-review records, and engineering specifications that reference architectures, data structures, and methodologies that are directly traceable to Lumos's proprietary technology.

Blackpine Capital Partners Pitch Deck. Perhaps the most revealing piece of documentary evidence is the pitch deck that Defendant Anand prepared for NovaSpark's seed funding round with Blackpine Capital Partners LP. The pitch deck, which was produced by NovaSpark in discovery, references specific product capabilities, data-integration capacities (including the number and type of alternative-data sources), and development timelines that are only explainable by access to Lumos's proprietary technology. A startup incorporated in early October 2022 could not plausibly have developed these capabilities and articulated these timelines by mid-November 2022 — when the seed round closed — without a pre-existing foundation of stolen technology. The pitch deck is a smoking gun, connecting the theft of trade secrets directly to NovaSpark's fundraising success.

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 independent economic value from not being generally known to, or readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. The LumosEdge model architecture, the feature-engineering libraries, the DataStream ETL pipeline, the curated training dataset, and the LumosEdge 3.0 product roadmap are each the product of substantial investment and would confer a significant competitive advantage upon any competitor that obtained access to them — as NovaSpark's rapid development trajectory confirms.

Second, Lumos has taken reasonable measures to maintain the secrecy of its proprietary technology. These measures include the PIIAAs executed by all employees, role-based access controls limiting access to sensitive systems and data on a need-to-know basis, confidentiality designations on sensitive documents, IT security protocols including monitoring and logging of data-transfer activities, and physical and electronic security measures at Lumos's facilities. The Court's finding at the preliminary injunction stage that Lumos's measures were reasonable is entitled to significant weight.

Third, Defendants acquired Lumos's trade secrets through improper means — specifically, through the unauthorized copying and transfer of proprietary materials to personal devices and cloud accounts in breach of the defendants' duties of confidentiality — and have used those trade secrets at NovaSpark in the development of a competing product. The forensic evidence, deposition testimony, and documentary record conclusively establish both the acquisition and the use.

The Court's granting of both the TRO and the preliminary injunction on all five categories of trade secrets, after full adversarial briefing and argument, strongly validates the merits of this claim and should give Defendants significant pause as they evaluate the risks of proceeding to trial.

B. Breach of Contract (PIIAA)

Each individual defendant breached multiple provisions of their PIIAA, as detailed in Section IV.C above. The breaches include the confidentiality and non-disclosure provision, the obligation to return all company materials upon termination, the non-solicitation of employees clause, the covenant not to use or disclose trade secrets, and the invention assignment clause. The PIIAAs are clear and unambiguous in their terms, and the evidence of breach is equally clear. Damages flowing from the breach include both actual harm suffered by Lumos and unjust enrichment conferred upon Defendants and NovaSpark.

C. Breach of Duty of Loyalty

Under California law, an employee owes a duty of loyalty to their employer during the term of their employment, which includes a duty not to act in a manner adverse to the employer's interests. Each of the three individual defendants breached this duty by planning and coordinating the formation of a competing enterprise — and the systematic theft of proprietary technology to fuel that enterprise — while still employed by Lumos.

The evidence demonstrates that Anand began planning NovaSpark before his departure from Lumos, that he communicated with Mallick and Yun about joining NovaSpark while all three were still Lumos employees, and that each defendant engaged in specific acts of data exfiltration during the final days of their employment. These activities — conducted covertly and in direct contravention of the defendants' duty to act in Lumos's interests — constitute clear breaches of the duty of loyalty. The fact that Anand incorporated NovaSpark on October 3, 2022, while Mallick and Yun were still employed at Lumos, further underscores the breach, as Anand's planning for NovaSpark necessarily predated his resignation on September 30, 2022.

D. Unfair Business Practices (Cal. Bus. & Prof. Code § 17200)

California Business and Professions Code section 17200 prohibits unfair, unlawful, and fraudulent business practices. Defendants' conduct satisfies all three prongs of this broadly construed statute. The conduct is unlawful because it violates CUTSA, breaches the PIIAAs, and violates the duty of loyalty. The conduct is unfair because it confers an undeserved competitive advantage upon NovaSpark — a startup that was founded on and built with stolen technology — at the expense of Lumos, which invested years and tens of millions of dollars in developing the proprietary technology that NovaSpark now exploits. The conduct is fraudulent because NovaSpark has held itself out to investors, potential customers, and the market as having developed its own technology, when in fact its product is built on a foundation of misappropriated trade secrets.

E. Conversion

Defendants converted Lumos's proprietary information by taking it without authorization, exercising dominion and control over it, and using it for their own benefit and to Lumos's detriment. While the proprietary information at issue is intangible, California courts have recognized claims for conversion of intangible property, including trade secrets and confidential business information, where the property is capable of precise identification and the plaintiff had a right to possess it. Each of the five categories of trade secrets identified by Lumos is precisely identified, and Lumos's right to exclusive possession is established by both its ownership of the information and the PIIAA provisions obligating the defendants to return all company materials upon termination.

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 misappropriation, focusing on the accelerated time-to-market that NovaSpark achieved by virtue of its access to Lumos's proprietary technology.

Specifically, the analysis estimates that NovaSpark saved approximately 14 to 18 months of product development time by having access to Lumos's proprietary ML model architecture, the library of 2,847 individually engineered features, the DataStream ETL pipeline codebase covering 43 alternative-data vendors, the approximately 14.6 terabyte curated and labeled training dataset, and the confidential LumosEdge 3.0 product roadmap. Without these assets, NovaSpark would have been required to build its technology from scratch — recruiting and retaining a team of experienced ML engineers and data scientists, conducting extensive research and experimentation to develop its own model architectures and feature libraries, negotiating and integrating 43 alternative-data vendor relationships, and assembling, curating, and labeling its own training dataset.

This accelerated time-to-market translates to significant economic value for NovaSpark across multiple dimensions. First, it enabled NovaSpark to bring a competing product to market far earlier than it could have done independently, generating revenue and building market presence on an accelerated timeline. Second, it substantially reduced NovaSpark's research and development costs, allowing the startup to conserve capital and allocate resources to sales, marketing, and business development rather than foundational technology development. Third — and perhaps most significantly — it enhanced NovaSpark's fundraising capability. NovaSpark raised $12 million in seed funding from Blackpine Capital Partners LP based in part on a pitch deck that touted capabilities and development timelines that were only achievable through access to Lumos's proprietary technology. The seed funding itself is thus a direct product of the misappropriation.

B. Actual Damages to Lumos

In addition to the unjust enrichment analysis, Lumos has suffered and continues to suffer substantial actual damages as a result of Defendants' misappropriation. These damages include:

Competitive Harm. The introduction into the market of a rival product built on Lumos's own technology has caused direct competitive harm to Lumos. NovaSpark is competing for the same customers — institutional asset managers, hedge funds, and proprietary trading desks — with a product that replicates the core capabilities of LumosEdge. Every dollar of revenue that NovaSpark earns in this market represents a potential diversion from Lumos.

Risk of Customer Diversion. The risk of customer diversion is particularly acute because NovaSpark's product, built on Lumos's technology, is capable of offering comparable functionality. Lumos's sales team has already encountered competitive situations in which NovaSpark is being evaluated alongside LumosEdge. The risk that existing Lumos customers may be lured away by a competitor offering Lumos-equivalent technology at a potentially lower price point is a concrete and ongoing harm.

Harm to Investor Relationships and Enterprise Value. Lumos raised $72 million in its Series D round from Northstar Growth Equity in June 2022 — just three months before the defendants' coordinated departure. The Series D valuation was predicated on the strength of Lumos's competitive moat, including the proprietary technology that the defendants subsequently misappropriated. The breach of that competitive moat has damaged Lumos's relationship with its investors and has the potential to reduce the company's enterprise value in future financing rounds or in a potential exit transaction. Lumos's board of directors and investors view this litigation — and its resolution — as critical to the protection of shareholder value.

Loss of Roadmap Confidentiality. The theft of the LumosEdge 3.0 product roadmap has deprived Lumos of the confidential strategic advantage represented by that document. NovaSpark now possesses advance knowledge of Lumos's product development plans through 2025, enabling it to anticipate and preempt Lumos's planned innovations. This harm cannot be fully quantified in monetary terms but represents a significant competitive setback.

C. Attorneys' Fees and Costs

Lumos has incurred and continues to incur substantial attorneys' fees and costs in connection with this litigation. CUTSA authorizes fee-shifting in cases of willful and malicious misappropriation under California Civil Code section 3426.4, and the evidence in this case amply supports a finding of willfulness and malice. The misappropriation was not inadvertent or accidental — it was a deliberate, coordinated, and premeditated scheme executed over a period of weeks.

In addition to Calderwood & Harkness LLP's legal fees, Lumos has incurred the following expert and forensic costs:

• Brindoval Digital Forensics LLC — Total forensic examination fees: $218,600. Under the current cost-allocation stipulation, Lumos's share is 40%, or $87,440. However, given the forensic findings confirming the misappropriation, Lumos's position is that Defendants should bear 100% of the forensic costs.

• Meridian Cybersecurity Advisors Inc. — Independent verification and damages analysis fees: $94,300, borne entirely by Lumos.

Finally, Lumos notes the potential for exemplary damages of up to twice the amount of actual damages for willful and malicious misappropriation, as authorized by California Civil Code section 3426.3(c). The evidence of willfulness and malice in this case — a coordinated, premeditated scheme involving three defendants, pre-departure planning, systematic exfiltration of proprietary materials, immediate deployment of those materials at a competing startup, and use of the stolen technology to secure $12 million in venture funding — is precisely the type of conduct that the exemplary damages provision was designed to address. The potential exposure to exemplary damages should be a significant factor in Defendants' evaluation of settlement.

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 $12.4 million, appropriately adjusted for litigation risk, the time value of money, and the benefit of certainty that a negotiated resolution provides. Lumos recognizes that a mediated settlement necessarily involves compromise on both sides, and Lumos's specific target range for the monetary component of a settlement will be discussed during the mediation session with the assistance of Judge Voss. Payment of the agreed monetary amount should be made within 30 days of the execution of a definitive settlement agreement.

B. Permanent Injunctive Relief

Lumos seeks a stipulated permanent injunction — entered by the Court as a consent order — permanently enjoining all Defendants and NovaSpark Technologies Inc. from possessing, using, disclosing, distributing, or in any way exploiting any Lumos trade secrets across all five identified categories. A stipulated injunction entered as a court order is essential to ensure enforceability, including the availability of contempt sanctions in the event of a violation.

Lumos recognizes that NovaSpark has employees and investors beyond the individual defendants and does not seek the shutdown of NovaSpark as a condition of settlement. NovaSpark may continue its operations, but only to the extent that its products and services are built entirely upon independently created technology or publicly available information. The stipulated injunction should include provisions requiring NovaSpark to certify compliance and to establish internal controls to prevent any future use of Lumos proprietary information.

C. Forensic Remediation

Lumos requires complete forens

THIS MEDIATION BRIEF IS CONFIDENTIAL AND PRIVILEGED. IT IS SUBMITTED SOLELY FOR USE IN CONNECTION WITH MEDIATION AND IS NOT TO BE DISCLOSED TO ANY PARTY, NON-PARTY, OR THE COURT, EXCEPT AS PERMITTED BY CALIFORNIA EVIDENCE CODE § 1119 ET SEQ.
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Submitted to: Hon. Eleanor Voss (Ret.), Mediator Tidewater Mediation Group
Date of Brief: August 30, 2023
Prepared by:
CALDERWOOD & HARKNESS LLP 555 California Street, 40th Floor San Francisco, CA 94104
Marcus Delgado, Responsible Partner Catherine Bloom, Billing Partner Wendy Schultz, Lead Associate Omar Siddiqui, Working Associate
Attorneys for Plaintiff Lumos Analytics Inc. 4700 Orchard Parkway, Suite 300 San Jose, CA 95134
THIS MEDIATION BRIEF IS CONFIDENTIAL AND PRIVILEGED. IT IS SUBMITTED SOLELY FOR USE IN CONNECTION WITH MEDIATION AND IS NOT TO BE DISCLOSED TO ANY PARTY, NON-PARTY, OR THE COURT, EXCEPT AS PERMITTED BY CALIFORNIA EVIDENCE CODE § 1119 ET SEQ.
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 strength of Lumos's legal claims, the scope of damages at issue, and the framework within which Lumos is prepared to negotiate a resolution.
Through this mediation, Lumos seeks to resolve this trade-secret misappropriation dispute through a negotiated resolution that provides three essential elements: (1) meaningful monetary compensation reflecting the substantial unjust enrichment conferred upon Defendants by their coordinated theft of Lumos's proprietary technology; (2) permanent injunctive relief, entered as a court order, to ensure that Defendants permanently cease any use, possession, or exploitation of Lumos's trade secrets; and (3) comprehensive forensic remediation, independently verified, to undo the damage caused by Defendants' systematic misappropriation and to restore the confidentiality of Lumos's proprietary information to the fullest extent possible.
At its core, this case presents a straightforward set of facts. Three former senior engineers at Lumos — Rajiv Anand, Serena Mallick, and Derek Yun — departed the company in rapid, coordinated succession over a three-week period in late September and October 2022. Their departures were not spontaneous. Before and during their final weeks of employment, each defendant methodically transferred Lumos's most sensitive proprietary materials — including proprietary machine-learning algorithms, customer data pipelines, confidential product roadmap materials, and other trade secrets — to personal devices and cloud storage accounts outside Lumos's control. Within days of their respective resignations, each defendant joined NovaSpark Technologies Inc. ("NovaSpark"), a competing startup that Defendant Anand had incorporated just three days after his own resignation from Lumos. NovaSpark then immediately deployed those misappropriated trade secrets to build a competing product and to raise $12 million in seed funding from Blackpine Capital Partners LP — funding that was secured, at least in significant part, on the back of capabilities and timelines that are only explainable by NovaSpark's access to Lumos's stolen technology.
This case presents strong facts for Lumos on every claim. The forensic evidence, obtained through the court-appointed neutral forensic examiner, Brindoval Digital Forensics LLC, confirms the presence of Lumos proprietary materials on NovaSpark's systems and on the personal devices and cloud accounts of all three individual defendants. The deposition testimony of each individual defendant includes admissions regarding the specific exfiltration events, the pre-departure coordination among the defendants, and the use of Lumos materials at NovaSpark. The documentary evidence — including the executed Proprietary Information and Inventions Assignment Agreements ("PIIAAs"), IT security logs, NovaSpark's own internal documents produced in discovery, and the Blackpine Capital Partners pitch deck — further corroborates the coordinated nature and scope of the misappropriation.
Notwithstanding the strength of its position, Lumos recognizes the inherent value of an efficient, negotiated resolution. A mediated settlement offers both sides the benefits of certainty, confidentiality, and finality. It permits NovaSpark to continue operations — on a legitimate, independent basis — while providing Lumos with the monetary compensation, injunctive protection, and forensic remediation it requires. Lumos is prepared to negotiate in good faith at the September 6 mediation session, and respectfully asks that Judge Voss facilitate a productive discussion toward a fair resolution.
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 optimization. Lumos is led by Chief Executive Officer Priya Chandrasekaran, who co-founded the company and has served as CEO since its inception. Thomas Brightwell serves as General Counsel, and Rachel Fong serves as Vice President of Engineering, overseeing the engineering organization that developed the proprietary technology at issue in this case.
Lumos's flagship product is LumosEdge, a sophisticated analytics platform that employs proprietary ensemble machine-learning models to generate predictive signals for equity and fixed-income portfolio optimization. LumosEdge is used by some of the most prominent institutional asset managers, hedge funds, and proprietary trading desks in the United States and internationally. The platform's competitive advantage derives from its proprietary model architecture, its extensive library of engineered features, its proprietary data-ingestion pipelines, and its curated and labeled training datasets — all of which are at the center of this dispute.
As of the filing date, Lumos employed approximately 340 individuals across its engineering, data science, sales, operations, and corporate functions. In 2022, Lumos achieved annual recurring revenue ("ARR") of approximately $67 million, reflecting strong growth and market adoption of the LumosEdge platform. Lumos has raised a total of $185 million in venture capital funding through its Series D round, a testament to the strength of its technology, its market position, and the proprietary intellectual property that its investors expect to be protected. Notably, Lumos's Series B round of $40 million was led by Ridgeline Ventures (General Partner: Helen Trask, who serves as a board observer), and its Series D round of $72 million — closed in June 2022, just three months before the defendants' coordinated departure — was led by Northstar Growth Equity (Managing Director: Jonathan Holt, who serves as a board member). The Series D valuation reflected the market's assessment of Lumos's competitive moat, a moat that the defendants have now materially compromised.
B. NovaSpark Technologies Inc.
NovaSpark Technologies Inc. is a Delaware-incorporated startup, headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. NovaSpark was incorporated on October 3, 2022 — a date that is critical to this case, as it falls just three days after Defendant Rajiv Anand resigned from Lumos on September 30, 2022. The speed with which NovaSpark was formed after Anand's departure is itself compelling evidence of the premeditated nature of the scheme.
NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks. This market is not merely adjacent to Lumos's core offering — it directly overlaps with the customer base, use cases, and competitive landscape in which Lumos operates. NovaSpark is, in every meaningful sense, a direct competitor to Lumos, and it was built using Lumos's own technology.
On November 15, 2022 — just six weeks after its incorporation — NovaSpark closed a $12 million seed funding round from Blackpine Capital Partners LP (Managing Partner: Franklin Osei). The speed with which NovaSpark secured this level of funding is itself noteworthy, and as discussed below, the pitch deck that Defendant Anand prepared for the Blackpine fundraise references capabilities and development timelines that are only plausible if NovaSpark had access to Lumos's proprietary technology. Defendant Rajiv Anand serves as the CEO and co-founder of NovaSpark.
C. Individual Defendants
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 of his role, Anand had access to Lumos's most sensitive proprietary codebases, model architectures, hyperparameter configurations, and training data. He was entrusted with this access precisely because of the seniority and criticality of his position, and he repaid that trust by systematically exfiltrating these materials in the final days of his employment.
On September 30, 2022, Anand resigned from Lumos, effective immediately. Three days later, on October 3, 2022, he incorporated NovaSpark Technologies Inc. in the State of Delaware (Delaware File Number: 7294183). Anand now serves as CEO of NovaSpark.
Upon joining Lumos in March 2019, Anand executed Lumos's standard Proprietary Information and Inventions Assignment Agreement ("PIIAA"). The PIIAA contains restrictive covenant provisions including: (a) an invention assignment clause, assigning to Lumos all inventions, developments, and works conceived or created during Anand's employment; (b) a confidentiality and non-disclosure provision, surviving for a period of three years following termination of employment; (c) a non-solicitation of employees clause, operative for a period of 12 months following separation from the company; and (d) a covenant not to use or disclose Lumos trade secrets at any time, without any temporal limitation. The PIIAA also includes an obligation to return all company materials — including all copies, in any format — upon termination of employment. Anand breached each and every one of these obligations.
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 known internally as "DataStream." DataStream is the system that ingests alternative financial data from a network of 43 data vendors into the LumosEdge platform. Mallick's intimate knowledge of the DataStream architecture, codebase, and schema definitions made her a valuable engineer — and made her departure, and her theft of the DataStream codebase, particularly damaging to Lumos.
Mallick resigned from Lumos on October 14, 2022. Just three days later, on October 17, 2022, she began employment at NovaSpark Technologies Inc. in the role of Vice President of Engineering. The rapidity of this transition — and the absence of any meaningful gap between departure and re-employment — further confirms the coordinated and premeditated nature of the scheme.
Mallick executed the same form PIIAA upon joining Lumos in June 2020, containing identical restrictive covenant provisions to those in Anand's agreement. Like Anand, she breached each of these obligations.
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 LumosEdge its predictive power and competitive advantage.
Yun resigned from Lumos on October 21, 2022, and commenced employment at NovaSpark as a founding engineer on October 24, 2022 — again, just three days later. As with Mallick, the seamless transition from Lumos to NovaSpark reflects advance planning and coordination with Anand.
Yun executed the same form PIIAA upon joining Lumos in January 2021, containing identical restrictive covenant provisions. Like his co-defendants, he breached each of these obligations.
D. Counsel
Lumos Analytics Inc. is represented in this matter by Calderwood & Harkness LLP, 555 California Street, 40th Floor, San Francisco, California 94104. The Lumos legal team consists of Marcus Delgado (Responsible Partner), Catherine Bloom (Billing Partner), Wendy Schultz (Lead Associate), and Omar Siddiqui (Working Associate).
Defendants NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun are represented by Whitfield, Raines & Gerber LLP, 235 Montgomery Street, Suite 1800, San Francisco, California 94104. The defense team is led by Patricia Whitfield (Lead Partner), with Samuel Gerber (Senior Associate) serving as co-counsel.
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 Lumos has taken reasonable measures to maintain the secrecy of each. The Court's granting of the preliminary injunction on all five categories — after full briefing and oral argument — confirms the strength of Lumos's identification and protection of these trade secrets.
A. LumosEdge Ensemble ML Model Architecture
The first category comprises Lumos's proprietary neural-network topology and hyperparameter configurations that form the core of LumosEdge's predictive signal-generation engine. This model architecture represents years of intensive research and development investment by Lumos's machine-learning engineering team. It encompasses the specific design of the ensemble of models — including the number and type of neural-network layers, the activation functions employed, the regularization techniques applied, the specific hyperparameter values tuned through thousands of iterations of experimentation, and the proprietary methods by which the ensemble's component models are weighted and combined to produce the final predictive signal.
This architecture is not publicly available, nor is it derivable from publicly available sources. It is the product of Lumos's substantial and sustained investment in proprietary R&D, and it constitutes the technological foundation upon which LumosEdge's competitive advantage rests. Defendant Anand, as Principal Engineer — ML Infrastructure, was one of the primary architects of this system, and he exploited that access to transfer model architecture specifications and hyperparameter configuration files to his personal Hollowell Health IT account on September 26, 2022.
B. Proprietary Feature-Engineering Libraries
The second category consists of Lumos's proprietary feature-engineering libraries, comprising 2,847 individually engineered features for financial signal generation. Feature engineering — the process of creating and selecting the specific input variables that feed into a machine-learning model — is widely recognized in the data science community as one of the most labor-intensive, expertise-dependent, and competitively valuable aspects of building a high-performing predictive model.
Each of the 2,847 features in Lumos's library represents a specific insight about the relationships between financial data points that Lumos's data scientists and machine-learning engineers identified, tested, refined, and validated through extensive experimentation. Collectively, these features represent the accumulated expertise, intuition, and iterative learning of Lumos's ML engineering team over multiple years. Recreating this library from scratch would require an enormous investment of time, talent, and computational resources. Defendant Yun had direct access to these libraries through his role as Machine Learning Engineer II, and he downloaded proprietary Jupyter notebooks containing feature-engineering code to his personal Larkspur Technologies account on October 18, 2022.
C. DataStream ETL Pipeline Codebase and Data-Schema Definitions
The third category encompasses the proprietary codebase and schema definitions for the "DataStream" ETL pipeline. DataStream is Lumos's proprietary system for extracting, transforming, and loading alternative financial data into the LumosEdge platform. It covers the ingestion of data from 43 alternative-data vendors, each with unique data formats, APIs, delivery schedules, and quality-assurance requirements. The DataStream system includes not only the code that performs the extraction, transformation, and loading operations, but also the proprietary data-schema definitions that structure how alternative data is organized, normalized, and made available for consumption by LumosEdge's machine-learning models.
DataStream was built and maintained primarily by Defendant Mallick during her tenure as Senior Software Engineer — Data Pipelines. The complexity of integrating 43 different data sources into a unified, reliable, and performant pipeline represents a significant engineering achievement and a substantial competitive advantage. Mallick cloned the entire DataStream ETL pipeline repository — approximately 780 megabytes of code, configuration files, and schema definitions — to a personal external USB drive (serial number WD-4837291) on October 10, 2022, just four days before her resignation.
D. Curated and Labeled Training Dataset
The fourth category consists of Lumos's curated and labeled training dataset, comprising approximately 14.6 terabytes of historical financial and alternative data. This dataset has been assembled, curated, cleaned, and labeled over years, at significant cost, by Lumos's data engineering and data science teams. The value of a machine-learning training dataset lies not merely in the raw data itself — much of which may be available from commercial data vendors — but in the substantial work of curation, cleaning, labeling, and quality assurance that transforms raw data into a training resource capable of producing high-performing predictive models.
Lumos estimates that recreating this dataset from scratch — including the labeling, curation, and quality-assurance processes — would require multiple years and millions of dollars in investment. The dataset represents one of Lumos's most significant competitive assets, as it directly determines the quality of the predictive signals generated by LumosEdge. Defendants had access to portions of this dataset through their respective roles, and forensic evidence confirms the presence of Lumos training data on NovaSpark's systems.
E. Confidential Product Roadmap — LumosEdge 3.0
The fifth category is the confidential product roadmap for LumosEdge 3.0, a 37-page PDF document containing detailed specifications and strategic plans for Lumos's unreleased next-generation product. The roadmap covers the 2023–2025 product development horizon and includes specific technical specifications, feature descriptions, market-positioning strategies, competitive analyses, pricing considerations, and go-to-market timelines. This document was prepared for internal use only and was shared on a strictly need-to-know basis within Lumos.
The competitive value of this roadmap is self-evident: it provides a competitor with advance knowledge of Lumos's strategic direction for the next two to three years. A competitor in possession of this roadmap can anticipate and preempt Lumos's planned product releases, adjust its own development priorities accordingly, and position its products to undercut Lumos in the market. Defendant Anand accessed and forwarded this document to his personal email address (r.anand.personal@vaultmail.com) on September 28, 2022, just two days before his resignation.
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 transfers approximately 3.2 gigabytes of files — including model architecture specifications, hyperparameter configuration files, and related proprietary documentation — from Lumos's internal systems to a personal Hollowell Health IT account. Lumos's IT security logs record the transfer, including the specific files, their sizes, and the destination account.
• September 28, 2022: Anand accesses the confidential 37-page "LumosEdge 3.0 Product Roadmap" PDF on Lumos's internal document-management system and forwards the document to his personal email address, r.anand.personal@vaultmail.com. This transfer is also recorded in Lumos's IT security logs.
• September 30, 2022: Anand submits his resignation from Lumos, effective immediately. He does not provide the standard two-week notice period. He does not return company materials or confirm deletion of Lumos proprietary information from personal devices and accounts, as required by the PIIAA.
• October 3, 2022: Anand incorporates NovaSpark Technologies Inc. in the State of Delaware, receiving Delaware File Number 7294183. The incorporation occurs just three days after his resignation from Lumos, confirming that the formation of NovaSpark was planned well in advance of his departure.
• October 10, 2022: While still employed at Lumos, Defendant Serena Mallick clones the entire DataStream ETL pipeline repository — approximately 780 megabytes of proprietary code, configuration files, and data-schema definitions — to a personal external USB drive, identified by serial number WD-4837291. The cloning event is recorded in Lumos's version-control system and IT security logs.
• October 14, 2022: Mallick submits her resignation from Lumos. Like Anand, she does not return company materials or confirm deletion of Lumos proprietary information upon departure.
• October 17, 2022: Mallick begins employment at NovaSpark Technologies Inc. in the role of Vice President of Engineering. The three-day gap between her resignation and her start date at NovaSpark further underscores the pre-arranged nature of the transition.
• October 18, 2022: While still employed at Lumos (his resignation would not come until three days later), Defendant Derek Yun downloads 47 proprietary Jupyter notebooks containing feature-engineering code, model-training scripts, and related proprietary materials to a personal Larkspur Technologies account. The download activity is recorded in Lumos's IT security logs.
• October 21, 2022: Yun submits his resignation from Lumos. As with Anand and Mallick, he does not return company materials or confirm deletion of proprietary information.
• October 24, 2022: Yun begins employment at NovaSpark Technologies Inc. as a founding engineer, again just three days after his resignation.
• November 15, 2022: NovaSpark closes a $12 million seed funding round from Blackpine Capital Partners LP (Managing Partner: Franklin Osei). The fundraise occurs approximately six weeks after NovaSpark's incorporation — an extraordinarily compressed timeline that, as discussed below, is only plausible if NovaSpark was able to demonstrate technical capabilities derived from Lumos's proprietary technology.
• December 12, 2022: Lumos's IT security team, conducting a routine review of access and transfer logs, identifies anomalous data-exfiltration activity from the final weeks of Anand's, Mallick's, and Yun's employment. The identified anomalies correspond precisely to the September 26, October 10, and October 18 exfiltration events described above.
• December 15, 2022: Lumos retains Calderwood & Harkness LLP to investigate the suspected misappropriation and to pursue all available legal remedies.
B. The Coordination Among Defendants
The evidence demonstrates unequivocally that the departures of Anand, Mallick, and Yun were coordinated in advance. The three departures occurred in rapid succession over a period of just 21 days — Anand on September 30, Mallick on October 14, and Yun on October 21. Each defendant resigned without providing standard notice, and each joined NovaSpark within three days of departing Lumos. The staggered timing — each departure separated by approximately one to two weeks — is consistent with a planned, sequential execution designed to minimize immediate suspicion while ensuring that each defendant completed the transfer of their respective area of proprietary expertise before departing.
Most critically, Anand incorporated NovaSpark on October 3, 2022 — before either Mallick or Yun had even resigned from Lumos. This fact alone demonstrates that the formation of NovaSpark was planned in advance, and that Anand had already secured the commitment of his co-conspirators to join the new venture before they departed Lumos. Deposition testimony, discussed in detail in Section VI below, further confirms this timeline: Anand acknowledged at his deposition that he communicated with both Mallick and Yun about joining NovaSpark prior to their resignations from Lumos, and Mallick confirmed communications with Anand about joining NovaSpark beginning in September 2022, while she was still employed at Lumos.
The division of labor among the three defendants is also telling. Each defendant took materials corresponding to their area of expertise at Lumos: Anand took the ML model architecture and product roadmap; Mallick took the DataStream ETL pipeline codebase; and Yun took the feature-engineering notebooks and model-training scripts. Together, the three defendants removed a comprehensive set of Lumos's core proprietary technology — the precise set of assets needed to build a competing product.
C. Breach of Contractual Obligations
Each of the three individual defendants executed Lumos's standard Proprietary Information and Inventions Assignment Agreement upon hire. The PIIAAs are identical in form and contain the same restrictive covenant provisions. Each defendant breached multiple provisions of their PIIAA, including but not limited to the following:
(a) Assignment of Inventions Clause. Each PIIAA contains a provision assigning to Lumos all inventions, developments, improvements, and works of authorship conceived, created, or reduced to practice during the term of employment. To the extent that any of the defendants contributed to the development of the trade secrets at issue during their employment at Lumos, those contributions are Lumos's property under the assignment clause. The defendants' transfer of these materials to NovaSpark constitutes a violation of this assignment.
(b) Confidentiality and Non-Disclosure Provision. Each PIIAA contains a confidentiality and non-disclosure provision that survives for a period of three years following termination of employment. This provision prohibits the disclosure of Lumos's proprietary and confidential information to any third party without Lumos's prior written consent. Each defendant violated this provision by transferring Lumos proprietary materials to personal devices and accounts and subsequently making those materials available to NovaSpark.
(c) Non-Solicitation of Employees Clause. Each PIIAA contains a non-solicitation of employees clause that is operative for a period of 12 months following separation from the company. The coordinated nature of the departures — in which Anand recruited Mallick and Yun to join NovaSpark while all three were still employed at Lumos — constitutes solicitation in violation of this provision.
(d) Covenant Not to Use or Disclose Trade Secrets. Each PIIAA contains a covenant not to use or disclose Lumos trade secrets at any time, without any temporal limitation. The defendants' use of Lumos's trade secrets to build NovaSpark's competing product is a direct violation of this covenant.
(e) Obligation to Return All Company Materials Upon Termination. Each PIIAA requires the departing employee to return all company materials — including all copies, in any format — upon termination of employment. None of the three defendants returned company materials or confirmed deletion of Lumos proprietary information from their personal devices and accounts upon departure.
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, each attesting to the nature and value of the trade secrets at issue, the circumstances of the defendants' departures, the evidence of exfiltration identified through Lumos's internal IT investigation, and the irreparable harm that Lumos would suffer absent immediate injunctive relief.
On January 23, 2023, the Honorable David Rutherford granted Lumos's application for a TRO. The TRO ordered all defendants to: (a) immediately cease all use, access to, and reliance upon Lumos proprietary information across all five categories of trade secrets; (b) preserve all electronic devices, storage media, and cloud storage accounts that may contain Lumos proprietary information; and (c) refrain from destroying, deleting, altering, or otherwise disposing of any documents, files, or data that may be relevant to this action.
On February 2, 2023, Defendants, through their counsel at Whitfield, Raines & Gerber LLP, filed an opposition to Lumos's motion for a preliminary injunction. The opposition argued, among other things, that the materials taken by defendants did not constitute trade secrets, that the defendants had independently developed NovaSpark's technology, and that Lumos could not demonstrate irreparable harm.
On February 10, 2023, the Court held a hearing on Lumos's motion for preliminary injunction. After considering the papers, declarations, and oral argument from both sides, the Court granted Lumos's motion in full, issuing a preliminary injunction covering all five categories of trade secrets identified by Lumos. The Court's decision to grant the preliminary injunction on all five categories — after adversarial briefing and argument — represents a significant judicial validation of the merits of Lumos's claims.
On February 17, 2023, the Court issued its formal Preliminary Injunction Order, which remains in effect.
B. Forensic Examination
On March 8, 2023, the parties stipulated to the appointment of Brindoval Digital Forensics LLC as the neutral forensic examiner in this case. Brindoval is led by Dr. Irene Chow, Managing Director and Lead Forensic Examiner, and Kevin Barr, Senior Forensic Analyst. Pursuant to the stipulation, the costs of the forensic examination were allocated 60% to Defendants and 40% to Lumos. It is Lumos's position, as discussed in the damages section below, that Defendants should bear 100% of forensic costs given the forensic findings.
Between March 22 and April 14, 2023, Brindoval conducted a comprehensive forensic examination, including the forensic imaging of NovaSpark's production and development servers, the personal devices of all three individual defendants (encompassing three laptops, two mobile phones, and two external storage drives), and the cloud storage accounts identified as repositories for exfiltrated materials (including the Hollowell Health IT account and Larkspur Technologies account used by Anand and Yun, respectively).
On May 1, 2023, Brindoval issued its Preliminary Forensic Report. The findings of that report are discussed in detail in Section VI below, but in summary, the report confirmed the presence of Lumos proprietary materials on NovaSpark's systems and on the personal devices of all three individual defendants. The report further confirmed that the metadata and timestamps associated with the identified files corroborated the specific exfiltration events that Lumos's internal IT investigation had identified.
C. Fact discovery
Fact discovery in this case has been extensive and has yielded significant evidence in support of Lumos's claims. The depositions of all three individual defendants have been completed:
• Rajiv Anand was deposed on May 15, 2023. His testimony is discussed in detail in Section VI.B below.
• Serena Mallick was deposed on June 7, 2023. Her testimony is discussed in detail in Section VI.B below.
• Derek Yun was deposed on June 22, 2023. His testimony is discussed in detail in Section VI.B below.
In addition to depositions, the parties have exchanged extensive written discovery, including Requests for Production of Documents and Special Interrogatories directed to each individual defendant and to NovaSpark Technologies Inc. The documents produced in response to these requests — including NovaSpark's own internal development documents and the Blackpine Capital Partners pitch deck — have provided critical evidence corroborating the use of Lumos's proprietary technology in NovaSpark's product development and fundraising activities.
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 analysis of NovaSpark's systems and the defendants' personal devices and cloud storage accounts. The report's key findings include the following:
Lumos Proprietary Files on NovaSpark Systems. Brindoval's forensic examination confirmed the presence of Lumos proprietary files on NovaSpark's production and development servers. These files included source code, configuration files, data-schema definitions, and other materials corresponding to multiple categories of Lumos's identified trade secrets. The presence of these files on NovaSpark's systems is direct evidence that the misappropriated materials were not merely taken from Lumos but were actively deployed in NovaSpark's product development.
File-Matching Analysis. Brindoval conducted a detailed file-matching analysis comparing the files found on NovaSpark's systems with Lumos's source files. The analysis confirmed that files on NovaSpark's systems were identical or near-identical to Lumos source files. In many cases, the files were byte-for-byte identical, conclusively establishing that they were copies of Lumos's originals rather than independently created works. In other cases, the files showed minor modifications — such as the renaming of variables, the removal of Lumos-identifying comments, or the addition of NovaSpark branding — that are consistent with a deliberate but superficial attempt to disguise the provenance of the code.
Metadata and Timestamp Corroboration. The metadata and timestamp evidence associated with the identified files on NovaSpark's systems and on the defendants' personal devices and cloud storage accounts corroborated the specific exfiltration events that Lumos's internal IT investigation had identified. Specifically, the metadata confirmed the September 26, 2022 transfer by Anand, the October 10, 2022 cloning by Mallick, and the October 18, 2022 download by Yun. This corroboration independently validates the accuracy and reliability of Lumos's internal IT logs.
Materials on Personal Devices and Cloud Accounts. Brindoval also confirmed the presence of Lumos proprietary materials on the defendants' personal devices and cloud storage accounts, including on Anand's personal laptop and Hollowell Health IT account, on Mallick's personal laptop and external USB drive (serial number WD-4837291), and on Yun's personal laptop and Larkspur Technologies account.
In addition to the Brindoval report, Meridian Cybersecurity Advisors Inc. (Senior Consultant: Naveen Kapoor) was retained by Lumos to independently verify Brindoval's findings and to assist in identifying the full scope of proprietary materials present on Defendants' systems. Meridian's independent analysis confirmed Brindoval's findings and further identified additional instances of Lumos-derived materials within NovaSpark's development environment that had not been cataloged in the initial Brindoval report. Meridian's work has also been instrumental in quantifying the scope of the misappropriation for purposes of the damages analysis discussed in Section VIII below.
B. Deposition Testimony
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 the forensic evidence, which confirms that the transferred files included model architecture specifications and hyperparameter configuration files — materials that are at the heart of Lumos's first category of identified trade secrets.
Anand further admitted that he accessed and forwarded the confidential 37-page LumosEdge 3.0 Product Roadmap to his personal email address (r.anand.personal@vaultmail.com) on September 28, 2022. He characterized this transfer as "inadvertent," claiming that he had been reviewing the document and accidentally forwarded it while managing his inbox. This explanation strains credulity given the deliberate and systematic nature of the other exfiltration activities occurring during the same time period.
Critically, Anand acknowledged during his deposition that he began planning NovaSpark before his departure from Lumos. While he attempted to minimize the extent of this pre-departure planning, he conceded that he had begun thinking about the concept for NovaSpark "in the weeks leading up to" his resignation. He also acknowledged communicating with both Mallick and Yun about joining NovaSpark prior to their respective resignations from Lumos. These admissions confirm the coordinated and premeditated nature of the scheme.
When questioned about NovaSpark's rapid product development and the speed with which it secured seed funding, Anand could not credibly explain how NovaSpark developed a competing product at the pace it did without reliance on Lumos's proprietary technology. His explanations — invoking "general industry expertise" and "publicly available research" — were unconvincing in light of the forensic evidence showing Lumos files on NovaSpark's servers.
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 them at NovaSpark. This explanation is directly contradicted by the forensic evidence, which shows DataStream-derived code on NovaSpark's production and development systems — the very systems that Mallick, in her capacity as VP of Engineering, was responsible for overseeing.
Mallick also confirmed during her deposition that she was in communication with Anand about joining NovaSpark beginning in September 2022, while she was still employed at Lumos. She acknowledged that Anand had described his plans for NovaSpark to her and had invited her to join as VP of Engineering before she resigned from Lumos. These admissions corroborate the coordinated nature of the departures and confirm that the formation of NovaSpark was a premeditated scheme rather than a coincidental sequence of independent career decisions.
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 claiming the notebooks were for "personal study" before acknowledging that he used "some" of the notebooks in his initial work at NovaSpark.
Yun later attempted to retract this admission, claiming that he had subsequently "re-created" the work independently and was no longer relying on the Lumos notebooks. This claim of independent re-creation is belied by the forensic evidence, which shows that the files found on NovaSpark's systems bear clear hallmarks of derivation from the Lumos originals, including identical variable names, identical commenting patterns, and identical algorithmic structures.
Yun's testimony further confirms the coordinated nature of the departures: he acknowledged that he was aware of Anand's plans for NovaSpark before his own resignation, and that he had communicated with Anand about joining the new venture.
C. Documentary Evidence
In addition to the forensic and testimonial evidence, the documentary record provides compelling corroboration of Lumos's claims. The key categories of documentary evidence include:
PIIAAs Executed by All Three Defendants. The executed PIIAAs are in the record and contain clear, unambiguous restrictive covenant obligations — including the confidentiality/non-disclosure provision, the non-solicitation clause, the covenant not to use or disclose trade secrets, and the obligation to return all company materials upon termination. These agreements define the contractual duties that each defendant breached.
IT Security Logs. Lumos's IT security logs document the specific exfiltration events with precision, recording the dates, times, files transferred, file sizes, and destination accounts or devices for each of the identified data transfers. The logs for the September 26, October 10, and October 18 events are consistent with and corroborated by the Brindoval forensic findings.
NovaSpark Internal Documents. NovaSpark's own internal documents, produced in response to Lumos's Requests for Production, reflect the use of Lumos-derived technology in NovaSpark's product development. These documents include internal development plans, code-review records, and engineering specifications that reference architectures, data structures, and methodologies that are directly traceable to Lumos's proprietary technology.
Blackpine Capital Partners Pitch Deck. Perhaps the most revealing piece of documentary evidence is the pitch deck that Defendant Anand prepared for NovaSpark's seed funding round with Blackpine Capital Partners LP. The pitch deck, which was produced by NovaSpark in discovery, references specific product capabilities, data-integration capacities (including the number and type of alternative-data sources), and development timelines that are only explainable by access to Lumos's proprietary technology. A startup incorporated in early October 2022 could not plausibly have developed these capabilities and articulated these timelines by mid-November 2022 — when the seed round closed — without a pre-existing foundation of stolen technology. The pitch deck is a smoking gun, connecting the theft of trade secrets directly to NovaSpark's fundraising success.
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 independent economic value from not being generally known to, or readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. The LumosEdge model architecture, the feature-engineering libraries, the DataStream ETL pipeline, the curated training dataset, and the LumosEdge 3.0 product roadmap are each the product of substantial investment and would confer a significant competitive advantage upon any competitor that obtained access to them — as NovaSpark's rapid development trajectory confirms.
Second, Lumos has taken reasonable measures to maintain the secrecy of its proprietary technology. These measures include the PIIAAs executed by all employees, role-based access controls limiting access to sensitive systems and data on a need-to-know basis, confidentiality designations on sensitive documents, IT security protocols including monitoring and logging of data-transfer activities, and physical and electronic security measures at Lumos's facilities. The Court's finding at the preliminary injunction stage that Lumos's measures were reasonable is entitled to significant weight.
Third, Defendants acquired Lumos's trade secrets through improper means — specifically, through the unauthorized copying and transfer of proprietary materials to personal devices and cloud accounts in breach of the defendants' duties of confidentiality — and have used those trade secrets at NovaSpark in the development of a competing product. The forensic evidence, deposition testimony, and documentary record conclusively establish both the acquisition and the use.
The Court's granting of both the TRO and the preliminary injunction on all five categories of trade secrets, after full adversarial briefing and argument, strongly validates the merits of this claim and should give Defendants significant pause as they evaluate the risks of proceeding to trial.
B. Breach of Contract (PIIAA)
Each individual defendant breached multiple provisions of their PIIAA, as detailed in Section IV.C above. The breaches include the confidentiality and non-disclosure provision, the obligation to return all company materials upon termination, the non-solicitation of employees clause, the covenant not to use or disclose trade secrets, and the invention assignment clause. The PIIAAs are clear and unambiguous in their terms, and the evidence of breach is equally clear. Damages flowing from the breach include both actual harm suffered by Lumos and unjust enrichment conferred upon Defendants and NovaSpark.
C. Breach of Duty of Loyalty
Under California law, an employee owes a duty of loyalty to their employer during the term of their employment, which includes a duty not to act in a manner adverse to the employer's interests. Each of the three individual defendants breached this duty by planning and coordinating the formation of a competing enterprise — and the systematic theft of proprietary technology to fuel that enterprise — while still employed by Lumos.
The evidence demonstrates that Anand began planning NovaSpark before his departure from Lumos, that he communicated with Mallick and Yun about joining NovaSpark while all three were still Lumos employees, and that each defendant engaged in specific acts of data exfiltration during the final days of their employment. These activities — conducted covertly and in direct contravention of the defendants' duty to act in Lumos's interests — constitute clear breaches of the duty of loyalty. The fact that Anand incorporated NovaSpark on October 3, 2022, while Mallick and Yun were still employed at Lumos, further underscores the breach, as Anand's planning for NovaSpark necessarily predated his resignation on September 30, 2022.
D. Unfair Business Practices (Cal. Bus. & Prof. Code § 17200)
California Business and Professions Code section 17200 prohibits unfair, unlawful, and fraudulent business practices. Defendants' conduct satisfies all three prongs of this broadly construed statute. The conduct is unlawful because it violates CUTSA, breaches the PIIAAs, and violates the duty of loyalty. The conduct is unfair because it confers an undeserved competitive advantage upon NovaSpark — a startup that was founded on and built with stolen technology — at the expense of Lumos, which invested years and tens of millions of dollars in developing the proprietary technology that NovaSpark now exploits. The conduct is fraudulent because NovaSpark has held itself out to investors, potential customers, and the market as having developed its own technology, when in fact its product is built on a foundation of misappropriated trade secrets.
E. Conversion
Defendants converted Lumos's proprietary information by taking it without authorization, exercising dominion and control over it, and using it for their own benefit and to Lumos's detriment. While the proprietary information at issue is intangible, California courts have recognized claims for conversion of intangible property, including trade secrets and confidential business information, where the property is capable of precise identification and the plaintiff had a right to possess it. Each of the five categories of trade secrets identified by Lumos is precisely identified, and Lumos's right to exclusive possession is established by both its ownership of the information and the PIIAA provisions obligating the defendants to return all company materials upon termination.
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 misappropriation, focusing on the accelerated time-to-market that NovaSpark achieved by virtue of its access to Lumos's proprietary technology.
Specifically, the analysis estimates that NovaSpark saved approximately 14 to 18 months of product development time by having access to Lumos's proprietary ML model architecture, the library of 2,847 individually engineered features, the DataStream ETL pipeline codebase covering 43 alternative-data vendors, the approximately 14.6 terabyte curated and labeled training dataset, and the confidential LumosEdge 3.0 product roadmap. Without these assets, NovaSpark would have been required to build its technology from scratch — recruiting and retaining a team of experienced ML engineers and data scientists, conducting extensive research and experimentation to develop its own model architectures and feature libraries, negotiating and integrating 43 alternative-data vendor relationships, and assembling, curating, and labeling its own training dataset.
This accelerated time-to-market translates to significant economic value for NovaSpark across multiple dimensions. First, it enabled NovaSpark to bring a competing product to market far earlier than it could have done independently, generating revenue and building market presence on an accelerated timeline. Second, it substantially reduced NovaSpark's research and development costs, allowing the startup to conserve capital and allocate resources to sales, marketing, and business development rather than foundational technology development. Third — and perhaps most significantly — it enhanced NovaSpark's fundraising capability. NovaSpark raised $12 million in seed funding from Blackpine Capital Partners LP based in part on a pitch deck that touted capabilities and development timelines that were only achievable through access to Lumos's proprietary technology. The seed funding itself is thus a direct product of the misappropriation.
B. Actual Damages to Lumos
In addition to the unjust enrichment analysis, Lumos has suffered and continues to suffer substantial actual damages as a result of Defendants' misappropriation. These damages include:
Competitive Harm. The introduction into the market of a rival product built on Lumos's own technology has caused direct competitive harm to Lumos. NovaSpark is competing for the same customers — institutional asset managers, hedge funds, and proprietary trading desks — with a product that replicates the core capabilities of LumosEdge. Every dollar of revenue that NovaSpark earns in this market represents a potential diversion from Lumos.
Risk of Customer Diversion. The risk of customer diversion is particularly acute because NovaSpark's product, built on Lumos's technology, is capable of offering comparable functionality. Lumos's sales team has already encountered competitive situations in which NovaSpark is being evaluated alongside LumosEdge. The risk that existing Lumos customers may be lured away by a competitor offering Lumos-equivalent technology at a potentially lower price point is a concrete and ongoing harm.
Harm to Investor Relationships and Enterprise Value. Lumos raised $72 million in its Series D round from Northstar Growth Equity in June 2022 — just three months before the defendants' coordinated departure. The Series D valuation was predicated on the strength of Lumos's competitive moat, including the proprietary technology that the defendants subsequently misappropriated. The breach of that competitive moat has damaged Lumos's relationship with its investors and has the potential to reduce the company's enterprise value in future financing rounds or in a potential exit transaction. Lumos's board of directors and investors view this litigation — and its resolution — as critical to the protection of shareholder value.
Loss of Roadmap Confidentiality. The theft of the LumosEdge 3.0 product roadmap has deprived Lumos of the confidential strategic advantage represented by that document. NovaSpark now possesses advance knowledge of Lumos's product development plans through 2025, enabling it to anticipate and preempt Lumos's planned innovations. This harm cannot be fully quantified in monetary terms but represents a significant competitive setback.
C. Attorneys' Fees and Costs
Lumos has incurred and continues to incur substantial attorneys' fees and costs in connection with this litigation. CUTSA authorizes fee-shifting in cases of willful and malicious misappropriation under California Civil Code section 3426.4, and the evidence in this case amply supports a finding of willfulness and malice. The misappropriation was not inadvertent or accidental — it was a deliberate, coordinated, and premeditated scheme executed over a period of weeks.
In addition to Calderwood & Harkness LLP's legal fees, Lumos has incurred the following expert and forensic costs:
• Brindoval Digital Forensics LLC — Total forensic examination fees: $218,600. Under the current cost-allocation stipulation, Lumos's share is 40%, or $87,440. However, given the forensic findings confirming the misappropriation, Lumos's position is that Defendants should bear 100% of the forensic costs.
• Meridian Cybersecurity Advisors Inc. — Independent verification and damages analysis fees: $94,300, borne entirely by Lumos.
Finally, Lumos notes the potential for exemplary damages of up to twice the amount of actual damages for willful and malicious misappropriation, as authorized by California Civil Code section 3426.3(c). The evidence of willfulness and malice in this case — a coordinated, premeditated scheme involving three defendants, pre-departure planning, systematic exfiltration of proprietary materials, immediate deployment of those materials at a competing startup, and use of the stolen technology to secure $12 million in venture funding — is precisely the type of conduct that the exemplary damages provision was designed to address. The potential exposure to exemplary damages should be a significant factor in Defendants' evaluation of settlement.
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 $12.4 million, appropriately adjusted for litigation risk, the time value of money, and the benefit of certainty that a negotiated resolution provides. Lumos recognizes that a mediated settlement necessarily involves compromise on both sides, and Lumos's specific target range for the monetary component of a settlement will be discussed during the mediation session with the assistance of Judge Voss. Payment of the agreed monetary amount should be made within 30 days of the execution of a definitive settlement agreement.
B. Permanent Injunctive Relief
Lumos seeks a stipulated permanent injunction — entered by the Court as a consent order — permanently enjoining all Defendants and NovaSpark Technologies Inc. from possessing, using, disclosing, distributing, or in any way exploiting any Lumos trade secrets across all five identified categories. A stipulated injunction entered as a court order is essential to ensure enforceability, including the availability of contempt sanctions in the event of a violation.
Lumos recognizes that NovaSpark has employees and investors beyond the individual defendants and does not seek the shutdown of NovaSpark as a condition of settlement. NovaSpark may continue its operations, but only to the extent that its products and services are built entirely upon independently created technology or publicly available information. The stipulated injunction should include provisions requiring NovaSpark to certify compliance and to establish internal controls to prevent any future use of Lumos proprietary information.
C. Forensic Remediation
Lumos requires complete forens

SUPERIOR COURT OF THE STATE OF CALIFORNIA

COUNTY OF SANTA CLARA

I. INTRODUCTION AND PURPOSE OF THIS BRIEF

II. THE PARTIES

III. THE TRADE SECRETS AT ISSUE

V. PROCEDURAL HISTORY

VI. THE EVIDENCE OVERWHELMINGLY SUPPORTS LUMOS'S CLAIMS

VIII. DAMAGES ANALYSIS

IX. LUMOS'S SETTLEMENT OBJECTIVES

Record

Parties

Dates

Amounts