1008-00005 · Lumos Analytics Inc · Pre-Litigation

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CALDERWOOD & HARKNESS LLP

555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-5500 Facsimile: (415) 773-5501

125 Broad Street New York, New York 10004 Telephone: (212) 558-4000 Facsimile: (212) 558-3588

www.calderwoodharkness.com

January 9, 2023

VIA OVERNIGHT COURIER AND EMAIL

NovaSpark Technologies Inc.

Attention: Rajiv Anand, Chief Executive Officer

88 Bluxome Street, Floor 4 San Francisco, CA 94107

Re: Demand to Cease and Desist from Use of Proprietary Information and Trade Secrets of Lumos Analytics Inc. C&H Matter No. 1008-00005

Dear Mr. Anand:

1. Identification of Sender and Client

This firm represents Lumos Analytics Inc. ("Lumos" or the "Company"), a Delaware corporation headquartered at 4700 Orchard Parkway, Suite 300, San Jose, California 95134. We write on Lumos's behalf and at its express direction concerning matters of the utmost seriousness.

Lumos is an AI-driven financial analytics software-as-a-service ("SaaS") company founded in approximately 2017. Since its founding, Lumos has grown to approximately 340 employees and achieved 2022 annual recurring revenue of approximately $67 million. To date, Lumos has raised approximately $185 million in venture capital financing through its Series D round, reflecting the significant value of its technology, intellectual property, and competitive position in the market. Lumos's flagship product, LumosEdge, leverages proprietary ensemble machine-learning models to generate predictive signals for equity and fixed-income portfolio optimization. LumosEdge is widely recognized in the institutional investment community as a leading platform for AI-driven financial analytics, and it represents the culmination of years of intensive research, engineering effort, and substantial capital investment.

This letter is addressed to NovaSpark Technologies Inc. ("NovaSpark"), a Delaware corporation (Delaware File Number 7294183) incorporated on October 3, 2022 — a date that, as detailed below, is just three days after the separation of your co-founder, Rajiv Anand, from his employment with Lumos — and headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks, a market that directly and substantially overlaps with Lumos's core business and the very market served by LumosEdge. As set forth below, Lumos has substantial evidence that NovaSpark's business has been built upon, and continues to depend upon, the misappropriation of Lumos's proprietary information and trade secrets.

The purpose of this letter is to demand that NovaSpark immediately cease and desist from all use of Lumos's proprietary information and trade secrets, preserve all relevant evidence, and return all materials belonging to Lumos. This letter also serves as formal notice that, should NovaSpark fail to comply fully and promptly with the demands set forth herein, Lumos is prepared to — and will — pursue all available legal remedies, including immediate litigation seeking injunctive relief, compensatory damages, exemplary damages, and attorneys' fees.

2. Background — The Departing Employees and Their Obligations

2.1 Rajiv Anand

Rajiv Anand served as Principal Engineer — ML Infrastructure at Lumos from March 2019 through September 30, 2022, a period of approximately three and one-half years. In that role, Mr. Anand was a key architect of the LumosEdge signal-generation engine, which is at the heart of Lumos's flagship product. By virtue of his position, Mr. Anand had access to Lumos's most sensitive proprietary codebases, training datasets, model architectures, hyperparameter configurations, and internal product roadmap documentation. He occupied a position of trust and was granted elevated security credentials commensurate with the sensitivity of the materials to which he required access for his role.

Mr. Anand resigned from Lumos on September 30, 2022, effective immediately, without providing the customary notice period. Just three days later, on October 3, 2022, Mr. Anand incorporated NovaSpark Technologies Inc. under the laws of the State of Delaware. Mr. Anand now serves as Chief Executive Officer and co-founder of NovaSpark. The near-simultaneous timing of Mr. Anand's departure from Lumos and the formation of NovaSpark — a company operating in Lumos's precise competitive space — is notable and, as set forth in greater detail below, indicative of premeditated misappropriation.

Upon commencing his employment with Lumos in March 2019, Mr. Anand executed Lumos's standard Proprietary Information and Inventions Assignment Agreement (the "PIIAA"), a binding agreement imposing significant and enforceable obligations regarding the protection, non-disclosure, non-use, and return of Lumos's proprietary information and trade secrets.

2.2 Serena Mallick

Serena Mallick served as Senior Software Engineer — Data Pipelines at Lumos from June 2020 through October 14, 2022. In her role, Ms. Mallick was responsible for building and maintaining the proprietary extract, transform, and load ("ETL") pipelines that ingest alternative financial data from third-party vendors into the LumosEdge platform. This system, known internally as "DataStream," is a critical component of Lumos's technology stack and represents a substantial investment of engineering resources. Ms. Mallick had detailed knowledge of the DataStream architecture, data-schema definitions, vendor integration specifications, and data-processing logic — all of which constitute highly sensitive proprietary information of Lumos.

Ms. Mallick resigned from Lumos on October 14, 2022 and commenced employment at NovaSpark as Vice President of Engineering a mere three days later, on October 17, 2022. The rapidity of this transition — without any intervening period between positions — further supports the inference that Ms. Mallick's departure was coordinated with Mr. Anand and formed part of a preconceived plan to establish NovaSpark using Lumos's proprietary technology.

Upon commencing her employment with Lumos in June 2020, Ms. Mallick executed the same standard PIIAA described above.

2.3 Derek Yun

Derek Yun served as Machine Learning Engineer II at Lumos from January 2021 through October 21, 2022. In this capacity, Mr. Yun had direct and extensive access to Lumos's proprietary training datasets, model hyperparameters, and feature-engineering libraries — including the individual engineered features that constitute a core element of LumosEdge's competitive advantage. Mr. Yun was actively involved in the training, tuning, and validation of Lumos's machine-learning models and possessed detailed knowledge of the methodologies, data sources, and algorithmic approaches that underpin LumosEdge's predictive capabilities.

Mr. Yun resigned from Lumos on October 21, 2022 and joined NovaSpark as a founding engineer just three days later, on October 24, 2022. As with Mr. Anand and Ms. Mallick, the brevity of the interval between Mr. Yun's departure from Lumos and his commencement of employment at NovaSpark — and the fact that his departure closely followed those of Mr. Anand and Ms. Mallick — is strongly indicative of a coordinated scheme.

Upon commencing his employment with Lumos in January 2021, Mr. Yun executed the same standard PIIAA described above.

2.4 PIIAA Obligations

Each of Mr. Anand, Ms. Mallick, and Mr. Yun (collectively, the "Former Employees") executed Lumos's standard PIIAA upon joining the Company. The PIIAA contains restrictive covenant provisions that are binding upon each individual and that survive the termination of his or her employment with Lumos. These provisions include, without limitation:

(a) Assignment of Inventions. Each Former Employee assigned to Lumos all right, title, and interest in and to any and all inventions, works of authorship, ideas, developments, improvements, and discoveries conceived, developed, or reduced to practice during the course of his or her employment with Lumos, whether or not patentable or copyrightable.

(b) Confidentiality and Non-Disclosure. Each Former Employee agreed to hold in strict confidence and not to use or disclose, directly or indirectly, any proprietary information or trade secrets of Lumos, both during and after his or her employment. This non-disclosure obligation survives termination of employment for a period of three (3) years, and with respect to trade secrets, for so long as such information retains its trade-secret status.

(c) Non-Solicitation of Employees. Each Former Employee agreed not to, directly or indirectly, solicit, recruit, induce, or encourage any employee of Lumos to leave Lumos's employ, for a period of twelve (12) months following the termination of his or her employment.

(d) Covenant Not to Use or Disclose Trade Secrets. Each Former Employee agreed not to use or disclose, at any time, any trade secrets of Lumos, a covenant that is unlimited in duration and enforceable under both the PIIAA and applicable law.

(e) Return of Company Materials. Each Former Employee agreed to return to Lumos, upon termination of employment, all documents, materials, files, data, equipment, and other property of Lumos in his or her possession, custody, or control, and to confirm in writing that he or she had done so and had not retained any copies.

Critically, none of the three Former Employees returned company materials upon their departure from Lumos, nor did any of them provide the required written confirmation that all Lumos proprietary information in their possession had been returned or permanently deleted. Despite Lumos's follow-up requests to each individual following their respective separations, Lumos has received no response or acknowledgment from any of the Former Employees regarding the return of materials or the destruction of proprietary information.

NovaSpark, as the current employer of all three Former Employees and as the entity that has directly and knowingly benefited from the use of Lumos's proprietary information, is on notice of and complicit in the ongoing violations of these obligations. NovaSpark's formation and operation are inextricably intertwined with the misappropriation of Lumos's proprietary materials by the Former Employees, and NovaSpark bears direct liability for the resulting harm, as set forth more fully below.

3. Lumos's Proprietary Information and Trade Secrets

Lumos has invested years of effort and substantial financial resources in developing its proprietary technology, methodologies, and data assets. These materials constitute trade secrets within the meaning of the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11, as they derive independent economic value from not being generally known to or readily ascertainable by others who could obtain economic value from their disclosure or use, and as Lumos has taken reasonable measures to maintain their secrecy.

The categories of trade secrets and proprietary information at issue in this matter include, without limitation, the following:

1. LumosEdge Ensemble ML Model Architecture. This includes Lumos's proprietary neural-network topology, ensemble model design, and hyperparameter configurations that govern the behavior, performance, and predictive accuracy of the LumosEdge signal-generation engine. This architecture is the product of years of iterative research and development, represents the core intellectual property of LumosEdge, and is not publicly available in any form.

2. Proprietary Feature-Engineering Libraries. Lumos has developed a suite of feature-engineering libraries containing 2,847 individual engineered features specifically designed and optimized for financial signal generation. These features were developed through extensive experimentation and domain expertise, and they constitute a significant competitive advantage that is not replicable without access to Lumos's internal work product.

3. DataStream ETL Pipeline Codebase and Data-Schema Definitions. The "DataStream" system comprises the proprietary codebase and data-schema definitions that enable LumosEdge to ingest, normalize, transform, and load alternative financial data from 43 separate alternative-data vendors. The DataStream system reflects substantial investment in vendor-specific integration logic, data-quality assurance processes, and scalable pipeline architecture.

4. Curated and Labeled Training Dataset. Lumos has compiled, curated, cleaned, and labeled a training dataset of approximately 14.6 terabytes of historical financial and alternative data. This dataset is the product of years of data collection, licensing agreements, proprietary labeling methodologies, and quality-control processes, and it is essential to the training and ongoing improvement of Lumos's machine-learning models.

5. Confidential Product Roadmap Documents for 2023–2025. These include unreleased specifications and strategic plans for "LumosEdge 3.0," a forthcoming major release of Lumos's flagship product. The LumosEdge 3.0 Product Roadmap is a 37-page confidential document detailing planned features, architectural changes, market positioning, competitive analyses, and release timelines for the period 2023 through 2025.

Lumos has taken extensive and reasonable measures to protect the secrecy of all of these materials. These measures include, but are not limited to: physical access controls at Lumos's offices; electronic access controls, including role-based access permissions and multi-factor authentication for all internal systems; need-to-know restrictions limiting access to proprietary materials to those employees whose job functions require such access; the use of employee agreements, including the PIIAAs described above; encryption of data at rest and in transit; monitoring of data-access and data-transfer activity through Lumos's endpoint detection and response ("EDR") systems; and regular training of employees regarding their obligations to protect proprietary information. These protections satisfy and exceed the requirements for maintaining trade-secret status under California law.

4. Evidence of Misappropriation

Lumos's internal IT security team, in conjunction with a third-party digital forensics firm retained for this purpose, initiated a comprehensive investigation on December 12, 2022 upon detection of anomalous data-exfiltration activity during the final weeks of the three Former Employees' respective tenures at Lumos. That investigation has revealed a pattern of coordinated and deliberate misappropriation of Lumos's most valuable proprietary materials. The evidence uncovered to date includes, but is not limited to, the following:

(a) Rajiv Anand — September 26, 2022. On September 26, 2022 — four days before his resignation — Mr. Anand transferred approximately 3.2 gigabytes of files from Lumos's internal systems to a personal Hollowell Health IT account. Forensic analysis of access logs and file metadata confirms that the transferred files included model architecture specifications, hyperparameter configuration files, and related technical documentation pertaining to the LumosEdge signal-generation engine. These transfers occurred outside of normal business hours, between approximately 11:47 p.m. and 1:12 a.m. Pacific Time, and were not authorized by Lumos.

(b) Rajiv Anand — September 28, 2022. On September 28, 2022 — two days before his resignation — Mr. Anand accessed the confidential "LumosEdge 3.0 Product Roadmap" PDF (37 pages) from Lumos's internal document management system and forwarded a copy to his personal email account at the address r.anand.personal@vaultmail.com. This document contains Lumos's highly confidential strategic product plans, unreleased feature specifications, and competitive positioning analyses for the 2023–2025 period. The forwarding of this document to a personal email account was not authorized and served no legitimate business purpose.

(c) Serena Mallick — October 10, 2022. On October 10, 2022 — four days before her resignation — Ms. Mallick connected a personal external USB drive (serial number WD-4837291) to her Lumos-issued workstation and cloned the entire DataStream ETL pipeline repository to that device. The cloned repository comprised approximately 780 megabytes of proprietary source code, configuration files, and data-schema definitions. Lumos's EDR system flagged this event in its logs, and the serial number of the USB device has been confirmed through forensic analysis. This unauthorized copying of an entire proprietary code repository constitutes a clear and egregious misappropriation of Lumos's trade secrets.

(d) Derek Yun — October 18, 2022. On October 18, 2022 — three days before his resignation — Mr. Yun downloaded 47 proprietary Jupyter notebooks from Lumos's internal machine-learning development environment to a personal Larkspur Technologies account. These notebooks contained feature-engineering code, model-training scripts, performance benchmarking data, and annotations reflecting Lumos's proprietary methodologies. The download was flagged by Lumos's data-loss prevention ("DLP") tools and has been confirmed through analysis of cloud-sync logs and file-access records.

The materials taken by the Former Employees were taken without authorization, in direct and knowing violation of each individual's PIIAA, and in breach of their fiduciary and contractual duties to Lumos. Based on the evidence available, it is clear that these materials have been or are being used in the development of NovaSpark's competing product, and that NovaSpark's business is dependent upon Lumos's stolen technology.

The timing and coordination of these events warrant particular emphasis. NovaSpark's receipt of $12 million in seed funding from Blackpine Capital Partners LP on November 15, 2022 — a mere six weeks after Mr. Anand's departure and approximately four weeks after the departures of Ms. Mallick and Mr. Yun — further confirms the rapid competitive deployment of Lumos's stolen technology. It is difficult to conceive of any legitimate explanation for how a company incorporated on October 3, 2022 could, within approximately six weeks, develop AI-driven alternative-data analytics technology sufficiently compelling to attract a $12 million institutional investment absent the use of misappropriated proprietary materials.

The coordinated nature of the departures, the immediate formation of NovaSpark, and the near-simultaneous hiring of all three individuals by NovaSpark — each of whom held critical technical roles at Lumos and each of whom exfiltrated proprietary data in the days immediately preceding his or her resignation — strongly suggest that this scheme was orchestrated while the Former Employees were still employed at Lumos, constituting a further breach of their duty of loyalty to the Company.

5. NovaSpark's Liability

Based on the foregoing, NovaSpark is liable for trade-secret misappropriation under the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11. The California Uniform Trade Secrets Act defines "misappropriation" to include both the acquisition of a trade secret by a person who knows or has reason to know that the trade secret was acquired by improper means, and the disclosure or use of a trade secret by a person who knows or has reason to know that the trade secret was derived from or through a person who owed a duty to maintain its secrecy. NovaSpark has acquired, used, and benefited from Lumos's misappropriated trade secrets with actual knowledge, or at minimum with reason to know, that such trade secrets were obtained through improper means and in violation of the Former Employees' contractual and legal obligations to Lumos.

NovaSpark's core business — AI-driven alternative-data analytics for hedge funds and proprietary trading desks — directly and substantially overlaps with Lumos's LumosEdge product and the market that Lumos serves. NovaSpark's accelerated development timeline, culminating in a $12 million seed investment within weeks of its formation, is inexplicable without access to Lumos's proprietary materials and would have been impossible through independent development in such a compressed timeframe.

In addition to trade-secret misappropriation, NovaSpark is liable for unfair business practices under California Business and Professions Code section 17200 et seq. Section 17200 prohibits any unlawful, unfair, or fraudulent business act or practice. NovaSpark's systematic misappropriation of a competitor's trade secrets, its knowing hiring of employees subject to restrictive covenant obligations, and its deployment of stolen proprietary technology to compete directly with the trade-secret owner constitute unfair and unlawful business practices within the meaning of section 17200.

Furthermore, NovaSpark is complicit in, and has induced and facilitated, each of the Former Employees' breaches of their respective PIIAAs. By hiring the Former Employees in rapid succession, by permitting or encouraging the use of Lumos's proprietary information in the development of NovaSpark's products, and by failing to take any steps to screen for or prevent the introduction of third-party proprietary materials into NovaSpark's operations, NovaSpark has acted as a knowing participant in the ongoing breaches of the Former Employees' contractual obligations to Lumos.

6. Demands

On behalf of Lumos Analytics Inc., Calderwood & Harkness LLP hereby demands that NovaSpark Technologies Inc. immediately take each of the following actions:

6.1 Cease All Use and Disclosure of Lumos Proprietary Information

NovaSpark must immediately cease and desist from all use, disclosure, exploitation, reproduction, distribution, or other utilization of any and all Lumos proprietary information and trade secrets, including, without limitation, all five categories of proprietary materials identified in Section 3 above and any derivative works, adaptations, or products developed in whole or in part from or with the benefit of such materials. This demand extends to all NovaSpark employees, contractors, agents, consultants, officers, directors, investors, and any other person or entity acting on NovaSpark's behalf or at its direction. NovaSpark must take immediate and affirmative steps to ensure that no Lumos proprietary information is being used, directly or indirectly, in any aspect of NovaSpark's operations, product development, marketing, sales, or strategic planning.

6.2 Preserve All Electronic Systems, Devices, and Files

NovaSpark must immediately institute a comprehensive litigation hold and preserve and safeguard all electronic systems, servers, workstations, laptops, desktop computers, mobile devices (including smartphones and tablets), external storage media (including USB drives, external hard drives, and optical media), cloud storage accounts (including but not limited to Hollowell Health IT, Larkspur Technologies, Ridgeway Industries, Crestline Systems, and any other cloud services), email accounts (both corporate and personal accounts used for NovaSpark business), source code repositories (including Aldermere Data Systems, Aldermere Software, Strathmore Solutions, and any internal version control systems), messaging platforms, and any other storage medium containing or potentially containing Lumos proprietary information.

NovaSpark must not delete, destroy, alter, overwrite, modify, or otherwise tamper with any data, files, communications, or records that may be relevant to Lumos's claims, including without limitation source code, compiled code, configuration files, training data, model weights, documentation, emails, instant messages, text messages, Meridian Solutions messages, calendar entries, meeting notes, presentations, financial records, investor communications, and any other materials. This preservation obligation extends to all metadata, file-system timestamps, access logs, version control histories, commit logs, deployment records, and backup systems, including both on-premises and cloud-based backups. Any spoliation of evidence will be met with appropriate legal consequences, including requests for adverse-inference instructions and sanctions.

6.3 Return All Lumos Materials

NovaSpark must immediately identify, collect, and return to Lumos all proprietary materials, documents, files, codebases, datasets, model architectures, hyperparameter configurations, feature-engineering libraries, product roadmap documents, training data, and any and all other information belonging to Lumos that is currently in NovaSpark's possession, custody, or control, whether in physical or electronic form. This includes materials on any device, system, account, or medium described in Section 6.2 above, as well as any printed or hard-copy materials.

NovaSpark must cooperate fully and in good faith in the identification, collection, and return of such materials. Following the return of all Lumos materials, NovaSpark must permanently delete and destroy all copies of Lumos proprietary information in its possession, custody, or control, and must certify such deletion and destruction in writing, as described below.

6.4 Confirm Compliance

Within five (5) business days of NovaSpark's receipt of this letter, NovaSpark must provide written confirmation to the undersigned, signed by an authorized officer of NovaSpark under penalty of perjury, that NovaSpark has complied with each of the foregoing demands. Such written confirmation must include, at a minimum:

(a) A detailed identification of all Lumos proprietary materials that have been located on NovaSpark's systems, devices, accounts, or other storage media, including the specific files, the dates on which they were created or received, the locations where they were stored, and the identities of all individuals who accessed them;

(b) A description of the specific steps NovaSpark has taken to cease all use and disclosure of Lumos proprietary information;

(c) A description of the specific steps NovaSpark has taken to segregate and preserve all potentially relevant evidence, including the implementation of a litigation hold;

(d) Confirmation that all Lumos proprietary materials have been returned to Lumos and that all copies have been permanently deleted and destroyed; and

(e) The identity and contact information for NovaSpark's legal counsel authorized to receive communications regarding this matter.

7. Warning of Imminent Litigation

Should NovaSpark fail to comply fully and promptly with each of the foregoing demands, Lumos is prepared to — and will — immediately commence litigation against NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun in the Superior Court of the State of California, County of Santa Clara, asserting claims including, but not limited to:

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

2. Breach of contract, including breach of the PIIAA obligations described herein;

3. Breach of the duty of loyalty owed by the Former Employees to Lumos during their employment;

4. Unfair business practices in violation of California Business and Professions Code section 17200 et seq.; and

5. Conversion of Lumos's proprietary materials and intellectual property.

In such litigation, Lumos will seek all available remedies at law and in equity, including without limitation: temporary restraining orders and preliminary and permanent injunctive relief enjoining NovaSpark from any further use, disclosure, or exploitation of Lumos's trade secrets and proprietary information; compensatory damages in an amount to be proven at trial; disgorgement of profits and unjust enrichment derived from the misappropriation; exemplary damages in an amount up to twice the compensatory damages award, as permitted by California Civil Code section 3426.3(c) where willful and malicious misappropriation is established; and attorneys' fees and costs as permitted by California Civil Code section 3426.4 and other applicable law.

Lumos also reserves the right to refer this matter to the appropriate law enforcement authorities for investigation and potential prosecution under applicable criminal statutes, including the California Uniform Trade Secrets Act's criminal provisions and the federal Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq.

This letter is not intended to be, and shall not be construed as, a complete or exhaustive statement of all facts, circumstances, claims, rights, or remedies available to Lumos. All such facts, circumstances, claims, rights, and remedies are expressly reserved.

8. Reservation of Rights

Lumos expressly reserves all rights, remedies, and claims available to it at law and in equity, whether or not specifically enumerated in this letter. Nothing contained herein shall be deemed or construed as a waiver of any right, remedy, claim, or defense, nor as an election of remedies. Lumos's decision to provide this notice and an opportunity to cure shall not be construed as an obligation to provide similar notice or opportunity in the future, nor shall it be construed as a limitation on any remedy available to Lumos in any subsequent proceeding. Lumos's rights are cumulative, and the exercise of any one right or remedy shall not preclude the exercise of any other right or remedy.

Lumos expects NovaSpark's prompt and serious attention to this matter and full compliance with all demands set forth herein. The consequences of inaction or non-compliance will be swift and severe. Please direct all responses and communications regarding this matter to the undersigned at the address listed below, or by email at m.delgado@calderwoodharkness.com.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner, intellectual Property Group 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-5500

Email: m.delgado@calderwoodharkness.com

cc (via email): Thomas Brightwell, General Counsel, Lumos Analytics Inc. Priya Chandrasekaran, Chief Executive Officer, Lumos Analytics Inc. Catherine Bloom, Partner, Calderwood & Harkness LLP Wendy Schultz, Associate, Calderwood & Harkness LLP

CALDERWOOD & HARKNESS LLP
555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-5500 Facsimile: (415) 773-5501
125 Broad Street New York, New York 10004 Telephone: (212) 558-4000 Facsimile: (212) 558-3588
www.calderwoodharkness.com
January 9, 2023
VIA OVERNIGHT COURIER AND EMAIL
NovaSpark Technologies Inc.
Attention: Rajiv Anand, Chief Executive Officer
88 Bluxome Street, Floor 4 San Francisco, CA 94107
Re: Demand to Cease and Desist from Use of Proprietary Information and Trade Secrets of Lumos Analytics Inc. C&H Matter No. 1008-00005
Dear Mr. Anand:
1. Identification of Sender and Client
This firm represents Lumos Analytics Inc. ("Lumos" or the "Company"), a Delaware corporation headquartered at 4700 Orchard Parkway, Suite 300, San Jose, California 95134. We write on Lumos's behalf and at its express direction concerning matters of the utmost seriousness.
Lumos is an AI-driven financial analytics software-as-a-service ("SaaS") company founded in approximately 2017. Since its founding, Lumos has grown to approximately 340 employees and achieved 2022 annual recurring revenue of approximately $67 million. To date, Lumos has raised approximately $185 million in venture capital financing through its Series D round, reflecting the significant value of its technology, intellectual property, and competitive position in the market. Lumos's flagship product, LumosEdge, leverages proprietary ensemble machine-learning models to generate predictive signals for equity and fixed-income portfolio optimization. LumosEdge is widely recognized in the institutional investment community as a leading platform for AI-driven financial analytics, and it represents the culmination of years of intensive research, engineering effort, and substantial capital investment.
This letter is addressed to NovaSpark Technologies Inc. ("NovaSpark"), a Delaware corporation (Delaware File Number 7294183) incorporated on October 3, 2022 — a date that, as detailed below, is just three days after the separation of your co-founder, Rajiv Anand, from his employment with Lumos — and headquartered at 88 Bluxome Street, Floor 4, San Francisco, California 94107. NovaSpark purports to offer AI-driven alternative-data analytics for hedge funds and proprietary trading desks, a market that directly and substantially overlaps with Lumos's core business and the very market served by LumosEdge. As set forth below, Lumos has substantial evidence that NovaSpark's business has been built upon, and continues to depend upon, the misappropriation of Lumos's proprietary information and trade secrets.
The purpose of this letter is to demand that NovaSpark immediately cease and desist from all use of Lumos's proprietary information and trade secrets, preserve all relevant evidence, and return all materials belonging to Lumos. This letter also serves as formal notice that, should NovaSpark fail to comply fully and promptly with the demands set forth herein, Lumos is prepared to — and will — pursue all available legal remedies, including immediate litigation seeking injunctive relief, compensatory damages, exemplary damages, and attorneys' fees.
2. Background — The Departing Employees and Their Obligations
2.1 Rajiv Anand
Rajiv Anand served as Principal Engineer — ML Infrastructure at Lumos from March 2019 through September 30, 2022, a period of approximately three and one-half years. In that role, Mr. Anand was a key architect of the LumosEdge signal-generation engine, which is at the heart of Lumos's flagship product. By virtue of his position, Mr. Anand had access to Lumos's most sensitive proprietary codebases, training datasets, model architectures, hyperparameter configurations, and internal product roadmap documentation. He occupied a position of trust and was granted elevated security credentials commensurate with the sensitivity of the materials to which he required access for his role.
Mr. Anand resigned from Lumos on September 30, 2022, effective immediately, without providing the customary notice period. Just three days later, on October 3, 2022, Mr. Anand incorporated NovaSpark Technologies Inc. under the laws of the State of Delaware. Mr. Anand now serves as Chief Executive Officer and co-founder of NovaSpark. The near-simultaneous timing of Mr. Anand's departure from Lumos and the formation of NovaSpark — a company operating in Lumos's precise competitive space — is notable and, as set forth in greater detail below, indicative of premeditated misappropriation.
Upon commencing his employment with Lumos in March 2019, Mr. Anand executed Lumos's standard Proprietary Information and Inventions Assignment Agreement (the "PIIAA"), a binding agreement imposing significant and enforceable obligations regarding the protection, non-disclosure, non-use, and return of Lumos's proprietary information and trade secrets.
2.2 Serena Mallick
Serena Mallick served as Senior Software Engineer — Data Pipelines at Lumos from June 2020 through October 14, 2022. In her role, Ms. Mallick was responsible for building and maintaining the proprietary extract, transform, and load ("ETL") pipelines that ingest alternative financial data from third-party vendors into the LumosEdge platform. This system, known internally as "DataStream," is a critical component of Lumos's technology stack and represents a substantial investment of engineering resources. Ms. Mallick had detailed knowledge of the DataStream architecture, data-schema definitions, vendor integration specifications, and data-processing logic — all of which constitute highly sensitive proprietary information of Lumos.
Ms. Mallick resigned from Lumos on October 14, 2022 and commenced employment at NovaSpark as Vice President of Engineering a mere three days later, on October 17, 2022. The rapidity of this transition — without any intervening period between positions — further supports the inference that Ms. Mallick's departure was coordinated with Mr. Anand and formed part of a preconceived plan to establish NovaSpark using Lumos's proprietary technology.
Upon commencing her employment with Lumos in June 2020, Ms. Mallick executed the same standard PIIAA described above.
2.3 Derek Yun
Derek Yun served as Machine Learning Engineer II at Lumos from January 2021 through October 21, 2022. In this capacity, Mr. Yun had direct and extensive access to Lumos's proprietary training datasets, model hyperparameters, and feature-engineering libraries — including the individual engineered features that constitute a core element of LumosEdge's competitive advantage. Mr. Yun was actively involved in the training, tuning, and validation of Lumos's machine-learning models and possessed detailed knowledge of the methodologies, data sources, and algorithmic approaches that underpin LumosEdge's predictive capabilities.
Mr. Yun resigned from Lumos on October 21, 2022 and joined NovaSpark as a founding engineer just three days later, on October 24, 2022. As with Mr. Anand and Ms. Mallick, the brevity of the interval between Mr. Yun's departure from Lumos and his commencement of employment at NovaSpark — and the fact that his departure closely followed those of Mr. Anand and Ms. Mallick — is strongly indicative of a coordinated scheme.
Upon commencing his employment with Lumos in January 2021, Mr. Yun executed the same standard PIIAA described above.
2.4 PIIAA Obligations
Each of Mr. Anand, Ms. Mallick, and Mr. Yun (collectively, the "Former Employees") executed Lumos's standard PIIAA upon joining the Company. The PIIAA contains restrictive covenant provisions that are binding upon each individual and that survive the termination of his or her employment with Lumos. These provisions include, without limitation:
(a) Assignment of Inventions. Each Former Employee assigned to Lumos all right, title, and interest in and to any and all inventions, works of authorship, ideas, developments, improvements, and discoveries conceived, developed, or reduced to practice during the course of his or her employment with Lumos, whether or not patentable or copyrightable.
(b) Confidentiality and Non-Disclosure. Each Former Employee agreed to hold in strict confidence and not to use or disclose, directly or indirectly, any proprietary information or trade secrets of Lumos, both during and after his or her employment. This non-disclosure obligation survives termination of employment for a period of three (3) years, and with respect to trade secrets, for so long as such information retains its trade-secret status.
(c) Non-Solicitation of Employees. Each Former Employee agreed not to, directly or indirectly, solicit, recruit, induce, or encourage any employee of Lumos to leave Lumos's employ, for a period of twelve (12) months following the termination of his or her employment.
(d) Covenant Not to Use or Disclose Trade Secrets. Each Former Employee agreed not to use or disclose, at any time, any trade secrets of Lumos, a covenant that is unlimited in duration and enforceable under both the PIIAA and applicable law.
(e) Return of Company Materials. Each Former Employee agreed to return to Lumos, upon termination of employment, all documents, materials, files, data, equipment, and other property of Lumos in his or her possession, custody, or control, and to confirm in writing that he or she had done so and had not retained any copies.
Critically, none of the three Former Employees returned company materials upon their departure from Lumos, nor did any of them provide the required written confirmation that all Lumos proprietary information in their possession had been returned or permanently deleted. Despite Lumos's follow-up requests to each individual following their respective separations, Lumos has received no response or acknowledgment from any of the Former Employees regarding the return of materials or the destruction of proprietary information.
NovaSpark, as the current employer of all three Former Employees and as the entity that has directly and knowingly benefited from the use of Lumos's proprietary information, is on notice of and complicit in the ongoing violations of these obligations. NovaSpark's formation and operation are inextricably intertwined with the misappropriation of Lumos's proprietary materials by the Former Employees, and NovaSpark bears direct liability for the resulting harm, as set forth more fully below.
3. Lumos's Proprietary Information and Trade Secrets
Lumos has invested years of effort and substantial financial resources in developing its proprietary technology, methodologies, and data assets. These materials constitute trade secrets within the meaning of the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11, as they derive independent economic value from not being generally known to or readily ascertainable by others who could obtain economic value from their disclosure or use, and as Lumos has taken reasonable measures to maintain their secrecy.
The categories of trade secrets and proprietary information at issue in this matter include, without limitation, the following:
1. LumosEdge Ensemble ML Model Architecture. This includes Lumos's proprietary neural-network topology, ensemble model design, and hyperparameter configurations that govern the behavior, performance, and predictive accuracy of the LumosEdge signal-generation engine. This architecture is the product of years of iterative research and development, represents the core intellectual property of LumosEdge, and is not publicly available in any form.
2. Proprietary Feature-Engineering Libraries. Lumos has developed a suite of feature-engineering libraries containing 2,847 individual engineered features specifically designed and optimized for financial signal generation. These features were developed through extensive experimentation and domain expertise, and they constitute a significant competitive advantage that is not replicable without access to Lumos's internal work product.
3. DataStream ETL Pipeline Codebase and Data-Schema Definitions. The "DataStream" system comprises the proprietary codebase and data-schema definitions that enable LumosEdge to ingest, normalize, transform, and load alternative financial data from 43 separate alternative-data vendors. The DataStream system reflects substantial investment in vendor-specific integration logic, data-quality assurance processes, and scalable pipeline architecture.
4. Curated and Labeled Training Dataset. Lumos has compiled, curated, cleaned, and labeled a training dataset of approximately 14.6 terabytes of historical financial and alternative data. This dataset is the product of years of data collection, licensing agreements, proprietary labeling methodologies, and quality-control processes, and it is essential to the training and ongoing improvement of Lumos's machine-learning models.
5. Confidential Product Roadmap Documents for 2023–2025. These include unreleased specifications and strategic plans for "LumosEdge 3.0," a forthcoming major release of Lumos's flagship product. The LumosEdge 3.0 Product Roadmap is a 37-page confidential document detailing planned features, architectural changes, market positioning, competitive analyses, and release timelines for the period 2023 through 2025.
Lumos has taken extensive and reasonable measures to protect the secrecy of all of these materials. These measures include, but are not limited to: physical access controls at Lumos's offices; electronic access controls, including role-based access permissions and multi-factor authentication for all internal systems; need-to-know restrictions limiting access to proprietary materials to those employees whose job functions require such access; the use of employee agreements, including the PIIAAs described above; encryption of data at rest and in transit; monitoring of data-access and data-transfer activity through Lumos's endpoint detection and response ("EDR") systems; and regular training of employees regarding their obligations to protect proprietary information. These protections satisfy and exceed the requirements for maintaining trade-secret status under California law.
4. Evidence of Misappropriation
Lumos's internal IT security team, in conjunction with a third-party digital forensics firm retained for this purpose, initiated a comprehensive investigation on December 12, 2022 upon detection of anomalous data-exfiltration activity during the final weeks of the three Former Employees' respective tenures at Lumos. That investigation has revealed a pattern of coordinated and deliberate misappropriation of Lumos's most valuable proprietary materials. The evidence uncovered to date includes, but is not limited to, the following:
(a) Rajiv Anand — September 26, 2022. On September 26, 2022 — four days before his resignation — Mr. Anand transferred approximately 3.2 gigabytes of files from Lumos's internal systems to a personal Hollowell Health IT account. Forensic analysis of access logs and file metadata confirms that the transferred files included model architecture specifications, hyperparameter configuration files, and related technical documentation pertaining to the LumosEdge signal-generation engine. These transfers occurred outside of normal business hours, between approximately 11:47 p.m. and 1:12 a.m. Pacific Time, and were not authorized by Lumos.
(b) Rajiv Anand — September 28, 2022. On September 28, 2022 — two days before his resignation — Mr. Anand accessed the confidential "LumosEdge 3.0 Product Roadmap" PDF (37 pages) from Lumos's internal document management system and forwarded a copy to his personal email account at the address r.anand.personal@vaultmail.com. This document contains Lumos's highly confidential strategic product plans, unreleased feature specifications, and competitive positioning analyses for the 2023–2025 period. The forwarding of this document to a personal email account was not authorized and served no legitimate business purpose.
(c) Serena Mallick — October 10, 2022. On October 10, 2022 — four days before her resignation — Ms. Mallick connected a personal external USB drive (serial number WD-4837291) to her Lumos-issued workstation and cloned the entire DataStream ETL pipeline repository to that device. The cloned repository comprised approximately 780 megabytes of proprietary source code, configuration files, and data-schema definitions. Lumos's EDR system flagged this event in its logs, and the serial number of the USB device has been confirmed through forensic analysis. This unauthorized copying of an entire proprietary code repository constitutes a clear and egregious misappropriation of Lumos's trade secrets.
(d) Derek Yun — October 18, 2022. On October 18, 2022 — three days before his resignation — Mr. Yun downloaded 47 proprietary Jupyter notebooks from Lumos's internal machine-learning development environment to a personal Larkspur Technologies account. These notebooks contained feature-engineering code, model-training scripts, performance benchmarking data, and annotations reflecting Lumos's proprietary methodologies. The download was flagged by Lumos's data-loss prevention ("DLP") tools and has been confirmed through analysis of cloud-sync logs and file-access records.
The materials taken by the Former Employees were taken without authorization, in direct and knowing violation of each individual's PIIAA, and in breach of their fiduciary and contractual duties to Lumos. Based on the evidence available, it is clear that these materials have been or are being used in the development of NovaSpark's competing product, and that NovaSpark's business is dependent upon Lumos's stolen technology.
The timing and coordination of these events warrant particular emphasis. NovaSpark's receipt of $12 million in seed funding from Blackpine Capital Partners LP on November 15, 2022 — a mere six weeks after Mr. Anand's departure and approximately four weeks after the departures of Ms. Mallick and Mr. Yun — further confirms the rapid competitive deployment of Lumos's stolen technology. It is difficult to conceive of any legitimate explanation for how a company incorporated on October 3, 2022 could, within approximately six weeks, develop AI-driven alternative-data analytics technology sufficiently compelling to attract a $12 million institutional investment absent the use of misappropriated proprietary materials.
The coordinated nature of the departures, the immediate formation of NovaSpark, and the near-simultaneous hiring of all three individuals by NovaSpark — each of whom held critical technical roles at Lumos and each of whom exfiltrated proprietary data in the days immediately preceding his or her resignation — strongly suggest that this scheme was orchestrated while the Former Employees were still employed at Lumos, constituting a further breach of their duty of loyalty to the Company.
5. NovaSpark's Liability
Based on the foregoing, NovaSpark is liable for trade-secret misappropriation under the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11. The California Uniform Trade Secrets Act defines "misappropriation" to include both the acquisition of a trade secret by a person who knows or has reason to know that the trade secret was acquired by improper means, and the disclosure or use of a trade secret by a person who knows or has reason to know that the trade secret was derived from or through a person who owed a duty to maintain its secrecy. NovaSpark has acquired, used, and benefited from Lumos's misappropriated trade secrets with actual knowledge, or at minimum with reason to know, that such trade secrets were obtained through improper means and in violation of the Former Employees' contractual and legal obligations to Lumos.
NovaSpark's core business — AI-driven alternative-data analytics for hedge funds and proprietary trading desks — directly and substantially overlaps with Lumos's LumosEdge product and the market that Lumos serves. NovaSpark's accelerated development timeline, culminating in a $12 million seed investment within weeks of its formation, is inexplicable without access to Lumos's proprietary materials and would have been impossible through independent development in such a compressed timeframe.
In addition to trade-secret misappropriation, NovaSpark is liable for unfair business practices under California Business and Professions Code section 17200 et seq. Section 17200 prohibits any unlawful, unfair, or fraudulent business act or practice. NovaSpark's systematic misappropriation of a competitor's trade secrets, its knowing hiring of employees subject to restrictive covenant obligations, and its deployment of stolen proprietary technology to compete directly with the trade-secret owner constitute unfair and unlawful business practices within the meaning of section 17200.
Furthermore, NovaSpark is complicit in, and has induced and facilitated, each of the Former Employees' breaches of their respective PIIAAs. By hiring the Former Employees in rapid succession, by permitting or encouraging the use of Lumos's proprietary information in the development of NovaSpark's products, and by failing to take any steps to screen for or prevent the introduction of third-party proprietary materials into NovaSpark's operations, NovaSpark has acted as a knowing participant in the ongoing breaches of the Former Employees' contractual obligations to Lumos.
6. Demands
On behalf of Lumos Analytics Inc., Calderwood & Harkness LLP hereby demands that NovaSpark Technologies Inc. immediately take each of the following actions:
6.1 Cease All Use and Disclosure of Lumos Proprietary Information
NovaSpark must immediately cease and desist from all use, disclosure, exploitation, reproduction, distribution, or other utilization of any and all Lumos proprietary information and trade secrets, including, without limitation, all five categories of proprietary materials identified in Section 3 above and any derivative works, adaptations, or products developed in whole or in part from or with the benefit of such materials. This demand extends to all NovaSpark employees, contractors, agents, consultants, officers, directors, investors, and any other person or entity acting on NovaSpark's behalf or at its direction. NovaSpark must take immediate and affirmative steps to ensure that no Lumos proprietary information is being used, directly or indirectly, in any aspect of NovaSpark's operations, product development, marketing, sales, or strategic planning.
6.2 Preserve All Electronic Systems, Devices, and Files
NovaSpark must immediately institute a comprehensive litigation hold and preserve and safeguard all electronic systems, servers, workstations, laptops, desktop computers, mobile devices (including smartphones and tablets), external storage media (including USB drives, external hard drives, and optical media), cloud storage accounts (including but not limited to Hollowell Health IT, Larkspur Technologies, Ridgeway Industries, Crestline Systems, and any other cloud services), email accounts (both corporate and personal accounts used for NovaSpark business), source code repositories (including Aldermere Data Systems, Aldermere Software, Strathmore Solutions, and any internal version control systems), messaging platforms, and any other storage medium containing or potentially containing Lumos proprietary information.
NovaSpark must not delete, destroy, alter, overwrite, modify, or otherwise tamper with any data, files, communications, or records that may be relevant to Lumos's claims, including without limitation source code, compiled code, configuration files, training data, model weights, documentation, emails, instant messages, text messages, Meridian Solutions messages, calendar entries, meeting notes, presentations, financial records, investor communications, and any other materials. This preservation obligation extends to all metadata, file-system timestamps, access logs, version control histories, commit logs, deployment records, and backup systems, including both on-premises and cloud-based backups. Any spoliation of evidence will be met with appropriate legal consequences, including requests for adverse-inference instructions and sanctions.
6.3 Return All Lumos Materials
NovaSpark must immediately identify, collect, and return to Lumos all proprietary materials, documents, files, codebases, datasets, model architectures, hyperparameter configurations, feature-engineering libraries, product roadmap documents, training data, and any and all other information belonging to Lumos that is currently in NovaSpark's possession, custody, or control, whether in physical or electronic form. This includes materials on any device, system, account, or medium described in Section 6.2 above, as well as any printed or hard-copy materials.
NovaSpark must cooperate fully and in good faith in the identification, collection, and return of such materials. Following the return of all Lumos materials, NovaSpark must permanently delete and destroy all copies of Lumos proprietary information in its possession, custody, or control, and must certify such deletion and destruction in writing, as described below.
6.4 Confirm Compliance
Within five (5) business days of NovaSpark's receipt of this letter, NovaSpark must provide written confirmation to the undersigned, signed by an authorized officer of NovaSpark under penalty of perjury, that NovaSpark has complied with each of the foregoing demands. Such written confirmation must include, at a minimum:
(a) A detailed identification of all Lumos proprietary materials that have been located on NovaSpark's systems, devices, accounts, or other storage media, including the specific files, the dates on which they were created or received, the locations where they were stored, and the identities of all individuals who accessed them;
(b) A description of the specific steps NovaSpark has taken to cease all use and disclosure of Lumos proprietary information;
(c) A description of the specific steps NovaSpark has taken to segregate and preserve all potentially relevant evidence, including the implementation of a litigation hold;
(d) Confirmation that all Lumos proprietary materials have been returned to Lumos and that all copies have been permanently deleted and destroyed; and
(e) The identity and contact information for NovaSpark's legal counsel authorized to receive communications regarding this matter.
7. Warning of Imminent Litigation
Should NovaSpark fail to comply fully and promptly with each of the foregoing demands, Lumos is prepared to — and will — immediately commence litigation against NovaSpark Technologies Inc., Rajiv Anand, Serena Mallick, and Derek Yun in the Superior Court of the State of California, County of Santa Clara, asserting claims including, but not limited to:
1. Misappropriation of trade secrets under the California Uniform Trade Secrets Act, California Civil Code sections 3426 through 3426.11;
2. Breach of contract, including breach of the PIIAA obligations described herein;
3. Breach of the duty of loyalty owed by the Former Employees to Lumos during their employment;
4. Unfair business practices in violation of California Business and Professions Code section 17200 et seq.; and
5. Conversion of Lumos's proprietary materials and intellectual property.
In such litigation, Lumos will seek all available remedies at law and in equity, including without limitation: temporary restraining orders and preliminary and permanent injunctive relief enjoining NovaSpark from any further use, disclosure, or exploitation of Lumos's trade secrets and proprietary information; compensatory damages in an amount to be proven at trial; disgorgement of profits and unjust enrichment derived from the misappropriation; exemplary damages in an amount up to twice the compensatory damages award, as permitted by California Civil Code section 3426.3(c) where willful and malicious misappropriation is established; and attorneys' fees and costs as permitted by California Civil Code section 3426.4 and other applicable law.
Lumos also reserves the right to refer this matter to the appropriate law enforcement authorities for investigation and potential prosecution under applicable criminal statutes, including the California Uniform Trade Secrets Act's criminal provisions and the federal Defend Trade Secrets Act, 18 U.S.C. § 1836 et seq.
This letter is not intended to be, and shall not be construed as, a complete or exhaustive statement of all facts, circumstances, claims, rights, or remedies available to Lumos. All such facts, circumstances, claims, rights, and remedies are expressly reserved.
8. Reservation of Rights
Lumos expressly reserves all rights, remedies, and claims available to it at law and in equity, whether or not specifically enumerated in this letter. Nothing contained herein shall be deemed or construed as a waiver of any right, remedy, claim, or defense, nor as an election of remedies. Lumos's decision to provide this notice and an opportunity to cure shall not be construed as an obligation to provide similar notice or opportunity in the future, nor shall it be construed as a limitation on any remedy available to Lumos in any subsequent proceeding. Lumos's rights are cumulative, and the exercise of any one right or remedy shall not preclude the exercise of any other right or remedy.
Lumos expects NovaSpark's prompt and serious attention to this matter and full compliance with all demands set forth herein. The consequences of inaction or non-compliance will be swift and severe. Please direct all responses and communications regarding this matter to the undersigned at the address listed below, or by email at m.delgado@calderwoodharkness.com.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner, intellectual Property Group 555 California Street, 40th Floor San Francisco, California 94104 Telephone: (415) 773-5500
Email: m.delgado@calderwoodharkness.com
cc (via email): Thomas Brightwell, General Counsel, Lumos Analytics Inc. Priya Chandrasekaran, Chief Executive Officer, Lumos Analytics Inc. Catherine Bloom, Partner, Calderwood & Harkness LLP Wendy Schultz, Associate, Calderwood & Harkness LLP

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