Risk Management Expert’s Conclusions about IBM’s Internal Capabilities Excluded
Posted on June 19, 2025 by Expert Witness Profiler
Plaintiff Gerald Hayden brought claims against Defendants International Business Machines Corporation (“IBM”), Pablo Suarez, and Shanker Ramamurthy, under the federal Defend Trade Secrets Act (“DTSA”) and for violating New York’s prohibition on the misappropriation of trade secrets.
Prior to joining IBM in 2015, Plaintiff developed a “methodology to construct an architecture for a digital platform,” which he called “Awareness to Execution” (“A2E”). According to Plaintiff, his alleged trade secret “describes an architecture for an IT solution that creates a digital platform which accesses data in near real-time . . . and applies big data prescriptive and predictive analytics.” A2E “can also be used as a methodology to market and sell the various components or elements of the digital platform, individually or in combination with each other.”
Plaintiff also brought a number of other claims under New York and federal law: breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, tortious interference, and retaliatory discharge under the Sarbanes-Oxley Act.
Defendants filed a motion to exclude the proffered testimony of Plaintiff’s expert, David Martin.
Risk Management Expert Witness
David Martin is a risk management consultant with over 40 years of experience as a financial executive. He has held senior positions at PricewaterhouseCoopers, Citibank, and AllianceBernstein, and has “extensive experience with technological solutions in the banking and financial markets industries.”
Discussion by the Court
Plaintiff offered Martin as an expert to opine on the nature and value of A2E. Defendants did not dispute Martin’s qualifications regarding the topics for which he has been engaged to testify. Instead, Defendants argued that Martin’s opinions are irrelevant and that his methodologies warranted exclusion of his testimony. Specifically, Defendants argued that Martin’s opinions are not based on sufficient facts and that he does not apply reliable methodologies to reach his conclusions.
Reliance on Sufficient Facts or Data or Reliable Methodologies
IBM’s Awareness of A2E
Regarding IBM’s awareness of A2E and the value it may have held for the company, the Court observed that Martin based his conclusions solely on his personal experience. He asserted that the solutions embodied in A2E were not known to IBM or the broader market as of 2015.
IBM’s Internal Capabilities
Martin stated—after reviewing depositions from a former IBM employee and another individual he described as “an expert in software technology”—that “without access to [Plaintiff’s] A2E trade secrets, competitors and IBM would not have been able to execute on these strategies and solutions.”
However, Martin did not explain how his background or expertise led him to conclusions about IBM’s internal knowledge or capabilities at any specific time. He failed to clarify how he determined that IBM lacked awareness of the “formulas, architectures, and solutions contained in A2E,” especially given that he had never worked for IBM or with the company in any professional capacity.
The Court found that this omission weakened Martin’s opinion that IBM could not have executed the solutions without access to Plaintiff’s trade secrets. Because his assertion that IBM was unaware of certain strategies lacked a sufficient factual foundation, his related conclusion about IBM’s inability to implement or act on those strategies was similarly flawed.
IBM’s Commercial Objectives
Martin further opined that, before Plaintiff’s employment, IBM was not focused on the core elements of A2E or on horizontally integrating workflows. He based this view on his review of Plaintiff’s deposition and certain documents produced by IBM describing its commercial offerings.
Nevertheless, the Court found that IBM’s public-facing commercial materials, even when considered alongside Plaintiff’s testimony, did not constitute “sufficient facts and data.” Moreover, Martin did not demonstrate how his industry experience in banking and finance qualified him to determine, from that limited set of documents, what IBM’s commercial priorities actually were at the time.
Cloud Pak’s Overall Design
Martin claimed that IBM incorporated parts of the Plaintiff’s trade secret—A2E—into its Cloud Pak products, and as a result, profited from A2E. He pointed to specific similarities, stating that Cloud Pak included “key combinations of elements” found in A2E, such as integrated data systems, a distinctive marketing framework, and a unique framework for analytics and decision-making.
Based on these similarities, Martin concluded that IBM’s Cloud Pak was directly based on A2E. He argued that the overlap was too significant to be a coincidence and therefore believed that Cloud Pak’s overall design and architecture were derived from A2E.
However, the Court rejected this reasoning. It held that Martin’s opinion amounted to a bare assertion—or ipse dixit—which is not valid expert testimony because it lacked a reliable, tested methodology.
To support his conclusion, Martin had simply compared two slide decks: one showing A2E’s reference architecture and the other showing Cloud Pak’s. The Court found that this kind of side-by-side comparison was not a scientifically valid or reliable method under Rule 702, and therefore could not support his expert opinion.
Hybrid Cloud Platform Solution
Regarding Martin’s opinion on how long it would have taken IBM to develop a hybrid cloud platform without knowledge of A2E, the Court found that he failed to offer any methodology to estimate the time IBM allegedly saved by using A2E.
Although Martin asserted that IBM gained a “head start” by using Plaintiff’s trade secret, the Court pointed out that he did not examine IBM’s internal processes for securing approval or funding for research and development. As a result, his opinion lacked the necessary factual basis and analytical framework.
Intruding on the Province of the Fact Finder
Although Martin did not expressly state that A2E qualified as a trade secret—and claimed that he had “no opinion” on that legal issue—he assumed, for the purposes of his report, that a trade secret is any formula that offers a business advantage. Based on that assumption, he concluded that A2E met this definition. However, the Court ruled that this was an inadmissible legal conclusion, which an expert is not permitted to make.
The Court also noted that Martin made improper credibility judgments by repeatedly adopting the testimony of fact witnesses to support his own conclusions, rather than relying on independent analysis.
Ultimately, the Court held that Martin’s testimony was inadmissible because his opinions and inferences merely reinforced the Plaintiff’s version of events, rather than offering objective, expert analysis.
Held
The Court granted the Defendants’ motion to preclude the testimony of Plaintiff’s expert, David Martin.
Key Takeaway:
Although an expert can “draw a conclusion from a set of observations based on extensive and specialized experience,” the expert must base that opinion on sufficient facts or data and “must explain how that experience leads to the conclusion reached, why that experience is a sufficient basis for the opinion, and how that experience is reliably applied to the facts.”
Case Details:
| Case Caption: | Hayden V. International Business Machines Corporation Et Al |
| Docket Number: | 7:21cv2485 |
| Court Name: | United States District Court, New York Southern |
| Order Date: | June 17, 2025 |
