MANCHESTER – A trade secrets dispute between Stonyfield Farm Inc. and former business partner Agro-Farma Inc. will proceed to trial in U.S. District Court in Concord.

A ruling by Judge Joseph N. Laplante narrowed the scope of the case this week.

Agro-Farma Inc., of New Berlin, N.Y., manufactured Greek style yogurt for Stonyfield for more than a year, from May 2007 until November 2008, before the business relationship turned sour.

Stonyfield switched its contract production of "Oikos" yogurt to Schreiber Foods Inc. of Green Bay, Wis., beginning in January, according to court documents.

LaPlante said in an order Oct. 7 that Agro-Farma's claims of misappropriation of ideas, unfair competition, unjust enrichment and constructive trust fell outside of New Hampshire's Uniform Trade Secret Act.

But LaPlante let stand seven other Agro-Farma claims against Londonderry-based Stonyfield and trade secret misappropriation claims against both Stonyfield and Schreiber.

A two-week trial is set to begin Aug. 3, 2010, before Judge Laplante.

Stonyfield spokesman Carmelle Druchniak declined to comment.

Attorney Robert J. Fluskey Jr., who represents Agro-Farma, said, "We are confident that New Hampshire law will protect Agro-Farma's ideas and processes for manufacturing Greek yogurt." Fluskey is with Hodgson Russ LLP law firm in Buffalo, N.Y.

"We believe that a jury will recognize the novelty and value of Agro-Farma's intellectual property, without which Stonyfield could neither make nor market its 'Oikos' Greek yogurt product," he said.

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Agro-Farma markets its products under the Chobani name.

Greek yogurt is strained to remove the whey, resulting in a creamier product.

Before its relationship with Agro-Farma, Stonyfield had not produced or marketed Greek yogurt and did not have the knowledge and expertise necessary to do so, LaPlante wrote in his opinion and order. "Agro-Farma, however, did have such knowledge and expertise."

At the heart of the dispute is a Confidentiality and Nondisclosure Agreement signed by Stonyfield and Agro-Farma.

Stonyfield alleges that substantial quantities of the Oikos Greek yogurt sold to it by Agro-Farma were defective and had to be destroyed.

"The non-conforming nature of these goods has been established by independent third party testing," Stonyfield attorney Peter S. Cowan, of Sheehan Phinney Bass and Green P.A. in Manchester, wrote in court papers.

Stonyfield claims breach of warranty, breach of contract and violation of New Hampshire' Consumer Protection Act. Stonyfield claims damages of nearly $7.7 million.

The case is a consolidation of claims and counterclaims by Stonyfield and Agro-Farma in both New York state and New Hampshire courts. It is case No. CV-08-488-JL.

French-based consumer products company Groupe Danone holds a controlling interest in Stonyfield.