Int’l Technologies Consultants, Inc. v. Stewart, No. 07-13391, 2010 WL 3789831 (E.D. Mich. Sept. 22, 2010) International Consultants sued on a variety of claims, including intentional interference with a business relationship, and Stewart Engineers counterclaimed for breach of the confidentiality agreement and misappropriation of trade secrets. The court granted International Consultants summary judgment with respect to Stewart Engineers’ counterclaims. The confidentiality agreement was void because it failed to include material terms – more specifically, a description of the particular confidential information it protected – and thus, the parties had not come to a mutual agreement regarding confidentiality. Stewart asked the court to cure the uncertainty by looking at two joint ventures on which the parties embarked subsequent to the signing of the confidentiality agreement. The court found, however, that doing so merely showed that the parties intended to maintain confidentiality with respect to those particular projects, not in general. The trade secrets claim failed for several reasons. First, Stewart failed to identify any specific misappropriated trade secrets in its brief. Second, during the two companies’ joint ventures, Stewart had signed agreements assigning the trade secrets utilized to International Consultants.
Dow Corning Corp. v. RSI Silicon Products, LLC, No. 10-11226-BC, 2010 WL 4723428 (E.D. Mich. Nov. 15, 2010) Defendants moved to dismiss Plaintiff’s misappropriation claim, arguing first that Plaintiff had failed to state a misappropriation claim in its pleading. They pointed out that the allegations did not provide the ‘who,’ ‘what,’ ‘when,’ ‘where,’ ‘why,’ or ‘how’ necessary to establish misappropriation. The court found such information unnecessary at the pleading stage; Plaintiff had done enough by asserting that it possessed trade secret technology, that Defendants had acquired that information, which they knew to be a trade secret, and that the trade secret was so carefully guarded, there was no avenue by which Defendants could have acquired it except by improper means. However, the court granted Defendants’ motion to dismiss, finding that it lacked personal jurisdiction over Defendants, which were based in Pennsylvania. Defendant had limited contacts with Michigan, and Plaintiff did not allege that trade secrets were stolen from a facility in Michigan or that Defendants traveled to Michigan to further the alleged misappropriation. The only contacts with Michigan were an email chain, and this began as a message from Michigan, rather than to Michigan. Plaintiff argued that the court could infer Defendants must have had Michigan contacts, given their alleged knowledge of the trade secrets, but this speculation was not enough.
Spartan Graphics, Inc. v. EnterMarket Corp., No. 292235, 2010 WL 4628643 (Mich. Ct. App. Nov. 16, 2010) In a preceding case involving separate allegations, Plaintiff, a designer and seller of specialty printed materials, and one of this case’s defendants, print broker EnterMarket, had reached a settlement that legally resolved any claims which could have been brought in that suit. Subsequently, Plaintiff sued EnterMarket and a former employee, alleging that the employee was now working for EnterMarket and was using Plaintiff’s confidential information to solicit Plaintiff’s customers. The court reversed a lower court’s ruling before trial that the prior case’s settlement precluded this suit’s misappropriation claim. The settlement agreement did settle “all claims . . . known or unknown,” but it also included language limiting the agreement to claims that “could have been alleged” in the prior lawsuit. Plaintiff argued that it did not know about the alleged misappropriation until after the prior lawsuit had concluded, that it therefore could not have alleged misappropriation in the prior suit, and thus, that the settlement did not preclude this suit. The court held that discovery was necessary to determine whether a misappropriation had occurred at such a time that it could have been alleged in the prior suit, in which case the claim would be barred by the settlement agreement.
Atlantech, Inc. v. Am. Panel Corp., No. 11-50076, 2011 WL 2078222 (E.D. Mich. May 24, 2011) Plaintiff had an ongoing relationship with Defendants in which Plaintiff purchased American aircraft displays from Defendants and exported them to Russian manufacturers. Plaintiff alleged that Defendants breached several agreements by selling to one of these Russian manufacturers, UIMDB, through an intermediary company, Nexel Defense (a third party in the case). Plaintiff moved to compel discovery of documents relating to communications between Nexel and Defendants regarding the relationships between Nexel and Defendants and between Nexel and UIMDB. The court found that the material did not qualify as a privileged matter under FRCP 45. However, it determined that the communications were trade secrets under the Michigan Trade Secrets Act, s. 445.1902(d), and the court exercised its discretion to deny Plaintiff’s motion. First, the information had economic value because even though there was a dispute about Plaintiff’s status as an active business, it could re-enter the market and use the information to compete with Nextel. Furthermore, the information had economic value because it was not generally known to others. In finding economic value, the court deemed it relevant that the relationship between Defendants and Nextel was ongoing, and that Nextel specifically indicated to the court which information would be disclosed and how it would be harmful. Second, both Nextel and Defendants had taken reasonable efforts to protect the information through a confidentiality and non-disclosure agreement, and the companies’ proprietary information had, in fact, been kept secret up to that point.
Dow Corning Corp. v. Xiao, No. 11-10008-BC, 2011 WL 2015517 (E.D. Mich. May 20, 2011) Plaintiff corporations alleged, among other things, that Defendants, an individual and multiple companies he formed, misappropriated Plaintiff’s trade secrets by hiring a former employee of Plaintiff and stealing Plaintiff’s processes for manufacturing a specific chemical compound. Defendant moved to dismiss this portion of the complaint, arguing that Plaintiff had not identified a specific trade secret that was misappropriated. In denying Defendant’s motion, the court pointed out that Plaintiff had specifically described in its complaint the relevant chemical compound and some of the basic processes involved in the Plaintiff’s manufacture of this compound, and that Plaintiff alleged that those processes, and the specifications and conditions necessary to run them well, were trade secrets. This amounted to sufficient factual information to let the court reasonably draw the inference that Defendant was liable.
Gene Codes Corp. v. Thomson, No. 09-14687, 2011 WL 611957 (E.D. Mich. Feb. 11, 2011) Plaintiff alleged that Defendant misappropriated the identities of a number of Plaintiff’s customers as well as Plaintiff’s plans to possibly incorporate a new type of software into its products. In granting Defendant’s motion for summary judgment, the court held that there were no protected trade secrets involved. Plaintiff had not identified a customer list and claimed nothing more than that Defendant knew who some of Plaintiff’s customers were; and Plaintiff’s plans to utilize new software were not trade secrets because Plaintiff had already publicly announced them. Even if Plaintiff had identified trade secrets, the court found that it could not demonstrate misappropriation. Plaintiff conceded that no actual misappropriation had occurred, but alleged threatened misappropriation through the doctrine of inevitable disclosure. Noting that Michigan courts had mentioned in neutral terms but not endorsed the concept of inevitable disclosure, the court found no threatened misappropriation. Plaintiff argued that disclosure was inevitable as evidenced by Defendant’s duplicity, specifically her communications with a competitor about changes in the market and a client’s enthusiasm for the competitor’s product, her solicitation of and employment with the competitor, and her contact with several of Plaintiff’s customers after accepting a job with the competitor. The court declared that Defendant’s contact with some of Plaintiff’s customers showed only that Plaintiff and Defendant’s new employer had overlapping customers. It found that discussing employment with a competitor was not duplicitous. The court noted that Defendant’s communications with the competitor either amounted to small talk or concerned matters already publicly known.
Sulfo Technologies, L.L.C. v. Schmoyer, No. 294246, 2011 WL 445808 (Mich. Ct. App. Feb. 8, 2011) Plaintiff accused Schmoyer, a former employee and shareholder, of misappropriating information regarding Plaintiff’s processes as well as its vendors and customers by sharing the information with a competitor, SAT, after his employment with Plaintiff ended. The court upheld the lower court’s decision in favor of Defendants. Plaintiff had failed to show that Defendants used any of Plaintiff’s confidential information. Schmoyer had not been a part of SAT’s sulfonation design and engineering process. More importantly, the equipment utilized in the sulfonation process was publicly and readily available, and while Plaintiff averred that its particular machinery configuration was a secret, the court found that because such configurations are simply a matter of trial and error and are products of the particular item to be treated, there was no evidence that SAT had used Plaintiff’s configuration.
Brake Parts, Inc. v. Lewis, Nos. 09-132-KSF, 10-212-KSF, 2010 WL 3470198 (E.D. Ky. Aug. 31, 2010) Defendants allegedly set up a scheme in which one of Plaintiff’s employees emailed them trade secrets for which Defendants paid the employee. The court dismissed Plaintiff’s RICO claim because the alleged misappropriation was not a continuous pattern of racketeering. The scheme to steal secrets had ended, Defendants already had in their possession the alleged trade secret, and Plaintiff merely alleged that Defendants would make use of that information in the future. The court disagreed, however, with Defendants’ argument that Kentucky’s Uniform Trade Secrets Act preempted the tortious interference claim. Plaintiff’s claim was based upon Defendants’ alleged inducement of Plaintiff’s employee to violate a non-disclosure agreement and disclose the confidential information. The court determined that this claim was based on a breach of contract and not necessarily on misappropriation of a trade secret, and thus was not preempted. In this regard, the court found it relevant that to prevail on the tortious interference claim, Plaintiff would not have to prove that the provided information constituted trade secrets.
Capitol Specialty Ins. v. Indus. Electronics, No. 09-6368, 2011 WL 96521 (6th Cir. Feb. 23, 2011) Defendants, an industrial electronics repair company and a company employee, were sued by the employee’s former employer for allegedly using that company’s confidential information, in violation of a confidentiality agreement. Plaintiff, Defendant company’s liability insurer, sought a ruling that it did not have to defend the suit. The Court of Appeals agreed. Putting aside legal issues regarding trade secret law in Kentucky, the court found that the insurance policy precluded claims arising out of any alleged breach of contract.
FBK Partners, Inc. v. Thomas, No. 09-292-GFVT, 2010 WL 4940056 (E.D. Ky. Nov. 30, 2010) Plaintiff’s claims included an allegation that several former employees had misappropriated a trade secret when they shared an email while still working for Plaintiff that contained information on Plaintiff’s pricing, materials used in its manufacturing processes, and its operational costs. Defendants requested summary judgment on all claims, arguing that Plaintiff’s claims for breach of fiduciary duty, conversion, and breach of contract were preempted by the trade secrets claim under Kentucky’s Uniform Trade Secrets Act, and that the trade secrets claim was meritless. The court denied summary judgment. Plaintiff’s non-trade secrets claims were only preempted by KUTSA with respect to the particular facts they shared in common with the trade secrets claim. To the extent that these claims arose out of facts not concerning the trade secrets claim, and to the extent that Defendant failed to demonstrate that any items involved in these claims did not amount to trade secrets, these claims were not preempted. The court also found that the trade secrets claim was a factual dispute appropriate for jury resolution because of several unresolved issues surrounding the disputed email. These issues included the significance of the information included, whether the costs included were industry-wide or specific to Plaintiff, and how the costs could have been available to the public. The court also declared that in general, whether information amounts to a trade secret is a question of fact.
Litigation Mgmt., Inc. v. Bourgeois, No. 95730, 2011 WL 2270553 (Ohio Ct. App. 8 Dist. June 9, 2011) Plaintiff, having secured damages at the trial court level for breach of nondisclosure agreements and for trade secret misappropriations, appealed that court’s refusal to permanently enjoin Defendants from utilizing the misappropriated information. The Court of Appeals reversed. First, the court noted that in the context of permanent injunctions, assessing whether Plaintiff has shown irreparable harm and whether damages are an inadequate remedy are essentially the same issues, and therefore are combined into a single analysis. The court found that damages were an inadequate remedy because they would merely remedy Plaintiff’s past injury from losing business to Defendants, and would do nothing to prevent future, similar injury. Without an injunction, the Defendants would obviously continue to use Plaintiff’s trade secrets, to Plaintiff’s detriment. Because the context was a trade secret misappropriation, Plaintiff was entitled to a rebuttable presumption of irreparable harm from losing its confidential information. Plaintiff prevailed despite not making a showing of future harm because the burden on this issue fell on Defendants in the trade secret context.
Jedson Eng’g, Inc. v. Spirit Constr. Services, Inc., No. 1:08cv413, 2010 WL 2541619 (S.D. Ohio June 18, 2010) The court granted Defendants summary judgment on Plaintiff’s claim that Defendants had misappropriated protected technical information, vendor lists, parts lists, designs, processes and techniques. The court agreed with Plaintiff that there was a genuine issue of fact as to whether this information was known outside of Plaintiff’s business, because while elements of the design were known outside of the business, the combination of the elements of design was not. However, the court found that Defendants were under no obligation to keep the information confidential. Plaintiff had not required any concerned parties to sign confidentiality agreements and had shared the disputed information with various third parties, and there was no support under Ohio law for Plaintiff’s position that there had been an implied duty of confidentiality. Defendants’ motion for summary judgment on Plaintiff’s claim under the Computer Fraud and Abuse Act, on the other hand, was denied. Defendants argued that Plaintiff couldn’t show damages as defined under the statute, which Defendants claimed only allowed recovery of costs incurred from investigating and fixing damage to a computer, or of costs incurred from a computer’s service being interrupted. But the court found that under the statute’s language, Plaintiff could recover for costs incurred from investigating how to make its website more secure, and Plaintiff alleged that as a result of Defendants’ unauthorized access to Plaintiff’s information via computer, it had done just such an investigation.
84 Lumber Co. v. Houser, No. 2009-P-0056, 2010 WL 3081494 (Ohio Ct. App. 11 Dist. Aug. 6, 2010) The court ruled that Defendant had waived personal jurisdiction requirements by filing a motion for summary judgment at the trial court level asking the court to consider the merits of the action against him. The court also reversed the lower court’s granting of summary judgment on a misappropriation claim. Plaintiff adequately alleged the disputed information was a trade secret by alleging that the information was highly confidential and that Plaintiff password protected that information. Plaintiff also adequately alleged that the information was misappropriated by alleging that Defendant, a former employee, had a deep knowledge of Plaintiff’s cost and pricing structures, allowing Defendant’s new employer to outbid Plaintiff for a customer. Defendant argued that the misappropriation did not occur within the 25-mile radius established in the noncompetition agreement between Plaintiff and Defendant. This was irrelevant, however, because the claim being considered was one for misappropriation of a trade secret and not breach of the noncompetition agreement. There are no territorial restrictions on statutory trade secret misappropriation.
Rogers Industrial Products Inc. v. HF Rubber Machinery Inc., No. 25093, 2010 WL 2837780 (Ohio Ct. App. 9 Dist. July 21, 2010) Defendants argued that the lower court’s granting of summary judgment in their favor on a trade misappropriation claim was merited because Plaintiff had disclosed the alleged trade secret in a patent application before the misappropriation. The appeals court disagreed, noting that trade secrets related to a patent application but not disclosed in the actual application retain protection. In this case, the patent application disclosed minimal information about a mechanism on a machine but no details about how the mechanism worked, and was not specific enough to allow a competitor to recreate the mechanism. Plaintiff did disclose the mechanism’s particulars in a later continuation patent application, but because that application was filed after the misappropriation, it had no bearing on the issue. Defendants also argued that Plaintiff had not adequately protected the information at issue because it had no confidentiality agreement with the party it allowed to see the information. Plaintiff, however, showed that it had established an implied confidentiality agreement with that party. Specifically, Plaintiff had emphasized that it wanted as few individuals as possible to witness its customer sample prototype. Plaintiff also had stamped “confidential” on the prototype’s owner’s manual. Finally, Plaintiff had a long-standing relationship with the party, during which time that party had always kept Plaintiff’s technological information confidential. Furthermore, Plaintiff had raised a genuine issue of fact regarding whether the information had economic value because the shared assembly drawings could save a competitor great time and expense. Notably, the lower court’s ruling that Plaintiff’s other claims (i.e., unfair competition, tortious interference with contracts or business relationships, and conversion) were preempted by the trade secrets statute was upheld because Plaintiff had done nothing to rebut this point other than indicate that there may have been more than one misappropriation or type of information at issue.
Alice’s Home v. Childcraft Educ. Corp., No. 09AP-299, 2010 WL 3448319 (Ohio Ct. App. 10 Dist. Sept. 2, 2010) Plaintiff filed suit after discovering that Defendant was selling other products extremely similar to one of Plaintiff’s products it had licensed to Defendant, potentially decreasing Defendant’s sales of the licensed product and thus decreasing Plaintiff’s royalties. The lower court awarded Defendant a directed verdict on Plaintiff’s trade secret claim, and the Court of Appeals affirmed. Plaintiff had not specified what aspects of the model it had licensed made it a protectable trade secret, and the nature of the design was readily examinable and could easily be reverse-engineered. Even if Plaintiff’s model were unique, the design would not have been a protected trade secret absent a formal confidentiality agreement. However, the court denied Defendant’s motion for fees under Ohio’s Uniform Trade Secrets Act. The lower court had initially denied summary judgment to Defendant and had found it necessary for the parties to proceed with discovery and for Plaintiff to present its case. Under such circumstances, an award of fees was not appropriate.
Kendall Holdings, Ltd. v. Eden Cryogenics, LCC, No. 2:08-cv-390, 2010 WL 3894166 (S.D. Ohio Sept. 29, 2010) Plaintiff alleged that former employees had acquired trade secrets in the form of shop drawings, manufacturing procedures, pricing information, and customer lists while working for Plaintiff and had misappropriated them after coming to work for a competitor. The court dismissed Plaintiff’s claim that the former employees had breached an implied contract of confidentiality, which Plaintiff argued was an implied term of their employment. The Ohio Uniform Trade Secrets Act, and Plaintiff’s trade secrets claim, preempted the breach claim. The disputed claim was not truly contractual, but was, in fact, a tort because Ohio courts have treated the duty of confidentiality as an issue of tort. Torts based on misappropriation of trade secrets are preempted by the statute, and Plaintiff’s claim rested entirely on allegations of just such a misappropriation. Plaintiffs’ claims for unfair competition, tortious interference, conversion, and duty of loyalty, on the other hand, were not preempted. This was so because these claims were based on stolen pieces of confidential information that were not coextensive with, but rather were broader than and inclusive of, the alleged misappropriated trade secrets. In other words, these claims depended in part on information that may have been confidential but was not necessarily a trade secret.
Apex Energy Solutions of Cincinnati LLC v. Apex Energy Solutions of Ind., LLC, No. 1:10cv106, 2010 WL 4642902 (S.D. Ohio Nov. 9, 2010) Plaintiffs alleged that Defendant Price had acquired trade secrets while working with Plaintiffs through training sessions held in Ohio. Price, who had worked with Plaintiffs in Indiana and Kentucky, moved to dismiss for want of personal jurisdiction, and the court granted his motion, holding that Ohio’s long-arm statute did not confer such jurisdiction in the instant case. First, the court found that Price had not transacted business in Ohio but had simply attended two business meetings and learned business information in Ohio. Price had conducted no sales activity in Ohio and had spent fewer than two days collectively in the state attending meetings. Second, Plaintiffs had not shown that Price took actions in Ohio causing tortious injury. Plaintiffs alleged that Price had acquired trade secrets in Ohio, but he had done so lawfully; Plaintiffs merely alleged that Price’s wrongful acts elsewhere would amount to a misappropriation. Price had engaged in no fraudulent behavior in Ohio. Finally, because Price did not compete in the Ohio market, there were no allegations suggesting that any disclosure by Price would be undertaken for the purpose of injuring Plaintiffs in Ohio.
Novak v. Farneman, No. 2:10-CV-768, 2010 WL 4643002 (S.D. Ohio Nov. 9, 2010) After Plaintiff discovered that Defendants had their own patent application containing information Plaintiff had shared with them, which was also information that Plaintiff already had incorporated into its own patent application, Plaintiff sought a preliminary injunction barring Defendants from misappropriating more information or commercializing the technology, and imposing a trust over Defendants’ patent application. The court agreed with Plaintiff that Defendants had taken Plaintiff’s information and used it in their patent application. Plaintiff’s information on the technology had, in large part, been literally copied and pasted into Defendants’ application. However, the court ruled for Defendants because Plaintiff had not taken adequate measures to protect the technology. Plaintiff alleged that he had required Defendants to sign non-disclosure agreements, but he could not produce any copies. Plaintiff also had allowed disclosure to other potential customers without using any confidentiality agreements.
Berardi’s Fresh Roast, Inc. v. PMD Enterprises, Inc., No. 93920, 2010 WL 4140294 (Ohio Ct. App. 8 Dist. Oct. 21, 2010) Plaintiff alleged substantial lost profits from a misappropriation and appealed a jury award it felt too small. The court affirmed the award. Plaintiff first argued that the trial court had erred by telling the jury that it should determine a “reasonable period of time” over which lost profits could be recovered. The court noted that the overwhelming weight of testimony indicated that the recipes tasted different. Defendants merely used Plaintiff’s recipe to save time creating their own. Under such circumstances, the amount of time under which damages should be calculated was properly a question for the jury, and the use of “reasonable” in the jury instructions was not error. Plaintiff also argued that the award was against the manifest weight of the evidence because Plaintiff’s president had shown figures indicating hundreds of thousands of dollars worth of sales of the company’s recipe prior to losing a particular customer. However, Plaintiff provided no documentary evidence on costs to generate sales. Because damages cannot be based on gross revenue, the jury did not misstep by using profits realized by Defendants as the basis for the award in the face of uncertainty regarding Plaintiff’s lost profits. This was particularly so because the misappropriated secret was used not directly to field a competing product, but merely to save time developing a product.
Allied Erecting and Dismantling Co., Inc. v. Genesis Equip. & Mfg., Inc., No. 4:06CV114, 2010 WL 3370286 (N.D. Ohio Aug. 26, 2010) Following a jury award for unjust enrichment, the court denied Plaintiffs’ motion to permanently enjoin Defendants from manufacturing and selling a product that was ostensibly created using misappropriated information. While Plaintiffs noted that many Sixth Circuit courts had found misappropriation of trade secrets irreparable in a variety of circumstances, the court found that this was not an ironclad rule, and given that the jury had not found that Plaintiffs had proven the misappropriation resulted in any lost profits, Plaintiffs were required to make some showing as to why the compensatory damages they had been awarded would not fully remedy the misappropriation, a showing Plaintiffs had not made. Additionally, the trade secrets had since been disclosed by Plaintiffs to the public through trade shows and public filings of the case. Finally, while the jury had found that Defendants misappropriated trade secrets, it had not identified what those trade secrets were, making a permanent injunction inappropriate.
Allied Erecting & Dismantling Co., Inc. v. Genesis Equip. & Mfg., Inc., No. 4:06CV114, 2010 WL 4818367 (N.D. Ohio Nov 19, 2010) After a jury verdict awarding Plaintiffs damages based on Defendants’ unjust enrichment from misappropriating Plaintiffs’ trade secrets, Plaintiffs filed a motion for a new trial on lost profits and punitive damages. Defendants filed a motion for judgment as a matter of law or, alternatively, a new trial. Defendants argued that there was no reasonable basis for awarding Plaintiffs unjust enrichment damages, and that Plaintiffs had not proven misappropriation of a trade secret. The court awarded Defendants judgment as a matter of law that Plaintiffs were not entitled to any unjust enrichment damages because Plaintiffs had presented no evidence demonstrating Defendants’ actual profits from the alleged misappropriation, and had instead focused on their own lost profits. The court denied Defendants judgment on the issue of misappropriation because Plaintiff had presented a large amount of evidence, though circumstantial, at trial regarding the alleged misappropriation, and thus the issue was a question of fact appropriate for a jury. Defendants’ motion for a new trial was denied. Defendants argued that the court below had erroneously issued summary judgment on the issue of whether information in an owner’s manual was confidential. This court found, however, that because the manual explicitly labeled itself confidential and because an owner had a legal duty not to disclose its contents, the information was, indeed, confidential. Plaintiffs’ motion for a new trial on damages was denied. Plaintiffs argued that because of erroneous jury instructions and evidence that should have been excluded, the jury had considered the number of competing products in determining damages, a consideration Plaintiffs maintained was irrelevant. The court disagreed, holding that such evidence is relevant to determining damages because it would influence a determination of which and how many sales would have been lost.
R.C. Olmstead, Inc. v. CU Interface, LLC, No. 5:08CV234, 2011 WL 557599 (N.D. Ohio Feb. 16, 2011) After garnering summary judgment in their favor on a misappropriation claim, Defendants moved to recover costs and attorneys’ fees under state and federal law. The court found that the misappropriation claim may have been brought in bad faith as Plaintiff’s president admitted that the product in question was not a trade secret and had not been protected. The claim was not frivolous, however, because Plaintiff would have brought its other claims, even if it had not brought the misappropriation claim. However, costs and fees were awarded starting from the point in trial when it became obvious that the misappropriation claim would not succeed. Specifically, after Plaintiff’s expert testimony was stricken from the record, it was clear to all concerned parties that Plaintiff’s claims would inevitably fail.
Acordia of Ohio, LLC v. Fishel, No. C-100071, 2010 WL 5275169 (Ohio Ct. App. 1 Dist. Dec. 17, 2010) Plaintiff alleged that several former employees had misappropriated trade secrets and confidential information to convert clients to their new employer. The court upheld the lower court’s granting of summary judgment in favor of Defendants. The former employees obtained the alleged confidential information through public sources and by asking the clients themselves, not by misappropriating Plaintiff’s secrets. The court noted that a finding that the information at issue in a particular case could be independently replicated does not, per se, preclude a finding that the information is a protected trade secret. However, in this case, Plaintiff failed to provide any evidence regarding how this allegedly confidential information was actually obtained.
J.T. Shannon Lumber Co., Inc. v. Barrett, No. 2:07-cv-2847-JPM-cgc, 2010 WL 3069818 (W.D. Tenn. Aug. 4, 2010) Defendant, a former employee, argued that the information in dispute was not a trade secret because he had acquired the knowledge outside of his employment with Plaintiff and because the information was commonly known within the industry. Plaintiff countered that the information was confidential and had been acquired by Defendant on the job, and that even if the information were publicly available, this particular combination of pieces of publicly available information was a protected trade secret. Without elaboration, the court denied both parties summary judgment. The court also denied summary judgment to both parties on whether Defendant, who had signed a confidentiality agreement, had misappropriated that information by emailing Plaintiff’s competitor about how to expand into one of Plaintiff’s markets. Defendant had argued that the confidentiality agreement did not prevent this particular disclosure because the information was not acquired under circumstances creating a duty to maintain secrecy.
Universal Delaware, Inc. v. Comdata Network, Inc., No. 3:10-mc-00104, 2011 WL 1085180 (M.D. Tenn. Mar. 21, 2011) Defendant, an issuer of “fleet cards” for trucks, was being sued in a separate case for monopolistic behavior and violations of the Sherman Act. Defendant moved to subpoena non-party FleetOne, a major competitor, to acquire information for its defense in that suit. FleetOne moved to modify the subpoena, arguing that the identities and number of customers won from Defendant, the reasons these customers switched companies, and FleetOne’s cooperation with truck stop chains to secure customers were trade secrets and should not have to be provided. The court applied an already-established three-prong test, asking whether each piece of information was a trade secret, and then asking whether each was necessary and relevant, and if both were the case, balancing the two interests. The court found all of these items to be trade secrets, despite what it called FleetOne’s conclusory arguments, because the confidential nature of such strategic information on competition and customers is self-evident, particularly where the disputing parties are direct competitors. As to the reasons customers switched companies and any coordination by FleetOne with truck stop chains, the court granted FleetOne’s motion because Defendant had failed to show why these were relevant to the Sherman Act suit. However, the number and identity of customers were plainly relevant to Defendant’s claim in the antitrust suit that competition was not lacking in the market. Balancing the two parties’ interest, the court denied FleetOne’s motion regarding this information because it was central to Defendant’s antitrust case and because the subpoena was limited to certain customers, not FleetOne’s entire customer list. The court noted FleetOne’s argument that the information was unnecessary because Comdata could determine on its own which customers had switched, and found this to be evidence that the damage from the subpoena to FleetOne would be slight because the information was not truly secret.