It's always good to know where the lines are. Today, Judge Williams awarded attorneys fees after the plaintiff in a Defend Trade Secrets Act action maintained an "objectively specious" argument after the close of fact discovery:
A claim is objectively specious where there is a complete lack of evidentiary proof from the party suing. . . . [T]he Court agrees with [defendant] Backer that [plaintiff] ZIM litigated this matter with knowledge that its claims were objectively specious. While Backer contends that ZIM knew that its claims were objectively baseless when it filed the Complaint, the Court finds that ZIM understood that its claims were objectively specious by the close of fact discovery on January 12, …
Wow! This is something you don't see every day. The defendant in Truinject Corp. v Galderma S.A., C.A. No. 19-592-GBW (D. Del.) filed—and won—five motions for summary judgment.
Impressively, each of the five motions had its own grounds. This isn't an instance where one winning argument resolved five motions.
Here are the five motions:
Breach of Contract: No damages. The Court granted summary judgment that because the alleged harm was not actually caused by the breach, there can be no damages.
Trade Secret Misappropriation: No misappropriation. Plaintiff showed that misappropriation could have happened—because employees had access and worked on defendant's product—but offered no evidence that it did happen.
New Judge Williams is on a roll lately, releasing seven new opinions on Wednesday alone. Sadly we can't post about them all—I'd be doing nothing but writing blog posts. But I wanted to take the opportunity to point out an opinion from a rare (in D. Del., at least) trade secret action.
In Zoppas Industries de Mexico, S.A. v. Backer EHP Inc., C.A. No. 18-1693-GBW (D. Del.), the plaintiff accused the defendant of misappropriating its trade secret information about heating elements for appliances.
According to the complaint, plaintiff disclosed its literal secret plan—the "Zoppas Plan"—to appliance manufacturer Whirlpool. The complaint also alleges that the defendant here, Backer, then acquired that secret plan …
We don't see too many DTSA cases here (at least in comparison to patent cases), but this one is interesting.
In Peloton Interactive v. iFIT Inc., C.A. No. 20-1535-RGA (D. Del.), a mechanic at defendant iFIT had a childhood friend who was working as a freelance prop man helping shoot some commercials for iFIT competitor Peloton.
According to the Court, the iFIT mechanic found out about his friend's work and, despite allegedly knowing the scripts for the commercials were under an NDA, convinced his friend the prop man to forward him the scripts, which he did (along with a note "Dont [sic] forward or show my name.").
The iFIT mechanic then forwarded the scripts to the hero of this story, an iFIT Vice President of Product Development, referred to in the opinion as "Mr. Willardson." Mr. Willardson immediately shut down the idea of using the competitor's information and involved in-house counsel:
On October 26, 2020, after returning to the office, Mr. Chambers printed a copy of the Scripts from his email. . . . After reading a portion of the Scripts, Mr. Chambers brought the document to his immediate supervisor, Mr. Willardson, VP of Product Development. . . . Mr. Willardson quickly flipped through the Scripts and told Mr. Chambers not to share the document with anyone. . . . Mr. Willardson then put the Scripts in a sealed envelope and gave the envelope to iFIT's in-house counsel. . . . Mr. Chambers and Mr. Willardson have both testified that they never disseminated the Scripts.
In a trade secret dispute over THC remediation processes, Judge Hall recently denied a hemp processing company's motion for a preliminary injunction. The redacted version of her opinion came out yesterday, and it gives some helpful guidance for parties litigating trade secret disputes. It also touches on an important tip for legal writers everywhere.
As usual, one of the key questions was whether the plaintiff adequately identified the trade secrets at issue. This requires a careful balancing act—the trade secret needs to be broad enough to cover what the defendant is doing, but narrow enough to qualify for trade secret protection in the first place.
In trying to walk this line, lawyers are often tempted to use terms like "and/or" to keep their options open. In this case, the plaintiff used "and/or" in defining the scope of two of its alleged trade secrets. This ended up playing an important role in Judge Hall's likelihood-of-success analysis:
Starting with (1), SCB’s definition is not only general, it uses the modifier “and/or,” which suggests to the Court that SCB is attempting to claim as a trade secret the idea of oxidizing THC into CBN. If so, the Court rejects it. As SCB acknowledged at oral argument, the process of oxidation, and more particularly the fact that THC oxidizes into CBN, was well known in 2019.
. . .
Although SCB’s position is not entirely clear, its use of the “and/or” modifier in its interrogatory response suggests that it might be seeking to claim as trade secrets each of the individual “parameters and conditions” set forth in its interrogatory response and every possible permutation. As Defendants’ expert points out, that's 57 potential combinations of trade secrets. (D.I. 47 ¶¶ 29, 30.) SCB does not provide separate argument as to any particular permutation, making it impossible for the Court to determine which combinations of “parameters and conditions” it intends to press.
On Monday, Judge Noreika issued a post-trial ruling in Agrofresh v. Essentiv LLC, C.A. No. 16-662, modifying the jury's liability verdict and its damages award. She also criticized a briefing practice that she called "unhelpful and largely ineffective."
In trade secret litigation, parties often fight bitterly over the level of particularity with which the party asserting misappropriation has described its trade secrets. That dispute frequently plays out in connection with interrogatory responses or other trade secret contentions, served after the initial pleadings are closed.
However, it can arise earlier in the case. In a recent order, Judge Andrews dismissed a federal trade secret misappropriation claim under Rule 12(b)(6) because the complaint identified "large, general areas of information that Plaintiff alleges to have shared with Defendant" but failed to "identify what the trade secrets are within those general areas."
Notably, the order, issued in Lithero, LLC v. Astrazeneca Pharms. LP, C.A. No. 19-2320-RGA (D. Del.), states …
This blog is for general informational purposes. It is not an offer to perform legal services, and should not be considered a substitute for legal advice. Nothing in this blog should be construed as forming an attorney-client relationship. If you have legal questions, please consult counsel in your jurisdiction.