Improper NDA Defeats Trade Secrets and Overly Broad Patent Claims are Invalid
| July 29, 2013
Convolve v. Compaq Computer
July 1, 2013
Panel: Rader, Dyk and O’Malley. Opinion by O’Malley
Summary
Convolve, Inc. (“Convolve”) and Massachusetts Institute of Technology (“MIT”) appeal the decision of the U.S. District Court for the Southern District of New York (“District Court”) granting summary judgment in favor of Compaq Computer Corp. (“Compaq”), Seagate Technology LLC. and Seagate Technology, Inc. (“Seagate”).
Convolve and MIT sued Compaq and Seagate in July 2000 for breach of contract; misappropriation of trade secrets listed in Amended Trade Secret Identification (ATSI); direct patent infringement; and inducement of patent infringement along with other complaints such as fraud; violation of California Business and Professions Code §17200 (“CA Unfair Competition”), etc.
In May 2006, the District Court disposed of all other charges from the suit except the breach of contract, misappropriation of trade secrets and patent infringement charges. The District Court later granted summary judgment in favor of Compaq and Seagate and dismissed the remaining charges. With regard to the trade secret charges, the District Court found that:
(1) some of Convolve’s trade secrets (ATSI 1B, 2A, 2C, 2E, and 3B-D) were covered under a Non-Disclosure Agreement (NDA), which Convolve failed to properly preserve according to the NDA procedures;
(2) some of Convolve’s trade secrets (ATSI 2A, 6B, and 7A) were public known or common knowledge in the industry, which were not entitled to protection;
(3) some of Convolve’s trade secrets were never used by the defendants (ATSI 2F and 7E); and
(4) because New York law does not extend trade secret protection to marketing concepts, some of the trade secrets alleged by Convolve are not recognized by the District Court.
With regard to the patent infringement charges, the District Court found that:
(1) out of the four models of products alleged by Convolve as infringing Patent’473, none read on the claims of the patent;
(2) Patent’635 was found invalid for being non-enabling based on the inventor’s testimony; and
(3) since no direct infringement was found, the claim for inducement of patent infringement must fail.
Taking all inference in favor of Convolve, the CAFC affirmed all counts of summary judgment with regard to the trade secret allegations, as well as the invalidity of Patent’635, but reversed the non-infringement decision about Patent’473.
Convolve （原告）与Compaq， Seagate（康柏电脑和希捷数码，被告）就原告开发的一些硬盘技术进行技术合作谈判，双方就谈判涉及内容签订了保密协议。但原告在向被告透露相关技术时没有严格按保密协定约定的程序处理涉密内容。后来改谈判未能达成一致，原告诉被告在谈判涉及的保密内容上侵犯商业机密及在另一些技术问题上专利侵权。一审结果，联邦区域法院裁定原告败诉。
上述法院均认定，尽管侵犯商业机密属于一个侵权法的范畴，然而在已签订合同中原被告双方均已同意以合同条款规定商业机密的范畴，故侵权法默认的商业机密标准不适用。因原告在履行保密协议过程中未遵循商定的处理程序，原告在此案中已丧失对该商业机密的索赔权。
另外， 关于专利侵权案，原告的专利在当年提出申请时对该发明的描述超过了发明人的当时可以实施实际该发明的范畴，故该专利被认定未能适当描述其实施方法因而无效。上述法院部分维持一审法院的判决。
Tags: enablement > NDA > non-disclosure agreement > trade secret
Summary Judgment improperly granted in trade secret misappropriation case
| September 7, 2012
Raytheon Company v. Indigo Systems Corp. and FLIR Systems, Inc.
August 1, 2012
Panel: Linn, Dyk and O’Malley. Opinion by Linn.
Summary
Raytheon sues Indigo for misappropriation of trade secrets in selling an infrared imaging camera to a general contractor on the F-35 Joint Strike Fighter program. The district court grants Indigo’s motion for summary judgment that the statute of limitations (3 years) had lapsed. Former employees of Raytheon started up Indigo to produce infrared imaging cameras. The district court impermissibly drew inferences against the non-moving party (Raytheon) in granting the summary judgment motion. Further, the summary judgment motion should not have been granted because Texas and California law state that the discovery rule for the statute of limitations is a question of fact and not of law.
Tags: statute of limitations > trade secret > trade secret misappropriation
