Take off your eclipse glasses, close that NASA photo gallery, and stop thinking about how “path of totality” would make an awesome band name: it’s time to get back to work. As the country recovers from Eclipse Mania 2017, we take a look at some space-related trade secrets cases.
Turn Around…
Someone might be stealing your trade secrets behind your back! A federal court found that’s what happened to Pacific Aerospace & Electronic, Inc. (PAE), a company that designs components for electronic circuitry in the aerospace and space exploration industries and whose products are used on the Hubble Telescope and the International Space Shuttle. According to PAE, the specialized nature of its business makes the identity of its customers—who are relatively few in number—critical to its business success. That’s why it was a problem when two PAE employees who had access to proprietary information about PAE’s technologies and customers left for a rival company, RAAD Technologies, Inc. One of the former employees allegedly copied backup tapes of design information weeks before leaving, and both employees allegedly compiled a list of prospective customers after leaving which they gave to RAAD’s sales representative for use in soliciting business. PAE brought a claim for misappropriation of trade secrets (among others) against these former employees and RAAD in the Western District of Washington, and moved for a preliminary injunction. The court ruled that PAE’s detailed customer information was a protectable trade secret, and that PAE risked irreparable harm in the absence of an injunction and would likely prevail on the merits of its misappropriation claim. However, the court limited the scope of injunctive relief only to future misuse of the trade secret customer list, rather than ongoing misuse—i.e., continued sales to wrongfully-acquired customers—as PAE had requested. The court reasoned that given the importance of PAE’s (and later RAAD’s) customers, public interest concerns favored permitting these ongoing business relationships and remedying any harm by an award of monetary damages.
Every Now and Then I Fall Apart…
Just like this business deal to work on solar panels. Back in 2010, CetrainTeed and BIPV (both in the solar roofing panel business) began discussions about a project concerning “Roof Integrated Photovoltaic Products.” Both parties executed nondisclosure agreements in connection with the project. The project culminated in a purchase order agreement, in which BIPV agreed to supply CertainTeed with Sun Energy Shingles. Unfortunately, shortly thereafter CertainTeed began receiving reports that some of the panels purchased from BIPV were catching fire on customers’ roofs following installation. CertainTeed concluded that the fires were caused by a defect in BIPV’s design, and cancelled the purchase order. CertainTeed then brought suit in the Eastern District of Pennsylvania, alleging breach of the purchase order; BIPV counter-sued for violation of the Pennsylvania Uniform Trade Secrets Act and breach of the NDAs, among other claims. The court granted summary judgment for CertainTeed on BIPV’s trade secret misappropriation claim: the uncontroverted facts established that all nineteen design items for which BIPV sought protection could be easily and readily reverse engineered, and eight of the nineteen had also been disclosed in abandoned patent applications, foreclosing trade secret protection.
There’s Nothing I Can Say…
That will convince the court that my idea is a legally protectable trade secret. BIPV is not alone in its troubles; prospective plaintiffs of all kinds can struggle to establish that their purported trade secrets warrant protection. Just ask Diane Russomanno, an author of children’s books about a character named Ricky Rocket who time travels in a magic rocket ship (okay, we took some liberties with the theme on this one). Russomanno got burned when the person who was supposed to help her develop and promote Ricky Rocket for television, Gianni Russo, instead allegedly stole her ideas and marketed them as A.J.’s Time Travelers, prompting Russomanno to sue. A settlement in that lawsuit permitted Russo to continue marketing A.J.’s Time Travelers, so long as existing episodes were modified so that “the time machine did not resemble a rocket or space ship and did not move through space, air, or water.” Perhaps unable to come up with alternate means of travel, Russo did not make the required changes, and the episodes were broadcast by Fox Children’s Network (Fox) as originally conceived. Russomanno then sued Fox and other defendants in California state court for misappropriation of trade secrets, among other claims. The trial court granted Fox’s motion for nonsuit on the misappropriation claim. The California Court of Appeal upheld this ruling, finding that Russomanno’s ideas—which included “teaching children how to understand science and history through the imaginary use of space travel” and interactive TV-ROM—were not protectable as trade secrets because they were obvious and lacked novelty. Russomanno v. Fox Children’s Network, Case No. B143105, 2004 WL 2137405 (Cal. Ct. App. Sept. 24, 2004).
These cases go to show that even though a company’s work might involve outer space, it’s still subject to earthly laws. There’s nothing it can do but face the consequences.