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Following a jury award of $64 million dollars for trade secret misappropriation, the Federal Circuit recently affirmed a district court’s decision granting judgment as a matter of law in favor of the alleged infringer.
Coda Development sued Goodyear Tire and Rubber Company in the U.S. District Court for the Northern District of Ohio for, among other things, trade secret misappropriation under Ohio law (which has adopted the Uniform Trade Secrets Act), and correction of inventorship of U.S. Patent No. 8,042,586. To prove trade secret misappropriation, Coda needed to show (1) existence of its sufficiently defined trade secrets; (2) Goodyear’s acquisition of the trade secrets because of a confidential relationship or through improper means; and (3) Goodyear’s unauthorized use. In September of 2022, a jury found that Goodyear had misappropriated five of the alleged trade secrets, which relate generally to self-inflating tire technology, and awarded Coda $2.8 million in compensatory damages and $61.2 million in punitive damages. Goodyear moved for judgment as a matter of law and the district court agreed, reasoning that the alleged trade secrets were not sufficiently definite, not secret, not disclosed by Goodyear, and not conveyed by Coda to Goodyear. Coda appealed to the Federal Circuit.
On appeal, Coda argued that its trade secrets were sufficiently definite based on its expert’s testimony and attorneys’ argument presented at trial. But the Federal Circuit found Coda’s descriptions used vague terms that provided no detail on how the functions were carried out. The Federal Circuit further reasoned that Coda’s trade secret definitions could not be revised at trial with the addition of limiting terms not in the definitions. Regarding Coda’s efforts to reasonably maintain secrecy of its alleged trade secrets, Coda argued that its disclosures in patent applications and public presentations were different than the trade secrets subject of the litigation. The Federal Circuit disagreed, finding that the public disclosures could not be meaningfully distinguished from the alleged trade secrets. Finally, Coda argued that its trade secrets were disclosed to Goodyear because some components of the same were disclosed to Goodyear. The Federal Circuit found this to be insufficient because (1) there was not evidentiary support that these the disclosure of some components constitutes a disclosure of “substantial aspects” of the alleged trade secret, and (2) Coda did not adequately refute that the disclosed components were also publicly disclosed. Litigants and business owners should be mindful of this decision when disclosing information subject to trade secret protection, defining and implementing reasonable efforts to maintain secrecy of trade secrets, and enforcing the same.