United States District Court, D. Rhode Island
OPINION AND ORDER
WILLIAM E. SMITH CHIEF JUDGE.
intellectual property odyssey came before the Court for a
three-week jury trial in the spring of 2019. The jury found
that the Defendants willfully misappropriated two of
plaintiff Alifax Holding SpA's trade secrets in violation
of Rhode Island law. The jury also found that defendant
Francesco Frappa alone misappropriated a third trade secret
and breached his confidential relationship with Alifax under
Italian law. The jury awarded Alifax $6.5 million in
unjust enrichment damages. Before the Court are the
Defendants' post-trial motions, which renew their
requests for judgment as a matter of law and, in the
alternative, seek a new trial or remittitur. See
Alcor's Mot. for a New Trial, or in the Alternative, for
Remittitur (“Mot. for New Trial”), ECF No. 303;
Alcor's Renewed Mot. for J. As A Matter of Law
(“Renewed Mot. for JMOL”), ECF No. 304.
sophisticated parties aided by experienced counsel and
experts locked horns in this dispute for nearly half a
decade. In contrast, a lay jury was asked to grasp unfamiliar
technological and mathematical concepts amid a complex and
shifting web of legal theories in a tiny fraction of that
time. The Court has calibrated the rigor of its post-trial
assessment to reflect the length and complexity of this
the Defendants' Rule 50(b) motion, the Court finds that
Alifax failed to introduce sufficient evidence that using a
clear, plastic photometer sensor (“CPS”) in an
ESR analyzer was a protectable trade secret under the Rhode
Island Uniform Trade Secrets Act (“RIUTSA”), R.I.
Gen. Laws § 6-41-1 et seq. Thus, for the reasons that
follow, the jury's verdict regarding this theory of
liability must be vacated and judgment must enter for the
Defendants. The Defendants' Rule 50(b) motion is
the Defendants' request under Rule 59, the Court has
conducted an exhaustive review of the trial record. Important
policies discourage overturning a jury's verdict, and
there is no doubt that the jury in this action made a
conscientious effort to find the facts and apply the law.
Nevertheless, after a careful examination of evidence, the
Court is left with a firm and abiding conviction that the
verdict finding that the Defendants' misappropriated
Alifax's secret conversion algorithm is contrary to the
clear weight of the evidence. The Court is similarly
persuaded that Alifax's sole damages witness exceeded the
scope permitted by Federal Rule of Evidence 1006 and that a
dramatic trial exhibit (a prototype black reading cell) was
admitted in error, unfairly prejudicing the Defendants. These
findings justify a new trial on what remains of Count II.
legal and technical principles that drive this dispute are
complex. The story is simple. Alifax produces automated
clinical instruments that are used to determine the
erythrocyte sedimentation rate (“ESR”) of human
blood samples. Francesco Frappa, an employee of an Alifax
subsidiary, departed the company and began working with
Alcor, a Rhode-Island based competitor.Within a year,
Alcor debuted a new instrument - the iSED - with rapid
analytical capabilities comparable to Alifax devices. This
thunderous litigation ensued.
has accused Alcor and Frappa of developing the iSED by
pilfering its intellectual property. Alifax's claims
included the following: (1) infringement of two patents under
35 U.S.C. § 271; (2) willful and malicious
misappropriation of numerous trade secrets under the Rhode
Island Uniform Trade Secrets Act (“RIUTSA”), R.I.
Gen. Laws § 6-41-1 et seq.; (3) breach of
Frappa's confidential relationship with Alifax; and (3)
copyright infringement. See generally Second Am.
& Suppl. Compl., ECF No. 68; Pl.'s Identification of
Misappropriated Trade Secrets, ECF No. 61-4. Alcor and Frappa
have always denied these contentions. Alcor even
counterclaimed, seeking declarations of patent invalidity and
alleging Alifax intentionally interfered with its prospective
contractual relations. Defs.' Ans. to Pl.'s Second
Am. & Suppl. Compl. & First Am. Countercl.
(“Ans.”) ¶ 43, ECF No. 71.
parties filed dispositive motions targeting various claims in
mid-2018. In that context, the Court ruled that Italian law
governed the substance of Alifax's cause of action for
breach of a confidentiality relationship. Alifax Holding
SpA v. Alcor Sci. Inc., 357 F.Supp.3d 147, 152 (D.R.I.
Jan. 8, 2019). The Court denied the Defendants' motion
for summary judgment on the claims of patent infringement,
trade secret misappropriation, copyright infringement, and
patent invalidity. Alifax Holding SpA v. Alcor Sci.
Inc, No. CV 14-440 WES, slip op. at 40 (D.R.I. Mar. 26,
2019). As the Court observed, a hairsbreadth stood between
some of Alifax's claims and an adverse result.
Id. Regardless, the Noerr-Pennington
doctrine supported summary judgment for Alifax on Alcor's
intentional interference counterclaim. Id.
parties tried the remaining claims to jury over three weeks
in April and May 2019. The trial was bifurcated into two
phases: liability and damages. Prior to the start of trial,
the Court excluded the copyright-related opinion of
Alifax's damages expert. See Alifax Holding SPA v.
Alcor Sci. Inc., C.A. No. 14-440 WES, 2019 WL 1579503,
*1 (D.R.I. Apr. 12, 2019). Without a theory of damages, the
parties agreed that Alifax's copyright claim was
“out of the case.” Trial Tr. vol. 1, 3:10-16,
Apr. 15, 2019. It was not tried to the jury. Five days of
testimony later, Alifax expressed that it no longer wished to
proceed on its patent infringement claims. Trial Tr. vol. 5,
4:7-10, Apr. 22, 2019. Without objection from any party, the
Court reconsidered its March 26th ruling and granted summary
judgment for Alcor on Count I of Alifax's Second Amended
Complaint. Id. at 77:16-78:7. The parties also
executed a covenant not to sue, which disposed of Alcor's
invalidity counterclaims. Id. at 78:11-79:14. Thus,
at the end of the liability phase, the jury deliberated over
just two claims: misappropriation of trade secrets and breach
of a confidential relationship. By that time the number of
alleged trade secrets had been whittled down to four.
April 30, 2019, the jury returned its verdict. The jury found
for Alifax, concluding that Alcor and Frappa misappropriated
two of Alifax's trade secrets:
1. Using a clear, plastic capillary photometer sensor
(“CPS”) in an automated ESR analyzer, but only
through February 6, 2014; and
2. Portions of computer program source code concerning the
conversion of photometric measurements, including source code
containing four specific conversion constants.
Verdict Form Phase I: Liability, ECF No. 292. It also found
Frappa (but not Alcor) misappropriated a trade secret
comprised of “[i]nformation concerning an anemia factor
. . . ”. Id. The jury found that both
Defendants had acted willfully and maliciously. Id.
At the conclusion of damages phase, the jury awarded Alifax
$6.5 million in unjust enrichment damages attributable to
Alcor's misappropriation of Alifax's source-code
related trade secret. Jury Verdict Form Phase II: Damages 2, ECF
299. One dollar in nominal damages was awarded for the
Defendants' misappropriation of the CPS-related trade
judgment as a matter of law to overturn a jury's verdict
is warranted only if no reasonable jury could have found for
the non-moving party. Fed.R.Civ.P. 50; Rinsky v.
Cushman & Wakefield, Inc., 918 F.3d 8, 26
(1st Cir. 2019). The Court must examine the evidence from the
nonmovant's case-in-chief, draw all reasonable inferences
in the non-movant's favor, and determine whether the
verdict has a sufficient evidentiary basis. Zimmerman v.
Direct Fed. Credit Union, 262 F.3d 70, 75 (1st Cir.
2001); Coyante v. Puerto Rico Ports Auth., 105 F.3d
17, 22 (1st Cir. 1997) (confining Rule 50 review to
“the record upon which the plaintiff rested her case .
. .”). The Court “may not consider the
credibility of witnesses, resolve conflicts in testimony, or
evaluate the weight of the evidence.” Barkan v.
Dunkin' Donuts, Inc., 627 F.3d 34, 39 (1st Cir.
2010). A verdict cannot be jettisoned with caprice; the
evidence must “point unerringly to an opposite
conclusion.” Zimmerman, 262 F.3d at 75.
Nevertheless, claims built on conjecture, speculation, or a
“mere scintilla” of evidence do not pass muster.
Katz v. City Metal Co., 87 F.3d 26, 28 (1st Cir.
1996). If a district court grants a renewed motion for
judgment as a matter of law, it must make a conditional
ruling on whether it would grant a new trial if the judgment
is later vacated. Fed.R.Civ.P. 50(c)(1); Jennings v.
Jones, 499 F.3d 2, 21 (1st Cir. 2007).
court has much greater discretion under Rule 59. Jennings
v. Jones, 587 F.3d 430, 436 (noting that a trial court
may exercise “broad legal authority” in this
context). A district court may order a new trial
“whenever, in its judgment, the action is required in
order to prevent injustice.” Id. (quotations
omitted); Ins. Co. of N. America v. Musa, 785 F.2d
370, 375 (1st Cir.1986) (stating grounds for a new trial
include finding “the verdict is against the clear
weight of the evidence, is based upon evidence that is false,
or resulted from some trial error and amounts to a clear
miscarriage of justice.”) (quotation marks omitted).
The Court is not bound by Rule 50's strictures. It is
free to consider witnesses' credibility, independently
weigh the proof, and order a new trial “even where the
verdict is supported by substantial evidence.”
Jennings, 587 F.3d at 439 (quoting Lama v.
Borras, 16 F.3d 473, 477 (1st Cir. 1994)). The Court may
also order a new trial if any legal or factual errors were
sufficiently grievous “as to have rendered the trial
unfair.'” Astro-Med, Inc. v. Plant, C.A.
No. 06-533 ML, 2008 WL 4372727, *1 (Sept. 23, 2008),
aff'd sub nom. Astro-Med, Inc. v. Nihon Kohden
America, Inc., 591 F.3d 1 (1st Cir. 2009) (quoting
Parker v. Town of Swansea, 310 F.Supp.2d 356, 370
(D. Mass. 2004)). Still, district courts must exercise their
discretion with caution. See Jennings, 587 F.3d at
436 (“[T]rial judges do not sit as thirteenth jurors,
empowered to reject any verdict with which they
has also asked the Court to consider an alternative course:
remittitur. If the court finds that jury's damages were
excessive or contrary to the weight of the evidence, a
district court may compel a victor to accept either a new
trial on damages or a reduced award. See Conjugal
P'ship Comprised by Joseph Jones & Verneta
G. Jones v. Conjugal P'ship Comprised of Arthur Pineda
& Toni Pineda, 22 F.3d 391, 397 (1st Cir. 1994);
see also Phelan v. Local 305, 973 F.2d 1050, 1064
(2d Cir.1992). A court-ordered abatement is justified if,
when considered in the most favorable light to the prevailing
party, the jury's award “exceeds any rational
appraisal or estimate of the damages that could be based upon
the evidence before [the jury].” E. Mountain
Platform Tennis, Inc. v. Sherwin-Williams Co. Inc., 40
F.3d 492, 502 (1st Cir. 1994); see also Trainor v. HEI
Hosp., LLC, 699 F.3d 19, 32 (1st Cir. 2012) (holding
remittitur required when evidence was “so thin”
that award was “vastly out of proportion” to
maximum recovery supported by evidence). The First Circuit
follows the “maximum recovery rule.”
Trainor, 699 F.3d at 33. Thus, any remittitur must
reflect “the highest reasonable total of damages for
which there is adequate evidentiary support.”
Marchant v. Dayton Tire & Rubber Co., 836 F.2d
695, 704 (1st Cir. 1988).
Clear, Plastic Capillary Photometer Sensor Trade Secret
Alifax Did Not Introduce Legally Sufficient Evidence to
Support Its Claim That The CPS-Related Trade Secret Was
Protectable Under RIUTSA.
argues that the Court should vacate the jury's liability
verdict on Alifax's CPS-related trade secret claim
because Alifax failed to introduce evidence showing that the
first asserted trade secret - “[u]sing a clear, plastic
capillary photometer sensor (“CPS”) in an
automated ESR analyzer” - satisfied RIUTSA's
requirements for protectability. See Renewed Mot.
for JMOL 4-15. Alcor alternatively requests a new trial on
this claim. See Alcor's Mot. for New Trial 4-11.
The Court agrees on both scores.
defines a “trade secret” in broad terms. The
[I]nformation, including a formula, pattern, compilation,
program, device, method, technique, or process, that:
(i) Derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and
(ii) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
R.I. Gen. Laws § 6-41-1(4). The Court required Alifax to
disclose “with reasonable particularity” the
trade secrets it alleged the Defendants
misappropriated. Scheduling Order ¶ 3, ECF No. 36.
This request was not busy work. It is a common-sense
requirement that furthers the practical needs of discovery
and a basic premise of misappropriation claims: a party must
be able to identify its asserted trade secrets with
reasonable specificity. See, e.g., IDX Sys.
Corp. v. Epic Sys. Corp., 285 F.3d 581, 583 (7th Cir.
2002); Dow Chem. Canada, Inc. v. HRD Corp., 909
F.Supp.2d 340, 346 (D. Del. 2012); Utah Med. Prods., Inc.
v. Clinical Innovations Assoc., Inc., 79 F.Supp.2d 1290,
1313 (D. Utah 1999), aff'd, 251 F.3d 171 (Fed.
other embodiments of the Uniform Trade Secrets Act
(“UTSA”), RIUTSA does not protect “general
categories of information” from exploitation.
Luigino's, Inc. v. Peterson, 317 F.3d 909, 912
(8th Cir. 2003); Sarkissian Mason, Inc. v. Enter.
Holdings, Inc., 955 F.Supp.2d 247, 255 (S.D.N.Y. 2013),
aff'd, 572 Fed.Appx. 19 (2d Cir. 2014). To show
a protectable interest, a plaintiff “must assert
specific allegations that it possessed information
that meets the definition of trade secret under [the act] and
must proffer evidence that Defendants actually received the
trade secret and improperly used it.” Sun Media
Sys., Inc. v. KDSM, LLC, 564 F.Supp.2d 946, 965 (S.D.
Iowa 2008) (interpreting language of Iowa UTSA); see also
IDX Sys. Corp., 285 F.3d at 583 (affirming summary
judgment for defendants on misappropriation claim because
plaintiff “failed to identify with specificity the
trade secrets that it accuses the defendants of
misappropriating.”); Imax Corp. v. Cinema Techs.,
Inc., 152 F.3d 1161, 1164 (9th Cir. 1998) (“A
plaintiff seeking relief for misappropriation of trade
secrets ‘must identify the trade secrets and carry the
burden of showing that they exist.'”).
uniform statute's language is the source of this
principle. A fact finder cannot judge whether an alleged
trade secret has “independent economic value” if
its contours are not reasonably defined. See R.I.
Gen. Laws § 6-41-1(4)(i). Nor could one assess whether
such information is not generally known or readily
ascer-tainable. See Dow Chem. Canada, Inc., 909
F.Supp.2d at 346 (holding trade secret “must be
particular enough as to separate the trade secret from
matters of general knowledge in the trade or of special
knowledge of persons skilled in the trade.”); Utah
Med. Prods., Inc., 79 F.Supp.2d at 1313 (concluding
plaintiff “must define its claimed trade secret with
the precision and particularity necessary to separate it from
the general skill and knowledge possessed by
first identified its asserted trade secrets in May 2016.
See Pl.'s Identification of Misappropriated
Trade Secrets, ECF No. 61-4. It amended its disclosures twice
over the ensuing ten months. See Pl.'s First Am.
Identification of Misappropriated Trade Secrets, ECF No.
61-5; Pl.'s Second Am. Identification of Misappropriated
Trade Secrets (“Pl.'s Second Disclosure”),
ECF No. 137-27. The scope of its trade secret claims narrowed
further at summary judgment. See Mem. of Law in
Opp'n to Defs.' Mot. for Partial Summary J. 13 n.2,
ECF No. 167 (dropping asserted trade secrets concerning the
means of creating a capillary channel in the plastic CPS or
the use of screws with Teflon washers). Each and every one of
Alifax's pretrial disclosures describes the material for
the plastic CPS as “a single, block of clear
acrylic” and defines the component as a “hard
transparent block with a capillary channel inside .
. . ”. Pl.'s Second Disclosure ¶¶ 1-2
on Alcor's disclosures, the Court defined the
CPS-re-lated trade secret at the close of the liability phase
as “[u]sing a clear, plastic capillary photometer
sensor (“CPS”) in an automated ESR analyzer, but
only through February 6, 2014.” See Verdict
Form Phase I: Liability, ECF No. 292; Charge Conf. Tr. 7-11,
Apr. 26, 2019, ECF No. 345. The Court included the term
“clear” over Alifax's objection and explained
its rationale. See Charge Conf. Tr. 7:18-8:17.
Paragraph 1 of Alifax's disclosure described the CPS as a
“transparent block.” Pl.'s Second Disclosure
¶ 1. Paragraph 2 described the CPS as a component made
from “a single block of clear acrylic.”
Id. ¶ 2. Thus, paragraph 2 simply specified the
material (clear acrylic) for the “transparent
block” referenced in paragraph 1. Charge Conf. Tr.
The question confronting the Court is whether the evidence at
trial can be rationally linked to the identified trade secret
(a clear, plastic CPS).
in the light most favorable to the verdict, Alifax's
trial evidence showed that it was developing a CPS that was
black or made of “dark material” to increase its
analyzer's reliability and reduce maintenance. Two
witnesses, Giovanni Batista Duic and Dr. Paolo Galiano,
testified that “La Mecca” was a project to
improve Alifax's instruments by replacing the Teflon
tubing with a plastic reading cell. Trial Tr. vol. 2,
40:7-41:6, Apr. 16, 2019; Trial Tr. vol. 6, 82:21-83:6. In
2008, Frappa corresponded with an Alifax vendor about
producing “La Mecca” reading cells by using a
“completely opaque . . . varnish or a thin layer of
black plastic material” to create an “optical
shield” around a clear reading cell. See Trial
Ex. 421. This evidence comports with Frappa's account of
“La Mecca” in his October 2011 technical report.
See Trial Ex. 33. It describes the reading cell as a
“block of dark material with a transparent area,
inside, [sic] which can be traversed by the light . . .
”. Id. The codename “Mecca” was
itself a reference to the reading cell's dark plastic
material (i.e., to the Kaaba in Mecca, Saudi Arabia).
See Trial Tr. vol. 2, 41:1-8. There is no mention of
a “clear” or “transparent” reading
cell. Duic confirmed that Frappa's report was
“accurate and complete.” Id. at
Duic could not confirm was that Sire employed Frappa when the
company produced both clear and black prototype
reading cells. Trial Tr. vol. 2, 53:4-8. He affirmed - at
most - that the prototypes in Fall 2011 were black.
Id. at 53:11-12. Several days later, Alifax
introduced a tangible prototype of a black reading cell
introduced into its analyzers in 2014. See Trial Ex.
136. Alifax's counsel invited the jury to compare the
prototype to Alcor's design drawings for a plastic CPS in
his summation. See id.; Trial Tr. vol. 9, 54:10-11,
Apr. 29, 2019.
now claims that the color of the CPS is irrelevant. Pl.'s
Opp'n to Def. Alcor Sci. Inc.'s Renewed Motion for J.
as a Matter of Law (“Opp'n to JMOL”) 6-7, ECF
No. 313. That cannot be. Alifax's asserted trade secret
was not the use of any plastic CPS in an automated
ESR analyzer. It was the use of a plastic CPS that was
“transparent” and made from a block of
“clear acrylic.” These are the particular
features Alifax used to distinguish its trade secret from
general industry knowledge. Furthermore, Alifax contends that
this information constituted a “combination”
trade secret comprised of public domain elements.
See Opp'n to JMOL 7; Pl. Alifax Holding
SpA's Opp'n to Def. Alcor Sci. Inc.'s Mot. for a
New Trial, or in the Alternative, for Remittitur
(“Opp'n to New Trial”) 6, ECF No. 314. For
such information to be protectable, the “unified
process” resulting from the asserted combination must
“afford a competitive advantage.” Imperial
Chem. Indus. Ltd. v. Natl. Distillers & Chem. Corp.,
342 F.2d 737, 742 (2d Cir. 1965). In other words, the
elements of the combination trade secret must together create
independent economic value. See, e.g.,
Electro-Craft Corp. v. Controlled Motion, Inc., 332
N.W.2d 890, 900 (Minn. 1983) (explaining that independent
economic value element of UTSA “carries forward the
common law requirement of competitive advantage”);
Champion Foodservice, LLC v. Vista Food Exch., Inc.,
No. 1:13-CV-1195, 2016 WL 4468001, *12 (N.D. Ohio August 24,
2016) (granting summary judgment as plaintiff “advanced
no evidence as to how the unique combination of the database
files-taken as a whole-constitutes information not readily
available to the public or within the industry, or how this
unified combination of information provides Champion with a
competitive economic advantage within the industry.”)
evidence of an essential element of the “unique
combination” claimed by Alifax throughout this
litigation was missing: the clear reading cell. The substance
of Alifax's evidence from its case in chief relates
exclusively to the development of a CPS made from
“black” or “dark” material. Although
Frappa's May 2008 email makes passing mention of a clear
reading cell, the same passage refers to covering such a cell
in “a completely opaque layer of varnish or a thin
layer of black plastic material . . .”. See
Trial Ex. 421. This speck of evidence cannot, by itself,
support the conclusion that Alifax was developing a clear
reading cell for use in its ESR analyzers during the relevant
was not the only flaw in Alifax's case concerning the
CPS-related trade secret. It is well-established that
information that a party can acquire through “normal
business channels” is not protectable. APG, Inc. v.
MCI Telecomm. Corp., 436 F.3d 294, 307 (1st Cir. 2006)
(affirming summary judgment for defendant on misappropriation
claim holding disputed information was “obtainable
within normal business channels, ” even if acquired by
other means); Rego Displays, Inc. v. Fournier, 379
A.2d 1098, 1101 (R.I. 1977) (stating that information
comprises a trade secret only if it “could not be
obtained through public channels”). Thus, accepting for
argument's sake that the opacity of the CPS was
immaterial, Alifax still had to prove that its CPS-related
trade secret was not “generally known” or
“readily ascertainable by proper means” by
persons who could “obtain economic value from its
disclosure or use.” R.I. Gen. Laws § 6-41-1(4)(i);
see also Giasson Aerospace Sci., Inc. v. RCO Engrg.,
Inc., 680 F.Supp.2d 830, 841 (E.D. Mich. 2010)
(“There can be no trade secret where the
‘secret' is readily ascertainable from the public
domain.”); MicroStrategy Inc. v. Business Objects,
S.A., 331 F.Supp.2d 396, 416-17 (E.D. Va. 2004)
(“If a competitor could easily discover the information
legitimately, the inference is that the information was
either essentially ‘public' or is of de minimus
the Court must consider the evidence from Alifax's case
in chief in the light most favorable to the verdict. Alifax
elicited testimony that its employees worked on the Mecca
project for several years. See Trial Tr. vol. 2,
41:16-24. Evidence was introduced that Alifax worked with a
third-party vendor to produce tangible versions of the CPS
component. See id. at 41:11-15; Trial Ex. 421. The
jury also heard some testimony concerning measures intended
to maintain the confidentiality of Alifax's company data,
including that preserving confidentiality was discussed at
Alifax R&D meetings; the company used generic email
footers noting that communications were confidential; and
that Alifax provided devices for holding company data, which
was not to be stored on personal devices. See
Trial Tr. vol. 2, 31:3-17, 35:2-24; Trial Ex. 20.
evidence was bereft of additional proof concerning
ascertainability. There was no evidence quantifying the
man-hours or monies expended on developing a CPS
component. There was no evidence about the hardware
found in ESR analyzers or similar diagnostic instruments
produced by companies other than Alifax or Alcor. There was
no evidence about the state of knowledge in the blood-testing
or clinical instrument industries concerning technologies for
measuring optical density. Indeed, Alifax cites nothing
to support the proposition in its briefing that, before
Frappa joined Alcor, “no other supplier of any type of
ESR analyzer had developed or used a clear plastic
CPS.” Opp'n to New Trial 8. Even if the Court
credited that statement, “[s]imply being the first or
only one to use certain information does not in and of itself
transform otherwise general knowledge into a trade
secret.” TGC Corp. v. HTM Sports, B.V., 896
F.Supp. 751, 757 (E.D. Tenn. 1995).
ruling in Pope v. Alberto-Culver Co., 694 N.E.2d
615, 617 (Ill.App.Ct. 1998) is also
instructive. In Pope, an Illinois appellate
court affirmed judgment for the defendant on a trade secret
misappropriation claim. Id. at 619. The
plaintiff's alleged trade secret consisted of a lye-based
hair relaxer in a squeezable tube that a consumer could use
to spread the product. Id. at 616. The Court
affirmed summary judgment, agreeing that plaintiff failed to
produce evidence that this combination trade secret was not
comprised of information “generally known or
understood” within the relevant industry. Id.
at 617. “[T]he key to secrecy under the Act, ”
the Court held, “is the ease with which information can
be developed.” Id. at 619. The Pope
plaintiff's asserted trade secret “could have been
easily and cheaply discovered utilizing existing
technology.” Id. at 618; see also Buffets,
Inc. v. Klinke, 73 F.3d 965, 968 (9th Cir. 1996)
(recipes that were “so obvious that very little effort
would be required to ‘discover' them” are not
Alifax was obliged to prove that a “clear, plastic
[CPS] in an automated ESR analyzer” qualified as a
trade secret. As a court from the District of Kansas
explained in Bradbury Co., Inc. v. Teissier-duCros,
“[t]here is a glaring lack of detail showing any facts
about how [the CPS-related trade secret] was not readily
ascertainable by the industry.” 413 F.Supp.2d 1209,
1227 (D. Kan. 2006) (finding plaintiff failed to meet burden
of proving a protectable trade secret at summary judgment).
There was no testimony or documentary proof concerning how
difficult, relative to the state of industry knowledge, it
would be to develop an ESR analyzer that measured optical
density using a plastic CPS. Al-cor's generalized
development timeline is, in and of itself, unavailing.
See Trident Prods. & Servs., LLC v. Canadian Soiless
Wholesale, Ltd., 859 F.Supp.2d 771, 779 (E.D. Va. 2012)
(“[E]ven if a company has expended significant
resources to develop a trade secret on its own, it cannot
prevail . . . if the barrier to obtaining that trade secret
is quite low in reality.”). Thus, for at least these
two reasons, the jury's verdict with respect to
misappropriation of a “clear, plastic CPS” under
Count II must be vacated.
Defendants Would Be Entitled to A New Trial On Liability for
Misappropriation of the CPS-Related Trade Secret.
Court would grant a new trial on the Defendants'
liability for misappropriating the CPS-related trade secret
even absent these evidentiary shortcomings. Upon reflection,
the Court concludes that Trial Exhibit 136 - a prototype
black reading cell introduced by Alifax and produced on the
eve of trial - should not have been admitted into evidence.
Alifax's use of this tangible evidence unfairly
prejudiced Alcor and, by itself, justifies a new trial.
first attempted to introduce Trial Exhibit 136 through Duic.
See generally Trial Tr. vol. 2, 47-53. Alcor
objected based on lack of disclosure. Id. at 48-49.
The Court initially deferred ruling and gave Alifax an
opportunity to lay additional foundation. Id. at
51:5-11. Duic testified that he could not recall what
prototypes Frappa worked with and Alifax abandoned its
attempt to admit the exhibit at that time. Id. at
tried again four days later while examining Dr. Gali-ano.
See Trial Tr. vol. 6, 77-82. Dr. Galiano identified
the object as “the device called MECCA.”
Id. 78:11. Alcor renewed its objection. Id.
at 78:3-5. Counsel for Alifax explained that the object
“is simply the plastic reading cell which is one of our
trade secret components” and that it was
“introduced in 2014” into Alifax's products.
Id. at 79:18-80:2. Counsel also explained that
(1) Alcor had not specifically requested this object in
discovery, and (2) Alcor had an Alifax machine in their
office, which when combined with Frappa's knowledge,
obviated any prejudice. Id. at 80:24-81:9. It was
undisputed that Alifax had produced the object at the final
pretrial conference and that Alcor's counsel photographed
it. Trial Tr. vol. 2, 49:11-50:4. The Court ruled that the
exhibit was admissible for the reasons stated by Alifax's
counsel. Trial Tr. vol. 6, 82:10-13.
Court should have sustained Alcor's objection.
Alcor's purported failure to target a tangible version of
the disputed reading cell in its discovery requests is
irrelevant. Rule 26 requires a party to disclose “a
copy . . . of all documents, electronically stored
information, and tangible things that the disclosing
party has in its possession, custody, or control and may use
to support its claims or defenses, unless the use would be
solely for impeachment.” Fed.R.Civ.P. 26(a)(1)(A)(ii)
(emphasis added). A party's initial disclosures must be
made “without awaiting a discovery request, ”
Fed.R.Civ.P. 26(a)(1)(A), and must be supplemented “in
a timely manner” if the response is materially
incomplete and the additional information has not been made
known to the other parties. Fed.R.Civ.P. 26(e)(1)(A). If a
party fails to provide material supplemental information, it
may not use that information at trial “unless the
failure was substantially justified or is harmless.”
physical properties of Alifax's CPS were always material
to its trade secret misappropriation claim. The Court also
has reason to doubt the contention that the substance of
Trial Exhibit 136 was “made known” to the
Defendants through their acquisition of one or more Alifax
devices. Alifax's counsel represented that Alifax
introduced the CPS represented by the exhibit into its
machines in 2014. See Trial Tr. vol. 6, 79:24-25.
But the deposition testimony of Alcor's CEO, Carlo
Ruggeri, suggests that the Alifax devices Alcor acquired were
from early 2012. See Ruggeri Dep.
162:1-22. Examining machines from that period
would not have revealed the proffered exhibit's
substance. If a tangible version of the CPS existed and
Alifax intended to use it at trial, it should have produced
it during discovery. It neither did so nor offered a
substantial justification for its last-minute disclosure.
See Fed.R.Civ.P. 37(c)(1). Moreover, when the Court
admitted the prototype, it did not fully appreciate the
incongruity between the proffered exhibit, the description of
the asserted trade secret as a “clear” plastic
block, and the complete dearth of evidence described above.
With the benefit of 20/20 hindsight, the correct outcome
dictated by these facts is more apparent.
Court also concludes that Alifax's failure to disclose
Trial Exhibit 136 was not harmless. In his summation,
Alifax's counsel urged the jury (as he urges the Court
post-trial) to infer misappropriation based on access and
substantial similarity. See Trial Tr. vol. 9
49:25-51:10; 54:3-11; Pl.'s Opp'n to New Trial 12-13.
He argued that the design for Alifax' CPS “evolved
into the ultimate design . . . that's in evidence as
Exhibit 136.” Trial Tr. vol. 9, 46:18-24. He invited
the jury to compare Trial Exhibit 136 and design
specifications for Alcor's reading cell, Trial Exhibit
81, physically placing the tangible object over the drawings
using the Court's document camera and achieving a
compelling dramatic effect. Trial Tr. vol. 9, 50:17-51:9;
54:3-11. The Defendants, on the other hand, were hamstrung by
their inability to investigate this object during discovery
and challenge its significance. Such circumstances are
fundamentally unfair. Thus, if the judgment for Alifax were
not vacated, the Court would order a new trial on liability
for the CPS-related trade secret. See Astro-Med,
2008 WL 4372727 at *1.
must make snap judgments at trial that are guided by
experience and instinct (and often based on imperfect
information). At other times, a judge is afforded time and
space for effortful deliberation and reflection. To borrow an
analogy offered by an observer of our profession: district
judges sometimes act like tortoises; at other times, they
must act like hares. Rule 59 ...