Holding: A trade secret description that only lists the functions of a finished product, without disclosing the underlying knowledge needed to develop it, is not sufficiently definite. Likewise, a mere list of components without disclosure of the design or development is insufficient to define a trade secret.
Coda sued Goodyear for trade secret appropriation and correction of ownership of Goodyear’s US Patent No. 8,042,586. The trade secrets and the ‘586 Patent both pertain to self-inflating tire technology. At district court, the jury found that Goodyear misappropriated Coda’s trade secrets and awarded Coda $64M in damages. However, following the trial, the district court granted Goodyear’s motion for JMOL, holding that several of the trade secrets were not sufficiently definite, some were not secret, some were never used or disclosed by Goodyear, and some were never conveyed by Coda to Goodyear. Coda introduced several trade secrets, but only five were relevant on appeal TS7[1], TS11[2], TS20[3], TS23[4], TS24[5].
Coda sued Goodyear in Ohio, which has a trade secret statute based on the Uniform Trade Secrets Act. To prove trade secret misappropriation, a plaintiff must show: “(1) the existence of a trade secret; (2) acquisition of the trade secret as the result of a confidential relationship or through improper means; and (3) an unauthorized use of the trade secret.” The trade secret must be defined with sufficient definiteness to allow the court to apply these criteria and to determine if there has been misappropriation.
For TS24, the Federal Circuit confirmed the district court’s holding that TS24 was not defined with sufficient particularity and not kept secret. Coda disclosed the placement of the pump in the sidewall and close to and above the rim in a 2007 PCT application and a 2008 article in Tire Technology. Both of these publications stated that the pump could be positioned in the tire sidewall. Coda’s trial witness tried to explain that these disclosures differed from the stated trade secret and attempted to add limiting terms to the trade secret that were not present in the definition at the district court. That these limiting terms would be necessary further supports that the trade secret was not identified with sufficient specificity.
The Federal Circuit agreed with the district court that TS7, TS11, and TS20 were also not identified with sufficient specificity and that these trade secrets were not used by Goodyear. Coda defined TS7 as a list of functions that can be accomplished by a multi-purpose interface, but did not provide a description of how that interface could be developed. A simple list of functions described in vague terms, with no detail on how those functions are performed, fails to articulate the substance of a trade secret. Similarly, TS11 and TS20 merely consist of a list of components described in vague terms and without a description of the particular design or development that leads to those components.
With regard to Goodyear’s use of TS7, TS11, and TS20, Coda was unable to prove that Goodyear disclosed each of the functions described in TS7 or disclosed each of the components described in TS11 and TS20. Although unauthorized use of a trade secret does not require the use or disclosure of every aspect of the trade secret, a showing of the use or disclosure of a substantial portion of the secret. Coda’s trial witness only provided a conclusory statement that Goodyear’s ‘586 Patent disclosed the TS7 concept. Additionally, Coda only showed the usage of two of the eight components of TS11 and two of seven components of TS20. This is not sufficient to show misappropriation of a substantial portion of the trade secret.
The Federal Circuit also confirmed the district court’s holding that the test results covered by TS23 were not used by Goodyear. The only evidence produced by Coda for use of the T23 test results was an email that included test results that did not match with the test results defined for TS23. Coda’s witness testified that he disclosed TS23 to Goodyear, and that Goodyear relied on that data in coming up with the data contained in the email. However, the test results in the email do not reflect the results covered by TS23.
Coda’s appeal as to the district court’s denial of its claim for correction of inventorship was also unsuccessful. Coda’s sole argument for correction of inventorship was that the district court improperly granted Goodyear’s motion for JMOL on the trade secret claims. Since there were no other arguments regarding correction of inventorship, denial of the trade secret misappropriation claims means that correction of inventorship also must be denied.
[1] TS 7: Coda’s design and development of a multi-purpose interface for transporting air in a self-inflating tire that can connect to the air source, connect to the tire interior, connect to the peristaltic pump, serve as an end to the peristaltic pump, connect to the regulator, carry the regulator, go around or through the bead, go around or through the tire layers, click to the bead and hold the filter;
[2] TS 11: Coda’s knowledge of how to design and develop self-inflating tire pump and groove solutions, consisting of round pump tubing in an outward-facing groove with straight, angled interior geometry; pump tubing with geometry that interlocks with its seat; pump tubing with elliptical interior cross-section; variant pump tube, groove and chamber dimensions, size and materials; pump tube and groove design to minimize internal friction; a “tube less” pump solution (i.e., a pump that may compose an integral part of tire); cross-section designs that minimize stress on compression in order to improve durability; and tubing with reinforced wall;
[3] TS 20: Coda’s knowledge of how to design and develop self-inflating tire systems with circulating and non-circulating pump variations, comprised of the disclosure of technical information through observations and descriptions of the three-way valve regulator, and explanations of the function and air paths for the states of recirculation and inflation; closure elements related to recirculation systems and a pressurized air reservoir that would permit the storage of air within the system without the need to engage the pump tube with each tire revolution; recirculation at different pressures, such as ambient pressure; recirculation through various paths, such as through the tire, the atmosphere and the pump tube; the safety benefit of recirculating around the pump tube isolated from the tire cavity; a check valve on intake (between the pump tube and the atmosphere) to only permit air in when pressure in the pump tube falls below atmospheric pressure; and a check valve on output (between the pump tube and tire interior) to only allow air into the tire when pressure in the pump tube exceeds the tire pressure;
[4] TS 23: Coda’s development of a functional self-inflating tire as demonstrated by the test results con firming that the tire pump can generate pressure higher than the pressure in the tire cavity, through the test results showing that the pump placed on the tread could generate 6.5 absolute atmospheres of pressure (5.5 relative atmospheres); the test results showing that the tube-in-groove pump of the prototype could generate 3.3 absolute atmospheres of pressure; and test results that demonstrated that the Flap Tubes could generate 1 relative atmosphere of pressure;
[5] TS 24: Coda’s knowledge regarding the optimal lo cation for placement of a pump in a tire for tire manufacturers, namely, in the sidewall close to, and above, the rim where the tire cyclically deforms in response to deformation.
Federal Circuit Precedential 
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