AMERICAN BIOMEDICAL GROUP, INC. v. TECHTROL, INC.
374 P.3d 820
| Okla. | 2016Background
- Plaintiffs (American Biomedical Group, ABG Cattletraq, and CEO Burgess) sued Techtrol and Ardrey for conversion of personal and intellectual property and unjust enrichment, alleging misuse of disclosed proprietary information and tangible items after an NDA-based relationship ended.
- Parties had an oral manufacturing agreement and a written nondisclosure agreement (NDA) that required disclosures be marked "Confidential" (or orally identified and summarized in writing within 30 days) and limited use to the stated purpose.
- Plaintiffs allege Defendants manufactured and sold ~1,500 boluses using Plaintiffs' proprietary software, circuitry, specifications, chips, thermistors, and tangible property; some items allegedly were not marked confidential.
- Defendants moved for partial summary adjudication, arguing Oklahoma does not recognize conversion of intangible property (absent trade-secret status) and that OUTSA (78 O.S. §92) displaces common-law claims; they also argued Plaintiffs had an adequate contractual remedy, precluding unjust enrichment.
- The district court granted summary adjudication for Defendants; the Court of Civil Appeals affirmed; the Oklahoma Supreme Court granted certiorari to review whether summary adjudication was proper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Oklahoma recognizes a common-law tort for misappropriation of intangible proprietary information (not rising to trade-secret level) | Plaintiffs: Oklahoma recognizes misappropriation of confidential business information as a common-law tort distinct from trade-secret law. | Defendants: Only trade-secrets (or tangible conversion) actionable; no independent tort for non‑trade‑secret intangibles. | Held: Oklahoma recognizes a common-law misappropriation tort for confidential business information obtained by improper means; conversion is limited to tangible property. |
| Whether OUTSA (78 O.S. §92) displaces common-law claims for misappropriation of non‑trade‑secret information | Plaintiffs: OUTSA does not displace common-law torts for information that does not meet the statutory trade-secret definition. | Defendants: OUTSA displaces conflicting common-law remedies for business-information misappropriation. | Held: Section 92(A) displaces remedies only for misappropriation of a trade secret; common-law torts for non‑trade‑secret confidential information survive. |
| Whether information not marked "Confidential" under the NDA is limited to contract remedies or is actionable at common law | Plaintiffs: Unmarked information may still be protected by common-law misappropriation if procured improperly or within a confidential relationship. | Defendants: Failure to mark as confidential means no NDA protection and thus only contractual remedies (or none). | Held: NDA governs contract obligations; Plaintiffs cannot benefit from failing to mark disclosures, but lack of marking does not necessarily bar common-law claims for tangible property or improperly procured confidential information; material facts disputed precluded summary adjudication. |
| Whether Plaintiffs' unjust enrichment claim is barred because an adequate remedy at law exists under the NDA | Plaintiffs: Unjust enrichment is available where equity requires restitution for improperly retained benefits. | Defendants: Plaintiffs have an adequate contractual remedy under the NDA, so unjust enrichment is precluded. | Held: If benefits were involuntarily acquired with no restitution obligation (e.g., under NDA), unjust enrichment fails; here disputed facts precluded resolving the issue on summary adjudication. |
Key Cases Cited
- ABC Coating Co., Inc. v. J. Harris & Sons Ltd., 747 P.2d 266 (Okla. 1986) (recognizes liability for procuring business information by improper means even if not a trade secret)
- Central Plastics Co. v. Goodson, 537 P.2d 330 (Okla. 1975) (distinguishes trade secrets from confidential business information; protects owner’s particular secrets)
- Shebester v. Triple Crown Insurers, 826 P.2d 603 (Okla. 1992) (conversion generally limited to tangible personal property)
- Krug v. Helmerich & Payne, Inc., 362 P.3d 205 (Okla. 2015) (unjust enrichment unavailable when adequate legal remedy for breach of contract exists)
- Brashier v. Farmers Ins. Co., Inc., 925 P.2d 20 (Okla. 1996) (statutory abrogation of common law must be expressed in clear, plain language)