AMERICAN BIOMEDICAL GROUP, INC. v. TECHTROL, INC.
374 P.3d 820
Okla.2016Background
- Plaintiffs (American Biomedical Group, ABG Cattletraq, and CEO James Burgess) alleged defendants (Techtrol and Ardrey) converted plaintiffs' personal and intellectual property and were unjustly enriched.
- Plaintiffs claim they disclosed proprietary information and tangible components (software, circuitry, drawings, chips, thermistors, bolus prototype) to Techtrol under an NDA; parties later parted ways and Techtrol manufactured/sold ~1,500 boluses.
- The NDA required disclosures be labeled "Confidential" (or orally identified and later summarized in writing) and limited recipients' use to the stated purpose.
- Defendants moved for partial summary adjudication asserting (1) Oklahoma does not recognize conversion of intangible property and (2) OUTSA (Oklahoma Uniform Trade Secrets Act) displaces common-law claims and plaintiffs have an adequate contractual remedy, so unjust enrichment is barred.
- The district court granted partial summary adjudication for defendants; the Court of Civil Appeals affirmed; Oklahoma Supreme Court granted certiorari.
- Supreme Court reversed: held defendants failed to present undisputed, evidentiary-supported facts to justify summary adjudication; OUTSA does not displace common-law misappropriation claims for non-trade-secret confidential information.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Oklahoma recognizes a common-law tort for misappropriation of intangible/confidential business information | Plaintiffs: yes — Oklahoma recognizes misappropriation of confidential business information separate from conversion of tangibles | Defendants: Oklahoma only recognizes conversion of tangibles; no tort for intangibles | Held: Oklahoma does recognize a common-law misappropriation tort for confidential business information distinct from conversion of tangible property |
| Whether OUTSA (78 O.S. §92) displaces common-law claims for misappropriation of non-trade-secret confidential information | Plaintiffs: OUTSA does not displace common-law torts for information that is not a "trade secret" under the statute | Defendants: OUTSA displaces conflicting common-law claims; plaintiffs' claims preempted | Held: OUTSA displaces remedies only for misappropriation of trade secrets; it does not displace common-law torts for non-trade-secret confidential information |
| Whether information not marked "Confidential" per the NDA can support a conversion/misappropriation claim | Plaintiffs: failure to mark does not eliminate common-law claims for misappropriation or conversion of tangible property | Defendants: unmarked info falls outside NDA and plaintiffs lack contractual or statutory protection | Held: NDA requires marking for contractual protection, but failure to mark does not automatically preclude common-law claims for wrongfully procured confidential information; factual disputes precluded summary adjudication |
| Whether unjust enrichment is barred because plaintiffs have an adequate remedy at law | Plaintiffs: unjust enrichment claim is available where retention of benefits would be inequitable | Defendants: plaintiffs had contractual remedies (NDA) or otherwise an adequate legal remedy so unjust enrichment is barred | Held: If defendants involuntarily acquired benefits under the NDA with no duty to return, unjust enrichment is barred; but defendants failed to show undisputed facts entitling them to summary adjudication |
Key Cases Cited
- Steenbergen v. First Fed. Sav. & Loan of Chickasha, 753 P.2d 1330 (1987 OK) (defines conversion as dominion over tangible personal property)
- Installment Fin. Corp. v. Hudiburg Chevrolet, Inc., 794 P.2d 751 (1990 OK) (conversion requires wrongful possession or control)
- Shebester v. Triple Crown Insurers, 826 P.2d 603 (1992 OK) (Oklahoma general rule: only tangible personal property may be converted)
- ABC Coating Co. v. J. Harris & Sons Ltd., 747 P.2d 266 (1986 OK) (recognizes tort for procuring business information by improper means; abuse of confidence or improper procurement is essential)
- Central Plastics Co. v. Goodson, 537 P.2d 330 (1975 OK) (distinguishes trade secrets from confidential business information and recognizes protection for the latter)
- Krug v. Helmerich & Payne, Inc., 362 P.3d 205 (2015 OK) (unjust enrichment barred when adequate legal remedy for breach of contract exists)
- Harvell v. Goodyear Tire & Rubber Co., 164 P.3d 1028 (2006 OK) (defines unjust enrichment and when restitution is required)
- Brashier v. Farmers Ins. Co., Inc., 925 P.2d 20 (1996 OK) (statutory abrogation of common law must be expressed plainly)