649 F.Supp.3d 584
E.D. Mich.2023Background
- Broad-Ocean, an automotive supplier developing next‑generation fuel‑cell electric drive components, invests millions in proprietary CAD models, schematics, simulations, firmware, and PCB fabrication data and protects them on a restricted internal server.
- Bo Lei was a Senior Software and Control Engineer (hired 2016) who signed Broad‑Ocean confidentiality and non‑compete agreements; he resigned in April 2021 and acknowledged post‑employment confidentiality obligations.
- Forensic review showed Lei downloaded hundreds of files (over 610 files, ~1.8 GB) from Broad‑Ocean’s server around his resignation, created a folder named “taxinfo,” uploaded it to his personal Google Drive, and used anti‑forensics tools (360Safe) and other deletion techniques; some transfers to a USB and to a subsequent employer’s laptop were suspected but not fully recoverable.
- Broad‑Ocean identified hundreds of downloaded files (file lists filed under seal) and contended most were 3D CAD part files related to Fuel Cell Control Units; it sued for DTSA, MUTSA, breach of contract, and breach of fiduciary duty (other claims later dismissed).
- Lei moved for summary judgment arguing, inter alia, that Broad‑Ocean failed to identify its trade secrets with sufficient particularity and that no fiduciary duty existed; the court held that trade secret and contract claims survive, but dismissed the fiduciary duty claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Broad‑Ocean identified trade secrets with required particularity | Lei copied specific, confidential CAD and related design files (file lists under seal) constituting trade secrets; secrecy measures and investment show value | Identification is too vague/broad; plaintiff cannot simply point to hundreds of documents or categories | Denied: sufficient particularity and factual dispute exist to survive summary judgment given concrete file lists, industry context, and evidence of concealment |
| Whether Lei acquired trade secrets by improper means | Forensics show downloads, uploads to personal Drive, use of anti‑forensics—improper given confidentiality obligations | Lei contends he had permission to use Google Drive, deleted Broad‑Ocean files before leaving, and did not access/download after employment ended | Denied: factual disputes (forensic evidence, timing, concealment) preclude summary judgment on misappropriation |
| Breach of contract — damages element | Loss can be proved; forensic evidence suggests potential transfer to competitor and nominal damages suffice | Argues plaintiff failed to show damages with reasonable certainty | Denied: fact issues on damages and nominal damages available, so claim survives summary judgment |
| Breach of fiduciary duty — existence and preemption by trade secret law | Broad‑Ocean contends confidentiality obligations created a fiduciary duty not to misappropriate | Employer‑employee relationship alone does not create fiduciary duty; claim duplicates MUSTA misappropriation and is preempted | Granted: fiduciary‑duty claim dismissed with prejudice (no evidence Lei was a fiduciary; claim preempted by MUTSA) |
Key Cases Cited
- Mike’s Train House, Inc. v. Lionel, L.L.C., 472 F.3d 398 (6th Cir. 2006) (design drawings can be trade secrets; combination secrets need explanation of unique components)
- Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., 53 F.4th 368 (6th Cir. 2022) (trade‑secret plaintiff must define protected information with sufficient definiteness)
- IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581 (7th Cir. 2002) (plaintiff cannot assert all information about a product is a trade secret; must separate secrets from general information)
- InteliClear, LLC v. ETC Glob. Holdings, Inc., 978 F.3d 653 (9th Cir. 2020) (distinguishes long lists of general areas from concrete identifications required to allow meaningful defense)
- Integrated Cash Mgmt. Servs., Inc. v. Digital Transactions, Inc., 920 F.2d 171 (2d Cir. 1990) (software trade‑secret claim survived where extensive evidence and expert testimony showed unique, nonpublic architecture)
- Pfahler v. Nat’l Latex Prod. Co., 517 F.3d 816 (6th Cir. 2008) (at summary‑judgment stage, fact of damages must be shown, but amount may remain for trial)
- Magna Donnelly Corp. v. Certain Underwriters at Lloyd’s, 662 F. Supp. 2d 855 (E.D. Mich. 2009) (discusses secrecy measures and value of information in trade‑secret inquiries)
- Wysong Corp. v. M.I. Indus., 412 F. Supp. 2d 612 (E.D. Mich. 2006) (employer‑employee relationship alone does not create fiduciary duty; fiduciary claim cannot duplicate statutory trade‑secret remedies)