527 F. App'x 910
Fed. Cir.2013Background
- Convolve (licensee) and MIT (owner of the ’635 patent) sued Seagate and Compaq alleging misappropriation of Convolve trade secrets and infringement of the ’473 (Convolve) and ’635 (MIT) patents; district court granted summary judgment to defendants on most claims and invalidated asserted ’635 claims.
- Convolve had NDAs with Compaq and Seagate limiting protection for oral disclosures unless followed by a written confirmatory memorandum within 20 days; several meetings and demonstrations occurred in 1998–1999.
- Disputed trade secrets concerned Input Shaping techniques for disk-drive seek/settle control, measurement techniques (LDVFT and AMT), model/controller methods, and a Quick-and-Quiet user interface/marketing material.
- The district court found many asserted trade secrets either publicly known, not properly designated under the NDA, or not used by defendants, and entered summary judgment for Seagate and Compaq on trade-secret and contract claims.
- For the ’473 patent (disk-drive application with a user interface allowing inverse seek-time/noise settings), the district court construed “selected unwanted frequencies” to require identifying and targeting specific frequencies and found no direct or induced infringement as a matter of law.
- For the ’635 patent (broad shaping-method claims), the district court held asserted claims invalid for lack of enablement under §112 because inventor testimony showed inability to practice long seeks in disk drives until years after filing; the Federal Circuit affirmed that invalidity but reversed the ’473 noninfringement rulings and remanded for fact issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| NDA marking/waiver — whether oral/visual disclosures were protected absent written follow-up | Convolve: parties treated disclosures as confidential by conduct; marking requirement waived | Seagate/Compaq: NDA plainly required written 20-day confirmatory memo; no waiver shown | Court: NDA’s written follow-up requirement enforced; no waiver—summary judgment for defendants on many trade-secret claims |
| CUTSA / implied confidentiality — whether CUTSA tort claim survives despite NDA noncompliance | Convolve: CUTSA permits implied confidential relationships; NDA procedures shouldn’t bar tort claim | Defendants: written NDA governs; express contract supplants implied duty so no duty arose where NDA procedures not followed | Court: NDA controls the confidentiality scope; CUTSA claim fails where NDA covers the subject matter and protections weren’t invoked |
| ’473 patent infringement — meaning of “selected unwanted frequencies” and whether drives targeted frequencies | Convolve: evidence shows engineers identified and targeted bands/cutoffs and provided UI/tools that enable infringing use; circumstantial evidence of direct/induced infringement | Seagate/Compaq: development used trial-and-error or indiscriminate filters; targeted single freq or none; no evidence users actually performed infringing method | Court: construction requires selecting/targeting frequencies; district court erred to grant noninfringement—material fact disputes exist as to whether defendants targeted frequencies and whether inducement evidence suffices; reversed and remanded |
| ’635 patent enablement — whether the patent enables full scope (esp. long seeks in disk drives) | Convolve: enablement proven via implementations in other systems and some disk-drive embodiments; long seeks are commercial preference, not disqualifying | Defendants: inventor admitted inability to implement long seeks on drives until years after filing; patent too broad to be enabled across full scope | Court: affirmed invalidity for asserted claims — inventor’s inability to practice long seeks at filing shows lack of enablement; claims invalid under §112 |
Key Cases Cited
- Atlantic Research Mktg. Sys., Inc. v. Troy, 659 F.3d 1345 (Fed. Cir.) (trade-secret law is state law)
- Ultimax Cement Mfg. Corp. v. CTS Cement Mfg. Corp., 587 F.3d 1339 (Fed. Cir.) (trade-secret misappropriation analyzed under state law)
- Presidio Components, Inc. v. Am. Technical Ceramics, Corp., 702 F.3d 1351 (Fed. Cir.) (literal infringement requires each claim limitation)
- Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301 (Fed. Cir.) (indirect infringement requires proof of direct infringement)
- Toshiba Corp. v. Imation Corp., 681 F.3d 1358 (Fed. Cir.) (instructions to use a product in an infringing way may support inducement)
- CFMT, Inc. v. YieldUP Int’l Corp., 349 F.3d 1333 (Fed. Cir.) (commercial failure for a specific customer does not necessarily show lack of enablement)
- Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361 (Fed. Cir.) (enablement requires teaching how to make and use full scope without undue experimentation)
- Union Pacific R.R. Co. v. Mower, 219 F.3d 1069 (9th Cir.) (written NDA supplants any implied duty of confidentiality)