259 P.3d 497
Colo.2011Background
- Gognat filed a December 2005 civil action asserting trade secret misappropriation among other claims.
- Gognat disclosed proprietary information to Ellsworth in 1997 as part of a joint venture to develop Western Kentucky oil and gas reserves.
- Ellsworth formed MSD Energy, Inc. in 1997, related to the disclosed trade secrets.
- Between 1997 and 2001, defendants allegedly misused the information to acquire leases and develop wells without proper compensation to Gognat, who by 2001 was aware of Smith’s involvement.
- Gognat alleged continuing misappropriation through later acts (2001–2005), but the district court granted summary judgment that the claim was time-barred by the three-year statute of limitations; the court of appeals affirmed, treating multiple misappropriations as a single accrual when related to the same trade secret or related secrets.
- The Colorado Supreme Court held that the relevant information constituted a single trade secret and that misappropriation was known to Gognat more than three years before filing suit, affirming the appellate judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the information constitutes a single trade secret or multiple related secrets | Gognat argues multiple related trade secrets existed | Smith argues information is a single trade secret or related but not separable | Single trade secret; not multiple separable secrets |
| When accrual occurred for the misappropriation | Accrual should align with later discoveries of misappropriation (2005) | Accrual began with first act (2001) | Accrual began in 2001, more than three years before filing |
| Whether continuing misappropriation doctrine applies to related trade secrets | Continuing misappropriation applies to related secrets | Continues only for same trade secret; related secrets may be distinct | Continued misappropriation doctrine limited to same trade secret; not to unrelated related secrets |
Key Cases Cited
- Cadence Design Sys., Inc. v. Avant! Corp., 29 Cal. 4th 215 (Cal. 2003) (recognizes related vs. separate trade secrets in accrual analysis)
- Andersen v. Lindenbaum, 160 P.3d 237 (Colo. 2007) (courts may grant summary judgment if no factual dispute on accrual timing)
- Mastro v. Brodie, 682 P.2d 1162 (Colo. 1984) (statute-of-limitations as a question of fact; timing issues)
- Safehouse Progressive Alliance for Nonviolence, Inc. v. Qwest Corp., 174 P.3d 821 (Colo. App. 2007) (summary judgment appropriate when no material factual dispute on accrual)
- Andersen v. Lindenbaum, 160 P.3d 237 (Colo. 2007) (accrual timing and misappropriation analysis under UTSA)