2:15-cv-01720
E.D. La.Feb 5, 2018Background
- WWCS developed a high-volume subsea hydrate-remediation system (later covered by U.S. Patents ’725 and ’185) and worked with contractors (GCM, Bayou Land, Keystone, SRC) and Oceaneering on projects beginning in 2009.
- WWCS and Oceaneering allegedly executed a December 11, 2009 reciprocal NDA defining confidential/proprietary information and excluding (a) information lawfully known from other sources, (b) information that later enters the public domain, and (c) information disclosed by the disclosing party on a nonrestrictive basis; the NDA selects Texas law.
- Oceaneering developed its own Flowline Remediation System (FRS) and performed jobs with it beginning in 2012; WWCS alleges Oceaneering used confidential WWCS information to develop the FRS and made misleading statements to win a BP job.
- Procedurally, WWCS asserted patent and various state-law claims; many claims were dismissed earlier; Oceaneering moved for summary judgment on WWCS’s breach of contract (NDA), fraudulent inducement, and tortious interference claims.
- The court analyzed whether the NDA covers (1) information now in the public domain (including published patent applications and public articles), (2) information disclosed to third parties on a nonrestrictive basis, and (3) information disclosed to Oceaneering before the NDA was executed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether NDA covers information now in the public domain | WWCS: NDA should still protect proprietary aspects; some operational know-how remains confidential | Oceaneering: Section 6(b) excludes information in the public domain; patents and published materials are not protected | Court: NDA does not cover information in public domain; published patents/articles cannot support breach claim |
| Whether disclosures to contractors/customers were "nonrestrictive" (thus excluded) | WWCS: disclosures to contractors and potential clients were made in confidence and under protective conditions | Oceaneering: disclosures to GCM, ATP, others were nonrestrictive, so NDA excludes them | Court: Genuine dispute exists; jury could find disclosures were restricted (NDAs, testimony, confidentiality notices) |
| Whether NDA covers information disclosed to Oceaneering before execution | WWCS: definition of Information covers material developed during periods of contracted services, not limited to NDA term | Oceaneering: NDA contains no explicit retroactivity provision | Court: Genuine dispute exists; NDA language can be read to cover prior disclosures during the parties’ services period |
| Summary judgment on fraudulent inducement and tortious interference | WWCS: claims arise independently from Oceaneering’s conduct and statements to clients | Oceaneering: claims fail because breach-of-contract theory is meritless | Court: Denied; fraudulent inducement does not require breach and tortious interference claim rests on alleged false statements; summary judgment not warranted |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (Supreme Court) (summary judgment burden-shifting framework)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Supreme Court) (standard for genuine issue of material fact)
- Int’l Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257 (5th Cir.) (movant burden when it will bear burden at trial)
- Tewari De-Ox Sys., Inc. v. Mountain States/Rosen, L.L.C., 637 F.3d 604 (5th Cir.) (information in patents/published applications not secret)
- Phillips v. Frey, 20 F.3d 623 (5th Cir.) (disclosure to potential buyers/customers can be confidential)
- Metallurgical Indus., Inc. v. Fourtek, Inc., 790 F.2d 1195 (5th Cir.) (disclosure to contractors may be limited and retain secrecy)
- Taco Cabana Int’l, Inc. v. Two Pesos, Inc., 932 F.2d 1113 (5th Cir.) (voluntary disclosure in business context may remain confidential)
- Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323 (Tex.) (contract interpretation principles under Texas law)