Coda Development S.r.o. v. Goodyear Tire & Rubber CompanyCoda Development S.r.o. v. Goodyear Tire & Rubber Company
GREGORY A. CASTANIAS, Jones Day, Washington, DC, argued for defendants-appellees. Also represented by TRACY A. STITT; JOHN CHARLES EVANS, CALVIN GRIFFITH,
Before LOURIE, DYK, and CUNNINGHAM, Circuit Judges.
CUNNINGHAM, Circuit Judge.
Coda Development s.r.o., Coda Innovations s.r.o., and Frantisek Hrabal (collectively, “Coda“) appeal a decision of the United States District Court for the Northern District of Ohio holding that Goodyear Tire & Rubber Company and Robert Benedict (collectively, “Goodyear“) were entitled to judgment as a matter of law of no trade secret misappropriation and denying correction of inventorship of Goodyear‘s U.S. Patent No. 8,042,586 (the “‘586 patent“). See Coda Dev. s.r.o. v. Goodyear Tire & Rubber Co., 667 F. Supp. 3d 590, 611 (N.D. Ohio 2023) (”JMOL Decision“); Coda Dev. s.r.o. v. Goodyear Tire & Rubber Co., 667 F. Supp. 3d 567, 589 (N.D. Ohio 2023) (”Bench Decision“). For the reasons below, we affirm.
I. BACKGROUND
Coda sued Goodyear in the United States District Court for the Northern District of Ohio, raising, among other things, claims for trade secret misappropriation under Ohio state law and correction of inventorship of the ‘586 patent.1 JMOL Decision at 593; J.A. 158-96. Both the asserted trade secrets and the ‘586 patent relate to self-
The district court held a jury trial on Coda‘s trade secret claims in September 2022. JMOL Decision at 598. The jury found that Goodyear had misappropriated five of Coda‘s alleged trade secrets and awarded Coda $2.8 million in compensatory damages and $61.2 million in punitive damages. Id. at 598-99; J.A. 17997-8001. These five alleged trade secrets, the only ones at issue on appeal, were defined by Coda as described below:
TS 7: Coda‘s design and development of a multipurpose interface for transporting air in a self-inflating tire that can connect to the air source, connect to the tire interior, connect to the peristaltic pump, serve as an end to the peristaltic pump, connect to the regulator, carry the regulator, go around or through the bead, go around or through the tire layers, click to the bead and hold the filter;
TS 11: Coda‘s knowledge of how to design and develop self-inflating tire pump and groove solutions, consisting of round pump tubing in an outward-facing groove with straight, angled interior geometry; pump tubing with geometry that interlocks with its seat; pump tubing with elliptical interior cross-section; variant pump tube, groove and chamber dimensions, size and materials; pump tube and groove design to minimize internal friction; a “tubeless” pump solution (i.e., a pump that may compose an integral part of tire); cross-section designs that minimize stress on compression in order to improve durability; and tubing with reinforced wall;
TS 20: Coda‘s knowledge of how to design and develop self-inflating tire systems with circulating and non-circulating pump variations, comprised of the disclosure of technical information through observations and descriptions of the three-way valve
regulator, and explanations of the function and airpaths for the states of recirculation and inflation; closure elements related to recirculation systems and a pressurized air reservoir that would permit the storage of air within the system without the need to engage the pump tube with each tire revolution; recirculation at different pressures, such as ambient pressure; recirculation through various paths, such as through the tire, the atmosphere and the pump tube; the safety benefit of recirculating around the pump tube isolated from the tire cavity; a check valve on intake (between the pump tube and the atmosphere) to only permit air in when pressure in the pump tube falls below atmospheric pressure; and a check valve on output (between the pump tube and tire interior) to only allow air into the tire when pressure in the pump tube exceeds the tire pressure; TS 23: Coda‘s development of a functional self-inflating tire as demonstrated by the test results confirming that the tire pump can generate pressure higher than the pressure in the tire cavity, through the test results showing that the pump placed on the tread could generate 6.5 absolute atmospheres of pressure (5.5 relative atmospheres); the test results showing that the tube-in-groove pump of the prototype could generate 3.3 absolute atmospheres of pressure; and test results that demonstrated that the Flap Tubes could generate 1 relative atmosphere of pressure;
TS 24: Coda‘s knowledge regarding the optimal location for placement of a pump in a tire for tire manufacturers, namely, in the sidewall close to, and above, the rim where the tire cyclically deforms in response to deformation.
Following trial, the district court granted Goodyear‘s motion for judgment as a matter of law under
Coda timely appeals. We have jurisdiction under
II. STANDARD OF REVIEW
“In reviewing district court judgments, we apply the law of the circuit in which the district court sits with respect to nonpatent issues, but we apply our own law to issues of substantive patent law.” In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803 (Fed. Cir. 2000). Under Sixth Circuit law, a district court‘s grant of judgment as a matter of law under
III. DISCUSSION
On appeal, Coda argues that the district court erred by (1) setting aside the jury‘s verdict that Coda had five valid trade secrets that were misappropriated by Goodyear, Appellants’ Br. 16-40; (2) rejecting Coda‘s equitable claims for injunctive relief and correction of inventorship of the ‘586 patent, id. at 50-52; (3) concluding that Coda had not raised a reasonable royalty damages theory and declining to give a corresponding jury instruction, id. at 40-50; and (4) “suggesting” that laches barred Coda‘s claims, id. at 52-56. Coda also requested that the case be reassigned to another district court judge in the event of a remand. Id. at 56-61. Because we affirm the district court‘s judgment with respect to the trade secret and correction of inventorship claims, we do not address Coda‘s arguments relating to damages, injunctive relief, laches, and case reassignment. See id. at 40-61.
A.
We first address Coda‘s argument that the district court erred in concluding that Goodyear was not liable for trade secret misappropriation. Appellants’ Br. 23-40. Specifically, Coda challenges the district court‘s determination that each trade secret was not sufficiently definite, not secret, and/or not used or disclosed by Goodyear. Id. We agree with the district court that no reasonable jury
We first provide an overview of the Ohio Uniform Trade Secrets Act (“OUTSA“), which governs the trade secret claims in this case. The OUTSA defines “trade secret” as:
(D) “Trade secret” means information, including the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, pattern, compilation, program, device, method, technique, or improvement, or any business information or plans, financial information, or listing of names, addresses, or telephone numbers, that satisfies both of the following:
(1) It derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.
(2) It is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
To succeed on a trade secrets misappropriation claim, a plaintiff must show: “(1) the existence of a trade secret; (2) acquisition of the trade secret as the result of a
i.
We begin with TS 24, the trade secret that served as the primary focus in the parties’ briefing and during oral argument. Coda argues that the district court erred in concluding that TS 24 was not defined with sufficient
We conclude that the district court correctly determined that (1) Coda publicly disclosed the information covered by TS 24, and (2) to the extent that TS 24 covered knowledge not disclosed in Coda‘s publications, Coda failed to identify TS 24 with sufficient particularity. TS 24 is directed to “Coda‘s knowledge regarding the optimal location for placement of a pump in a tire,” which the trade secret explains is “in the sidewall close to, and above, the rim.” JMOL Decision at 598. However, Coda disclosed this placement in a 2007 PCT application and a 2008 article published in Tire Technology. See id. at 603-04; J.A. 252-96 (International Patent Application Publication No. WO 2007/134556 (filed May 23, 2007; published November 29, 2007)); J.A. 23863-67. For example, the 2007 PCT application discloses that a pump can be located “at any place in the wall of the tire . . . or in its vicinity, so for example, in the tread or side wall of the tire.” J.A. 274 at col. 21 ll. 1-3; see, e.g., J.A. 289 at Fig. 2(c); J.A. 271-72 at col. 18 l. 27 to col. 19 l. 3 (explaining that the pump can be located in a “lug boss on the tire . . . wall” as shown in Fig. 2(c)). Similarly, the 2008 Tire Technology article discloses that “[t]he peristaltic tubing can be implemented in the tire wall . . . as a crevice in the tire sidewall.” J.A. 23865; see, e.g., J.A. 23866 at Fig. 4. Mr. Hrabal confirmed this understanding of the two publications at trial. See, e.g., J.A. 15756 at 624:14 (“The lug boss is part of the tire sidewall.“); J.A. 15795 at 663:2 (“The lug boss is on the rim near and above the rim.“); J.A. 15757 at 625:9-12 (“Q. So locating a peristaltic pump in the tire sidewall near the rim in an area where it cyclically deforms was not a trade secret? A. This is public.“). Thus, the district court did not err in concluding that no reasonable jury could find that the information contained in TS 24, as defined by Coda, qualified as a trade secret.
Turning to TS 7, TS 11, and TS 20, Coda argues that the district court erred in concluding that these trade secrets are not identified with sufficient specificity and were not used by Goodyear. Appellants’ Br. 31-37. Coda also challenges the determination that TS 11 and TS 20 were also not secret. Id. We find no reversible error in the district court‘s determination that these trade secrets are not sufficiently definite and were not used by Goodyear.5
The district court did not err in determining that Coda failed to define TS 7, TS 11, and TS 20 with sufficient particularity. TS 7 covers “Coda‘s design and development of a multi-purpose interface for transporting air in a self-inflating tire that can” perform a list of ten functions, including “connect[ing],” “go[ing] around or through,” and “hold[ing]” other components. JMOL Decision at 596. Absent from TS 7, however, is any description of the information for which trade secret protection is sought—the “design and development” knowledge that would enable someone to develop this interface. Id. Rather, TS 7 merely describes the functions that can be performed by the final product created by the knowledge in TS 7. Coda‘s emphasis of Mr. Hrabal‘s testimony regarding the “specific value” of the interface is misguided as this testimony fails to address the relevant issue at hand—whether the articulation of TS 7 sufficiently defines the “design and development” information. See Appellants’ Br. 31 (citing J.A. 15559-61;
As the district court correctly recognized, TS 11 and TS 20 face similar definiteness problems, including that they are “articulated [as] no more than an undifferentiated list of components” described in vague terms and that they contain “no disclosure of what [the claimed] knowledge is and/or what the design or development is.” JMOL Decision at 606-07; see id. at 596-97. For the same reasons explained above with respect to TS 7, the district court did not err in concluding that TS 11 and TS 20 are not sufficiently definite.
Even if TS 7, TS 11, and TS 20 were valid trade secrets, the district court correctly concluded no reasonable jury could find that Goodyear used these trade secrets. As explained, the descriptions of TS 7, TS 11, and TS 20 all include lists of components or functions. With respect to TS 7, Coda challenges the district court‘s finding that the testimony of its expert, Mr. Coughlin, was vague and failed to identify all ten TS 7 functions in the Goodyear patent that allegedly disclosed TS 7, see JMOL Decision at 605, on the basis that “[t]he unauthorized use need not extend to every aspect or feature of the trade secret; use of any substantial portion of the secret is sufficient.” Appellants’
Coda‘s arguments regarding Goodyear‘s use of TS 11 and TS 20 fail for similar reasons. With respect to TS 11, Coda argues that Goodyear disclosed substantial aspects of TS 11 in Goodyear‘s patents and other documents. Appellants’ Br. 33 (citing J.A. 16763; J.A. 80-81; J.A. 20017-100 as “disclosing ‘passageway’ pump, i.e., a tubeless solution“; then citing J.A. 16766-67; J.A. 21664 as disclosing “an elliptical cross section was easiest to pinch“; then citing J.A. 20163; J.A. 20257 (Figure 5-1); J.A. 22193; J.A. 22262 (Figure 5-2) as “showing tubeless solution“). Coda‘s citations, however, only speak to usage of two of TS 11‘s eight components. Even if we ignore the lack of evidentiary support for Goodyear‘s assertion that these two elements constitute “substantial aspects of TS 11,” Appellants’ Br. 33, Coda fails to refute Goodyear‘s assertion that these elements were previously publicly disclosed. See Appellees’ Br. 55; id. at 15-16 (citing J.A. 290 (Figs. 3(d)-(f)); J.A. 271 at 18:27-29; J.A. 15768-69 at 636:23-637:4; J.A. 15933 at 801:6-25); Appellants’ Reply Br. 11-14. With respect to TS 20, Coda again alleges use of only two of the seven elements in the combination. See Appellants’ Br. 36-37 (“Goodyear used both the dead space and the recirculation
iii.
We now turn to the last trade secret, TS 23. Coda argues that the district court erred in concluding that TS 23 was not used by Goodyear. Appellants’ Br. 37-40. We disagree.
Coda presents insufficient evidence for a reasonable jury to find that Goodyear used TS 23. At trial, the only alleged evidence of use presented by Coda was a January 21, 2009 email that did not contain the test results described in TS 23.6 See JMOL Decision at 609; J.A. 23469 (disclosing only the test results of “approximately 6.5A absolute pressure (or 5.5A relative pressure)” (cleaned up)); J.A. 15546 at 414:9-24 (Mr. Hrabal corroborating the test results disclosed in the email).
Coda argues that it is irrelevant “that the specific testing results described in the email and those in TS 23 do not
For the reasons stated, we affirm the district court‘s judgment as a matter of law with respect to the trade secret claims.
B.
Lastly, we address Coda‘s challenge to the district court‘s denial of its claim for correction of inventorship of the ‘586 patent. Coda argues that the district court erred
Moreover, Coda‘s challenge separately fails because it is premised on the position that the district court improperly ignored the jury‘s factual findings. See id. at 51-52; Appellants’ Reply Br. 21-24. In reaching its conclusion that Coda failed to show it was entitled to correction of inventorship of the ‘586 patent, the district court noted differences between the locations of the pump assembly covered by TS 24 and by the ‘586 patent claims and determined that the trade secret and patent claims do not cover the same scope. See Bench Decision at 587-89. The jury, however, was never asked to compare the scopes of the ‘586 patent claims and TS 24. See J.A. 17996-18002. Accordingly, the district court‘s finding that TS 24 and the ‘586 patent claims have different scopes does not conflict with the jury‘s findings. The district court did not err in concluding that Coda‘s alleged trade secret is insufficient evidence to show that Mr. Hrabal was the sole inventor of the
For the reasons stated, we affirm the district court‘s judgment regarding Coda‘s correction of inventorship claim.
IV. CONCLUSION
We have considered Coda‘s remaining arguments and find them unpersuasive. We affirm the district court‘s judgment.
AFFIRMED