DUR-A-FLEX, INC. v. SAMET DY
(SC 20821) (SC 20823)
Supreme Court of Connecticut
July 2, 2024
349 Conn. 513
Robinson, C. J., and McDonald, D’Auria, Mullins, Ecker, Alexander and Elgo, Js.
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Pursuant to statute (
The plaintiff, which develops, manufactures and sells resinous flooring systems, sought to recover damages from the individual defendants J, K, L, S, and the corporate defendants A Co., D Co., E Co., I Co., M Co., and P Co., in connection with their alleged misappropriation of the plaintiff’s trade secrets. S was employed by the plaintiff as a research chemist and helped develop a product known as Poly-Crete. Several years after hiring S, who was an at-will employee, the plaintiff required him to sign a noncompete agreement as a condition of his continued employment. The noncompete agreement prohibited S from disclosing or using any of the plaintiff’s trade secrets and from competing with the plaintiff for two years following the termination of his employment. Although S signed the agreement, he then established his own floor coating business, A Co., before resigning from his employment with the plaintiff. S also constructed a laboratory, where he developed formulas for flooring systems, and hired J as an assistant. After resigning, S contacted K, the president of E Co., a floor installation company and longtime customer of the plaintiff. E Co. agreed to test S’s products in exchange for a discount on future purchases, but all of S’s products that E Co. tested had significant problems. S also agreed to act as a consultant for I Co., which installs a flooring system known as Indu-Crete, for a monthly fee. I Co. did not manufacture its own resin and hardener at the time but was interested in doing so. S and J eventually developed and provided I Co. with an Indu-Crete formula, and they also developed for A Co. a product known as ProKrete, which D Co., a floor installation company owned by L, began using for some of its projects. Thereafter, M Co. allowed S and A Co. to produce their products on its premises, without charging them rent. Subsequently, S transferred A Co. to L, who renamed it P Co. When the plaintiff learned of S’s activities, it brought the present action, claiming, inter alia, that S had breached
With respect to the plaintiff’s appeal, held:
- The plaintiff could not prevail on its claim that the trial court had incorrectly concluded that K, E Co., I Co., and M Co. did not misappropriate the plaintiff’s trade secrets in violation of CUTSA:
- The trial court’s finding that I Co. did not ‘‘use’’ the plaintiff’s trade secrets, for purposes of
§ 35-51 (b) (2) (B) (iii) , when it manufactured Indu-Crete using S’s formula was not clearly erroneous:After considering case law and other authorities construing the term ‘‘use’’ and the factors that courts have considered in determining whether a defendant has wrongfully used a trade secret, this court concluded
that the uncontested evidence in the record supported the trial court’s conclusion that S primarily used his independent skills and knowledge to develop the Indu-Crete formula and that his knowledge of the specific Poly-Crete formula was not a substantial, contributing factor. Contrary to the plaintiff’s contention, the trial court’s finding that S used the plaintiff’s trade secrets to accelerate the development of Indu-Crete, combined with its finding that ProKrete embodied the Poly-Crete formula because S used his knowledge of the Poly-Crete formula to accelerate the development of ProKrete, did not necessarily compel the conclusion that Indu-Crete embodied the Poly-Crete formula, as the trial court distinguished the development of ProKrete, which it found embodied the plaintiff’s trade secrets, from the development of Indu-Crete, which it found did not, on the ground that Indu-Crete, unlike ProKrete, did not substantially derive from the plaintiff’s trade secrets.
Moreover, this court was not persuaded by the plaintiff’s contention that the trial court’s finding that S used the plaintiff’s trade secrets to accelerate the development of Indu-Crete was dispositive because any use of a trade secret as a starting point or to accelerate the development of a product constitutes ‘‘use’’ for purposes of CUTSA, as none of the cases that the plaintiff cited held that the substantial derivation standard is inapplicable to starting point or acceleration claims.
Furthermore, the plaintiff’s contention that the trial court should not have applied the doctrine of independent development to conclude that I Co. did not use the plaintiff’s trade secrets inasmuch as I Co. had never raised that doctrine as a special defense was grounded on an incorrect premise, as the court did not implicitly conclude that I Co. and the plaintiff followed separate and independent routes to the same destination but, rather, that the Indu-Crete and Poly-Crete formulas were substantially different destinations.
- The trial court’s finding that K, E Co., and M Co. did not know or have reason to know that S had misappropriated the plaintiff’s trade secrets was not clearly erroneous:
With respect to K and E Co., the evidence that they knew that S had been employed by the plaintiff, that S had provided them with a formula within weeks of leaving his employment with the plaintiff, and that they had been added as defendants in the present action did not compel the conclusion that they knew or should have known that S had misappropriated the plaintiff’s trade secrets, and the trial court was free to credit the evidence demonstrating that K was not in a position to compare the various formulas and K’s testimony that he believed S’s statement that S had not used the plaintiff’s formulas, which testimony was bolstered by evidence indicating that the products that S had provided to E Co. had significant problems.
Moreover, the trial court was free to draw an inference from a letter that K had written to the court, in which he stated that he reasonably believed that S had used publicly available sources to develop the formula for ProKrete. With respect to M Co., evidence that its president knew that S had been employed by the plaintiff and had developed Poly-Crete did not compel the conclusion that he knew or should have known that S had misappropriated the plaintiff’s trade secrets, as the trial court was free to credit the evidence that M Co.’s president was not in a position to know whether the ProKrete formula had been derived from the Poly-Crete formula, as well as testimony that S had denied using the plaintiff’s formulas and that the first formulas that S provided had performed poorly, which would not have been the case if they had been substantially derived from the Poly-Crete formula.
- The trial court’s finding that I Co. did not ‘‘use’’ the plaintiff’s trade secrets, for purposes of
- The plaintiff could not prevail on its claim that the trial court had improperly granted the motion for summary judgment on the civil conspiracy claims as to K, E Co., and M Co.:
- The plaintiff’s claim that it was procedurally improper for the trial court to consider the motion for summary judgment during trial because it was filed long after the summary judgment deadline had expired, and because the plaintiff was not in agreement that such a motion should be heard or considered, was unavailing:
The case law on which the plaintiff relied was not controlling because the trial court did not act sua sponte but, rather, ruled on a written motion for summary judgment filed by the defendants, the plaintiff had notice of that motion and filed an objection thereto, and the court heard argument on the issue.
Moreover, because the defendants effectively complied with the rule of practice (
§ 17-44 ) requiring a party to seek the trial court’s permission to file a summary judgment motion, and because the plaintiff had an opportunity to respond to the motion, the trial court did not abuse its discretion when it considered and granted the motion. - The plaintiff could not prevail on its claim that the trial court, in granting the summary judgment motion, had incorrectly determined that the plaintiff’s civil conspiracy claims against K, E Co. and M Co. were preempted by CUTSA:
The plaintiff claimed that, even if K, E Co., and M Co. did not misappropriate the plaintiff’s trade secrets, they could be held liable for civil conspiracy if they knew that J, L, and S had done so and if they aided and abetted that wrongful conduct for their own benefit, but that claim failed in light of this court’s conclusion that the trial court reasonably had
found that K, E Co., and M Co. did not know or have reason to know that J, L, and S had misappropriated the plaintiff’s trade secrets.
- The plaintiff’s claim that it was procedurally improper for the trial court to consider the motion for summary judgment during trial because it was filed long after the summary judgment deadline had expired, and because the plaintiff was not in agreement that such a motion should be heard or considered, was unavailing:
- The trial court did not abuse its discretion in denying the plaintiff’s request to enjoin K, E Co., I Co., and M Co. from using the plaintiff’s trade secrets in the future:
With respect to I Co., this court previously held that the trial court reasonably had determined that S did not use the plaintiff’s trade secrets to develop Indu-Crete, and, with respect to K, E Co., and M Co., even if they unknowingly used products that embodied the plaintiff’s trade secrets in the past, the plaintiff cited no evidence that they had any intention of continuing to do so.
- The trial court did not abuse its discretion in imposing a monetary penalty on the plaintiff and awarding attorney’s fees to the defendants as sanctions for F’s attempted spoilation of evidence, and the amount of the sanctions was not grossly disproportionate to the harm suffered by the defendants and the trial court:
F’s misconduct, namely, attempting to have certain photographs removed from the plaintiff’s Facebook page while a witness was testifying, resulted in significant confusion, aggravation, and inconvenience, interrupted the trial for two days, required the defendants’ counsel to investigate whether the plaintiff had engaged in other misconduct and to brief what form of sanctions should be imposed, and was an affront to the integrity of the court.
Moreover, the facts that F’s misconduct was discovered, that F was ultimately unsuccessful in his attempt to conceal the photographs, and that the defendants did not seek information about the plaintiff’s Facebook page through discovery before the issue arose at trial did not reduce the egregious nature of F’s conduct.
- The trial court did not abuse its discretion in awarding attorney’s fees to K and E Co. pursuant to
§ 35-54 on the ground that the plaintiff’s claims of misappropriation against them were made in bad faith:The trial court’s denial of K and E Co.’s pretrial motion for summary judgment on the ground that a reasonable fact finder might conclude that they knew or should have known that S had misappropriated the plaintiff’s trade secrets did not, as the plaintiff claimed, preclude the trial court, after hearing all of the evidence and assessing its credibility and persuasiveness, from later concluding that the plaintiff had brought the claims in bad faith because it knew that there was no evidence to support them.
Moreover, the trial court’s finding that the claims against K and E Co. were objectively specious, insofar as they superficially appeared to have
merit but there was a complete lack of evidence to support them, was not clearly erroneous. Specifically, the trial court found credible evidence demonstrating that all of the products that S provided to E Co. had significant problems, that K had no way of comparing the formulas developed by S with those developed by the plaintiff, that S denied having misappropriated the plaintiff’s trade secrets when K confronted him, that the plaintiff’s owner had represented that he saw no merit to the claims against K and E Co., and that, in a letter to the court, K expressed his belief that S had developed the formulas from information in the public domain.
Furthermore, although the trial court did not identify the specific evidence supporting its conclusion that the plaintiff had displayed a punitive attitude toward K and E Co., and that the plaintiff was retaliating against K and E Co. for their support of S, the trial court’s finding that the plaintiff knew fairly early in the litigation, if not from the start, that its claims against K and E Co. were without evidentiary support, and were therefore pursued with subjective bad faith, was not clearly erroneous.
With respect to the appeal by L, D Co., and P Co., held:
- The trial court incorrectly interpreted the knowledge requirement of
§ 35-51 (b) (2) (B) (iii) as requiring proof only that L, D Co., and P Co. knew or should have known that S misappropriated the plaintiff’s trade secrets, when the plaintiff was required to prove that L himself and, through him, D Co. and P Co., had knowledge of the plaintiff’s trade secrets:Although there was a split of authority on the issue of whether a plaintiff is required to prove that a defendant had knowledge of the plaintiff’s trade secret, or only that the defendant had knowledge that the trade secret was derived through improper means, a review of the relevant case law led this court to conclude that the defendant’s knowledge of the trade secret is an element of a claim of misappropriation under
§ 35-51 (b) (2) (B) (iii) , that a defendant cannot ‘‘use’’ a trade secret for purposes of that statute if the defendant does not have knowledge of the trade secret itself, and that the defendant must actually or constructively possess the information that constitutes the trade secret, and not merely use or possess a product that embodies the trade secret but does not disclose to the defendant any material aspect of the trade secret itself.Because the trial court’s interpretation of
§ 35-51 (b) (2) (B) (iii) was incorrect, this court reversed that court’s judgment against L, D Co., and P Co. on the misappropriation claims and remanded the case for a new trial limited to the issue of L’s knowledge of the plaintiff’s trade secrets. - L, D Co., and P Co. could not prevail on their claim that the trial court had failed to properly balance their interest in pursuing their livelihoods with the plaintiff’s interest in protecting itself from unfair competition
when it determined that they had misappropriated the plaintiff’s trade secrets to develop ProKrete and ProSpartic: Although this court has long recognized the competing interests of employees in being able to leave employers and to continue to work in the area of their greatest expertise and of employers in protecting their trade secrets, given the highly fact-specific nature of the determination as to whether an employee accused of misappropriation had been using his general knowledge and expertise or, instead, had been using his former employer’s trade secrets, this court could not conclude that the trial court had improperly balanced the competing interests at issue.
Specifically, the trial court clearly recognized that S had the right to continue to use his general knowledge and expertise as a chemist after he left his employment with the plaintiff, and the court’s finding that S had not used his general knowledge but, instead, had misappropriated the plaintiff’s trade secrets and used them to develop the formulas for ProKrete and ProSpartic was amply supported by the evidence.
- The plaintiff identified its trade secrets with sufficient particularity in its complaint and in its responses to certain interrogatories:
L, D Co., and P Co. failed to demonstrate how the plaintiff’s pleadings did not satisfy the requirement that the trade secret be defined with sufficient particularity to put the court and the defendants on notice of what was claimed to have been misappropriated, and the mere fact that the plaintiff identified an additional formula as a trade secret in its amended complaints and provided greater detail in its responses to interrogatories did not make the trade secret a moving target, deprive the defendants of the information they needed to defend themselves, or prevent the trial court from managing the discovery process effectively and efficiently.
- The trial court applied an incorrect standard in determining the appropriate remedies for the misappropriation of the plaintiff’s trade secrets by L, D Co., and P Co.:
The trial court ordered L, D Co., and P Co. to disgorge the profits from the sale of ProKrete and ProSpartic and enjoined them from manufacturing those products until the trade secrets on which those products were based cease to exist, and it declined their request to limit damages to the head start period, which is the period of time that the proprietary information would have remained unavailable to the defendants in the absence of the appropriation, on the ground that they did not use the plaintiff’s trade secrets as a starting point for or to accelerate the development of a new product when, instead, ProKrete and ProSpartic were substantially derived from the plaintiff’s trade secrets.
After reviewing the relevant authorities, however, this court concluded that, except in certain limited circumstances not present in this case, monetary and injunctive relief for the misappropriation of trade secrets is appropriate only for the head start period, regardless of whether the defendant used the trade secret to accelerate the development of a new product or whether a new product substantially embodied the trade secret, and applying the head start concept when the trade secret is substantially embodied in the new product was also consistent with the language of the injunctive relief statute ( § 35-52 ).Accordingly, the trial court applied an incorrect standard when it determined that the head start concept did not apply because L, D Co., and P Co. did not use the plaintiff’s trade secrets as a starting point to develop something new, and, if the court concludes on remand that those defendants are liable for misappropriation, it must then determine the amount of damages and the extent of the injunctive relief, if any, applying the correct standard.
- L, D Co., and P Co. could not prevail on their claim that the injunctive relief afforded by the trial court, namely, an order prohibiting the manufacture, sale, or distribution of any product made with a formula that has an essentially identical form as the ProKrete formula, was impermissibly vague and restrictive:
Although this court recognized the difficulties inherent in determining whether formulas are sufficiently similar to support a finding that a trade secret has been used, it determined that those difficulties are simply unavoidable in this context, and this court declined to conclude that the principle that the substantial use of a trade secret constitutes misappropriation could not be applied to the commercial activities of L, D Co., and P Co.
With respect to the plaintiff’s cross appeal, held:
- This court declined to review the plaintiff’s claim that the trial court had improperly limited the testimony of the plaintiff’s damages expert, as the plaintiff failed to identify where in the voluminous record the trial court’s ruling on this issue could be found.
- The trial court incorrectly determined that the plaintiff’s noncompete agreement with S was unenforceable for lack of consideration, and, accordingly, this court reversed the trial court’s judgment with respect to the plaintiff’s breach of the noncompete agreement claim and remanded the case for further proceedings to determine whether S received adequate consideration in exchange for executing the noncompete agreement and, if so, whether S breached the agreement:
Under Roessler v. Burwell (119 Conn. 289), a promise of indefinite, continued employment for an at-will employee in exchange for the
employee’s promise not to compete constitutes adequate consideration to form an enforceable agreement, and, because none of the parties asked this court to overturn or modify Roessler, the trial court’s conclusion in the present case that an at-will employee’s continued employment can never constitute consideration for a noncompete agreement was incorrect. Nonetheless, the plaintiff in the present case never explicitly promised S that it would continue to employ him for any particular period, the trial court did not evaluate whether the noncompete agreement imposed an obligation on the plaintiff that would make the agreement enforceable, and, because the plaintiff’s forbearance of its right to terminate S’s employment could constitute valid consideration if it altered S’s at-will status, further proceedings were necessary to determine whether the plaintiff provided adequate consideration.
- The trial court correctly determined that CUTSA preempted the plaintiff’s claim that S had violated his common-law duty of confidentiality:
A review of the relevant provisions of CUTSA, the Uniform Trade Secrets Act, and, in particular, the provision (
§ 35-57 (a) ) of CUTSA that provides that claims for the misappropriation of trade secrets are governed solely by CUTSA led this court to conclude that CUTSA preempts noncontractual civil claims against a former employee based on the acquisition, disclosure, or use of confidential information that does not rise to the level of a trade secret, and the two tiered system of liability advocated by the plaintiff, pursuant to which plaintiffs may bring claims under CUTSA for the alleged misappropriation of trade secrets and common-law claims for the alleged misuse of other confidential information, was inconsistent with the preemption clause in§ 35-57 (a) .Moreover, this court determined that its dictum in Allen Mfg. Co. v. Loika (145 Conn. 509) suggesting that a former employee has a common-law duty to maintain the confidentiality of information that does not constitute a trade secret no longer reflected the current state of the law.
- The plaintiff could not prevail on its claim that the trial court had improperly rendered judgment for L, D Co., and P Co. on the plaintiff’s civil conspiracy claims on the ground that those claims were preempted by CUTSA:
After a review of case law from other states addressing whether a claim for civil conspiracy that does not fall squarely within CUTSA’s prohibition on misappropriation is nevertheless preempted, this court determined that, in the absence of evidence that the alleged conspirator possessed actual or constructive knowledge of the trade secret, CUTSA, which specifies that only those who have such knowledge may be held liable for misappropriation, preempts common-law claims that dispense with that requirement, and to conclude otherwise would result in a confusing
and nonuniform patchwork of statutory and nonstatutory causes of action arising from the misappropriation of trade secrets, which is the very situation that the preemption provision was intended to prevent. In the present case, because the objective of the civil conspiracy alleged by the plaintiff was the misappropriation of the plaintiff’s trade secrets, the trial court correctly determined that the plaintiff’s civil conspiracy claims were preempted by
§ 35-57 (a) . - The plaintiff could not prevail on its claim that the trial court had incorrectly concluded that J, L, S, D Co., and P Co. did not act maliciously in misappropriating the plaintiff’s trade secrets and, therefore, that the plaintiff was not entitled to punitive damages and attorney’s fees pursuant to statute (
§ 35-53 (b) ):The trial court denied the plaintiff’s request for punitive damages and attorney’s fees on the ground that, although L and S may have disliked certain individuals associated with the plaintiff, their main motivation for the misappropriation was to make money, and the court’s conclusion that L and S disliked the plaintiff did not compel the conclusion that they were motivated to misappropriate its trade secrets by a desire to injure the plaintiff.
Moreover, there was no compelling evidence in the record that any of the defendants had malicious intent, it was entirely the prerogative of the trial court to so find, and, accordingly, the court did not abuse its discretion in denying the plaintiff’s request for punitive damages and attorney’s fees pursuant to
§ 35-53 (b) .
Argued September 6, 2023—officially released July 2, 2024*
Procedural History
Action to recover damages for, inter alia, breach of a noncompete agreement, and for other relief, brought to the Superior Court in the judicial district of Hartford, where the case was transferred to the Complex Litigation Docket; thereafter, A&E ProCoat, LLC, et al. were added as defendants; subsequently, the court, Sheridan, J., granted in part the plaintiff’s motion to strike the special defenses filed by the defendant Indue Sales and Services, Inc.; thereafter, the action was withdrawn as to the defendant Polystar, LLC, et al.; subsequently, the court, Sheridan, J., denied the motion for summary
Michael D. Blumberg, with whom, on the brief, was Lawrence G. Rosenthal, for the appellant in SC 20821 and the appellee-cross appellant in SC 20823 (plaintiff).
Proloy K. Das, with whom were Jonathan M. Shapiro and, on the brief, Lorey R. Leddy and Julie A. Lavoie, for the appellants-cross appellees in SC 20823 (defendant ProRez Performance Resins and Coatings, LLC, et al.).
Daniel J. Krisch, with whom were Jennifer A. Pedevillano and, on the brief, Joseph G. Fortner, Jr., for
Jonathan M. Shapiro, for the appellees in SC 20821 (defendant Engineering Coatings, Inc., et al.).
Jeffrey O. McDonald, for the appellee in SC 20821 (defendant Merrifield Paint Company, Inc.).
Opinion
ALEXANDER, J. These appeals1 arise from a dispute over whether the defendants2 misappropriated the trade secrets of the plaintiff, Dur-A-Flex, Inc., in violation of the Connecticut Uniform Trade Secrets Act (CUTSA),
The record reveals the following facts that the trial court reasonably could have found. The plaintiff is engaged in the business of developing, manufacturing, and selling commercial and industrial flooring systems and polymer component materials. Soon after the plaintiff hired Samet as a research chemist in 2004, he began work on the development of a product known as Poly-Crete. Poly-Crete is sold in three components: a resin, a hardener, and an aggregate. The components are mixed on site, rolled or troweled into place, and then left to cure. In 2011, Samet entered into a ‘‘Noncompetition, Nonsolicitation and Confidentiality Agreement’’ (noncompete agreement) with the plaintiff that prohibited him from performing any services for any company that competes with the plaintiff for a period of twenty-four months from the last day of his employment with the
Lipman started working as a chemist for the plaintiff in 2003. In 2010, the plaintiff terminated his employment. Lipman subsequently created his own company, Durafloor, which installs flooring systems.
On January 2, 2013, Samet resigned from his employment with the plaintiff. Unbeknownst to the plaintiff, prior to the effective date of his resignation, Samet had filed articles of incorporation for the defendant A&E ProCoat, LLC (A&E). Samet also had constructed a laboratory in his garage, in which he developed formulas for flooring systems. To assist him in these endeavors, Samet hired his nephew, the defendant Auttdomm Dy (Josh), in August, 2012.
Immediately upon resigning from the plaintiff, Samet contacted Krone, ECI’s vice president. ECI, a floor installation company, was a longtime customer of the plaintiff. Samet provided ECI with sample flooring products, which it agreed to test in the field in exchange for an open-ended discount on future purchases of one of the products, below the price that it was paying for similar products made by the plaintiff. All of the products that ECI tested for Samet and A&E had significant problems.
In August, 2013, Tom Scanlan, the president of Indue, flew from Wisconsin, where Indue’s corporate headquarters are located, to Connecticut to meet with Samet. Indue is in the business of installing a cementitious urethane flooring system known as Indu-Crete. Indue did not manufacture its own resin and hardener at the time but was interested in doing so because its supplier was about to discontinue those products. Following the visit from Scanlan, Samet executed a contract with Indue to act as a consultant for a fee of $10,000 per month.
In February, 2014, Samet and A&E started producing products on the premises of Merrifield, a paint manufacturing company located in Rocky Hill. Merrifield did not charge rent to A&E for the use of the space. In November, 2014, Samet transferred A&E to Lipman, who renamed it A&E ProCoat North America, LLC, and, ultimately, ProRez. Lipman continued to pay Samet out of ProRez’ earnings.
After learning of Samet’s activities, the plaintiff brought this action, claiming that Samet had breached the noncompete agreement and his common-law duty of confidentiality; Samet, A&E, Josh, Lipman, Durafloor, ProRez, Merrifield, Krone, ECI, and Indue had misappropriated the plaintiff’s trade secrets in violation of CUTSA; Samet, A&E, Josh, Lipman, and Merrifield had engaged in malicious misappropriation; and A&E, Josh, Lipman, Durafloor, ProRez, Merrifield, Krone, and ECI had engaged in civil conspiracy.
The bench trial was conducted in three phases: phase one, in which the trial court determined the scope of the plaintiff’s trade secrets; phase two, in which the court determined whether any trade secrets had been misappropriated; and phase three, in which the court determined damages and remedies. In phase one, the court concluded that the formulas for the resin and hardeners that the plaintiff used in the manufacture of Poly-Crete and a number of other products and processes, including a ‘‘polyaspartic-imine resin’’ floor coating, were trade secrets. The court also concluded that the noncompete agreement was unenforceable
In phase two, the trial court concluded that Samet, A&E, Josh, Lipman, Durafloor, and ProRez had misappropriated the plaintiff’s Poly-Crete formula to create ProKrete and its polyaspartic technology to create a product known as ProSpartic. With respect to the plaintiff’s CUTSA claims against Indue, Krone, ECI, and Merrifield, the court concluded that they did not misappropriate the plaintiff’s trade secrets and rendered judgment in their favor.4 The court further concluded that it could not maintain jurisdiction over Indue, Krone, ECI, and Merrifield for purposes of granting injunctive relief because they had not engaged in any wrongful conduct. The court subsequently granted Krone and ECI’s motion for attorney’s fees pursuant to
In phase three, the trial court concluded that the defendants who had misappropriated the plaintiff’s trade secrets must disgorge the money that they wrongfully gained as the result of the misappropriation and enjoined those defendants from manufacturing the products that they had developed using the trade secrets until the trade secrets cease to exist.
During the course of the litigation, the trial court also granted the motion for summary judgment filed by Lipman, Durafloor, ProRez, Krone, ECI, and Merrifield on the plaintiff’s claims of civil conspiracy, concluding that the claims were preempted by CUTSA. In addition, the court limited the testimony of the plaintiff’s expert
I
THE PLAINTIFF’S CLAIMS ON APPEAL
A
The plaintiff first claims that the trial court incorrectly determined that Indue, Krone, ECI, and Merrifield did not misappropriate the plaintiff’s trade secrets in violation of CUTSA. We disagree.
The following additional facts are relevant to this claim. In its phase two memorandum of decision, the trial court found that all cementitious urethane floor coatings have the same three components: a resin containing polyols, a hardener, and an aggregate. In addition, the products contain surfactants, wetting agents, plasticizers, defoamers, and fillers. Creating a product that performs well in the field requires years of experimentation, observation, and trial and error to determine the proper combination of ingredients. The court also found that ‘‘the [parties’ expert witnesses] . . . all agree[d] that any small chemical change in the brand of the foo foo dust [the trial court’s designation for the unique components of a cementitious urethane flooring product] or its ingredients changes everything.’’ In addition, the court found that, in developing a useful product, ‘‘[b]asic research practices, such as the use of ladder studies and good lab bookkeeping, would seem part of a basic chemist’s tool kit. They even could include more sophisticated concepts, such as the notion that cementitious urethane formulas typically need defoamers, surfactants, and plasticizers. These things are too common to be trade secrets.’’ (Internal quotation marks omitted.)
With respect to the ProKrete formula developed by Samet after he left the plaintiff, the trial court found
During the trial, the parties conducted a comparative demonstration of Poly-Crete, Indu-Crete, and ProKrete at a warehouse. The trial court concluded that Poly-Crete and ProKrete were ‘‘remarkably similar in appearance and performance.’’ On the basis of this and other evidence, the court concluded that Samet had misappropriated the Poly-Crete formula and ‘‘embedded it in ProKrete.’’
The trial court reached a different conclusion with respect to the Indu-Crete formula that Samet had developed for Indue. The court found that Indu-Crete contained six ingredients that were not contained in the Poly-Crete formula, that Poly-Crete contained ten ingredients that were not contained in Indu-Crete, and that some shared ingredients were used for different purposes. The court also found that Indu-Crete was specifically created for Indue’s particularized needs and designed to be used with Indue’s own aggregate. Samet provided seven different batches of the product before the eighth batch finally satisfied Indue’s requirements. During the comparative demonstration, the court observed that Indu-Crete and Poly-Crete behaved very differently.
On the basis of this evidence, the trial court found that, ‘‘[u]nlike ProKrete, Indu-Crete is not substantially the same formula created in substantially the same way for substantially the same purpose as Poly-Crete’’ and concluded that, based on ‘‘the totality of the circum-
The trial court further concluded that, even if Samet and Josh had engaged in ‘‘research chicanery’’ when they developed the Indu-Crete formula, Indue had no reason to know about it. The court based this conclusion on credible evidence that Scanlan had explained Indue’s need for a product with very specific characteristics to Samet when he was hired, had warned Samet ‘‘not to use anyone else’s information improperly,’’ and had no knowledge of the formula for Poly-Crete.
With respect to ECI, Krone, and Merrifield, the trial court concluded that none of them was liable under CUTSA because they did not know or have reason to know that Samet was using the plaintiff’s trade secrets to develop his products. Specifically, there was no evidence that Krone and ECI had sufficient knowledge of the plaintiff’s formulas to know that they were embodied in the products that Samet was selling. Similarly, Merrifield was not in a position to compare the formulas that Samet provided with the plaintiff’s formulas, and, in any event, the products that Samet provided to Merrifield were performing poorly. In addition, Merrifield’s owner, Douglas Merrifield, had warned Samet that he did not want to be involved with him if he was misappropriating information, and Samet had assured him that he could make a product in an entirely different way than the plaintiff.
The trial court summarized its holdings by stating that Samet, Josh, and Lipman ‘‘used [the plaintiff’s] trade secrets to accelerate [the] development of ProKrete . . . and Indu-Crete’’ and that ‘‘[t]hose trade secrets are embodied in ProKrete . . . but not in Indu-Crete.’’
On appeal, the plaintiff contends that the trial court’s conclusion that Indue did not use the plaintiff’s trade
1
We first address the plaintiff‘s claims relating to Indue. We conclude that the trial court‘s finding that Indue did not use the plaintiff‘s trade secrets when it used Samet‘s formula to manufacture Indu-Crete was not clearly erroneous.5 We therefore need not address the plaintiff‘s claim that the trial court incorrectly determined that Indue had no reason to know that Samet used its trade secrets to develop Indu-Crete.
We begin by setting forth the standard of review and the governing legal principles. Whether Indue used trade secrets belonging to the plaintiff that it acquired
The term “use,” as used in
“The unauthorized use need not extend to every aspect or feature of the trade secret; use of any substantial portion of the secret is sufficient to subject the actor to liability. Similarly, the actor need not use the trade secret in its original form. Thus, an actor is liable for using the trade secret with independently created improvements or modifications if the result is substantially derived from the trade secret. . . . [I]f the contribution made by the trade secret is so slight that the actor‘s product or process can be said to derive from other sources of information or from independent creation, the trade secret has not been ‘used’ for purposes of imposing liability . . . .” Restatement (Third), supra, § 40, comment (c), pp. 455-56; see also Mangren Research & Development Corp. v. National Chemical Co., 87 F.3d 937, 944 (7th Cir. 1996) (under Illinois Trade Secrets Act, 765 Ill. Comp. Stat. Ann. 1065/1 et seq., user who modifies or improves another‘s trade secret may still be liable for misappropriation if “the substance of the process . . . is derived from the other‘s [trade] secret” (internal quotation marks omitted)); 4 R. Milgrim & E. Bensen, Milgrim on Trade Secrets (2020) § 15.01 [1] [d] [vi], p. 15-256 (“a plaintiff may prevail on a trade secret claim by establishing that [the] defendant used [the] plaintiff‘s trade secret as the helpful starting point for [the] defendant‘s own development efforts“).
A number of courts have observed that plaintiffs attempting to establish that a trade secret has been used or disclosed often face a difficult task. See, e.g., Eden Hannon & Co. v. Sumitomo Trust & Banking Co., 914 F.2d 556, 561-62 (4th Cir. 1990), cert. denied, 499 U.S. 947, 111 S. Ct. 1414, 113 L. Ed. 2d 467 (1991). The reasons for this are twofold. First, the misappropriation of trade secrets can be difficult to prove because the cases often depend on ambiguous and circumstantial evidence. See, e.g., id., 561. Second, although the UTSA embodies the important public policy of protecting trade secrets in order “to maintain standards of commercial ethics and to encourage research and innovation“; Fleming Sales Co. v. Bailey, 611 F. Supp. 507, 511 (N.D. Ill. 1985); plaintiffs confront an “equally strong policy against inhibiting competition in the marketplace.” Id., 511-12. This court has long recognized that “[t]here is undoubtedly . . . an important policy [that] encourages employees to seek better jobs from other employers or to go into business for themselves . . . [as well as] a policy [that] is designed to protect employers against improper disclosures of information [that] their employees have received in confidence . . . . Our judicial decisions have faithfully sought to vindicate both policies by preserving to employees their
“[T]he line distinguishing . . . an employee‘s general knowledge or skill and an employer‘s protectable trade secrets . . . may often be difficult to draw.” Mallet & Co. v. Lacayo, 16 F.4th 364, 386 (3d Cir. 2021); see also Van Products Co. v. General Welding & Fabricating Co., 419 Pa. 248, 263-64, 213 A.2d 769 (1965) (“[T]he concept of know-how is . . . a very fuzzily defined area, used primarily as a [shorthand] device for stating the conclusion that a process is [protectable]. It covers a multitude of matters, however, which in the broad sense are not [protectable], e.g., an employee‘s general knowledge and skill.” (Internal quotation marks omitted.)). In the end, “[i]t is the trade secret owner that bears the burden of demonstrating its claimed secrets are protectable and are not general industry knowledge. Just how much specificity a court should require of the plaintiff-owner is . . . a context-specific matter.” Mallet & Co., supra, 387; see also Mattel, Inc. v. MGA Entertainment, Inc., 782 F. Supp. 2d 911, 967 (C.D. Cal. 2011) (plaintiff must “describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special knowledge of those persons who are skilled in the trade, and to permit [the] defendant to ascertain at least the boundaries within
Factors that courts have considered when determining whether a defendant wrongfully used a trade secret to develop a product or, instead, lawfully used his or her general knowledge and skill include whether the ingredients of the product were significantly different than those of the protected product; see, e.g., Raytheon Co. v. Indigo Systems Corp., 895 F.3d 1333, 1341 (Fed. Cir. 2018); whether the protected product was created in or gave rise to “a new and unique field” of commercial endeavor; Van Products Co., 419 Pa. 262; whether the defendant personally developed the protected product; see, e.g., id.; whether the information possessed and used by the defendant would be readily accessible to other similarly skilled persons in the same field; see, e.g., System Development Services, Inc. v. Haarmann, 389 Ill. App. 3d 561, 578, 907 N.E.2d 63 (2009); and whether the process for making the protected product was used as a starting point for developing the new product. See, e.g., Basic American, Inc. v. Shatila, 133 Idaho 726, 741, 992 P.2d 175 (1999). These factors are not exclusive, and none is dispositive. See MicroStrategy, Inc. v. Li, 268 Va. 249, 265, 601 S.E.2d 580 (2004) (whether trade secret has been misappropriated “is uniquely factual in nature because it ordinarily involves extensive circumstantial evidence“).
We now turn to the question of whether the trial court correctly applied these principles to the facts when it concluded that Indue did not use the plaintiff‘s trade secrets to develop Indu-Crete. We conclude that it did. The uncontested evidence showed that Indu-Crete contained six ingredients that Poly-Crete did not contain, Poly-Crete contained ten ingredients that Indu-Crete did not contain, some ingredients that the prod-
In support of its claim that Indue used its trade secrets, the plaintiff relies on the trial court‘s finding that Samet “used [the plaintiff‘s] trade secrets to accelerate [the] development of . . . Indu-Crete,” which can constitute misappropriation. See, e.g., On-Line Technologies, Inc. v. Perkin-Elmer Corp., supra, 253 F. Supp. 2d 323; see also 4 R. Milgrim & E. Bensen, supra, § 15.01 [1] [d] [vi], p. 15-256. The plaintiff contends that this finding, combined with the court‘s finding that ProKrete embodied the Poly-Crete formula because Samet used his knowledge of the Poly-Crete formula to accelerate the development of ProKrete, compels the conclusion that Indu-Crete embodied the Poly-Crete formula.
We disagree that the conclusion urged by the plaintiff was the only reasonable outcome available to the trial court on the basis of its findings. The court acknowledged in its phase two memorandum of decision that the use of a trade secret can be established by showing that “a defendant was relying on the trade secret to
The trial court thus distinguished the development of ProKrete, which it found embodied the plaintiff‘s trade secrets, from the development of Indu-Crete, which did not, on the ground that, unlike ProKrete, Indu-Crete did not substantially derive from the trade secrets. See Restatement (Third), supra, § 40, comment (c), p. 456 (“an actor is liable for using the trade secret with independently created improvements or modifications if the result is substantially derived from the trade secret” (emphasis added)). We conclude that the court‘s factual findings on this issue were sufficient to support this conclusion.
The plaintiff also contends that the trial court‘s finding that Samet used the plaintiff‘s trade secrets to accelerate the development of Indu-Crete is dispositive because ”any use” of a trade secret as a starting point or to accelerate the development of a product constitutes use for purposes of CUTSA, regardless of whether the defendant used a substantial portion of the trade secret. (Emphasis in original.) In support of this proposition, the plaintiff cites numerous cases holding that a defendant‘s improvements to or modifications of a trade
Finally, the plaintiff contends that the trial court should not have applied the doctrine of independent development to conclude that Indue did not use the plaintiff‘s trade secrets because Indue never raised that doctrine as a special defense. See Integrated Cash Management Services, Inc. v. Digital Transactions, Inc., 732 F. Supp. 370, 377-78 (S.D.N.Y. 1989) (“[when] a defendant in a trade secret case claims independent
2
We next address the plaintiff‘s claim that the trial court incorrectly determined that Krone, ECI, and Merrifield neither knew nor should have known that they were using the plaintiff‘s trade secrets for purposes of
The following additional facts are relevant to our resolution of this claim.13 Evidence was presented at trial that ECI had been a longtime customer of the plaintiff and that Krone knew that the plaintiff had employed Samet. As we previously indicated, there also was evidence that Samet and A&E provided ECI with floor product samples within a few weeks of Samet‘s leaving the plaintiff, and ECI agreed to test the products in exchange for a discount on one of the products significantly below the price that it was then paying for similar products, including the plaintiff‘s products. All of the products provided by Samet and A&E that ECI evaluated had significant problems.
On November 24, 2014, before Krone or ECI were made defendants in this action, Krone wrote a letter to the Honorable Richard M. Rittenband, judge trial referee, who was then the presiding judge in this case. Krone stated in the letter, which was admitted into evidence at trial, that all of the components of cementitious urethane were “available in the public domain . . . and easily accessible for a creative formulator to use as a starting point formulation for a product like Poly-Crete.” Krone also stated that the information about resinous floor coating systems contained in “material safety, product data sheets, and expired patents . . . is readily ascertainable by any interested formulator” and that “[t]he number of resinous flooring purveyors commercially trading this class of materials presently demonstrates this.”
The trial court concluded that this evidence did not establish that “Krone had enough knowledge of the [plaintiff‘s] formulas and [Samet‘s] formulating process to mean that he [and, through him, ECI] should have known [that Samet] had embodied trade secrets in products he sold [to] him.” The court expressly referred to Krone‘s letter to Judge Rittenband and noted that, although the letter “seem[ed] to have gotten [Krone] sued,” it did not establish that Krone knew that Samet had misappropriated the plaintiff‘s trade secrets. The court therefore rendered partial judgment for Krone and ECI.
With respect to Merrifield, the record shows that its representatives were subpoenaed to testify as nonparty witnesses in this case in February, 2015. According to two motions for capias and sanctions filed by the plaintiff, which the trial court ultimately denied, they refused to answer questions or to produce relevant documents. The plaintiff also claims that the evidence showed that Merrifield knew that Samet had been employed by the plaintiff.
Douglas Merrifield testified at trial that, at some point, he asked Samet about his knowledge of the plaintiff‘s formulas, and Samet‘s responses satisfied any concerns that Douglas Merrifield had regarding misappropriation. He also testified that the products that Samet was providing were not performing properly in the field.
The trial court found that Douglas Merrifield saw the formulas that Samet was providing but that he was not in a position to compare the formulas to the formulas for the plaintiff‘s products. In addition, the court found
Whether Krone, ECI, and Merrifield “knew or had reason to know” that their use of the plaintiff‘s trade secrets was wrongful for purposes of
We begin with the relevant statutory language.
As the trial court noted in its ruling denying ECI and Krone‘s motion for summary judgment on the plaintiff‘s misappropriation claims against them, “[o]ne has notice of facts . . . when he knows of them or when he should know of them . . . . He should know of them if, from the information [that] he has, a reasonable man would infer the facts in question, or if, under the circumstances, a reasonable [person] would be put on inquiry
We conclude that the trial court‘s finding that Krone, ECI, and Merrifield did not know or have reason to know that Samet had misappropriated the plaintiff‘s trade secrets was not clearly erroneous. With respect to Krone and ECI, the evidence that they knew that Samet had been employed by the plaintiff, that Samet provided a formula within weeks of leaving the plaintiff, and that they were added as defendants in this action in 2015 does not compel the conclusion that they knew or should have known that Samet had misappropriated the plaintiff‘s formulas. See, e.g., SASCO v. Rosendin Electric, Inc., 207 Cal. App. 4th 837, 848-49, 143 Cal. Rptr. 3d 828 (2012) (“It was perfectly legitimate for [the defendant company] to hire the individual defendants and for the individual defendants to leave the employ of [the plaintiff] in favor of a competitor, [the defendant company]. . . . Speculation that the individual employees must have taken trade secrets from [the plaintiff] based on their decision to change employers does not constitute evidence of misappropriation.” (Citation omitted.)). The court was free to credit the evidence showing that Krone was not in a position to compare the formula for Poly-Crete with the formula for ProKrete and Krone‘s testimony that he believed Samet‘s statement that he had not used the plaintiff‘s formulas, which testimony was bolstered by the evi-
The trial court was also free to draw an inference from Krone‘s letter to Judge Rittenband that Krone reasonably believed that Samet had used publicly available sources to develop the formula for ProKrete. To the extent that the plaintiff contends that being added as defendants in this action put them on notice, the plaintiff has cited no authority for the proposition that a defendant in an action pursuant to
Similarly, with respect to Merrifield, the evidence that Douglas Merrifield was aware of this action and that he knew that Samet had been employed by the plaintiff and had developed Poly-Crete does not compel the conclusion that he knew or should have known that Samet had misappropriated the plaintiff‘s trade secrets. The trial court was free to credit the evidence that
B
We next address the plaintiff‘s claim that the trial court improperly granted the defendants’ motion for summary judgment on the civil conspiracy claims as to Krone, ECI, and Merrifield.15 We disagree.
The following additional facts and procedural history are relevant to our resolution of this claim. Before trial, Krone and ECI filed a motion for summary judgment on the civil conspiracy claims against them, arguing that there was no genuine issue of material fact as to whether they had actual knowledge of the plaintiff‘s trade secrets. The trial court, Sheridan, J., denied the motion, concluding that “[t]he law imposes no requirement that all the conspirators know every detail of every aspect of the formed conspiracy—it only requires that they be in agreement as to the purpose of the conspiracy and the means by which it will be carried out.”
Thereafter, during phase two of the trial, the defendants filed a motion for summary judgment on the civil conspiracy claims, arguing that the claims were preempted by CUTSA pursuant to
The plaintiff raises two claims. First, it claims that it was procedurally improper for the trial court to grant the motion for summary judgment on the civil conspiracy claims during trial. Second, it claims that the court incorrectly determined that its civil conspiracy claims against Krone, ECI, and Merrifield were preempted by CUTSA.
1
We first address the plaintiff‘s procedural claim. This court previously has recognized that “the trial court, in the exercise of its case management authority, has the discretion, as a trial is about to begin, to decide a dispositive question of law that the parties to the case submit to the court orally, without a written motion or compliance with certain applicable provisions of the [rules of practice]. . . . A fortiori, the trial court . . . [has] such discretion to decide . . . dispositive questions of law that [have] been presented in writing . . . .” (Emphasis omitted; footnote omitted; internal quotation marks omitted.) McNamara v. Tournament Players Club of Connecticut, Inc., 270 Conn. 179, 193, 851 A.2d 1154 (2004). “We review case management decisions for abuse of discretion, giving [trial] courts wide latitude. . . . A party adversely affected by a [trial]
The plaintiff contends that, notwithstanding the broad discretion of the trial court to consider and decide a motion for summary judgment, regardless of when it is filed, it was improper under Vertex, Inc. v. Waterbury, 278 Conn. 557, 898 A.2d 178 (2006) (Vertex), for the trial court to consider the defendants’ motion for summary judgment on the civil conspiracy claims when it was filed “long after the summary judgment deadline in this case [had] expired, and [when the plaintiff] was not in agreement that such a motion should be heard or considered.” In Vertex, the trial court had, sua sponte, determined, on the basis of the parties’ pretrial briefs, that two counts of the plaintiff‘s complaint were without legal merit. Vertex, Inc. v. Waterbury, supra, 564. On appeal, this court concluded that “[t]he trial court‘s broad case management authority simply does not extend so far as to permit the court to: (1) initiate the pretrial disposition of a claim based on the court‘s perception of its legal insufficiency; and (2) proceed to consider such disposition (a) in disregard of the procedural protections provided in our rules of practice without the agreement of counsel and (b) without notice to the parties and a reasonable opportunity for the plaintiff to oppose the disposition of its claims.” Id., 569.
Vertex is not controlling in the present case. First, the trial court here did not initiate the pretrial disposition of a claim sua sponte but, rather, ruled on the defendants’ motion for summary judgment, the plaintiff had notice of the motion and filed an objection, and the court heard argument on the issue.
Second, although the plaintiff contends that the defendants violated the rules of practice by filing the
2
We next address the plaintiff‘s claim that the trial court improperly granted the defendants’ motion for summary judgment. Specifically, the plaintiff claims that, if Krone, ECI, and Merrifield were not liable for misappropriating its trade secrets, its civil conspiracy
In its reply brief, the plaintiff retreats from this claim and again reasserts the claim that it made in the trial court, which is premised on the assumption that, even if Krone, ECI, and Merrifield did not misappropriate the plaintiff‘s trade secrets, they knew that Samet, Josh, and Lipman did. We ordinarily would not address a claim that was raised for the first time in a reply brief.
C
We next address the plaintiff‘s claim that the trial court improperly denied the plaintiff‘s request that it maintain jurisdiction over Indue, Krone, ECI, and Merrifield for purposes of enjoining the future use of the plaintiff‘s trade secrets pursuant to
The following additional facts are relevant to our resolution of this claim. In its motion for reconsideration of the trial court‘s rulings in its phase two memorandum of decision, the plaintiff contended that, because Indue, Krone, ECI, and Merrifield were now on notice that the products developed by Samet embodied the plaintiff‘s trade secrets, the court should permanently enjoin them from using those products in the future. The court concluded that it did not have “the power to enjoin people who have done nothing wrong.” It further concluded that, although the plaintiff was correct that Indue, Krone, ECI, and Merrifield were on notice that using ProKrete and ProSpartic would involve using the plaintiff‘s trade secrets, if they did so, “[the plaintiff] knows what to do, and [they] can have little doubt [the plaintiff] will do it.”
“A prayer for injunctive relief is addressed to the sound discretion of the court and the court‘s ruling can be reviewed only for the purpose of determining whether the decision was based on an erroneous statement of law or an abuse of discretion.” (Internal quotation marks omitted.) Lydall, Inc. v. Ruschmeyer, 282 Conn. 209, 236, 919 A.2d 421 (2007). The court may enjoin actual or threatened misappropriation of a trade secret. See
The plaintiff contends that the trial court improperly denied its request for injunctive relief because, even if Indue, Krone, ECI, and Merrifield did not knowingly use the plaintiff‘s trade secrets in the past, they now know that Samet, Josh, and Lipman used the trade secrets to develop Indu-Crete, ProKrete, and other products and, therefore, that their future use of the trade secrets to manufacture those products would be unlawful. We conclude that, with respect to Indue, the factual premise of this claim is incorrect, as we held in this opinion that the trial court reasonably had determined that Samet did not use the plaintiff‘s trade secrets to develop Indu-Crete. With respect to Krone, ECI, and Merrifield, even if they unknowingly used products that embodied the plaintiff‘s trade secrets, the plaintiff has cited no evidence that they have any intention of continuing to do so. We conclude, therefore, that the trial court did not abuse its discretion when it concluded that it should not grant the plaintiff‘s request for injunctive relief. See BTS, USA, Inc. v. Executive Perspectives, LLC, 166 Conn. App. 474, 498, 142 A.3d 342 (trial court did not abuse its discretion in denying request for injunctive relief pursuant to
We next address the plaintiff‘s claim that the trial court improperly sanctioned it for the attempted spoliation of evidence when no evidence was actually destroyed, and the defendants19 did not act with due diligence by asking for the evidence through discovery before trial. The plaintiff further contends that, even if sanctions were properly imposed, the amount of the sanctions was grossly disproportionate to the misconduct.20 We disagree.
The following additional facts are relevant to our resolution of this claim. During phase two of the trial, the plaintiff claimed that certain aspects of its manufacturing plant and equipment constituted trade secrets for purposes of CUTSA. During the testimony of the plaintiff‘s chief executive officer and owner, Robert Smith, the defendants’ attorney began to question him about certain photographs of the plant‘s interior that were posted on the plaintiff‘s Facebook page. The plaintiff‘s president, Ferris, was in the courtroom at the time and sent a text message to a marketing employee of the plaintiff directing him to remove all interior photographs of the plant from the plaintiff‘s Facebook page. Later, while Smith was testifying about a photograph of the plaintiff‘s founder standing next to machinery that the plaintiff claimed to be a trade secret, Ferris sent a text to the employee ordering him to remove the photograph ” ‘now.’ ” The photographs were removed, and Ferris sat silently as the defendants’ attorneys attempted to find the photographs that they previously had seen on the plaintiff‘s Facebook page and asked Smith whether they had been removed.
This court has recognized that “a trial court in this state has the inherent authority to impose sanctions against an attorney and his client for a course of claimed dilatory, bad faith and harassing litigation conduct, even in the absence of a specific rule or order of the court that is claimed to have been violated.” (Internal quotation marks omitted.) CFM of Connecticut, Inc. v. Chowdhury, 239 Conn. 375, 393, 685 A.2d 1108 (1996), overruled in part on other grounds by State v. Salmon, 250 Conn. 147, 735 A.2d 333 (1999). This includes “the inherent authority to assess attorney‘s fees when the
In the present case, we have little difficulty concluding that the trial court did not abuse its discretion when it imposed a monetary penalty and awarded attorney‘s fees to the defendants as sanctions for Ferris’ misconduct. The misconduct resulted in significant confusion, aggravation, and inconvenience, and interrupted the trial for two days. In addition, it required the defendants to investigate whether the plaintiff had engaged in other misconduct and to brief what form of sanctions should be imposed. Most important, the misconduct was an affront to the integrity of the court. The fact that Ferris’ misconduct was discovered and he was ultimately unsuccessful in his attempt to conceal that the photographs were posted on the plaintiff‘s Facebook page does not reduce the egregious nature of the conduct; nor does the fact that the defendants did not seek information about the plaintiff‘s Facebook page through discovery before the issue arose at trial. We conclude that the amount of the monetary sanctions and attorney‘s fees was not grossly disproportionate to the harm suffered by the defendants and the trial court. We therefore reject this claim.
E
We next address the plaintiff‘s claim that the trial court improperly awarded attorney‘s fees to Krone and ECI
The following additional facts are relevant to our resolution of this claim. In 2017, Krone and ECI moved for summary judgment on the claims against them, including the misappropriation claims. They argued that, “[r]egardless of whether a reasonable juror could find that [they] knew or should have known that [Samet] was misappropriating trade secrets, there is a separate and independent element of trade secret misappropriation requiring proof that the defendant actually knows the trade secret itself.” They further argued that they did not know and had no reason to know the formula for any of the products that ECI evaluated for Samet.
Judge Sheridan denied the motion for summary judgment. Although Judge Sheridan agreed with Krone and ECI that there did not appear to be any genuine issue of material fact as to whether they knew the formulas for the products that Samet provided to ECI for evaluation, he concluded that the plaintiff was not required to prove such knowledge in order to prevail on its claim. Rather, he concluded that the plaintiff could prevail if it proved
Thereafter, the trial court rendered judgment in favor of Krone, ECI, and Merrifield on the plaintiff‘s misappropriation claims. Those defendants then sought an award of attorney‘s fees and costs pursuant to
The trial court found that the plaintiff‘s claims against Krone and ECI “[stood] out among all of the claims as being meritless. Following the lengthy trial, the court was left with the impression . . . that the [action] against them was in retaliation for [Krone‘s] writing a letter to [Judge Rittenband] in defense of Samet . . . . Krone helped [Samet] in ways that never reflected that he knew he was using trade secret information.” The court also observed that there was undisputed testimony that Smith had acknowledged that the claims against Krone and ECI lacked merit. The court was apparently referring to Krone‘s testimony during phase two of the trial that he met with Smith in the fall of 2015, after Krone and ECI had been added as defendants, and that it was a “very positive meeting, a good first step meeting, and that he would take what was discussed . . . back to [the plaintiff‘s attorney] and see . . . if he [could] get [them] released.” ECI‘s president, Alan Landau, was also at the meeting and testified at trial that Smith had stated that he “was going to go back and talk to [the plaintiff‘s
The trial court also observed that the claims against Krone and ECI “appear to be an example of a punitive attitude [that the plaintiff] took toward its competitors and those who would help Samet . . . . That attitude is a thread that has run through much of the evidence and testimony in the case.” The court concluded that the “claims were baseless” and that “they were made for the improper purpose of punishing and intimidating [Krone and ECI].” The court therefore granted the request for an award of attorney‘s fees with respect to Krone and ECI. The court rejected the request with respect to Merrifield, finding that, although the plaintiff‘s claims against it were meritless, the court was not convinced that they were made in bad faith.
We first address the plaintiff‘s claim that “it is . . . a bizarre, illogical, and legally improper result [when] the trial court finds that issues of fact exist [that] need to be tried in denying summary judgment, and [when] it refused to dismiss those claims for lack of a prima facie case at trial, but later decides these claims were made in bad faith.” Whether the denial of a defendant‘s motion for summary judgment precludes a later finding that there was no evidence to support an element of the plaintiff‘s claim as a matter of law is a question of law subject to plenary review. See, e.g., Mirjavadi v. Vakilzadeh, 310 Conn. 176, 183, 74 A.3d 1278 (2013).
We find this reasoning persuasive. In addition, it is important to recognize that a trial court may not resolve credibility issues when ruling on a motion for summary judgment. See, e.g., Doe v. West Hartford, 328 Conn. 172, 197, 177 A.3d 1128 (2018). “It is only when the witnesses are present and subject to cross-examination that their credibility and the weight to be given to their testimony can be appraised.” (Internal quotation marks omitted.) Id. A court considering a motion for summary judgment also must view the evidence in the light most favorable to the nonmoving party; Stearns & Wheeler, LLC v. Kowalsky Bros., Inc., 289 Conn. 1, 7, 955 A.2d 538 (2008); and the party seeking summary judgment is held to a strict standard. Grenier v. Commissioner of Transportation, 306 Conn. 523, 535, 51 A.3d 367 (2012). Thus, even when a trial court has serious doubts as to whether there is a genuine issue of material fact on an element of a claim, the court reasonably can deny the motion without prejudice to filing the motion again after the parties have had an opportunity to submit all of their evidence. We conclude, therefore, that Judge Sheridan‘s denial of Krone and ECI‘s motion for summary judgment on the ground that a reasonable fact finder might conclude that they knew or should have known that Samet had misappropriated the plaintiff‘s trade secrets did not preclude the trial court from reaching a contrary conclusion after hearing all of the evidence and assessing its credibility and persuasiveness.
This court has not previously addressed the question of what constitutes bad faith for purposes of
The court in SASCO also held that “[s]ubjective bad faith under [California‘s statutory analogue to
In the present case, the only evidence that the plaintiff points to in support of its claim that Krone and ECI knew or should have known that Samet had misappropriated the plaintiff‘s trade secrets is the evidence that Krone knew that Samet previously had worked for the plaintiff, that Samet provided products to ECI within a few weeks of his leaving the plaintiff, and that Krone was aware of the existence of this action and was ultimately added as a defendant. As we already explained, “[s]peculation that [an employee] must have taken trade secrets from [its prior employer] based on [the] decision to change employers does not constitute evidence of misappropriation.” SASCO v. Rosendin Electric, Inc., supra, 207 Cal. App. 4th 848-49. Moreover, knowledge of unproven allegations of misappropriation that the defendant denies does not compel a finding of notice. See Silvaco Data Systems v. Intel Corp., 184 Cal. App. 4th 210, 109 Cal. Rptr. 3d 27 (2010), overruled on other grounds by Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 120 Cal. Rptr. 3d 741, 246 P.3d 877 (2011). The
On the basis of this evidence, we conclude that the trial court‘s finding that the claims against Krone and ECI were objectively specious was not clearly erroneous. In addition, although it would have been helpful if the court had identified the specific evidence supporting its conclusion that the plaintiff had displayed a “punitive attitude” toward Krone and ECI, and was retaliating against them for their support of Samet, we cannot conclude that the court‘s finding that the plaintiff knew fairly early in the litigation, if not from the start, that its claims against Krone and ECI were without evidentiary support and were therefore pursued with subjective bad faith was clearly erroneous. See Daniels v. Robbins, supra, 182 Cal. App. 4th 226 (“malice can be inferred when a party continues to prosecute an action after becoming aware that the action lacks probable cause” (emphasis in original)).
In reaching this conclusion, we recognize that there may be some merit to the plaintiff‘s contention that a finding of bad faith is unwarranted when a party does not recognize until trial has ended that a claim lacks any credible evidentiary support. This is not the case here. Notwithstanding the plaintiff‘s insistence that Krone and ECI had to have engaged in a systematic program of
II
LIPMAN, DURAFLOOR, AND PROREZ’ CLAIMS ON APPEAL
A
We next address the claim of the defendants Lipman, Durafloor, and ProRez24 that the trial court misconstrued the knowledge requirement of
As a preliminary matter, we note that the trial court‘s phase two memorandum of decision is not entirely clear as to whether the court concluded that the defendants knew that Samet was using his knowledge of the plaintiff‘s trade secrets to develop the products that he provided to them or, instead, that the defendants themselves had knowledge of the trade secrets. The court found that Lipman “was an expert installer and led the field tests that led to ProKrete with full knowledge that what was mixing and what was going down was almost the mirror of what [the plaintiff had] developed and owned,” but it never expressly found that Lipman had knowledge of either the plaintiff‘s trade secrets or the formulas that Samet developed that embodied the trade secrets.27 We conclude that, in light of Judge Sheridan‘s ruling that the plaintiff was not required to prove that the defendants had knowledge
Whether
In accordance with
We agree with the defendants that, on its face,
In support of their claim that the framers of the UTSA had this intention, the defendants cite Silvaco Data Systems v. Intel Corp., supra, 184 Cal. App. 4th 210, in which the California Court of Appeal applied a definition of “misappropriation” that is substantially identical to that set forth in
The court concluded that “[t]he sine qua non of a trade secret . . . is the plaintiff‘s possession of infor-
The court further concluded that a person does not use a trade secret when one uses ”something that was made using the [trade] secret.” (Emphasis in original.) Id., 224. Resorting to a colorful analogy, the court stated: “One who bakes a pie from a recipe certainly engages in the use of the latter; but one who eats the pie does not, by virtue of that act alone, make use of the recipe in any ordinary sense, and this is true even if the baker is accused of stealing the recipe from a competitor, and the diner knows of that accusation.” (Internal quotation marks omitted.) Id. In other words, using a trade secret necessarily entails having knowledge of the trade secret; one cannot happen without the other.
Finally, the court concluded that Silvaco could not establish that Intel had the requisite “knowledge of the trade secret” under the California Uniform Trade Secrets Act. (Internal quotation marks omitted.) Id., 225, 229; see
The court ultimately concluded that “[l]iability under [the California Uniform Trade Secrets Act] is not dependent on the defendant‘s comprehension of the trade secret but does require knowledge of it.” (Internal quotation marks omitted.) Id., 229. Because Intel did not know and had no way to get the information constituting Silvaco‘s trade secrets, it could not be held liable for misappropriation. Id.; see also Control Module, Inc. v. Data Management, Inc., Docket No. 3:07CV00475 (AWT), 2007 WL 4333814, *4 (D. Conn. December 10, 2007) (“[o]ne cannot be liable pursuant to
The court emphasized that nothing in its decision “should be taken to suggest that a defendant cannot be liable for misappropriation unless he personally possessed knowledge of the trade secret. He can of course acquire such knowledge, and indeed can conduct the entire misappropriation, vicariously, e.g., through an agent.31 Further, constructive knowledge of the secret
We agree with the court in Silvaco Data Systems that, although there is authority to support the notion that knowledge of the trade secret is not required, that authority is unpersuasive. Silvaco Data Systems v. Intel Corp., supra, 184 Cal. App. 4th 226–29; see also ClearOne Communications, Inc. v. Chiang, Docket No. 2:07-cv-37 TC, 2007 WL 4376125, *2 n.3 (D. Utah December 13, 2007) (‘‘Although [
The court in Silvaco Data Systems concluded that the court in ClearOne Communications, Inc., had ‘‘dismissed’’ the actual text of the applicable statute and had ‘‘conflat[ed] two distinct mental elements of liability . . . .’’ Silvaco Data Systems v. Intel Corp., supra, 184 Cal. App. 4th 227. The court further noted that a treatise that the court in ClearOne Communications, Inc., had cited had been superseded, and, in any event, it did not support the proposition that ‘‘[l]iability . . . attaches only in the event that it can be proved that the defendant used or disclosed the trade secret after having actual knowledge or reason to know that the information was improperly obtained.’’33 (Internal quotation marks omitted.) Id., quoting ClearOne Communications, Inc. v. Chiang, supra, 2007 WL 4376125, *2 n.3. Rather, the quoted language ‘‘appears in the context of the author’s enumeration of the different types of misappropriation that may be predicated on use or disclosure. The . . . language does not concern the defendant’s knowledge of the trade secret but his cognizance of the means by which it was obtained. The statute specifies required mental states with respect to both the trade secret and the means by which it became available to the defendant. To equate one of these
With respect to Data General Corp., the court in Silvaco Data Systems concluded that the court’s ‘‘reasoning reflects a certain vagueness, not to say incoherence, about what constituted the trade secret at issue there.’’ Id., 228. Specifically, the court in Data General Corp. had not explained how the use of object code could result in misappropriation when object code, unlike source code, does not constitute information, ‘‘any more than a pie is the same information as the recipe used to bake it.’’ (Internal quotation marks omitted.) Id., 228–29.
We are persuaded by the analysis of the court in Silvaco Data Systems and conclude that the defendant’s knowledge of the trade secret is an element of a claim of misappropriation under
See, e.g., South Windsor v. Lanata, 341 Conn. 31, 42, 266 A.3d 875 (2021) (‘‘a retrial may be limited to a specific issue or issues, [when] the error as to one issue or issues is separable from the general issues . . . [and] such . . . limitation does not work injustice to the other issues or the case as a whole’’ (internal quotation marks omitted)). If the trial court concludes on remand that the defendants did not have knowledge of the plaintiff’s trade secrets, it necessarily must find that the defendants did not use the trade secrets. On the other hand, if the court determines that Lipman had knowledge of the trade secrets, it must then determine whether he used that knowledge to develop or manufacture ProKrete or ProSpartic.
B
We next address the defendants’ claim that the trial court failed to properly balance the interest of the defendants in pursuing their livelihoods in the area of their greatest expertise with the plaintiff’s interest in protecting itself from unfair competition when it determined that they had misappropriated the plaintiff’s trade secrets to develop ProKrete and ProSpartic.35 We are not persuaded.
The trial court found the following additional relevant facts. While still working for the plaintiff, Samet set up a chemistry lab in his garage for his nephew, Josh,
Josh began his work on developing cementitious urethane on September 6, 2013, and had a formula by September 30, 2013. The final ProKrete formula was completed by December, 2014. Josh admitted at trial that matching or exceeding the Poly-Crete formula had always been the goal. An expert witness for the plaintiff testified that he had forty-one years of experience in the cementitious urethane flooring business and that it would have taken him three to five years to develop such a formula.
The trial court found that the chemicals used in the process of formulating ProKrete that were also contained in Poly-Crete included two polyols, the surfactant, the principal defoamer, the filler, and the hardener. The defoamer had been developed especially for the plaintiff and was not advertised by the manufacturer but had to be requested by name. In addition, in the process of developing ProKrete, Samet used several specific products that he also had used in researching the development of Poly-Crete. After conducting a comparative demonstration, the court found that there were
The trial court further found that, while discovery requests for the information were pending, Samet destroyed or erased numerous files and other information on his computers. The court concluded that Samet’s testimony in court and at his deposition denying that he had done so was perjured. Pursuant to Practice Book § 13-14, the court drew an adverse inference from this conduct and concluded that the information that was destroyed would have shown that Samet stole trade secrets belonging to the plaintiff. Other evidence produced at trial established that Samet had, on one of his USB drives, ‘‘a Poly-Crete mixing video with all the ingredients explained.’’
With respect to Samet’s ProSpartic formula, the trial court found that Samet ‘‘developed a polyaspartic product part of the way’’ while employed by the plaintiff, but the product was ‘‘put on the shelf . . . .’’ The court further found that ‘‘[Josh’s] starting point for [ProSpartic’s] . . . development simply adopted the patent circumventing idea [Samet] first discovered’’ while he was working for the plaintiff.
On the basis of these subsidiary factual findings, the trial court concluded that Samet had used the plaintiff’s trade secrets to develop the ProKrete and ProSpartic formulas in violation of CUTSA and rejected the defendants’ claim that Josh had used information that was in the public domain to develop the products. The court also rejected the defendants’ contention that Samet had done nothing more than use his general knowledge as a chemist to develop ProKrete, which he would have been entitled to do. The court observed that an employee lawfully ‘‘can take and use knowledge of some things’’ when he or she leaves a job, and ‘‘[t]here
As we discussed in part I A 1 of this opinion, this court has long recognized the competing interests of employees in being able to leave employers and to continue to work in the area of their greatest expertise and of employers in protecting their trade secrets. See, e.g., Allen Mfg. Co. v. Loika, supra, 145 Conn. 517. As we also explained, the question of whether a former employee was lawfully continuing to use his general knowledge and expertise or, instead, was unlawfully using his former employer’s protectible ‘‘know-how’’ involves a very ‘‘fuzzily defined’’ concept. (Internal quotation marks omitted.) Van Products Co. v. General Welding & Fabricating Co., supra, 419 Pa. 263. ‘‘The question of whether information sought to be protected by [CUTSA] rises to the level of a trade secret is one of fact for the [fact finder in the] trial court.’’ (Internal quotation marks omitted.) Elm City Cheese Co. v. Federico, 251 Conn. 59, 68, 752 A.2d 1037 (1999).
In the present case, the defendants claim that the trial court’s statement that it ‘‘might be okay’’ for Samet to use his knowledge of basic chemistry and scientific principles after he left the plaintiff’s employment shows that the court’s ‘‘starting position was that it was unclear’’ whether Samet had the right to continue in his chosen profession, and, therefore, the court could not have properly balanced the relevant competing
C
We next address the defendants’ claim that the plaintiff failed to identify its trade secrets with sufficient particularity or specificity in its complaint and in its responses to Knone and ECI’s interrogatories. The defendants contend that the plaintiff’s alleged failure to do so led the trial court to afford an overly broad scope of protection to the plaintiff’s trade secrets in its misappropriation analysis. We conclude that the court correctly determined that the plaintiff had identified its trade secrets with sufficient particularity.37
In its responses to Knone and ECI’s interrogatories that the plaintiff identify each process and formula that it claimed as a trade secret, the plaintiff listed approximately twenty separate trade secrets, all of which were related to the plaintiff’s formula for Poly-Crete.38 Krone and ECI filed a motion to compel, arguing that the plaintiff’s responses failed to identify its trade secrets with ‘‘reasonable particularity . . . .’’ Following its review of the unredacted copy of the plaintiff’s interrogatory responses, the trial court denied the motion to compel on the ground that the plaintiff had identified its trade secrets ‘‘with adequate specificity to inform the defendant[s] what it is that is alleged to have been misappropriated.’’ At the conclusion of phase one of the trial, the court found that the plaintiff proved it owned the following trade secrets: the Poly-Crete resin and hardener formulas, the resin and hardener formulas for Dur-A-Glaze No. 4 and Dur-A-Glaze MVP, the formula for a ‘‘polyaspartic-imine resin,’’ and the specific experiments performed and data related to the experiments undertaken to develop these products ‘‘as recorded in the company lab books . . . .’’
‘‘A person claiming rights in a trade secret bears the burden of defining the information for which protection is sought with sufficient definiteness to permit a court to apply the criteria for protection described in this [s]ection and to determine the fact of an appropriation.’’
The plaintiff’s original complaint identified the formula for Poly-Crete as its trade secret, and the amended complaints expanded that definition to include ‘‘[t]he processes and formulae for [the plaintiff’s] products and research . . . .’’ The second definition, although significantly broader than the one provided in the original complaint, was limited by the immediately preceding paragraph, which alleged that, until his resignation, ‘‘Samet . . . was instrumental in the development of the processes and formulae for Poly-Crete, one of the plaintiff’s most important proprietary products, and other products and formulae for dual-cure polyaspartic and other floor coating systems.’’ In its responses to Krone and ECI’s interrogatories, the plaintiff specified which formulas and processes it claimed as trade secrets, beginning with the formula for Poly-Crete. The additional formulas identified by the plaintiff in its responses include parts of the Poly-Crete formula, such as the formula for the hardener. The plaintiff also identified various other aspects of the Poly-Crete formula and its manufacturing process, such as the amount of water in the resin formula, the additives in the resin, and the ratio of resin to hardener. Most of the trade secrets disclosed in the plaintiff’s responses share a common theme. They are all part of or related to the formula for Poly-Crete, which the trial court found to
We conclude that the mere fact that the plaintiff refined its claim in the amended complaints to add one additional formula, for ‘‘dual-cure polyaspartic and other floor coating systems,’’ and provided greater detail in its responses to Krone and ECI’s interrogatories did not make the plaintiff’s trade secret a ‘‘moving target,’’ deprive the defendants of the information they needed to defend themselves, or prevent the trial court from managing the discovery process effectively and efficiently. To the contrary, the plaintiff’s responses to Krone and ECI’s interrogatories narrowed the scope of the plaintiff’s trade secret claim by identifying which aspects of the Poly-Crete formula and its manufacturing process constituted alleged trade secrets and by limiting the plaintiff’s claim of trade secret status as to ‘‘dual-cure polyaspartic and other floor coating systems’’ solely to the formula for ‘‘polyaspartic amine product.’’39
D
We next address the defendants’ claim that, if the trial court correctly determined that they misappropriated the plaintiff’s trade secrets, it used an incorrect
The following additional facts are relevant to our resolution of this claim. In its memorandum of decision on liability, the trial court found that Samet used his knowledge of the plaintiff’s trade secrets to ‘‘speed up the [development] process’’ for ProKrete and that, as a result, ProKrete was developed in ‘‘far less time’’ than Poly-Crete. The court also found that Samet’s development of the formula for ProSpartic ‘‘was simply a matter of picking up . . . where he left off’’ on his work at the plaintiff, necessarily implying that Samet developed the formula for ProSpartic in less time than he would have without the misappropriation.
In a memorandum of law concerning damages that the defendants submitted to the trial court, they argued that the evidence presented at trial showed that ‘‘there was limited, if any, acceleration [of Samet’s development of the formulas for ProKrete and ProSpartic] associated with [his] alleged use of [the plaintiff’s] trade secrets.’’40 They further argued, quoting the Restatement (Third) of Unfair Competition, that, if the court granted the plaintiff’s request seeking recovery for the defendants’ unjust enrichment caused by their misappropriation of the plaintiff’s trade secrets, it should limit the damages to ‘‘the period of time that the information would have remained unavailable to the defendant[s] in the absence of the appropriation,’’ known as the ‘‘head start’’ period. Restatement (Third), supra, § 45,
Although the trial court agreed that this theory might apply to the unlawful development of a product such as Indu-Crete, which did not substantially embody the plaintiff’s trade secrets, the court disagreed that the theory applied to the development of ProKrete and ProSpartic, which did. According to the court, this was because the plaintiff’s trade secrets did not merely give the defendants a head start on the development of ProKrete and ProSpartic; rather, the trade secrets were ‘‘something old that belonged to [the plaintiff] that ProRez brought into blossom. Therefore, every time the [products were] sold, it violated [CUTSA]. The same is not true of [Indu-Crete].’’ The court ordered the defendants to disgorge all of their profits from the sale of products that were developed using the plaintiff’s trade secrets for the years 2014 through 2021. See
In support of their argument that the trial court applied an incorrect standard when it ordered them to disgorge all of their profits and indefinitely enjoined
We agree with the defendants that the trial court appears to have been confused about how the ‘‘head start’’ and ‘‘acceleration’’ concepts apply to the crafting of relief for misappropriation claims. Specifically, the court reasoned that, if the person accused of misappropriation did not use the trade secret merely as a starting point to develop a new product but, instead, substantially embodied the trade secrets in the new product, the head start and acceleration concepts simply do not apply, and the person may be permanently enjoined from using the trade secret and required to disgorge
Applying the ‘‘head start’’ concept when the trade secret is substantially embodied in the new product is also consistent with the language of
We do not suggest that the trial court is required, in every case, to limit damages and injunctive relief to the head start period. There may be circumstances, which should be clearly explained by the trial court, in which awards that exceed that period are warranted. See, e.g., Kilbarr Corp. v. Business Systems, Inc., 679 F. Supp. 422, 427 (D.N.J. 1988) (limitation of damages to head start period was not appropriate when defendant’s appropriation effectively preempted market), aff’d, 869 F.2d 589 (3d Cir. 1989). There also may be cases in which the head start concept simply does not apply because the defendant would never have been able to develop the product independently. In the absence of such circumstances, we conclude that monetary and injunctive remedies for misappropriation ‘‘are appropriate only for the period of time that the information would have remained unavailable to the defendant in the absence of the appropriation.’’42 Restatement (Third), supra, § 45, comment (h), p. 519. We conclude, therefore, that the trial court applied an incorrect standard when it determined that this principle did not apply because the defendants did not use the plaintiff’s trade secrets as a starting point to develop something new. If the trial court concludes on remand that the defendants are liable for misappropriation, it must then determine the amount of damages and the extent of the injunctive relief, if any, applying the correct standard.
E
We finally address the defendants’ claim that the injunctive relief granted by the trial court was impermissibly vague and restrictive. We disagree.
Consistent with the general rules governing injunctive orders, an injunctive order relating to the misappropriation of trade secrets ‘‘should be sufficiently precise to give the defendant fair notice of the information that is encompassed within the terms of the injunction.’’ Restatement (Third), supra, § 44, comment (c), p. 502. ‘‘When the trade secret is narrow in scope and closely related to publicly available information, the injunction should be carefully restricted to the contours of the trade secret in order to avoid encroachment on the public domain.’’ Id., comment (d), p. 502. The scope and contours of an order of injunctive relief are subject to review for abuse of discretion. See, e.g., Tomasso Bros., Inc. v. October Twenty-Four, Inc., 230 Conn. 641, 648, 646 A.2d 133 (1994).
The defendants contend that the trial court’s order prohibiting them from manufacturing, selling, or distributing any product made with a formula that has an ‘‘essentially identical form’’ as the current ProKrete formula is both vague—because it is extremely difficult to determine whether formulas are essentially identical—and impermissibly restrictive—‘‘because it can be interpreted as enjoining the use of any similar variation of
Although we understand the difficulties inherent in determining whether formulas are sufficiently similar to support a finding that a trade secret has been used, those difficulties are simply unavoidable in this context. The defendants are effectively asking us to conclude that the principle that the substantial use of a trade secret constitutes misappropriation cannot be applied to their commercial activities. See, e.g., Mangren Research & Development Corp. v. National Chemical Co., supra, 87 F.3d 944. We decline to do so and, therefore, reject this claim.
III
THE PLAINTIFF’S CLAIMS ON CROSS APPEAL
A
The plaintiff first claims that the trial court improperly limited the testimony of its damages expert. We take this opportunity to remind parties that it is their responsibility, not this court’s, to clearly identify how and where in the record the claim that the party is raising on appeal was preserved for review and where in the record the trial court’s ruling on the claim may be found—a responsibility that has been neglected in several instances by all of the parties in the present case. Because the plaintiff has failed to identify where in the voluminous record the trial court’s ruling on this
B
The plaintiff next claims that the trial court incorrectly determined that Samet’s noncompete agreement was unenforceable for lack of adequate consideration.43 We conclude that the case must be remanded for further proceedings to determine whether Samet received adequate consideration in exchange for executing the noncompete agreement and, if so, whether Samet breached the agreement.
As we previously explained, several years after hiring Samet as a chemist, the plaintiff required him to sign the noncompete agreement, which provided that he would not ‘‘disclose, divulge, communicate or use any confidential or proprietary business information or trade secrets’’ of the plaintiff or its customers during or after his employment and that he would not compete with the plaintiff for two years after his employment terminated. Samet was an at-will employee at the time. At trial, Samet claimed that the noncompete agreement was unenforceable because he had received no consideration for it. The plaintiff claimed that, to the contrary, Samet received consideration for the agreement because, when he resigned, he accepted the plaintiff’s offer to continue to consult with the plaintiff in exchange for compensation and that he orally reaffirmed the agreement at that time.
Relying on Thoma v. Oxford Performance Materials, Inc., 153 Conn. App. 50, 100 A.3d 917 (2014), the trial court held that ‘‘a party giving nothing more than the status quo of continuing employment . . . offers no consideration [in] exchange for his promise, and the
On appeal, the plaintiff contends that Thoma is distinguishable from the present case and that, under this court’s decision in Roessler v. Burwell, 119 Conn. 289, 176 A. 126 (1934), when employment is terminable at will, continued employment constitutes consideration for a noncompete agreement. The plaintiff further contends that the trial court incorrectly determined that the severance payment to Samet did not constitute consideration.
As the plaintiff points out, for years, the determination as to whether continued employment may be consideration for a noncompete agreement has been controlled by Roessler. In Roessler, the plaintiff, a business owner, agreed to continue employing the defendant, one of his salesmen, indefinitely in exchange for his promise not to compete with the plaintiff or to solicit his customers for one year after the defendant’s employment ended. Id., 290–91. Eventually, the defendant voluntarily left his position and went into business for himself selling similar products and seeking orders from the plaintiff’s customers. Id., 291–92. The trial court subsequently granted an injunction enforcing the noncompete agreement. Id., 292. On appeal, this court affirmed the trial court’s judgment, concluding that ‘‘[t]he underlying purpose of the defendant in entering
In the present case, none of the parties has asked this court to overturn or modify Roessler, and we will not consider its viability sua sponte. Although it was decided in a different era, its reasoning has long been followed by federal courts applying Connecticut law, the Appellate Court, and the Superior Court. See, e.g., MacDermid, Inc. v. Selle, 535 F. Supp. 2d 308, 316 (D. Conn. 2008) (“the Connecticut Supreme Court has long recognized that continued employment may suffice as adequate consideration to support a covenant in an at-will employment relationship“); Schimenti Construction Co., LLC v. Schimenti, 217 Conn. App. 224, 246, 288 A.3d 1038 (2023) (“[Roessler‘s] holding that consideration in the form of continued employment for at-will employees can be sufficient to make enforceable a restrictive covenant agreed to by the parties at some point after the commencement of employment remains binding precedent“). Under Roessler, a promise of indefinite, continued employment for an at-will employee in exchange for the employee‘s promise not to compete
We cannot say as a matter of law, however, that the plaintiff gave sufficient consideration to render the noncompete agreement enforceable. In Roessler, the plaintiff promised to employ the defendant ” ‘indefinitely’ ” in exchange for his promise not to compete. Id., 290-91. In the present case, on the other hand, the plaintiff did not explicitly promise Samet that it would continue to employ him for any particular period. Because the trial court failed to address this court‘s decision in Roessler and categorically rejected the notion that continued employment can ever suffice as consideration, it did not evaluate whether the noncompete agreement imposed an obligation on the plaintiff that would make the agreement enforceable.45
Further proceedings are therefore necessary to determine whether the plaintiff provided adequate consideration.
As we explained, the trial court relied on Thoma to support its conclusion that the promise of continued employment to an at-will employee can never provide adequate consideration for a noncompete agreement. That case is distinguishable from the present case. In Thoma, the plaintiff and the defendant, her former employer, executed two agreements. Thoma v. Oxford Performance Materials, Inc., supra, 153 Conn. App. 52-53. The first agreement included a noncompete provision and imposed conditions on the defendant‘s right to terminate the plaintiff‘s employment, thus altering the plaintiff‘s status as an at-will employee. Id. The second agreement included not only a noncompete provision but also a provision that the defendant could terminate the plaintiff‘s employment at any time without cause or notice. Id., 53-54. When the defendant terminated the plaintiff‘s employment, the plaintiff brought an action alleging that the defendant had breached the first agreement by terminating her employment without notice, cause, or compensation. Id., 54. The trial court ruled that the defendant had breached the first agreement and that the second agreement was unenforceable because it was not supported by consideration. Id. The Appellate Court affirmed the trial court‘s judgment, concluding that the second agreement required nothing of the defendant that it was not already contractually obligated to provide and therefore lacked consideration. Id., 52, 66, 68.
In the present case, because Samet was an at-will employee, the plaintiff‘s forbearance of its right to terminate his employment could be valid consideration if it altered his at-will status. Accordingly, a remand to the trial court to make that determination is necessary. If the trial court determines on remand that the noncompete agreement is enforceable, it must then determine whether Samet breached the agreement.
Finally, we disagree with the plaintiff‘s claim that the trial court incorrectly determined that the severance compensation that Samet received did not constitute consideration for the noncompete agreement. The court heard several contradictory explanations for why the plaintiff continued to pay Samet and to utilize his services after his resignation. After weighing the witnesses’ credibility, the court determined that their testimony did not support the conclusion that the plaintiff compensated Samet in exchange for his assent to the noncompete agreement but, rather, that the plaintiff would have continued to pay him regardless of whether the agreement existed.
“[I]t is the exclusive province of the trier of fact to weigh conflicting testimony and [to] make determinations of credibility, crediting some, all or none of any given witness’ testimony.” (Internal quotation marks omitted.) Wall Systems, Inc. v. Pompa, 324 Conn. 718, 741, 154 A.3d 989 (2017). “It is not our role to reevaluate the credibility of witnesses or to overturn factual findings of a [trial] court unless they are clearly erroneous. . . . If there is any reasonable way that the [trier of fact] might have reconciled the conflicting testimony before [it], we may not disturb [its] [credibility determination].” (Citation omitted; internal quotation marks omitted.) Id.
After reviewing the record, we are not “left with the definite and firm conviction that a mistake has been committed.” (Internal quotation marks omitted.) In re Jacob W., 330 Conn. 744, 770, 200 A.3d 1091 (2019). Accordingly, we will not disturb the trial court‘s conclusion that Samet‘s oral affirmation of the noncompete agreement did not render the agreement enforceable.
C
We next consider the plaintiff‘s claim that the trial court incorrectly determined that any common-law duty of confidentiality that Samet owed to the plaintiff was preempted by
To determine whether the plaintiff‘s common-law claim is preempted, we must examine the provisions of
In accordance with
In support of its claim that
For the following reasons, we conclude that our dictum in Allen Mfg. Co. suggesting that a former employee has a common-law duty to maintain the confidentiality of information that does not constitute a trade secret no longer reflects the law. First, the Restatement (Third) of Unfair Competition provides that, in the absence of an enforceable confidentiality or noncompete agreement,49 a former employee is subject to only “the general rules prohibiting use or disclosure of another‘s trade secrets in breach of a duty of confidence.” (Emphasis added.) Restatement (Third), supra, § 42, comment (b), p. 480; see also id., comment (d), p. 481 (“[in the absence of] an enforceable covenant not to compete, a former employee may utilize in competition with the former employer the general skills, knowledge, training, and experience acquired during the employment, but the employee remains obligated to refrain from using or disclosing the employer‘s trade secrets” (emphasis added)); id. (“[a]n employer who is asserting rights in information against a former employee bears the burden of proving the existence and ownership of a trade secret” (emphasis added)). Thus, former employees are treated differently under trade secrets law than current employees, who have a duty of loyalty not to compete with the employer that includes the “duty to refrain from using confidential information acquired through the employment . . . .” (Emphasis added.)
In addition, our conclusion that, in the wake of the legislature‘s adoption of
Finally, our conclusion finds support in the breadth of the statutory definition of “trade secret,” which is far broader than many earlier common-law definitions. Compare
We conclude, therefore, that
D
We next address the plaintiff‘s claim that the trial court improperly rendered summary judgment in favor
To establish the elements of a civil action for conspiracy, a plaintiff must show: “(1) a combination between two or more persons, (2) to do a criminal or an unlawful act or a lawful act by criminal or unlawful means, (3) an act done by one or more of the conspirators pursuant to the scheme and in furtherance of the object, (4) which act results in damage to the plaintiff.” (Internal quotation marks omitted.) Macomber v. Travelers Property & Casualty Corp., 277 Conn. 617, 635-36, 894 A.2d 240 (2006).
This court has not previously considered whether
The court in Hauck Mfg. Co. then applied this standard to the facts of the case before it. The court observed that the plaintiff, Hauck Manufacturing Co. (Hauck), alleged that the defendants, Astec Industries, Inc. (Astec), and Bruce Irwin had “conspired, agreed, and planned that Irwin, while still a Hauck employee, would provide confidential information to Astec, in violation of his confidentiality and conflict of interest agreements, the duty of loyalty owed to Hauck, and the [
We agree with the court in Hauck Mfg. Co. that a claim that a defendant engaged in a civil conspiracy
In the absence of evidence that the alleged conspirator possessed actual or constructive knowledge of the trade secret, however, we conclude that
The objective of the civil conspiracy alleged by the plaintiff in the present case was the misappropriation of the plaintiff‘s trade secrets. We conclude, therefore, that its civil conspiracy claims are preempted by
E
We next address the plaintiff‘s claim that the trial court incorrectly concluded that Samet, Josh, Lipman, Durafloor, and ProRez did not act maliciously in misappropriating the plaintiff‘s trade secret, and, therefore,
The following additional facts are relevant to our resolution of this claim. The trial court found that, before trial, Samet engaged in what the court characterized as “repeatedly obscene and offensive behavior at his deposition” by the plaintiff. The court also characterized Lipman as being “disaffected” with the plaintiff and found that he had “stoked [Samet‘s] dislike for what he perceived as the [plaintiff‘s] harshening regime.”
After the court found Samet, Josh, Lipman, Durafloor, and ProRez liable for misappropriation, the plaintiff requested that the trial court award punitive damages and attorney‘s fees pursuant to
The plaintiff contends on appeal that the trial court improperly denied its request for punitive damages and attorney‘s fees because the defendants “in any trade secret misappropriation case will nearly always have a primary purpose to benefit themselves financially. The court‘s ruling here—to minimize or disregard the defendants’ malice in light of their primary profit motive—would render
“The decision to enter sanctions . . . is a matter within the sound discretion of the trial court. . . . In reviewing a claim that this discretion has been abused the unquestioned rule is that great weight is due to the action of the trial court and every reasonable presumption should be given in favor of its correctness.” (Internal quotation marks omitted.) D‘Ascanio v. Toyota Industries Corp., supra, 309 Conn. 671.
This court has held that an award pursuant to
We conclude that the trial court‘s finding that Samet and Lipman disliked the plaintiff does not compel the conclusion that they were motivated to misappropriate its trade secrets by a desire to injure the plaintiff rather than a desire to make money. Based on the existing record, there is no compelling evidence that any of the defendants in the present case had such an intent, and, in any event, it would be entirely the prerogative of the trial court to so find. We therefore conclude that the trial court did not abuse its discretion when it denied the plaintiff‘s request for punitive damages and attorney‘s fees pursuant to
IV
SUMMARY
In summary, we conclude that the trial court incorrectly determined that the plaintiff was not required to
The judgment is reversed with respect to the misappropriation claims against Lipman, Durafloor, and ProRez and the breach of contract claim against Samet, and the case is remanded for further proceedings in accordance with the preceding paragraph; the judgment is affirmed in all other respects.
In this opinion the other justices concurred.
Notes
“(b) This chapter does not affect: (1) Contractual or other civil liability or relief that is not based upon misappropriation of a trade secret . . . .”
***
“(b) the actor uses or discloses the other‘s trade secret without the other‘s consent and, at the time of the use or disclosure,
“(1) the actor knows or has reason to know that the information is a trade secret that the actor acquired under circumstances creating a duty of confidence owed by the actor to the other . . . or
“(2) the actor knows or has reason to know that the information is a trade secret that the actor acquired by means that are improper . . . or
“(3) the actor knows or has reason to know that the information is a trade secret that the actor acquired from or through a person who acquired it by means that are improper . . . or whose disclosure of the trade secret constituted a breach of a duty of confidence owed to the other . . . .”
Restatement (Third), supra, § 40, pp. 452-53.
Thus, the Restatement (Third) presumes that a trade secret is comprised of “information” and that the person accused of misappropriation must “acquire,” i.e., take possession of, that information to be liable.