By Jody Coultas, J.D.
Federal Circuit affirms that trade secret claims cannot be backdated to subsequent discoveries of misappropriation.
The U.S. Court of Appeals for the Federal Circuit affirmed two holdings by the federal district court in Cleveland holding that an inventor failed to show that Therm-O-Disc ("TOD") was liable for trade secret misappropriation or that he should have been listed on a patent held by TOD. The trade secrets claims were barred by the four-year statute of limitations of the Ohio Uniform Trade Secrets Act. Also, there was no evidence that the inventor should have been listed as an inventor on the sensor patent at issue (Maatuk v. Emerson Electric, Inc., August 14, 2019, per curiam).
In 1997, Josef Maatuk and TOD entered into a confidentiality agreement, so that TOD could evaluate Maatuk’s multi-functional liquid sensor technology for a potential licensing agreement. On December 10, 2003, TOD employees Prasad Khadkikar and Bernd Zimmermann jointly conceived of a multi-function sensor that combined and integrated a turbidity sensor with a liquid level sensor. On August 17, 2010, the USPTO granted the ’105 Patent and listed Khadkikar and Zimmermann, as joint inventors. The ’105 patent describes a multi-function sensor that "incorporates a fluid level sensor module [or a fluid flow rate sensor], a turbidity sensor module, a temperature sensor module, and a pressure sensor module." The patent states that "[a] turbidity sensor module is … integrally included on the multi-function sensor," and every claim in the patent recites a multi-function sensor combining a turbidity sensor with a fluid level sensor or a fluid flow rate sensor. Maatuk never disclosed to Khadkikar and Zimmermann the idea of integrating a turbidity sensor with a liquid level sensor or fluid flow sensor into a single sensor package, and he also did not disclose the way the ’105 patent measured turbidity and flow rate. TOD claims that it never practiced the ’105 patent. TOD never manufactured or sold a multi-function sensor covered by the ’105 patent, licensed the ’105 patent, or enforced the ’105 patent against a third party. TOD gave Maatuk the opportunity to pay renewal fees on the ‘105 patent, but he sent the wrong amount, and the USPTO notified him of the error only after the ’105 patent lapsed and said that the ’105 patent could only be judicially re-instated. Maatuk sued TOD after he learned that TOD issued the ’105 patent. Maatuk alleged that he should have been a co-inventor on the ’105 patent, because it was based on designs and trade secrets that he disclosed to TOD, Khadkikar, and Zimmermann, while TOD was determining whether to license the sensor.
In 2016, the Ohio district court held that Maatuk’s claims for correction of inventorship for the ’105 patent, misappropriation of trade secrets, and unjust enrichment were time-barred under the Ohio Uniform Trade Secrets Act. In a separate order in 2019, the court granted summary judgment to the defendants on the inventorship and damages claims, holding that Maatuk failed to produce evidence sufficient for a reasonable jury to conclude that he contributed to the multi-function sensor technology described in the ’105 patent, which notably included a turbidity sensor.
Trade secrets. The district court did not err in holding that the trade secrets and unjust enrichment claims were barred by the statute of limitations, the appellate court held. Trade secrets claims in Ohio are subject to a four-year statute of limitations. The limitations period begins to run once the wronged party becomes aware of a breach of a confidential relationship, and subsequent breaches do not create a new cause of action. Maatuk’s trade secret claim accrued when he instructed his attorney to send a cease and desist letter to TOD on August 28, 2000, as it was proof he knew of a breach in the confidential disclosure agreement. Thus, the August 17, 2016, suit fell well outside the four-year statutory period. The appellate court rejected Maatuk’s argument that Amalgamated Indus. Ltd. v. Tressa, Inc., 69 F. App’x 255 (6th Cir. 2003), allowed trade secret plaintiffs to backdate a claim for subsequent discoveries of misappropriation.
Correction of inventorship. Because Maatuk provided no evidence that he made a non-insignificant contribution to the conception of the ’105 patent, the district court properly concluded that he failed to create a genuine dispute of material fact as to inventorship. Maatuk argued that he contributed a cost-effective configuration for the heater and thermocouples to measure the temperature, fluid-level, and pressure in the ’105 patent, and conceived of the idea of a multi-function sensor using a single substrate and arranging the sensor’s thermocouples in parallel. However, Maatuk failed to provide evidence as to how these ideas were significant to the ’105 patent’s conception. Also, Maatuk did not provide evidence that a parallel thermocouple configuration was new or significant. The fact that the parallel configuration was not explicitly stated in the claims showed that it is insignificant when compared to the dimensions of the full patent, which provides a means of creating a multi-function sensor combining a turbidity sensor with at least one other fluid sensor. Finally, Maatuk failed to create any material dispute as to the date of conception.
The case is No. 2019-1615.
Attorneys: Josef Maatuk, pro se. David Utykanski (Harness, Dickey & Pierce, PLC) for Therm-O-Disc and Emerson Electric, Inc.
Companies: Therm-O-Disc; Emerson Electric, Inc.
MainStory: TopStory Patent TradeSecrets FedCirNews
Interested in submitting an article?
Submit your information to us today!Learn More
IP Law Daily: Breaking legal news at your fingertips
Sign up today for your free trial to this daily reporting service created by attorneys, for attorneys. Stay up to date on intellectual property legal matters with same-day coverage of breaking news, court decisions, legislation, and regulatory activity with easy access through email or mobile app.