At our law firm, we advocate for clients with ownership interests in trade secrets, meaning private information confidentially held that has economic or commercial value to the owner. Think, for example, of a manufacturing technique or chemical formula. We use a variety of legal means to protect our clients' trade secrets from misappropriation by others.
We also vigorously defend claims of misappropriation or wrongful disclosure of trade secrets.
The opaque-paint dispute
On May 25, a Delaware Chancery Court judge refused to dismiss a trade-secret lawsuit in state court brought by Dow Chemical against Organik Kimya, a Turkish company that also does business in the U.S. through a subsidiary and in other countries.
Dow alleges that Organik has stolen trade secrets involving "recipes and manufacturing instructions for opaque and non-opaque polymers" used in paint production. Dow came to own the proprietary information through its acquisition of Rohm and Haas, which has had success with its polymers under the brand ROPAQUE that has "dominated the industry" since the 1990s.
The trade secrets at issue cover polymer recipes as well as manufacturing processes. Dow says it protects these secrets by restricting which employees can access the information, imposing nondisclosure agreements on employees and using "anonymous identifiers on certain ingredients."
The crux of Dow's claims is the allegation that Organik hired key, high-level employees that previously worked for Dow and could share detailed proprietary information about polymer production with Organik. This information was allegedly uncovered through the discovery process in a related dispute at the U.S. International Trade Commission or ITC.
Organik asked the court to dismiss the lawsuit on several grounds, arguing that the Delaware Uniform Trade Secrets Act or DUTSA did not apply to actions alleged to have taken place outside Delaware's borders. The defendant also said DUTSA preempts common law claims also brought by Dow.
The judge disagreed because of Delaware's liberal rule of "notice pleading" that says a plaintiff must only give a defendant "fair notice in a general way of the cause of action asserted." The plaintiff can survive a motion to dismiss without even identifying a law, legal theory or other basis for the claim, so long as the injury for which it seeks redress is sufficiently asserted to put the defendant on notice of the allegation of harm.
The court found that Dow adequately described the harm alleged to give "general notice of the claim asserted." Further, the judge observed that the complex legal issues and factual findings required in this case make dismissal at an early stage inappropriate because further development of the evidence is required to answer these questions.