Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_04-cv-03843/USCOURTS-cand-5_04-cv-03843-1/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

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United States District Court

For the Northern District of California

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*E-filed 8/17/05*

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MEMRY CORPORATION,

Plaintiff,

v.

KENTUCKY OIL TECHNOLOGY, N.V.,

PETER BESSELINK, MEMORY METALS

HOLLAND, B.V.,

Defendants.

 

KENTUCKY OIL TECHNOLOGY, N.V.,

Counterclaimant,

v.

MEMRY CORPORATION and

SCHLUMBERGER TECHNOLOGY

CORPORATION,

Counterdefendants.

 /

Case No. C04-03843 RMW (HRL)

ORDER GRANTING KENTUCKY OIL'S

MOTION TO COMPEL PRODUCTION OF

DOCUMENTS

On August 16, 2005, this court heard the motion of defendant and counterclaimant Kentucky

Oil Technology ("KOT") to compel production of documents. Plaintiff and counterdefendant,

Schlumberger Technology Corporation ("STC"), opposed the motion. Based upon the papers

submitted, and the arguments of counsel, the court issues the following order.

Case 5:04-cv-03843-RMW Document 104 Filed 08/17/05 Page 1 of 8
United States District Court

For the Northern District of California

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BACKGROUND

Memry Corporation sued KOT for a declaratory judgment that Memry did not misappropriate

trade secretes relating to "Biflex technology" from KOT's predecessors in interest, Peter Besselink,

Memory Metal Holland, B.V., and "United Stenting." KOT counterclaimed against Memry and STC

for trade secret misappropriation. "Biflex technology" comprises the design, manufacture, and use of

"bistable" and "multistable" cells for medical and non-medical applications. A "bistable" cell is a

structure capable of assuming a stable collapsed state and a stable expanded state. A "multistable" cell

is a structure capable of transitioning through a number of stable intermediate states between the

collapsed and expanded states. Expandable tubes made of bistable and multistable cells, called

"stents," can be placed in passageways, such as arteries, to prevent collapse or blockage. This

technology was the subject of multiple patent applications filed by Besselink (the "Besselink

Applications"). In 1999, Besselink published an article on the technology called "Biflex Stents" (the

"Article"). 

Besselink entered into an agreement with Memry to develop prototypes for these stents for

medical use. During the course of the collaboration, Besselink shared with Memry proprietary

information regarding his designs, subject to a non-disclosure agreement. After this collaboration

agreement ended, Memry was retained by STC to develop this technology for use in oil well

boreholes. KOT now alleges that Memry divulged Besselink's (now KOT's) proprietary trade secret

information to STC.

Pursuant to California Code of Civil Procedure § 2019.210, a party alleging trade secret

misappropriation must identify its trade secrets in pre-discovery disclosures. The trial judge in this

matter requires trade secret litigants to comply with this statute. Accordingly, KOT served its

Identification of Trade Secrets ("Identifications") pursuant to § 2019.210, listing 26 separate trade

secrets it believed were infringed. Claiming the Identifications to be deficient, STC has refused to

provide any discovery to KOT, including documents identified in STC's initial disclosures and those

responsive to KOT's First Request for Production. KOT moves the court to compel production of

these documents. Because STC's only ground for resisting production is the alleged inadequacy of

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For the Northern District of California

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1Effective July 1, 2005, this section replaced former section 2019(d) without change.

3

KOT's Identifications, the only question presented for the court's determination is whether KOT's

Identifications meet the requirements of Cal. Civ. Proc. Code § 2019.210.

DISCUSSION

I. Legal Standard

"In any action alleging the misappropriation of a trade secret under the Uniform Trade Secrets

Act . . . , before commencing discovery relating to the trade secret, the party alleging the

misappropriation shall identify the trade secret with reasonable particularity." CAL. CIV. PROC. CODE §

2019.210 (West 2005).1

Compliance with § 2019.210 does not require a plaintiff to disclose all available information

about its trade secrets. Rather, 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 who are skilled in the trade, and to permit the defendant to ascertain at least the

boundaries within which the secret lies." Computer Economics, Inc. v. Gartner Group, Inc., 50 F.

Supp.2d 980, 984 (S.D. Cal. 1999)

Section 2019.210 serves practical purposes: "(1) it promotes investigation of claims prior to

suit and discourages the filing of meritless trade secret complaints; (2) it prevents plaintiff from using

the discovery process as a means to obtain the defendant's trade secrets; (3) it frames the appropriate

scope of discovery; and (4) it enables the defendant to form complete and well-reasoned defenses."

Neothermia Corp. v. Rubicor Medical, Inc., 345 F. Supp.2d 1042, 1044 (N.D. Cal. 2004).

II. Parties Argument

Citing Neothermia, STC alleges that KOT's Identifications do not support any of the stated

purposes behind the statute. It claims that if KOT had properly investigated its claims, it would have

known that STC utilized only publicly disclosed information in its product development. STC further

alleges that KOT refuses to delineate the boundaries of its claimed secrets because it wants to claim

ownership of any STC secrets that KOT may learn about during the discovery process. STC asserts

that KOT already broadened one of its Identifications (No. 8) once it discovered information about

STC's technology. STC argues that the court will not be able to determine what discovery is relevant

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For the Northern District of California

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28 2Appendix A to STC's Opposition is a chart comparing each one of KOT's § 2019.210 Identifications

with information gleaned from the Besselink Applications and Article. 

4

to this case based on KOT's broad descriptions, and STC will not be able to formulate a well

reasoned defense if it must "guess" at the boundaries of KOT's claims.

For example, STC cites part of KOT's first identified trade secret: "Detailed explanation of the

principles and theory of operation of bistable and multistable cells." STC then argues that the

Besselink Applications and the Article describe "principles and theory of operation of bistable and

multistable cells." STC claims that KOT Identifications Nos. 1, 10, 14 and 19 all claim these

unidentified "principles and theories."2

As another example, STC cites portions of Identification No. 4: "Design techniques and

exemplary cell patterns for determining the relative thicknesses of thin/thick strut segments required to

achieve bistable action." STC then says that the '702 patent (one of the Applications) also "contains

specific drawings illustrating the thickness profiles of strut segments in a bistable cell unit."

STC argues that each Identification suffers from a similar vagueness. In sum, it claims that

KOT has not distinguished its trade secrets from publicly available information, and thus has not

complied with § 2019.210.

KOT responds that its Identifications satisfy the requirements of § 2019.210 and that STC is

simply trying to avoid producing discovery of its own while collecting enough information from KOT to

support a motion for summary judgment.

KOT explains that Identification Nos. 2, 3, 4, 5, 6, 7, 16, 17 and 18 relate to design

techniques, know-how, and/or exemplary patterns for creating specific component parts or features of

bistable cells. KOT argues that the published information, as laid out in Appendix A, does not include

specific design techniques or dimensional information which could be used to actually build working

cell structures. At most, the public information contains general descriptions and drawings that are

without dimensional data and not to scale.

Identifications Nos. 10, 11, 12, 13, 14 and 24 relate to modeling, testing, and evaluation of

bistable cell structures. KOT explains that the published information does not discuss in detail

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numerical modeling, performance evaluation, test equipment design, testing specifications or evaluating

prototype test results, all of which are included in its Identifications.

Identification Nos. 8, 19, 20, 25 and 26 relate to manufacturing, including data files for laser

cutting, and equipment selection. The Identifications refer to specific electronic files designed by LPL

Systems which contain cutting instructions for automated cutting machines. Identifications Nos.

21, 22 and 23 involve the "scaling up" of small bistable tube structures into larger ones. KOT asserts

that nothing in the published material discusses this type of "scaling up," except perhaps mentioning it

might be possible.

Identification No.1 refers to "aspects of principles and theory of bistable cells," including cell

geometry, cell structure properties, manufacturing processes for cell designs, deformation behavior,

toggle mechanisms, and locking mechanisms. While the Article mentions "toggle" mechanisms, it does

not discuss the interplay of factors necessary to create a suitable toggle. The Identifications do.

Identification Nos. 9 and 15 refer to the suggestion that bistable cells could be used in nonmedical applications, such as wellbore support, and the material selection criteria for bistable cell

structures. The Besselink Applications discuss possible materials but gives no further details.

Finally, KOT asserts that it is not attempting to claim the basic structure of the bistable cell as

trade secret, as STC alleges. KOT says that, at STC's request, it merely described the basic structure

with its Identifications to provide context for them.

III. Analysis

Whether trade secret disclosures meet the requirements of § 2019.210 is a fact intensive

inquiry. In Whyte v. Schlage Lock Company, a California state case, the cross-complainant 

identified approximately 20 trade secrets, including:

Information about new products . . . Market research data . . . Advertising strategy

plans for the calendar year 2000 . . . [and] Composite material process technologies

(i.e., the unique composite materials used by [cross-complainant] in its products and

the processes applied to those composite materials.

101 Cal. App. 4th 1443, 1452 (4th Dist. 2002). The court found that these disclosures "removed any

doubts about the 'boundaries within which the secret[s] lie[].'" Id. at 1453, quoting Diodes, Inc. v.

Franzen, 260 Cal. App. 2d 244, 253 (1968).

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For the Northern District of California

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3While much of this supplemental information seems to be redundant boilerplate, some of it is detailed

and informative.

4For example, the Besselink Application offers diagrams without measurements that are not drawn to

scale.

6

Comparing the trade secrets described in Whyte to those in the present case, it would appear

that KOT has met its burden. KOT's Identification No. 19 describes:

Know-how relating to manufacturablilty issues, including analysis of stress

concentration/cracking arising from cell geometry and/or deposition of remelted metal

on adjacent tube areas during laser cutting.

See Appendix A to Opp. at ¶ 19. In fact, here KOT's is more specific than what was acceptable to

the court in Whyte.

Even KOT's most generalized Identification, No. 1, identifies the trade secret with reasonable

particularity:

Detailed explanation of the principles and theory of operation of bistable and

multistable cells . . . Each of the foregoing aspects of bistable and multistable cells is a

function of cell geometry, material properties of the material from which the cell

structure is constructed, and manufacturing processes. Such information regarding the

operation of bistable and multistable elements, the required material properties to

implement bistable and multistable cell structures, and suitable manufacturing

processes . . . is not generally known to those in the art of fabricating expandable

metal tubes.

See Appendix A To STC's Opposition at ¶ 1.

STC's characterizations of KOT's claims are not quite accurate. STC overlooks the detail

that KOT added as a result of the parties' meet and confer efforts.3 Likewise, STC's comparison

between the Identifications and the published information misses the mark. While STC is correct that

the Besselink Applications and Article discuss the technology at issue, those documents do not contain

detailed descriptions of the manufacturing process for the cell structures, such as the criteria for

selecting materials, testing techniques, or cell patterns and dimensions.4

In summary, KOT's Identifications are more detailed than the information available to the

public. And, KOT's Identifications meet the overall purposes of § 2019.210. They reflect adequate

pre-filing investigation by KOT. They shape the relevant areas of discovery. They are specific enough

both to prevent KOT from abusing the discovery process and to allow STC to formulate its plan of

defense.

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For the Northern District of California

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ORDER

Based on the foregoing, the court finds that Kentucky Oil's Trade Secret Identifications

comply with the requirements of California Code of Civil Procedure § 2019.210. Accordingly,

Kentucky Oil's motion to compel is GRANTED. Schlumberger is ordered produce documents

identified in its initial disclosures and those responsive to Kentucky Oil's First Request for Production

on or before August 31, 2005.

IT IS SO ORDERED.

Dated: 8/17/05 

HOWARD R. LLOYD

UNITED STATES MAGISTRATE JUDGE

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For the Northern District of California

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THIS SHALL CERTIFY THAT A COPY OF THIS ORDER WILL BE SENT TO:

Michael H. Bierman mbierman@luce.com

William J. Cass WCass@CantorColburn.com

Kimberly K. Dodd kdodd@foley.com, llow@foley.com

Nancy J. Geenen ngeenen@foleylaw.com, rbarcena@foleylaw.com

Benjamin J. Holl benjamin.holl@dbr.com, dalia.rom@dbr.com

David B. Moyer dmoyer@foley.com

Nicola A. Pisano npisano@luce.com

Andrew C. Ryan Ryan@CantorColburn.com

Charles A. Reid , III charles.reid@dbr.com, kristi.baughman@dbr.com, april.miller@dbr.com

* Counsel are responsible for providing copies of this order to co-counsel.

Dated: 8/17/05

 /s/ RNR 

 Chambers of Magistrate Judge Lloyd

Case 5:04-cv-03843-RMW Document 104 Filed 08/17/05 Page 8 of 8