PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_______________

No. 18

- 1368

_____________

HERAEUS MEDICAL GMBH

,

Appellant

v.

ESSCHEM

, INC.

_______________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania (E .D. Pa. No. 2

- 14

- cv

- 0 5169 )

Honorable Cynthia M. Rufe , U.S. District Judge

_______________

Argued: October 23 , 2018

Before: KRAUSE

, COWEN

, and FUENTES

, Circuit Judges

(Opinion Filed : June 21, 2019)2 Bruce P. Merenstein

Samuel W. Silver

John R. Timmer Schnader Harrison Segal & Lewis

1600 Market Street

Suite 3600 Philadelphia, PA 19103

John Nilsson

Matthew M. Wolf [Argued] Arnold & Porter Kaye Scholer 601 Massachusetts Avenue, N.W. Washington, DC 20001

R. Reeves Anderson Arnold & Porter Kaye Scholer

370 Seventeenth St.

Suite 4400 Denver, CO 80202

Counsel for Plaintiff

- Appell ant Heraeus Medical

GmbH

Benjamin P. G ilford Greenberg Traurig

333 Southeast 2nd Avenue

Suite 4 4 00 Miami, FL 33131

Richard D. Harris [Argued]

Cameron M. Nelson Gregory E. Ostfeld Greenberg Traurig3 77 West Wacker Drive

Suite 3100 Chicago, IL 60601

Mary F. Platt

Fineman Krekstein & Harris

Ten Penn Center 1801 Market Street, Suite 1100 Philadelphia, PA 19103

Counsel for Defendant

-

Appellee Esschem

, Inc.

_______________

OPINION OF THE COURT

_______________

KRAUSE, Circuit Judge

.

The case before us involves another skirmish in a long

running, cross

- border court battle over the alleged theft of a trade secret: Heraeus Medical G mb H’s recipe for its bone

cement. In this appeal, we consider whether Heraeus’ suit against Esschem , Inc.

— a company that works as a chemical manufacturer for Heraeus’ main competitor

— is barred by the statute of limitations under the Pennsylvania Uniform Trade

Secrets Act. At summary judgment, t he District Court held

that all of Heraeus’ claims , including tho se for Esschem’s alleged continuing misappropriation during the three

- year limitations period, are time

- barred and entered judgment for

Esschem

. We agree that alleged misappropriations that

occurred more than three years before Heraeus filed suit are time

- barred, but because we hold that Pennsylvania applies the rule of separate accrual to continuing trade se cret4 misappropriations, Heraeus may sue for misappropriations that

occurred within the three

- ye ar period before filing

. We thus

will reverse in part and affirm in part the District Co urt’s grant of summary judgment.

I. Background 1

Heraeus is a German company that develops and produces Palacos, a bone cement used to anchor artificial joints in joint replacement surgeries. To make Palacos, Heraeus developed its own particular process to manufacture two key
components: copolymers known as R 262 and R263 (the

“c opolymers”). Biomet also sells bone cement and is one of

Heraeus ’ major competitors in this market

. To make its bone cement, Biomet uses the same c opolymers, which it buys from

Esschem , a Pennsylvania company that manufactures acrylic polymers and monomers.

Heraeus holds trade secrets related to the “ overall specifications for the . . . bone cement,” including

1 The facts set forth here are drawn from a combination

of the District Court ’s recital of the facts and the parties’ submissions on summary judgment. To the extent certain background facts appear only in the District Court opinion, we note that the District Court appears to have drawn them from the complaint, although Esschem ind icated it was “without knowledge or information sufficient to form a belief” about many of those facts. Esschem’s Answer at 1

– 10 , ECF No. 87

. Nonetheless, because these allegations pertain only to general background and Esschem does not take issue with t hem on appeal, we will reference them where relevant.5 “specifications for [the] copolymers.” App. 81

. T hese trade

secrets changed hands several times over the years before allegedly falling into Esschem’s possession

. I n 1972, thirteen years after Palacos first came on the market, Heraeus entered

into a di stribution agreement with M erck, pursuant to which

Heraeus disclosed its trade secrets so that Merck could “obtain and maintain regulatory approval” to distribute Palacos. App.

84

. Merck was also obligated under the agreement to protect

Heraeus’ trade secrets from disclosure to third parties without first obtaining Heraeus’ consent

. This arrangement was in place until 1997, when Merck and Biomet entered into a joint

venture that took o ver the distribution of Palacos

. At that point, Heraeus agreed to supply the joint venture , and only Merck, pursuant to its confidentiality agreement with Heraeus, had access to the trade secrets covering the copolymers.

I n 2004, however, Biomet acquired Merck’s shares in the joint venture, taking over the distribution agreement and

, unbeknown st to Heraeus, also gaining access to Heraeus’ trade

secrets. Upon learning of the joint venture’s sale to its competitor

, Heraeus announced it would terminate the distribution agreement in August 2005, but b y the t ime

Heraeus severed its ties with Biomet

, Biomet had already

launched its own competing bone cement

— a feat that Heraeus alleges its “competito rs had failed to do for decades ” and that

it contends has since cost it 50 percent of its market share. App. 88

. Suspecting that Biomet’s bone cement was created using its trade secrets, Heraeus acquired and analyzed samples

of Biomet’s bone cement in 2005 and discovered that

, exc ept for “[m]inor discrepancies,” it “ w[as] virtually identical to”

Heraeus ’ bone cement and that Esschem was manufacturing

the c opolymer components for Biomet

. App. 89

.6 Over the next few years, Heraeus took legal action to protect its trade secrets. I t filed suit for trade secret misappropriation against Bio met in Germany in December

2008 , and shortly there after , in aid of that litigation, brought discovery suit s in the United States against both Esschem and

Biomet

. 2

In its discovery suit against Esschem, Heraeus sought “documents relating to communications between Esschem and

. . . B iomet . . . regarding the develop ment” of the c opolymers.

In re Heraeus Kulzer GmbH , 2009 WL 2981921, at *3. At the time, Heraeus’ theory was that Biomet had “ instruct[ed Esschem] to manufacture [the c opolymers ] using Heraeus’ highly confidential information and trade secrets.” App. 651

. After an appeal, this Court ordered expedited discovery from Esschem in July 2010

. Heraeus Kulzer GmbH , 390 F. App’x

at 93

. Esschem then produced s e veral e

- mail chains betwe en employees of Biomet and Esschem in which they discuss ed the

dev elopment of t he c opolymers

. I n those chain s , all of which

had been produced to Heraeus by March 2011

, Biomet

em ployee s Dan Smith and Rainer Specht specifically “discuss[ ed ] the specifications for R262 and R263” with Esschem employees

. Appellee’s Br. 37

– 38

.

2 In re Heraeus Kulzer GmbH , No. 09

- MC

- 00017, 2009 WL 2981921 (E.D. Pa. Sep. 11, 2009), rev’d by Heraeus
Kulzer GmbH v. Esschem, Inc. , 390 F. App’x 88 (3d Cir. 2010); In re Application of Heraeus Kulzer for Order Pursuant

to 28 U.S.C. Section 1782 , No. 3:09

- CV

- 183 RM, 2009 WL 2058718 (N.D. Ind. Jul. 9

, 2009), rev’d by Heraeus Kulzer,
GmbH v. Biomet, Inc. , 633 F.3d 591 (7th Cir. 2011).7 Discovery against Esschem ended sometime between August and December 2011, but d iscovery and litigation against Biomet cont inued for several more years

. In the course

o f the proceedings against Biomet

— specifically, in a

December 2011 deposition

— Dan Smith corroborated what the

e

- mail chains had indicated : that Biomet employees were “direct participant s , ” Appellant’s Br. 11 (quoting Sealed App. 1703) in the development of the c opolymers and that “their

work with Esschem

. . . ultimately led to the copolymers manufactured by Esschem for use in Biomet’s bone cement

, ”

id

. Heraeus contends it was not until “ that time

, ” i.e., December 2011, that it had “s ufficient information to believe that Esschem had actively participated in the misappropriation of [ its] trade secrets.” Id. at 12.

Just short of three years later, o n September 8, 2014,

Heraeus sued Esschem for trade secret misappropriation i n the Eastern District of Pennsylvania

. The complaint included one count for misappropriation of trade secrets under the Pennsylvania Uniform Trade Secrets Act (PUTSA) and five

counts for common law claims. 3

Following discovery, Es schem moved for summary jud gment, arguing that all of Heraeus ’ claims were time

barred

. Under the PUTSA, a plaintiff has three years from when “the misappropriation was discovered or by the exercise of reasonable diligence should have been discovered” to bring

3 Those common law claims were: (1) conspiracy to misappropriate a tra de secret; (2) unjust enrichment; (3) unfair competition; (4) tortious interference with economic advantage; and (5) conversion.8 suit. 1 2 Pa. Cons. S tat. § 5307. Esschem argued that Heraeus

discovered or should have discovered the alleged misappropriations as early as 2005 , making its PUTSA claims untimely. And because the common law claim s were based on

the same facts as the PUTSA claims and were subject to

statute s of limitations of no more than four years , they were also untimely.

In its opposition motion

, Heraeus countered that it did

not discover the necessary facts to sue for trade secret misappropriation until “the end of 2011,” and that any dispute

over when it discovered those facts was an issue of triable fact

t hat precluded summary judgment

. App. 66 3

. Heraeus also urged that continuing misappropriations were subject to the separate accrual rule, so that , under the PUTSA, each

additional use of Heraeus’ trade secrets within three years of the filing of the complaint gave rise to a separate and timely

cause of action.

The District Court rejected both of Heraeus’ arguments

and ruled that the statutes of limitations had run on its PUTS A

and common law claims

. At the very latest, the Court found,

Heraeus was aware of “the facts supporting its misappropriation claims” against Esschem by January 2009

. Heraeus Med. GmbH v. Esschem, Inc. , 285 F. Supp. 3d 855, 861 (E.D. Pa. 2018)

. It also held that Esschem’s additional

use s of the trade secrets between September 2011 and the filing of the complaint in September 2014 were part of a single and

time

- barred cause of action under the PUTSA because

Esschem’s continued use of the trade secret s was “nothing more than a continuation of the original alleged misappropriation

. ” Id. at 863

. Interpreting the PUTSA to adopt the separate accrual rule, it reasoned, would “eliminate9 the statute of limitations altogether” by allowing Heraeus to “sit by for nearly a decade” after learning all facts necessary to bring a claim and to obtain damages for the entire period so long as one misappropriation took place within the statute of

limitations. 4 Id

. On that basis, t he Court granted summary judgment for Esschem, and Heraeus now appeals

.

II. Jurisdiction and Standard of Review

The District Court had diversity jurisdiction under 28 U.S.C. § 1332(a) and we have jurisdiction under 28 U.S.C. § 1291. Because we are sitting in diversity and Heraeus brings

sta te claims, we apply Pennsylvania law to address the parties’ arguments related to the PUTSA’s statute of limitations. See Ragan v. Merchs

. Transfer & Warehouse Co. , 337 U.S. 530

, 533 (1949 ) ; Lafferty v. St. Riel , 495 F.3d 72, 76 (3d Cir. 2007) (citing Gua r. Tr. Co. of N.Y. v. York , 326 U.S. 99, 110 (1945))

.

We review the District Court’s grant of summary judgment de novo. Faush v. Tuesday Morning, Inc. , 808 F.3d 208, 215 (3d Cir. 2015). To prevail at this stage, the moving party must establish that “there is no genuine dispute as to any

4 The District Court correctly identified the tension between those jurisdictions that treat continuing misappropriations as a single claim and those that treat continuing misappropriations as a series of separate misappropriations subject to the separate accrual rule. As we explain below, however, it was mistaken in conflating the effect of the separate accrual rule with the eff ect of the continuing violation doctrine on the statute of limitations. See infra Section III.B.2.10 material fact and the movant is entitled to judgment as a matter

of law. ” Fed. R. Civ. P. 56(a). Al l facts should be viewed “in the light most favorable to the non

- moving party, ” with “all

reasonable inference s [drawn] in that party’s favor. ” Scheidemantle v. Slippery Rock Univ. State Sys. of Higher

Educ. , 470 F.3d 535, 538 (3d Cir. 2006). A factual dispute is genuine “if the evidence is such that a reasonable jury could

return a verdict fo r the nonmoving party. ” Anderson v. Liberty Lobby

, Inc. , 477 U.S. 242, 248 (1986).

III. Discussion

On appeal, Heraeus raises the same two arguments it did

below . First, it contends that it did not discover sufficient facts

to state a claim against Esschem until December 2011, and

ther efore its September 2014 suit fell within the three

- year limitation s period

. And to the extent there is a dispute over

when Heraeus discovered sufficient facts to state a claim, Heraeus argues

, this is a factual dispute for the jury

. Second,

Heraeus posits that even if the limitations period began to run before September 2011, Esschem would still be liable for each

time it use d the trade secrets to manufacture the copolymers between September 2011 and Sep tember 2014 because continuing misappro priations under the PUTSA are subject to the separate accrual rule

. We address these issues in turn. 5

5 The District Court dismissed Heraeus’ common law

claims for the same reasons it dismissed its PUTSA claim s

. On appeal, however, Heraeus directs its arguments only to its PUTSA claims and thus has waived any challenge to the denial

of its common law claims.11 A

. The Commencement of the Limitations

Period

A “limitations period generally begins to run ‘as soon as [an] inj ury is sustained.’” Davis v. Wells Fargo, 824 F.3d 333, 344 n.13 (3d Cir. 2016) (quoting Mest v. Cabot Corp. , 449 F.3d 502, 510 (3d Cir. 2006)). In Pennsylvania, t here are

several “exce ption[s]” to this “general rule. ” Pocono Intern. Raceway, Inc. v. Pocono Produce, Inc. , 468 A.2d 468, 471 (Pa. 1983). One is the discovery rule, which evolved from the notion that a limitations period should not “run[] against” a plaintiff who is “ignorant of his loss

. ” Lewey v. H.C. Frick

Coke Co.

, 31 A. 261, 264 ( Pa. 1895). When the discovery rule applies, the limitations period only begins to run once the plaintiff is no longer “ignorant of his loss ,” id.

, i.e., once he is

able to “ascertain the fact of a cause of action

, ” Pocono , 468

A.2d at 471

. That is not to sa y the period is suspended until the plaintiff has “acquired finite knowledge of all operative

facts.” Id. (emphasis added). Rather, “ [f]or the statute of limitations to run, a plaintiff need not know the ‘exact nature’ of his injury, as long as it object ively appears that the plaintiff ‘is reasonably charged with the knowledge that he has an injury caused by another. ’” Mest , 449 F.3d 502, 510

- 11 ( quoting Ackler v. Raymark Indus., Inc., 551 A.2d 291, 293 (Pa. Super. Ct. 1988)).

The PUTSA explicitly incorporates the discovery rule.

U nder the statute, a p laintiff has three years to file an action for

trade secret misappropriation once she “discover[s]” or “should have . . . discovered” the misappropriation. 6 12 Pa.

6 In full, this provision reads: “An action under this chapter for misappropriation must be brought within three12 Cons. Stat. § 5307. “M isappropriat ion

, ” in turn, is defined in several ways, but one definition in particular applies here: If, as Heraeus contends, Esschem received Heraeus’ trade secrets

not from Heraeus itself, but from Biomet, Esschem could be

liable for “use of a trade secret of anot her without express or implied consent,” so long as , “ at the time of

. . . use,” Esschem “knew or had reason to know that [its] knowledge of the trade

secret was

. . . derived from or through a person who owed a duty to the person seeking relief to maintai n it s secrecy or limit

it use.” 12 Pa. Cons. Stat. § 5302(2)(ii)(C). In other words, the limitations period would only begin to run once Heraeus

discover ed sufficient facts to make it reasonably aware not only that Esschem used Heraeus’ trade s ecrets wit hout Heraeus’ consent, but also t hat Esschem knew or had reason to know that Biomet owed a duty to Heraeus to main tain their

secrecy

. Cf. Merck & Co. v. Reynolds , 559 U.S. 633, 63 7 (2010) (holding that “scienter” is a fact which a plaintiff must discover in order for the statute of limitations to begin running on a § 10(b) claim under the Securities Exchange Act).

According to Heraeus, it was not until it deposed

Biomet’s Dan Smi th in December 2011 that it obtained

sufficient evidence of scienter. Specifically, Heraeus directs us to two pieces of information that it asserts gave it notice of

Esschem’s state of mind : Smith’s testimony (1) that he and another Biomet employee were “direct participants ” in work with Esschem; and (2) that this work with Esschem “u ltimately led to the copolymers . . . for use in Biomet’s bone cement s .”

years after the misappropriation w as discovered or by the exercise of reasonable diligence should have been discovered.”

12 Pa. Cons. Stat. § 5307.13 Appellant’s Br. 11

– 12

. H eraeus contends those concessions finally revealed that “Esschem knew that Biomet was using

stolen trade secrets.” Id. at 33.

But the argument proves too much, for if that information was sufficient to put Heraeus on notice of Esschem’s scienter, then Heraeus was necessarily on notice nine months earlier when it came into possession of essentially

the same information. In a March 2011 discovery production,

Heraeus received, among other things, a 2004 e

- mail exchange between Smith and Esschem in which Smith attempted to

troubleshoot Esschem’s m anufacturing difficulties

, and

, in declining to provide more detailed copolymer specifications

, noted that doing so would dis close non

- public information

. But follow

- up e

- mails to Esschem from the other Biomet employee, R ainer Specht, which Heraeus also received in discovery by March 2011, did provide Esschem with those supposedly non

- public details. And soon thereafter , as He raeus was well aware, Biomet released its competing bone

cement.

This sequence and the face of these detailed exchanges about the copolymer specifications reveal that the very facts

that Heraeus claims it first learned in the December 2011 deposition were in its possession by March 2011 : (1) “direct participat[ion]” by Biomet employees in Esschem’ s development of the copolymers; and (2) that this participation is what “ultimately led” to Esschem’s successful production of the copolymers. Appellant’s Br. 11. Moreover , the March 2011 discovery revealed the additional fact that Esschem had reason to believe Specht’s subsequent disclosure of the copolymer specifications constituted non

- public i nformation, i.e., information that was “ derived from or through a person14 who owed a duty to the person seeking relief to maintain its

secrecy

. ” 12 Pa. Cons. Stat. § 5302. 7 T hus, the information that Heraeus learned through Smith’s testimony was duplicative and, if anything, less revealing than the discovery

it receiv ed in March 2011. S o, it was March 2011 when the limitations period began to run and March 2014, three years later, when it expired. 8

7 In a filing below, Heraeus itself touted this logic, describing the information in Specht’s later e

- mails as “the

same information that Ess chem had previously requested [from Biomet] . . . [but] had been told that Biomet could not provide.” App. 142.

8 The District Court held, and Esschem argues on appeal, that Heraeus had sufficient information to state a claim against Esschem at various po ints between 2005 and 2010, such as in January 2009, when Heraeus brought its discovery suit against Esschem in the United States. At that time, Heraeus sought information from Esschem about its

communications with Biomet because it believed that Biomet

h ad “instruct[ed Esschem] to manufacture [the c opolymers] using Heraeus’ highly confidential information and trade secrets.” App. 651 . Esschem maintains that this suspicion was enough for Heraeus to bring suit for Esschem’s alleged misappropriations. As Heraeus points out, however, without evidence that Esschem knew the instructions it was receiving from Biomet were derived from Heraeus’ trade secrets, the possibility that Esschem was “a total innocent” remained. Appellant ’s Reply Br. 23. In any event, we need not determine whether Heraeus could have stated a claim at some point before March 2011 because, outside of any claims that accrued in the

three

- year period before filing, its September 2014 suit was15 Heraeus , however, did not file suit until September

201 4

— three and a half years later. Thus , any misappr opriations prior to March 2011 and any that occurred between March and September 2011 ( which would have been discovered as they occurred ) are indeed time

- barred.

The question remains whether Esschem’s alleged

c ontinued use of Heraeus’ trade secrets between September 2011 and September 2014 is properly viewed as part of one

violation that is time

- barred in its entirety, as the District Court held, or instead as a series of separate misappropriations that accrued individually and thus were timely asserted. A s we explain next , the PUTSA provides the answer

.

B

. The Timeliness of Claims for Misappropriation A fter September 2011

The Pennsylvania General Assembly based the PUTSA on the provisions of the Uniform Trade Secrets Act (UTSA). But while it adopted most of those provisions, it opted to diverge from them in certain instances. One such instance is

in the treatment of a “ continuing misappropriation

. ” T he UTSA provides:

An action for misappropriation must be brought within 3 years after the misappropriat ion is discovered or by the exercise of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim.

untimely even if the limitations period began to run earlier than

March 2011.16 Unif. Trade Secrets Act § 6 (Unif. Law Comm’n 1985). In the PUTSA, t

he Pennsylvania General Assembly tracked this language nearly verbatim, except that it omitted the final

sentence , so that Pennsylvania’s statute states simply :

An action under this chapter for misappropriation must be brought within three years after the misappropriation was discovered or by the exercise of reasonable diligence should have been discovered.

12 Pa. Cons. Stat. § 5307.

The parties view the omission of the final sentence very differently . Heraeus argues that the Pennsylvania legislature

i ntended “each wrongful use of misappropriated trade secrets [to] trigger a distinct limitations period ” and that

, under this separate accrual rule

, its claims for misappropriations between September 2011 and September 2014 are timely. Appellant’s

Br. 14

. Esschem , on the other hand, defends the District Court’s rejection of the separate accrual rule as a rule that would nullify the PUTSA’s statute of limitations, and it urges that we affirm the denial of Heraeus’ PUTSA claims as a single, time

- barred cause of action.

As explained below, Heraeus has the better of the
argument

. Th e District Court erred in treating Esschem’s

continued use of Heraeus’ trade secrets as a single misappropriation for three reasons: (1) the text of the PUTSA; (2) Pennsylvania’s comm on law rule of separate accrual

, which provided the backdrop against which the PUTSA was drafted ; and (3) Pennsylvania’s adoption of th e Restatement of Torts

,17 which also endorses the separate accrual rule for continuing misappropriations

. We address these in turn.

1. The PUTSA Treats Continuing Misappropriations as Separate Violations Subject to the Separate

Accrual Rule

a. The Text of the PUTSA

The UTSA, by its terms, treats a continuing misappropriation as a single claim, but Pennsylvania, like

s ome other states, opted not to enact that particular provision.

See , e.g. , N.C. Gen. Stat. Ann. § 66

- 157 (North Carolina); Ala. Code § 8

- 27

- 5 (Alabama). While we do not have the occasion to opine on the significance of that omission for other states,

Pen nsylvania’s canons of construction indicate that the omission reflects the General Assembly’s intent to apply the separate accrual rule to continuing misappropriations.

Pennsylvania law provides that “[t]he object of all interpretation and construction of statutes is to ascertain and

effectuate the in tention of the General Assembly.” 1 Pa. Cons.

Stat. § 1921. A situation like the one here, where the General Assembly omitted text from a borrowed statute, offers strong evidence of legislative intent. See Fletcher v. Pa. Prop. & Cas.

Ins. Guar. Ass’ n , 985 A.2d 678, 684 (Pa. 2009) (holding that “where a section of a statute contains a given provision, the omission of such a provision from a similar section is significant to show a d ifferent legislative intent”). Under the

“ separate

- accrual rule, ” which we have defined as “[a] corollary of the standard rule” for accrual of federal causes of action, a continuing misappropriation gives rise to multiple18 discrete claims corresponding to each act of misapprop riation, and “[b]ecause each act violates the law on its own, each act separately triggers its own limitations period.” Blake v. JP Morgan Chase NA

, No. 18

- 2368, s lip o p. at 10 (3d Cir. June

19 , 2019)

. The Uniform Law Commission expressly rejected

this s eparate accrual rule in the second sentence of UTSA § 6 by providing that “a continuing misappropriation constitutes a single claim,” i.e., not a series of claims. Unif. Trade Secrets Act § 6 (emphasis added). But the Pennsylvania General Assembly reject ed that second sentence and retained only the first when it enacted PUTSA § 5307, indicating that it intended to retain the separate accrual rule. See Flet c her , 985 A.2d at

684.

Esschem , however, asks us to ignore the significance of

the second sentence’ s omission and to imply the General Assembly’s rejection of the separate accrual rule into the first

sentence

. But in interpreting a statute, “language should not be implied where excluded

, ” and we will not cont ravene legislative intent by reading into PUTSA § 5307 the very language that the General Assembly chose to omit. Fonner v. Shandon, Inc. , 724 A.2d 903, 907 (Pa. 1999)

. Nor does the text
of the first sentence support Esschem’s reading. That sentence

, which the General Assembly retained, simply specifies when

the li mitations period begins

— which is when “ the misappropriation is discovered ” or “should have been

discovered

. ” Unif. Trade Secrets Act § 6 . It has no bearing on

whether continuing misappropriation s are treated as a single

claim or mult iple claims. That is a separate question that is addressed by the UTSA’s second sentence, independent of the

first.19 The comments to the UTSA reinforce this reading of PUTSA § 5307

. 9 The UTSA drafters made explicit that they sought in § 6 to achieve two distinct results: (1) to “reject[] the continuing wrong approach,” under which “the limitation period with respect to a specific act of misappropriation begins at the time that the act of misappropriation occurs”

— that is, to reject the sepa rate accrual rule; and (2) to start the limitation s period upon “discover[y of] the existence of misappropriation. ” Unif. Trade Secrets Act § 6 cmt. Esschem’s argument that the first sentence alone is sufficient

to achieve both of these results is thus n ot only atextual , but it also renders the second sentence mere surplusage , contrary to Pennsylvania’s canons of construction. See Matter of Emps. of Student Servs., Inc. , 432 A.2d 189, 195 (Pa. 1981).

We decline to adopt Esschem’s reading

. Instead, we

g lean from the text of the statutes that the UTSA adopted the

discover y rule and single

- claim treatment for continuing misappropriations, and the PUTSA embraced the UTSA’s discovery rule but declined its single

- claim treatment in favor of the separate accru al rule.

9 “ T he comments or report of the commission . . . which drafted a statute may be consulted in the construction or application of the original provisions of the statute” as long as

those materials were available when the statut e was drafted. 1 Pa. Cons. Stat. § 1939. Since the UTSA was last updated in 1985 and the PUTSA was passed in 2004, the Uniform Law Commission’s comments are properly within the scope of our analysis. See Advanced Fluid Sys., Inc. v. Huber

, No. 1:13

- CV

- 3 087, 2017 WL 2445303, at *11 n.7 (M.D. Pa. June 6, 2017).20 b. Pennsylvania’s Common Law Rule of Separate Accrual

That the Pennsylvania legislature intended to follow the separate accrual rule is all the more apparent when we consider the omission of the UTSA’s second sentence against the backdrop of Pen nsylvania common law.

As explained by our former Chief Judge Edward Becker

when he sat on the District Court in Anaconda Co mpany v. Metric Tool & Die Co mpany , Pennsylvania courts have adopted the “property ” view of trade secrets, under which the

basis of a claim for trade secret misappropriation is the violation of a property right , in contrast to the “ confidential relationship” view, under which a misappropriation is based on a violation of a duty of confidentiality. 485 F. Supp. 410, 425

– 26 (E.D. Pa. 19 80)

. 10 And the property view provides the

10 See generally Van Prods. Co. v. Gen. Welding & Fabricating Co.

, 213 A.2d 769 , 780 (Pa. 1965) ( rejecting the confidential relationship view and holding that “[t]he starting point in every case of [ trade secret misappropriation] is not whether there was a confidential relationship, but whether . . .

there was a trade s ecret to be misappropriated”); Den

- Tal

- Ez, Inc. v. Siemens Capital Corp. , 566 A.2d 1214, 1228 (Pa. Super. 1989) (noting that “ Van Prod ucts has been construed to have adopted the ‘property’ view of trade secrets” and that “[c]ases decided more recently than Van Products make it clear that this is still the proper focus in a trade secrets case”); see also Moore v. Kulicke & Soffa Indus., Inc. , 318 F.3d 561, 571 (3d Cir. 2003) (discussing Van Products and its progeny); Sims v. Mack Truck Corp. , 488 F. Supp. 592, 598 (E.D. Pa. 1980)21 theoretical underpinnings for the separate accrual rule: While a breach of confidentiality only occurs upon the initial misappropriation, and the “fabric of the [confidential] relationship once rent is not torn an ew wi th each added use or disclosure, ” under the property view, a trade secret “is in t he nature of property[ ] [ and] is damaged or destroyed by the

adverse use

, ” such that “each use is a new wrong.” Monolith

Portland Midwest Co. v. Kaiser Aluminum & Chem. Corp.

, 407 F.2d 288, 293 (9th Cir. 1969). It is for that r eason, as Judge Becker held in applying Pennsylvania ’s common law of trade

secrets, that “ the statute of limitations for the tort of wrongful use begins to run at the time of the wrongful use, and not at the time of the initial misappropriation.” Anaconda , 485 F. Supp.

at 426. He recognized, in other words, that Pennsylvania ’s common law embraced the separate accrual rule.

Esschem takes issue with Anaconda ’s holding on the ground that no Penns ylvania court “ever applied the separate

accrual rule to common law trade secret claims.” Appellee’s

Br. 49

– 50 . But Anaconda ’s reasoning is sound, and although

no Pennsylvania court has explicitly discussed this reasoning, other courts have, confirming the separate accrual rule’s roots
in the property view and its incompatibility with the confidential relationship view. Compare Underwater Storage,

Inc. v. U.S. Rubber Co. , 371 F.2d 950, 955 (D.C. Cir. 1966) ( recognizing that use of a trade secret gives r ise to a cause of

action and allowing “suit for any use of the [trade] secret so long as the use has occurred within the statutory period of limitations immediately preceding the bringing of the action”)

,

(“Pennsylvania cleaves to the ‘property’ view of trade secrets law.”).22 with Monolith , 407 F.3d at 293 (holding that “[t]he cause of action arises but once,” when the confidential relationship is breached). As the Fifth Circuit summarized, “[j]urisdictions that adopt the ‘breach theory’ of trade secret misappropriation, as opposed to the ‘property theory,’ generally do not tr eat trade secret misappropriation as a continuing tort.” Gen. Universal Sys., Inc. v. HAL, Inc ., 500 F.3d 444, 451 (5th Cir. 2007); see also Cypress Semiconductor Corp. v. Superior Court , 163 Cal. App. 4th 575, 582 (2008) (collecting cases and noting the same).

We hold today that this common law rule was not displaced by the PUTSA. The Pennsylvania Supreme Court has long instructed that “provisions in derogation of the

com mon law are to be held strictly,” Gibson v. Commonwealth

, 87 Pa. 253, 256 (1878), and that “[s]tatutes are never presumed to make any innovation in the rules and principles of the common law or prior existing law beyond what is expressly declared in their provisions,” Rahn v. Hess , 10 6 A.2d 461, 464 (Pa. 1954). The PUTSA “expressly de clare[s]” only that trade secret misappropriation claims are subject to the discovery rule. So by omitting the UTSA’s second sentence, the General Assembly in effect codified Pennsylvania common law, foregoing the single

- claim approach in favor of the sep arate accrual rule and harmonizing the PUTSA with Pennsylvania’s property view of trade secrets. Far from abrogating the common law rule of separate accrual then, the PUTSA was drafted to preserve it.23 c. Pennsylvania’s Adoption of the

Restatement of To rts

O ur reading of the PUTSA is also in line with the approach taken by the Restatement of Torts, which courts in Pennsylvania “have generally accepted

. . . as the basic outline

for [Pennsylvania’s] trade secrets law .” O.D. Anderson, Inc. v.

Cricks , 815 A.2d 1063, 1070 (Pa. Super. Ct. 2003) ; s ee Coll. Watercolor Grp., Inc. v. William H. Newbauer, Inc. , 360 A.2d 200, 204 (Pa. 1976) (“The standard for determining whether

one is liable for the use or disclosure of another’s trade secret

is set forth in the Restatement, Torts, [§] 757 (1939) and in Van

Products

. . . . ”) ; Den

- Tal

- Ez, Inc. , 566 A.2d at 1228 (noting

the same ). The Restatement r ecognizes a cause of action not only for the initial disclosure of a trade secret

— the confidential relationship v iew

—

but also for the wrongful use of a trade secret, explaining that a trade secret holder “may be harmed merely by the disclosure of his secret to others as well as by the use of his secret in competition with him.” Restatement (First) of Torts § 757 cmt . c (1939). As we just discussed, h arm arising from wrongful use is the hallmark feature of the property view, and the Restatement embraces this theory by providing a cause of action for both disclosure and use of a

trade secret. Id. § 757

. Pennsylvania ’s adoption of the Restatement, then, lends further support to the conclusion that Pennsylvania followed the separate accrual r ule for misappropriation claims prior to the PUTSA and that the PUTSA was deliberately drafted to preserve it.

Ultimately, t he G eneral Assembly drafted the PUTSA against the backdrop of Pennsylvania’s adoption of the

Restatement of Torts and its common law rule of separate accrual rule for trade secret misappropriation claims, and it24 deliberately omitted a sentence from the UTSA that rejected the separate accrual rule. A dopting Esschem’s reading of the PUTSA, and finding that it eliminated the separate accrual rule, requires us to ignore legislative intent along with several unambiguo us directives from the Pennsylvania Supreme

Court. As a result, we hold that, under Pennsylvania law, the separate accrual rule applies to continuing misappropriations. 11

11 In so holding, we are mindful of th e Philadelphia

Court of Common Pleas’ decision in WebDiet, Inc. v. NutriSystem, Inc. , in which it held that the “misappropriation of trade secrets is [not] a continuing tort under the PUTSA,” using “continuing tort” to refer to the separate accrual rule. No. 4055 Commerce Program, 2016 Phila. Ct. Com. Pl. LEXIS 133, at *18

– 19 (Pa. C.P. Apr. 1 2 , 2016). However, the Court’s treatment of this issue is but a few lines long and it relied solely on the statement in the comment to § 6 of the UTSA that the

“Act r ejects a continuing wrong approach.” Id. As we already discussed, that statement in the comment is tied exclusively to the sentence that the General Assembly chose to omit and is inapposite to interpreting the text of PUTSA. Sitting in diversity, we are “careful to avoid the ‘danger’ of giving ‘a state court decision a more binding effect than would a court

of that state under similar circumstances.’” McKenna v. Ortho Pharm. Corp. , 622 F.2d 657, 662 (3d Cir. 1980) (citation omitted). For the reasons we have discussed , we predict the Pennsylvania Supreme Court would find WebDiet similarly unpersuasive.25 2

. Esschem’s Arguments to the Contrary Are Unavailing

Esschem raises two primary objections to this application of the separate accrual rule. Neither is persuasive.

First, following the District Court ’s lead

, Esschem

argues that applying the separate accrual rule to a claim for a continuing misappropriation “ would nullify t he . . . s tatute of limitations provision. ” Appellee’s Br. 41

– 42

. A “continuing misappropriation” subject to the separate accrual rule may be a “continuing violation” in the colloquial sense, but it is conceptually distinct from the “continuing violation doctrine.” The District Court appears to have conflated the two.

T he “continuing violation doctrine” applies only to a narrow class of continuing violations for which courts have

concluded that a claim accrues over time as a result of a “continuing patte rn, practice, [or] policy” that is unlawful in

nature

. Havens Realty Corp. v. Coleman , 455 U.S. 363, 381 (1982) ; see also Randall v. City of Phila. Law Dep ’ t

, 919 F.3d 196, 198 (3d Cir. 2019) (“This doctrine applies ‘ when a

defendant’s conduct is part of a continuing practice.’” (citation omitted)). In such cases

, “[n] o single act may be enough to

make out a claim [, s]o the statute of limitations runs from the last act of the illegal conduct ,” and a plaintiff “ may sue for all acts that make out his claim, even acts that predate the limitations period. ” Blake , s lip o p. at 10 (citing Nat’l R.R. Passenger Corp. v. Morgan , 536 U.S. 101, 118, 122 (2002)).

The same is not true for continuing violations subject to the separate accrual rule, where e ach violation “starts the statutory period running again” and “the commission of a26 separate new overt act [within the limitations period] generally does not permit the plaintiff to recover for the injury caused by

old overt acts ou tside the limitations per iod.” Klehr v. A.O. Smith Corp. , 521 U.S. 179, 189 (1997)

. Because the separate
accrual rule is sometimes referred to with terminology similar

to “ continuing violation,” see, e.g. , Allied Erecting & Dismantling Co. v. Genesis Equip. & Mfg., Inc. , 805 F.3 d 701, 704 (6th Cir. 2015 ) ( noting that the “‘continuing wrong’ approach[ ] [ is] also known as [the] ‘separate

- accrual’ rule” ) , it is perhaps unsurprising that court s and litigant s confuse the

two

, see Petrella v. Metro

- Goldwyn

- Mayer, Inc. , 572 U.S. 663,

67 1 n.6 (2014) (warning against this exact mix

- up) ; Blake

, s lip

o p. at 9

– 1 1 (describing confusion in the parties’ arguments about which doctrine applies ).

But the separate accrual rule does not “eliminate the statute of limitations altogether” or allow a plaintiff to “s it by for nearly a decade and

. . . override PUTSA’s three

- year statute of limitations ,” Heraeus , 285 F. Supp. 3d at 863 ; it merely allows th e plaintiff to claim a s separate misappropriations those wrongful uses of a trade secret that occurred within three years of the complaint’s filing. The

three

- year statute of limitations thus remain s in full force under the separate accrual rule

— and is fa r fr om “toothless,” Appellee’s Br. 44.

Second, Esschem contends that Heraeus cannot benefit

from the separate accrual rule because it did not “assert [in its complaint] distinct claims for each new batch of copolymers

that Esschem has sold to Biomet

, ” and cannot do so because

Esschem ’s “ ongoing sale of products ” does not constitute a continuing misappropriation. Appellee’s Br. 53. Because the alleged misappropriation is not a continuing one, the argument27 goes , but a singular one with lingering effects, Heraeus’ claim

is time

- barred even un der the separate accrual rule.

Esschem is right that an i njury that is “the lingering effect[] of past unlawful conduct” is “not a continuing violation and . . . thus not actionable in [its] own right.” Elad Peled,

R ethinking the Continuing Violation Doctrine: The Application of Statutes of Limitations to Continuing Tort

Claims , 41 Ohi o N.U. L. Rev. 343, 366 (2015). And t hough

we recognize that courts, legislators

, and academics may disagree on the exact bounds of a continuing violation, 12 we are persuaded that Esschem’s alleged continued use of

Heraeus’ trade secrets is within those bounds

.

T he PUTSA’s broad definition of misappropriation

includes a trade secret’s “use ,” which Black’s Law Dictionary

defines as “[t]he application or employment of something; esp., a long

- continued possession and employment of a thing for the purpose for which it is adapted, as distinguished from a possession and employment that is merely temporary or

occasional.” Black’ s Law Dictionary (10th ed. 2014). The wrongful use that Heraeus claims against Esschem is not merely sales , but the continued employment of Heraeus’ trade

12 S ee, e.g. , Ledbetter v. Goodyear Tire & Rubber Co.,

Inc. , 550 U.S. 618 , 633

– 37 (2007), abrogated by 42 U.S.C. § 2000e

- 5(e)(3)(A) (discussing whether, in an employment suit alleging decreased pay based on gender, the initial employment decision to pay the employee less or the issuance of each reduced paycheck was the actionable violation); Peled,

41 Ohio N.U. L. Rev. at 379

– 81 (proposing a new framework

fo r de fining continuing violations).28 secrets in Esschem’s manufacturing process. Such conduct, if

prove n , is well within the broad meaning of “use” and in line

with other courts’ understanding of continuing misappropriations. See Underwater Storage

, 371 F.2d at 951

– 52 (use of misappropriated fuel tank designs to create similar fuel tanks); Anaconda , 485 F. Supp. at 417

– 19 (use of a machine that was desig ned based on misappropriated trade secrets to produce telephone cord armor); Cadence Design Sys., Inc. v. Avant! Corp. , 57 P.3d 647, 648

– 49 (Cal. 2002) (use of misappropriated source code to crea te new software). And because the separate accrual rule appl ies, injuries Heraeus

suffered due to any such uses after September 2011 are actionable under the PUTSA.

IV. Conclusion

For the foregoing reasons, we will reverse in part and affirm in part the District Court’s grant of summary judgment and remand for proceedings consistent with this opinion

.