COLORADO COURT OF APPEALS 2016COA176 

Court of Appeals No. 14CA1321 

City and County of Denver District Court No. 13CV31457 

Honorable Karen L. Brody, Judge 

Hawg Tools, LLC, 

Plaintiff-Appellee, 

v. 

Newsco International Energy Services, Inc.; Newsco International Energy 

Services USA, Inc.; Newsco Directional & Horizontal Services, Inc.; and Joe 

Ficken, 

Defendants-Appellants. 

JUDGMENT AFFIRMED IN PART, REVERSED 

IN PART, AND CASE REMANDED WITH DIRECTIONS 

Division II 

Opinion by JUDGE BERNARD 

J. Jones and Harris, JJ., concur 

Announced December 1, 2016 

Robinson Waters & O’Dorisio, P.C., Anthony L. Leffert, Laura J. Ellenberger, 

Denver, Colorado, for Plaintiff-Appellee 

Gordon & Rees LLP, John R. Mann, Thomas B. Quinn, Tamara A. Hoffbuhr 

Seelman, Denver, Colorado, for Defendants-Appellants
1 

¶ 1 What is a trade secret? According to a Colorado statute, it is, 

as is pertinent to this case, “the whole or any portion . . . of any . . . 

design . . . which is secret and of value.” § 7-74-102(4), C.R.S. 

2016. We conclude in this appeal that the act of keeping a design 

secret does not necessarily mean that it is a trade secret. Rather, 

the design itself must be secret; focusing on the act of protecting 

the design’s secrecy skips the first and fundamental step in the 

analytical process. 

¶ 2 In this appeal, defendants, Newsco International Energy 

Services, Inc.; Newsco International Energy Services USA, Inc.; 

Newsco Directional & Horizontal Services, Inc.; and Joe Ficken, 

appeal the trial court’s judgment in favor of plaintiff, Hawg Tools, 

LLC, on Hawg’s claims for misappropriation of a trade secret and 

conversion. Mr. Ficken appeals the judgment against him on 

Hawg’s claim for breach of contract. We reverse the judgment as far 

as Hawg’s claim for misappropriation of a trade secret is concerned, 

but we affirm the judgment on Hawg’s claims for conversion and 

breach of contract. 
2 

I. Background 

A. Mud Motors 

¶ 3 We have learned from the record that drilling operations 

typically employ a tool called a mud motor to drill for oil. (Drilling 

fluid is commonly referred to as “mud.”) During a drilling 

operation, a mud motor is inserted into a well hole. When fluid is 

pumped through the mud motor, the motor drives a drill bit, and 

the drill bit drills a hole. 

¶ 4 A mud motor consists of a power section and a transmission. 

The power section contains a stator and rotor. (A stator is a static 

part; a rotor is a moving part.) Drilling fluid is pumped through the 

stator to turn the rotor. 

¶ 5 The transmission consists of three parts: 

(1) a mandrel, or a tubular shaft around which other parts 

are assembled, which is attached to the rotor to drive the 

drill bit; 

(2) a bearing pack that allows the mandrel to turn the drill 

bit without friction; and 

(3) a bit box that contains the drill bit. 
3 

¶ 6 Bearing packs come in two types: wash bearing packs and 

sealed bearing packs. A wash bearing pack leaves the bearings 

exposed to the surrounding mud. In a sealed bearing pack, the 

bearings are lubricated by an oil bath. The oil bath is enclosed by 

seals to prevent mud from leaking in. This case involves an alleged 

trade secret concerning the design of a sealed bearing pack. 

¶ 7 The following diagram, Figure 1, shows a typical mud motor 

with a sealed bearing pack. 

Figure 1: Schematic of a Typical Oilfield Downhole Drilling Mud Motor 

(Mud Motor Seals, Kalsi Engineering, https://perma.cc/K2JQ-M7TD) 

¶ 8 As seen in Figure 1, a sealed bearing pack includes a pressure 

compensating piston. As drilling fluid pressure increases during 

drilling, the piston slides to compress the lubricant reservoir. 

Similarly, as the oil bath heats up when the drill is withdrawn, the 

piston slides back to expand the reservoir. In this way, the piston 

maintains equal pressure between the drilling fluid and the oil bath. 
4 

¶ 9 Sealed bearing packs protect components called thrust 

bearings longer than wash bearing packs. When using a wash 

bearing pack, thrust bearings last a few hours before they break 

and then have to be replaced. But, when using a sealed bearing 

pack, the seals break first instead of the thrust bearings, and the 

seals can last days instead of hours. So the obvious advantage of a 

sealed bearing pack is that the drill runs longer before it has to be 

stopped to perform maintenance. 

¶ 10 This kind of sealed bearing pack was invented in 1971. 

B. This Case 

¶ 11 Hawg rents mud motors to oil and gas drilling companies. 

Newsco uses mud motors to provide drilling services. 

¶ 12 Daniel Gallagher owned Hawg. Before he formed this 

company, he operated a similar business called New Venture. In 

2008, he asked a machinist to manufacture sealed bearing packs 

for use in New Venture’s mud motors. The machinist arranged for a 

designer, Joe Ficken, who is one of the defendants in this case, to 

design the sealed bearing packs. 

¶ 13 The designer did not receive compensation for the design. He 

testified that he created it as a favor to help the machinist, a friend 
5 

who was having financial difficulties. The design was “simple,” and 

it took him only two days to do it. Neither Mr. Gallagher nor the 

machinist asked him to incorporate any specific features or 

customizations into the design. 

¶ 14 The designer assigned his rights in the design to the 

machinist. The machinist assigned those rights to Mr. Gallagher in 

exchange for $350,000, some of which was allocated to 

manufacture a number of sealed bearing packs for Mr. Gallagher 

using the design. Mr. Gallagher later assigned his rights in the 

design to Hawg. 

¶ 15 The designer continued to make changes to the design 

through June of 2011. During this time — in February 2011 — he 

accepted a job at Newsco, and he began designing a sealed bearing 

pack for his new employer. 

¶ 16 Mr. Gallagher learned in 2013 that the designer had designed 

a sealed bearing pack for Newsco. After determining that the 

Newsco design was similar to the Hawg design, Mr. Gallagher filed 

this lawsuit. 
6 

II. Analysis 

A. Hawg Did Not Establish That Defendants 

Misappropriated a Trade Secret 

¶ 17 Defendants contend that the trial court erred when it denied 

their motions for directed verdict and judgment notwithstanding the 

verdict on Hawg’s claim for misappropriation of a trade secret. We 

agree because, for the reasons that we discuss below, the evidence 

did not prove that the design of the sealed bearing pack in question 

was a secret. 

¶ 18 We review a trial court’s rulings on motions for directed verdict 

and for judgment notwithstanding the verdict de novo. Vaccaro v. 

Am. Family Ins. Grp., 2012 COA 9M, ¶ 40. 

¶ 19 The determination of whether a trade secret exists is a 

question of fact. Colo. Supply Co. v. Stewart, 797 P.2d 1303, 1307 

(Colo. App. 1990). In reviewing a trial court’s rulings when these 

sorts of motions concern a question of fact, “[w]e consider all the 

evidence in the light most favorable to the nonmoving party and 

indulge every reasonable inference that can be drawn from the 

evidence in that party’s favor.” Hall v. Frankel, 190 P.3d 852, 862 

(Colo. App. 2008). A motion for directed verdict or judgment 
7 

notwithstanding the verdict should be granted only if “no 

reasonable person would conclude that any evidence, or any 

reasonable inference arising therefrom, has been presented on 

which the jury’s verdict against the moving party could be 

sustained.” Id.; see also Boulders at Escalante LLC v. Otten Johnson 

Robinson Neff & Ragonetti PC, 2015 COA 85, ¶ 19.

¶ 20 As we noted above, and as is relevant to our analysis in this 

case, “‘[t]rade secret’ means the whole or any portion . . . of any . . . 

design . . . which is secret and of value.” § 7-74-102(4). To 

determine whether a trade secret exists, the fact finder considers, 

among other things, the extent to which the information is known 

outside the business. Colo. Supply Co., 797 P.2d at 1306. “The 

subject of a trade secret must be secret, and must not be of public 

knowledge or of a general knowledge in the trade or business.” 

Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 475 (1974); see also 

In re S & D Foods, Inc., 144 B.R. 121, 168 (Bankr. D. Colo. 

1992)(matters commonly known in a trade or business cannot be 

considered trade secrets). 

¶ 21 Trade secrets can consist of a combination of elements that 

are in the public domain if the combination is unique and the 
8 

unified process, design, and operation of these elements afford the 

claimant a competitive advantage. Electrology Lab., Inc. v. Kunze, 

169 F. Supp. 3d 1119, 1153 (D. Colo. 2016); cf. Colo. Supply Co., 

797 P.2d at 1306 (product formulas were not trade secrets because 

they “were not unique to plaintiff and were versions of formulas 

from products not created by or unique to the plaintiff”). 

¶ 22 In this case, the general verdict form indicates only the jury’s 

conclusion that defendants misappropriated a trade secret. But the 

trial court instructed the jury on the definition of the term “trade 

secret” in accordance with section 7-7-102(4) and relevant case law. 

So the verdict demonstrates that the jury found, at least implicitly, 

that the sealed bearing pack design was secret. 

¶ 23 However, our review of the record reveals that “no reasonable 

person would conclude that any evidence, or any reasonable 

inference arising therefrom, [was] presented on which the jury’s 

verdict against [defendants] could be sustained.” Hall, 190 P.3d at 

862. 

¶ 24 Hawg presented ample evidence to establish that its design 

and the Newsco design were essentially the same. But we conclude 

that Hawg did not present sufficient evidence to distinguish its 
9 

design from other designs that were publicly available at the same 

time. In other words, the evidence in the record showed that the 

design of Hawg’s sealed bearing pack was “of public knowledge or of 

a general knowledge” in the mud motor manufacturing business, 

Kewanee Oil Co., 416 U.S. at 475, and that the design was 

commonly known in that business, see In re S & D Foods, Inc., 144 

B.R. at 168. In light of such evidence, which we now discuss, the 

record does not support a finding that Hawg’s design was secret. 

¶ 25 First, Mr. Gallagher testified that the “special or unique” 

aspect of the design he commissioned was “[t]hat, if it didn’t run, 

[the designer] would be there to fix it.” This testimony indicates 

that the “secret” was that the designer was familiar with the design 

and technically competent to repair it if it broke. And Mr. Gallagher 

testified that he had not asked the designer to include any 

particular feature or customization in the design. 

¶ 26 Second, Hawg’s expert witness testified at length to show the 

sealed bearing packs in the Hawg design and the Newsco design 

were the same. They had the same eight components: 

(1) An outer bearing housing. 

(2) A mandrel to mount a drill bit. 
10 

(3) A thrust bearing assembly to support the drill bit and to 

allow the mandrel to rotate inside the housing. The 

thrust bearings were lubricated by an oil bath contained 

in a lubricant reservoir. The expert testified that the 

Hawg device used a different thrust bearing assembly 

than the Newsco device. In particular, one of them used 

more rows of roller bearing elements than the other. But, 

he continued, “thrust bearings are thrust bearings are 

thrust bearings,” and using different thrust bearings did 

not change the design because they performed the same 

function. 

(4) A piston that slid along the mandrel to maintain balance 

between pressure outside and pressure inside the 

lubricant reservoir. The expert testified that the pistons 

in the two designs performed the same function. He 

stated that, although the two designs had different 

dimensions, different spacing between seals, and 

different depths of seal grooves, there was “no functional 

difference between the two.” 
11 

(5) A split ring assembly to clamp the thrust bearings in 

place. The expert testified that the differences in the two 

designs were immaterial because both types of split rings 

perform the same function. He stated that “[s]plit rings 

are split rings. They all serve the same function.” 

(6) A lower seal carrier to seal the oil bath inside the sealed 

bearing assembly and provide radial support for the 

mandrel. 

(7) A flow restrictor. The expert testified that the two 

designs used different flow restrictors that were not 

interchangeable because they were different sizes. But 

this did not change the design because both components 

performed the same function. 

(8) A dump plug, or opening, in the outer bearing housing. 

The opening served as an exit port for drilling mud 

flowing through the device. 

¶ 27 Figure 2 compares the Hawg sealed bearing pack (Figure 2a) 

and the Newsco sealed bearing pack (Figure 2b). 
12 

Figure 2: Comparison of Hawg and Newsco Designs 

¶ 28 In evaluating whether the two designs were the same, the 

expert focused on the pressure balancing piston. But he did not 

identify any feature of the pressure balancing piston that was 

unique to the Hawg and Newsco designs. Instead, he only 

described the basic function of a pressure balancing piston: 

They both utilize the same method of 

containing oil between the lower seal carrier 

and the sliding piston and that is the key 

point, for me, that when I see how that seal 

carrier, mandrel and piston was executed in 

the design, this is why I’m saying it’s the same 

design. 

. . . . 
13 

The criteria that I used [to determine whether 

the designs were the same] rests on the fact 

that the piston is sliding along the mandrel to 

create a balanced pressure between the 

lubricating oil and the drilling mud. I’ve based 

my decision that the designs are similar on 

that mechanical aspect of the design. 

¶ 29 Third, the expert testified that the Hawg design was different 

from designs that were publicly available in 2008 for the following 

reasons: 

 Not all sealed bearing packs had the same eight 

components in the same configuration. But the expert did 

not give any examples. And he did not testify that only the 

Hawg and Newsco designs used these eight components in 

this configuration. 

 Although some patented sealed bearing packs had a 

balanced seal arrangement like the Hawg and Newsco 

designs, some of their design elements were different. But 

he did not specify which elements were different. 

 The patents in his report showed designs that were different 

from the Hawg and Newsco designs in the following ways: 
14 

 There were differences in how they were organized. But 

he did not specify what those differences were or why 

they were significant. 

 Some of the designs had extra thrust bearings. But he 

had testified earlier that the Hawg design and the Newsco 

design were the same even though they had different 

thrust bearings. 

 Some designs had radial bearings. But the fact that 

some designs had a different type of bearing than the 

Hawg design does not establish that all of them were 

different. 

 Some had a mandrel with a different geometry. But he 

did not explain how this made the design different. And 

again, the fact that some designs were different does not 

establish that all of them were different. 

¶ 30 The expert also asserted that the patented designs must have 

been different from the Hawg design because the United States 

Patent and Trademark Office had issued patents on those designs. 

But such reasoning is not convincing because the Patent and 
15 

Trademark Office had not reviewed the Hawg design or compared it 

to patented designs. 

¶ 31 Fourth, when asked what would be the smallest change 

necessary to produce a different design of a sealed bearing pack, 

the expert testified: 

That’s a tough question. As the designs are 

fairly well evolved, there’s not a whole lot of 

room in the tool to, to change the design. 

You’re very limited. It wouldn’t be unusual for 

different designers to come up with the same 

ideas, except not quite dimensionally the 

same. That does not constitute a different 

design. The designers may try to do things like 

change the . . . seals, change some 

dimensions, all with a view to improving sealed 

bearing longevity down hole. I’ve done similar 

things myself. I’ve tried different seals, I’ve 

tried seal vents, things of that sort, but the 

overall design didn’t change. So, as to the 

smallest element that would change the 

design, . . . they would have to get rid of the 

piston, the mandrel, and the flow restrictor and 

try something else to make it totally different. 

(Emphasis added.) Defense counsel asked if a sealed bearing pack 

without those elements would be operable. The expert responded, 

“[I]t’s conceivable that somebody could come up with something to 

change those elements. And, yes, they could conceivably come up 

with a different sealed bearing pack design. I haven’t seen it.” 
16 

¶ 32 So, although the expert said that the Hawg design and the 

Newsco design were the same, he did not provide evidence of 

sufficient probative force to support a conclusion that the Hawg 

design of a sealed bearing pack was different from publicly available 

designs that existed before the designer had designed it. To the 

contrary, the expert’s testimony supported a conclusion that drastic 

changes would be required to create a different sealed bearing pack 

design. 

¶ 33 Fifth, a defense expert compared the Hawg design to designs 

that had been publicly available at that time. One of these was 

illustrated by U.S. Patent Application Pub. No. 2003/0015352 fig.1 

(filed July 17, 2001), which we compare to the Hawg design in 

Figure 3. 
17 

Figure 3: Comparison of Hawg Design and Illustrative Design 

¶ 34 We can see that the illustrative design includes the same eight 

components in substantially the same configuration as the Hawg 

design. Hawg did not present any evidence to show what 

variations, if any, between its design and the illustrative design 

were sufficient to establish that the designs were different according 

to the standard set by its own expert.

¶ 35 Sixth, the designer testified that he created the Hawg design 

based on an example that he had found in a handbook published 

by Kalsi Engineering. That design, shown earlier in this opinion as 

Figure 1, also appears to have the same basic components as the 

Hawg design. 
18 

¶ 36 In summary, Hawg did not establish that its design, in whole 

or in part, was substantially different from designs that were 

publicly available at the time of its creation. We therefore conclude 

that the record lacks evidence of sufficient probative force to 

support a conclusion that the Hawg design was secret. See 

Kewanee Oil Co., 416 U.S. at 475; Hall, 190 P.3d at 862. 

¶ 37 Hawg points to a lot of evidence in the record that supports its 

assertion that it took careful steps to keep its design a secret. See 

§ 7-74-102(4) (“To be a ‘trade secret’ the owner thereof must have 

taken measures to prevent the secret from becoming available to 

persons other than those selected by the owner to have access 

thereto for limited purposes.”); Ruckelshaus v. Monsanto Co., 467 

U.S. 986, 1002 (1984)(“Because of the intangible nature of a trade 

secret, the extent of the property right therein is defined by the 

extent to which the owner of the secret protects his interest from 

disclosure to others.”); cf. Saturn Systems, Inc. v. Militare, 252 P.3d 

516, 521-22 (Colo. App. 2011)(in a trade secret case dealing with 

sensitive information, as opposed to a design, extensive efforts by 

the holder of the information to maintain its secrecy can be a 
19 

relevant factor to determining whether the information is a trade 

secret). 

¶ 38 But that is not the first question that we needed to answer in 

this appeal. We had to decide instead whether sufficient evidence 

showed that the design was a secret in the first place, and we have 

concluded that the evidence on that issue was insufficient. See 

Kewanee Oil Co., 416 U.S. at 475; accord Restatement (First) of 

Torts § 757 cmt. b (Am. Law Inst. 1939)(“The subject matter of a 

trade secret must be secret.”). In other words, Hawg’s efforts to 

protect the secrecy of its design did not bear on our analysis 

because the design was not a secret in the first place. See Kewanee 

Oil Co., 416 U.S. at 475; accord Restatement (First) of Torts § 757 

cmt. b (“Matters of public knowledge or of general knowledge in an 

industry cannot be appropriated by one as his secret.”). 

¶ 39 So, after reviewing all the evidence in the light most favorable 

to Hawg and after indulging every reasonable inference that can be 

drawn from that evidence in Hawg’s favor, we conclude that the 

record does not contain sufficient evidence to support the trial 

court’s decision to deny defendants’ motions for a directed verdict 

and for judgment notwithstanding the verdict on Hawg’s claim for 
20 

misappropriation of a trade secret. See Hall, 190 P.3d at 862. We 

therefore additionally conclude that the court should have granted 

those motions because no reasonable person would conclude that 

any evidence, or any reasonable inference arising from that 

evidence, had been presented that could sustain the jury’s verdict. 

See id. We therefore reverse the judgment in favor of Hawg on that 

claim. 

B. Defendants Waived the Defense of Preemption 

¶ 40 Defendants contend that the trial court erred when it denied 

their motion for judgment notwithstanding the verdict on Hawg’s 

conversion claim, which alleges that they “committed unauthorized 

acts of dominion, control, and ownership over the [sealed bearing 

pack] designs for their financial benefit.” Defendants assert that 

the Uniform Trade Secrets Act preempts claims for conversion of 

trade secrets. See § 7-74-108, C.R.S. 2016. We disagree, although 

we apply different reasoning than the trial court used. Negron v. 

Golder, 111 P.3d 538, 542 (Colo. App. 2004)(court of appeals may 

affirm on different grounds than those relied upon by trial court). 

¶ 41 Under C.R.C.P. 8(c), a defendant waives all affirmative 

defenses and avoidances that do not appear in his or her answer. 
21 

Town of Carbondale v. GSS Props., LLC, 169 P.3d 675, 681 (Colo. 

2007); Duke v. Pickett, 168 Colo. 215, 218, 451 P.2d 288, 290 

(1969). But “an opposing party who fails to object to an untimely 

affirmative defense and instead chooses to litigate the merits of the 

defense in a summary judgment proceeding cannot raise a 

timeliness objection after the trial court has ruled on the summary 

judgment motion.” GSS Props., LLC, 169 P.3d at 679-80. 

¶ 42 If a preemption defense concerns the choice of law to be 

applied by the trial court, and not whether the trial court has 

jurisdiction to hear the parties’ dispute, the defense can be waived. 

“If, as in most cases, the alleged preemption would simply alter the 

applicable substantive law governing the case, then preemption is 

waivable.” Id. at 682. Or, to put it another way, “where preemption 

changes only the law to be applied, rather than the forum applying 

it, preemption is an affirmative defense which will be waived unless 

timely raised.” Id. 

¶ 43 In this case, defendants did not assert that the trial court was 

an improper forum for their defense. Instead, they simply 

contended that the substance of Hawg’s conversion claim was 

preempted by state statute. This was a preemption defense based 
22 

on choice of law. So we conclude that, not only could this defense 

be waived, but defendants waived it because they raised it for the 

first time in their motion for judgment notwithstanding the verdict. 

See C.R.C.P. 8(c); GSS Props., LLC, 169 P.3d at 681; Duke, 168 

Colo. at 218, 451 P.2d at 290; see also Fid. Nat’l Title Co. v. First 

Am. Title Ins. Co., 2013 COA 80, ¶ 51 (raising an issue for the first 

time in a post-trial motion is insufficient to preserve it for appeal); 

Miller v. Rowtech, LLC, 3 P.3d 492, 495 (Colo. App. 2000)(party 

waives defense that it first raises in a post-trial motion); 

Levy-Wegrzyn v. Ediger, 899 P.2d 230, 232 (Colo. App. 1994). 

¶ 44 We recognize that, in the response to defendants’ motion for 

judgment notwithstanding the verdict, Hawg addressed defendants’ 

preemption claim on the merits. But Hawg bracketed that 

two-paragraph discussion with two sentences. The first sentence 

stated that “[a]fter more than a year of litigation, extensive briefing 

on every topic imaginable, and motions for directed verdicts, 

[d]efendants for the first time claim that Hawg’s conversion claim is 

preempted by the Colorado Uniform Trade Secrets Act.” The last 

sentence said, “[h]owever, never before this juncture did . . . 
23 

[d]efendants raise any issue regarding the preemption or 

displacement of the conversion claim.” 

¶ 45 We conclude that the first and last sentences of the discussion 

of the preemption claim preserved Hawg’s objection to the court 

considering that claim at such a late date in the proceedings. See

GSS Props., LLC, 169 P.3d at 679-80. The substantive discussion of 

the issue was not Hawg’s only argument; it was simply an 

alternative argument. 

C. Hawg Has Standing to Bring Its Claim Against 

the Designer for Breach of Contract 

¶ 46 The designer contends that the trial court erred when it 

rejected his assertion that Hawg lacks standing to bring suit against 

him for breach of contract based on his violation of a confidentiality 

agreement. He asserts that he executed the agreement with 

Mr. Gallagher and that Mr. Gallagher did not properly assign his 

rights under the agreement to Hawg. We disagree. 

¶ 47 Standing is a question of law that we review de novo. 

Ainscough v. Owens, 90 P.3d 851, 856 (Colo. 2004). Contract 

interpretation and the validity of an assignment also present 

questions of law that we review de novo. Regency Realty Inv’rs, LLC 
24 

v. Cleary Fire Prot., Inc., 260 P.3d 1, 4 (Colo. App. 

2009)(assignment); Roberts v. Adams, 47 P.3d 690, 694 (Colo. App. 

2001)(contract interpretation). 

¶ 48 C.R.C.P. 17(a) requires that every action “be prosecuted in the 

name of the real party in interest.” A plaintiff whose standing 

depends upon its status as an assignee must prove “a full and 

complete assignment of the claim from an assignor who was a real 

party in interest with respect to the claim.” Alpine Assocs., Inc. v. 

KP & R, Inc., 802 P.2d 1119, 1121 (Colo. App. 1990). 

[A]bsent some express reservation or limitation 

upon the interest transferred, or some other 

evidence of a contrary intent to be found 

within the transferring document, an 

assignment of all of an owner’s right, title, and 

interest in intangible personal property 

includes an assignment of any agreement 

respecting that property to the extent that 

such agreement benefits the transferee 

because of his or her ownership of the 

property. 

Thistle, Inc. v. Tenneco, Inc., 872 P.2d 1302, 1306 (Colo. App. 1993). 

¶ 49 In Thistle, the plaintiff acquired ownership of certain 

proprietary data. The predecessor in title to the data had entered 

into agreements with the defendant that prohibited the defendant 

from transferring the data or making it available to any third 
25 

person. Id. at 1303. The division held that “[t]he right to control 

the persons who have access to . . . data is necessarily an incidental 

attribute of the right of ownership of that data. Indeed, without the 

right to such control, the right of ownership would be meaningless.” 

Id. at 1307. 

¶ 50 In this case, the designer and the machinist entered into an 

Assignment Agreement with Mr. Gallagher in 2010. As is relevant 

to our analysis, the agreement read: 

Assignment. [The machinist] hereby transfers, 

assigns and conveys to Assignee, its 

successors and assigns, all of his right, title 

and interest in and to the [sealed bearing pack] 

[d]esigns, including prints, elaborations, 

explanations, illustrations and other 

instructional or directive material, inventions, 

improvements, techniques and any other 

materials possessed, developed, conceived or 

invented by [the designer] necessary to the 

design and operation of the [sealed bearing 

packs] (the “Protected Material”). 

. . . . 

Confidentiality. [The designer] shall not at any 

time use for [his] own benefit, or disclose to 

any person or entity any of the Protected 

Materials or any information related thereto 

(the “Confidential Information”). 

. . . . 
26 

General. . . . This Agreement will inure to the 

benefit of, and be binding upon the parties and 

their respective heirs, successors and assigns. 

¶ 51 Mr. Gallagher entered into an Assignment and Contribution 

Agreement with Hawg in 2012. That agreement assigned “all of 

[Mr. Gallagher’s] right, title, and interest in and to the [s]eal[ed] 

[b]earing [p]ack [d]esign[]” to Hawg. The agreement did not 

specifically refer to the 2010 Assignment Agreement between 

Mr. Gallagher and the designer. 

¶ 52 But the 2010 Assignment Agreement conveyed both the rights 

to the sealed bearing pack design and the right to control the 

designer’s disclosure of the design. The confidentiality clause 

benefited Mr. Gallagher because of his ownership of the design. So 

the right to control the designer’s disclosure of the design was 

necessarily an incidental attribute of the right of ownership. As a 

result, the assignment of all of Mr. Gallagher’s right, title, and 

interest in the design included an assignment of the confidentiality 

agreement. Id. at 1306. 

¶ 53 We reject the designer’s contention that the confidentiality 

clause cannot be assigned. Cf. People v. Adams, 243 P.3d 256, 261 

(Colo. 2010)(Colorado law “disallows assignments involving matters 
27 

of personal trust and confidence”; a claim to treble damages under 

the Trust Fund Statute was not assignable because it was in the 

nature of a penalty); but see Matson v. White, 122 Colo. 79, 84, 220 

P.2d 864, 866 (1950)(contracts not involving personal skill, trust, or 

confidence are generally assignable without consent). The 

confidentiality clause did not involve matters of personal trust or 

confidence; it merely constrained the designer’s disclosure of 

information. And the 2010 Assignment Agreement expressly stated 

that it would “inure to the benefit of . . . the parties . . . and [their] 

assigns.” 

¶ 54 We therefore conclude that Mr. Gallagher fully assigned his 

rights under the 2010 Assignment Agreement to Hawg. So Hawg 

had standing as the real party in interest with respect to its claim 

for breach of that agreement. 

¶ 55 The judgment is reversed as to Hawg’s claim for 

misappropriation of a trade secret. We remand the case to the trial 

court to enter judgment in favor of defendants on that claim and to 

vacate the award of damages on that claim. The judgment is 

otherwise affirmed. 

JUDGE J. JONES and JUDGE HARRIS concur.