IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 10-50137

TEWARI DE-OX SYSTEMS, INC.,

Plaintiff–Appellant

v.

MOUNTAIN STATES/ROSEN, L.L.C.,

Defendant–Appellee

Appeal from the United States District Court

for the Western District of Texas

Before BARKSDALE, CLEMENT, and PRADO, Circuit Judges.

EDWARD C. PRADO, Circuit Judge:

Tewari De-Ox Systems, Inc. (“Tewari”) allegedly owns trade secrets related

to a meat-packing method that creates a zero parts-per-million (“ppm”) oxygenstorage atmosphere. Dr. Gustav Tewari, Tewari’s President and CEO (“Dr.

Tewari”), visited Mountain States/Rosen, L.L.C. (“MTSR”), a company that sells

fresh cuts of lamb to retail stores, and demonstrated Tewari’s meat-packing

method and trade secrets to MTSR after MTSR signed a nondisclosure

agreement (“NDA”). Tewari later came to believe that MTSR misappropriated

its trade secrets, and brought suit against MTSR for (1) breach of contract; (2)

misappropriation of trade secrets; (3) violation of the Texas Theft Liability Act;

(4) breach of fiduciary duty; and (5) fraud and fraudulent inducement.

United States Court of Appeals

Fifth Circuit

F I L E D

April 5, 2011

Lyle W. Cayce

Clerk

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MTSR moved for summary judgment on all of Tewari’s claims, which the

district court granted with respect to Tewari’s fraud and fraudulent inducement

claim and denied in all other respects. Tewari moved for summary judgment on

its breach of fiduciary duty claim, which was denied. Thereafter, the district

court on reconsideration granted MTSR’s motion for summary judgment in full,

ruling that Tewari disclosed its trade secrets in a 2004 patent application and

that it failed to raise a fact issue as to the existence and use of a trade secret.

Tewari appeals the entry of summary judgment against it, the district court’s

refusal to rule on an element of its breach of fiduciary duty claim on Tewari’s

motion for summary judgment, and the district court’s failure to sua sponte

enter summary judgment in favor of Tewari that at least one trade secret was

disclosed to MTSR. We affirm in part and reverse in part and remand.

I. FACTUAL AND PROCEDURAL BACKGROUND

Tewari develops and markets a zero ppm oxygen meat-packing method

(the “zero oxygen” method or system) for packing fresh meat for shipment and

display in retail stores. The precise manner in which fresh meat is packaged for

shipment and retail display is fairly complex, but the general process involves,

inter alia, placing the meat on individual trays and covering them (typically with

plastic film), putting multiple meat trays in a plastic bag, adding an oxygen

scavenger to absorb residual oxygen, flooding the bag with a gas to eliminate as

much oxygen as possible from the bag, and sealing the bag. Tewari’s method is

supposedly unique in many respects, including the use of special iron-based selfactivated oxygen scavengers, special “barrier” or “master” bags, and a particular

type or mixture of gases, all to achieve zero ppm oxygen—a uniquely low level

of oxygen—in a uniquely short amount of time. Tewari also alleges its trade

secrets include knowledge about how the shelf-life of various meat types and

cuts can be extended and how to adapt the Tewari process to an “open nozzle”

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system of meat packing, which has a higher level of initial oxygen than other

meat-packing processes.

In 2005, MTSR contacted Tewari to see if Tewari’s zero ppm meat-packing

method could help it increase the shelf life of its case-ready cuts of lamb. After

Tewari and MTSR signed the NDA, Dr. Tewari demonstrated Tewari’s product

to MTSR, in which he claims he revealed trade secrets related to Tewari’s meatpacking method. Afterward, MTSR allegedly misappropriated those trade

secrets, and Tewari sued. After extensive discovery, MTSR filed for summary

judgment on all of Tewari’s claims, arguing, inter alia, that Tewari did not have

any trade secrets. In opposition to MTSR’s motion, Tewari filed an affidavit in

which Dr. Tewari avers that he disclosed five trade secrets to MTSR in March

2005. MTSR filed seventeen pages of objections to Tewari’s proffered evidence

including Dr. Tewari’s affidavit, which contained Dr. Tewari’s definitions of the

trade secrets he claims to have disclosed to MTSR. Tewari sought leave to file

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a response to the objections, which was later denied as moot. Tewari also filed

its own motion for partial summary judgment on its fiduciary duty claim.

The district court granted MTSR’s motion for summary judgment as to

Tewari’s fraud and fraudulent inducement claim, but denied the motion as to

Tewari’s other claims. After describing Tewari’s trade secrets, the district court

Many of MTSR’s objections do not make sense in the context of summary judgment. 1

For example, MTSR’s objections to Tewari’s Exhibit 1 are not evidentiary objections at all, as

Exhibit 1 is not “evidence”; rather, it is a summary of undisputed facts and corresponding

arguments against MTSR’s motion. To the extent MTSR’s objections to Dr. Tewari’s affidavit

(Exhibit 2) were on the basis of relevancy, these objections were unnecessary because the

district court is perfectly capable of distinguishing relevant evidence from the clearly

irrelevant. As for MTSR’s remaining objections to the affidavit, the district court could have

properly denied the objections and considered the evidence on summary judgment. That the

evidence ultimately may not be admissible at trial after the foundation for Dr. Tewari’s

testimony is laid—either to testify as an expert witness or to prove-up the facts MTSR objectsto as lacking factual support—is irrelevant for disposition on a Rule 56 motion, where the

district court lacks the benefit of the context of trial when making his evidentiary rulings. We

decline to speculate as to how MTSR’s objections should be resolved at trial.

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concluded they were sufficiently specific to constitute trade secrets and that

Tewari raised a fact question as to whether its process was unique or merely

used techniques and equipment known in the industry. The district court

rejected MTSR’s argument that Tewari’s process was not a trade secret because

it was disclosed in a 2004 patent application, on the ground that a patent

application does not disclose a trade secret. The district court also held that

Tewari raised a question of fact as to whether MTSR used Tewari’s system in

breach of the NDA and used its trade secrets without authorization. The court

overruled MTSR’s objections to Dr. Tewari’s affidavit as moot, stating that it

“reached its conclusions in this order without reliance on the evidence MTSR

objects to.”

MTSR moved for reconsideration, arguing that the district court made a

clear error in law in determining that disclosure in a patent application alone

did not destroy a trade secret’s secrecy. Relying on Group One, Ltd. v. Hallmark

Cards, Inc., 254 F.3d 1041, 1051 (Fed. Cir. 2001), the district court agreed and

ruled that any information disclosed in Tewari’s 2004 patent applications were

no longer trade secrets when the NDA was signed in March 2005. Relying

heavily on Exhibit BB to MTSR’s motion for summary judgment, a MTSRprepared chart that “quotes the alleged trade secret ‘process’” as Dr. Tewari

identified it in his interrogatory responses, the district court found that Tewari’s

trade secret was either disclosed in the 2004 patent application or was already

known in the industry. The district court found that the primary difference

between what was disclosed by 2004 and what Tewari disclosed to MTSR in 2005

was that the 2005 process was merely a customization based on MTSR’s needs

using MTSR’s equipment. Accordingly, the district court held that Tewari failed

to raise a fact issue as to the existence and use of a trade secret.

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The district court granted MTSR’s motion for reconsideration as follows:

Defendant’s motion for reconsideration (docket no. 112) is

GRANTED. The sealed order of October 13, 2009 (docket no. 110) is

MODIFIED as follows: MTSR’s motion for summary judgment

(docket no. 71) is GRANTED in full on all claims asserted against

it by Tewari De-Ox Systems, Inc., which shall take nothing on its

claims. All pending motions are DENIED as moot, and the Clerk is

instructed to close this case.

Tewari timely appealed.

II. STANDARD OF REVIEW

We review “a grant of summary judgment de novo and apply the same

legal standard as the district court.” Maverick Recording Co. v. Harper, 598 F.3d

193, 195 (5th Cir. 2010). Summary judgment is proper only if there “is no

genuine dispute as to any material fact and the movant is entitled to judgment

as a matter of law.” FED. R. CIV. P. 56(a). “For the purposes of a summary

judgment determination, all fact questions are viewed in the light most favorable

to the nonmovant.” Aucoin v. Haney, 306 F.3d 268, 271 (5th Cir. 2002).

III. ANALYSIS

A. Whether the District Court Considered Dr. Tewari’s Affidavit on

Reconsideration

Tewari first appeals the district court’s apparent failure to consider its

evidence in opposition to MTSR’s motion for summary judgment. It argues that

while it was proper for the district court to reach its conclusions without relying

on the evidence it proffered in the original order denying summary judgment, it

was improper to do so in a motion granting summary judgment on

reconsideration. Specifically, in its original order denying summary judgment

in part, the district court stated it did not rely on Tewari’s proffered evidence to

which MTSR objected—most importantly, specific paragraphs from Dr. Tewari’s

affidavit describing the trade secrets at issue. On reconsideration, the district

court granted summary judgment and modified its previous order, but did not

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modify it to delete the statement that it did not rely on Tewari’s proffered

evidence.

The district court could have been more explicit in its order on

reconsideration where it modified its order granting summary judgment, and

should have made clear that it either did not consider the motion to reconsider

to also raise anew the evidentiary objections or was re-denying the objections it

previously denied as moot. Tewari has, however, utterly failed to substantiate

its argument that the order contains factually erroneous statements that are

refuted by Dr. Tewari’s affidavit and the district court therefore failed to

consider all the evidence. Furthermore, the first order denying MTSR’s motion

for summary judgment stated that the court “reached its conclusions in this

order without reliance on the evidence” to which MTSR objected (emphasis

added). This language does not imply that the district court also reached its

conclusions explained in the second order—which indisputably stand alone and

are not grafted on to the first order—without considering Dr. Tewari’s affidavit.

While the order granting reconsideration of the order on MTSR’s summary

judgment does not specifically discuss the evidence put forward in Dr. Tewari’s

affidavit, absent any evidence to the contrary we are convinced the district court

considered all the evidence when ruling on MTSR’s motion to reconsider. In any

event, our review is de novo and, looking at all the evidence in the record, we

reverse the entry of summary judgment against Tewari. We make no

speculation as to which, if any, of the contested summary judgment evidence

would be admissible if properly presented during trial.

B. MTSR’s Motion for Summary Judgment

As a preliminary matter, we note that Tewari does not appeal the district

court’s initial grant of summary judgment in MTSR’s favor on Tewari’s fraud

and fraudulent inducement claim. Nor does Tewari, in its briefing to this Court,

address the district court’s order on reconsideration granting summary judgment

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in MTSR’s favor on Tewari’s breach of contract and Texas Theft Liability Act

claims. “An appellant abandons all issues not raised and argued in its initial

brief on appeal.” Cinel v. Connick, 15 F.3d 1338, 1345 (5th Cir. 1994). A party

who inadequately briefs an issue is considered to have abandoned the claim.

Villanueva v. CNA Ins. Cos., 868 F.2d 684, 687 n.5 (5th Cir. 1989). Tewari’s sole

basis of appeal is the entry of summary judgment on its trade secret

misappropriation and breach of fiduciary duty claims. Tewari has waived its

right to appeal the dismissal of its other claims, and we accordingly examine

only those claims properly before us.

On reconsideration, the district court granted summary judgment in

MTSR’s favor on the misappropriation and breach of fiduciary claims. The court

concluded that it had previously committed a clear error of law when it

concluded that the publication of a patent application did not disclose and

destroy a trade secret. It then concluded that either Tewari’s 2004 patent

application disclosed every part of Tewari’s trade secrets or the elements were

known in the industry, and that Tewari therefore did not have any trade secrets

which could give rise to claims for misappropriation and breach of fiduciary duty.

It also concluded that MTSR did not use any of Tewari’s trade secrets because

Tewari did not have any trade secrets for MTSR to use. We hold that the district

court correctly determined that any information disclosed in the 2004 patent

applications were no longer trade secrets, but incorrectly ruled that Tewari’s

unique combinations of previously disclosed elements could not constitute trade

secrets.

1. Applicable Law

The parties agree that Texas law governs this dispute. “Trade secret

misappropriation under Texas law is established by showing: (a) a trade secret

existed; (b) the trade secret was acquired through a breach of a confidential

relationship or discovered by improper means; and (c) use of the trade secret

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without authorization from the plaintiff.” Phillips v. Frey, 20 F.3d 623, 627 (5th

Cir. 1994). To determine whether a trade secret exists, Texas courts weigh six

factors set forth in the Restatement of Torts in the context of the surrounding

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circumstances:

(1) the extent to which the information is known outside of the

business;

(2) the extent to which it is known by employees and others involved

in the business;

(3) the extent of measures taken to guard the secrecy of the

information;

(4) the value of the information to the business and to its

competitors;

(5) the amount of effort or money expended in developing the

information;

(6) the ease or difficulty with which the information could be

properly acquired or duplicated by others.

In re Union Pac. R.R. Co., 294 S.W.3d 589, 592 (Tex. 2009) (citations omitted).

“[T]he party claiming a trade secret should not be required to satisfy all six

factors because trade secrets do not fit neatly into each factor every time.” In re

Bass, 113 S.W.3d at 740.

The second element of misappropriation of a trade secret is that the trade

secret be acquired improperly, through either a confidential relationship or

under an obligation not to disclose it. See Hyde Corp. v. Huffines, 314 S.W.2d

763, 769 (Tex. 1958) (“One who discloses or uses another’s trade secrets, without

a privilege to do so, is liable to the other if (a) he discovers the secret by improper

“Texas courts continue to follow the definition of trade secrets, as well as the six 2

factors used to identify a trade secret, set forth in section 757 of the original Restatement of

Torts, despite the fact[] that this section was omitted from the Restatement (Second) of Torts,

that the Restatement (Third) of Unfair Competition provides a slightly altered definition of

trade secrets, and that many states—not including Texas—have adopted the Uniform Trade

Secrets Act.” Parker Barber & Beauty Supply, Inc. v. Wella Corp., No. 03-04-00623-CV, 2006

Tex. App. LEXIS 8841, at *51 n.19 (Tex. App.—Austin Oct. 11, 2006, no pet.); see also In re

Bass,113 S.W.3d 735, 739–42 (Tex. 2003) (discussing history and concluding that section 757

remains instructive in Texas).

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means, or (b) his disclosure or use constitutes a breach of confidence reposed in

him by the other in disclosing the secret to him.”) (citation and internal

quotation marks omitted). This element does not appear to be in dispute. If

what Tewari disclosed to MTSR was in fact a trade secret, it was disclosed in

confidence pursuant to the NDA and MTSR’s later use, if any, constitutes a

breach of that confidence.

The final requirement to prove misappropriation of a trade secret is its use

“without authorization from the plaintiff.” Phillips, 20 F.3d at 627. The district

court originally found that a genuine dispute of material fact existed on this

element, but on reconsideration concluded that Tewari failed to raise a fact issue

with respect to this element because there was no trade secret for MTSR to have

used without Tewari’s authorization.

2. Whether Tewari Has Any Trade Secrets

Tewari appeals the district court’s conclusion that the 2004 patent

application disclosed and destroyed its trade secrets because the patent never

issued. It also appeals the district court’s interpretation and construction of its

asserted trade secrets, specifically arguing that the combination of various

disclosed elements constitute their own trade secrets and that these

combinations gain trade secret protection even if obvious. It also challenges the

district court’s determination that its customization to MTSR’s existing

equipment was not itself a trade secret.

a. Whether Publication of a Patent Application Destroys

a Trade Secret

The district court’s order granting reconsideration recognized that it made

an error of law in determining that the publication of an issued patent, but not

the publication of a patent application, discloses the secret contained therein.

Tewari argues that MTSR misled the district court as to the relevant body of law

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on this point, arguing that Texas focuses on how the trade secret was obtained

rather than whether it was published. This argument is without merit.

“It is self-evident that the subject matter of a trade secret must be secret.”

Luccous v. J. C. Kinley Co., 376 S.W.2d 336, 338 (Tex. 1964). “Information that

is public knowledge or that is generally known in an industry cannot be a trade

secret.” Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1002 (1984). As part of the

Intellectual Property and Communications Omnibus Reform Act of 1999, a

patent application submitted after November 29, 2000 may be published after

eighteen months under 35 U.S.C. § 122(b)(1)(A). See also Bondpro Corp. v.

Siemens Power Generation, Inc., 463 F.3d 702, 707 (7th Cir. 2006) (discussing

patent applications and stating “now [under 35 U.S.C. § 122(b)(1)(A)] they have

to be published after 18 months . . . the aim of this rule being to disseminate the

knowledge revealed in the application to the inventor community so that other

inventors can build upon it.”).

Although no post-2000 Texas case directly addresses whether a published

patent application destroys the secrecy of its contents for trade secret purposes,

the weight of authority from other jurisdictions holds that it does. See, e.g.,

Group One, 254 F.3d at 1051; OLA, LLC v. Builder Homesite, Inc., 661 F. Supp.

2d 668, 673 (E.D. Tex. 2009) (“[T]his information lost its trade secret status on

July 25, 2002, when the application that became the ‘553 patent was

published.”). There can be no dispute that a published patent application, like

a patent, is readily available—the United States Patent and Trademark Office

and Google both allow free online searching of published patent applications.

Under Texas law, information that is generally known or readily available by

independent investigation is not secret for purposes of trade secrecy. See H. E.

Butt Grocery Co. v. Moody’s Quality Meats, 951 S.W.2d 33, 35 (Tex.

App.—Corpus Christi 1997, pet. denied); Gonzales v. Zamora, 791 S.W.2d 258,

264 (Tex. App.—Corpus Christi 1990, no writ) (“The word secret implies that the

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information is not generally known or readily available.”); Allan J. Richardson

& Assocs., Inc. v. Andrews, 718 S.W.2d 833, 837 (Tex. App.—Houston [14th Dist.]

1986, no writ) (“Even in the vernacular the word secret implies that the

information is not generally known or readily available.”).

Tewari argues that Texas law looks to how the alleged trade secret was

obtained rather than whether the information is in fact secret. See Luccous, 376

S.W.2d at 340; K. & G. Oil Tool & Serv. Co. v. G. & G. Fishing Tool Serv., 314

S.W.2d 782 (Tex. 1958). These cases are inapposite. K&G involved unpatented

technology that was misappropriated before the trade secrets at issue were

disclosed by a subsequent patent. The Luccous Court explained that K&G “held

that plaintiff was not deprived of his cause of action for defendant’s breach of

confidence simply because some of plaintiff’s secrets were later disclosed by the

issuance of a patent.” 376 S.W.2d at 339 (emphasis added). In Luccous, the

plaintiff was denied relief because the alleged misappropriation occurred after

a patent on the technology at issue had expired. Id. The Luccous Court

explained the decision to seek a patent is an either/or choice: either “secure the

material rewards for his invention for a limited time” on condition “that he make

full disclosure for the benefit of the public of the manner of making and using

the invention” or “make no public disclosure of his invention and thereby protect

his trade secret.” Id. at 340 (citations omitted). We have characterized Luccous

as concluding that a “design of a device could not be a trade secret because it had

been patented—and thus revealed to all the world—before any dealing between

the parties.” Metallurgical Indus., Inc. v. Fourtek, Inc., 790 F.2d 1195, 1200 (5th

Cir. 1986).

This is not a case where MTSR argues it gained knowledge of Tewari’s

processes while they were still trade secrets and those processes subsequently

lost trade secret protection due to publication. Rather, MTSR argues that

Tewari’s alleged trade secrets are not protectable because they were disclosed

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in patent applications before MTSR signed the NDA. The two patent

applications at issue were published on January 15, 2004 and April 15, 2004.

Although the district court did not discuss Texas law in doing so, it correctly

concluded that any processes disclosed in these applications were not trade

secrets in 2005 when Tewari and MTSR executed the NDA.

b. Tewari’s Trade Secrets

Tewari defines its trade secrets in Dr. Tewari’s deposition testimony and

in paragraphs 17–18 of Dr. Tewari’s affidavit, identifying five trade secrets that

arguably were not disclosed in the 2004 patent applications. Simplifying

matters for purposes of this opinion, Dr. Tewari defined the trade secrets as:

(1) a tri-gas mixture in combination with the Tewari zero-oxygen process

published in 2004; (2) an oxygen scavenger disclosed in a 2006 patent application

with the ability to quickly operate in certain environmental conditions; (3) the

combination of trade secrets 1 and 2; (4) the knowledge of how to adopt the

previously disclosed Tewari process to an open-nozzle system, including

knowledge of ideal initial-oxygen levels (and how to achieve them) and best

practices for monitoring oxygen levels; and (5) knowledge of the importance of

the foam tray on which the meat is placed in retail packaging for oxygen levels.

The district court concluded that “[a]s MTSR’s exhibit BB describes in detail . . .

every specific of Tewari’s claimed trade secret was either disclosed in the 2004

patent applications or already disclosed and known in the industry. . . .”

(emphasis added). As we explain below, the conclusion that Tewari did not have

any trade secrets because each of their elements was disclosed was in error.

A trade secret “is one of the most elusive and difficult concepts in the law

to define.” Lear Siegler, Inc. v. Ark-Ell Springs, Inc., 569 F.2d 286, 288 (5th Cir.

1978). In many cases, the question of whether certain information constitutes

a trade secret ordinarily is best “resolved by a fact finder after full presentation

of evidence from each side.” Id. at 289. Regardless, we have specifically rejected

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the contention that a combination of disclosed technologies cannot itself

constitute a trade secret. Metallurgical Indus., 790 F.2d at 1202 (citing Ventura

Mfg. Co. v. Locke, 454 S.W.2d 431 (Tex. Civ. App. 1970, no writ); Sikes v.

McGraw-Edison Co., 665 F.2d 731, 736 (5th Cir. 1982)). The district court’s

reliance on H. E. Butt Grocery was misplaced because in that case the trade

secret—a process for making pre-marinated beef fajitas—was disclosed in full

by another company. 951 S.W.2d at 39. Here, Tewari argues its trade secrets

constitute unique combinations of disclosed technologies or processes, a

distinction that was not at issue in H.E. Butt.

Even more relevant to the case at hand, the Ventura Manufacturing case

specifically granted trade secret protection to a “trial and error” process of

cleaning small yet valuable titanium scraps lost during the manufacturing of

airplanes. 454 S.W.2d at 434. The Texas court explained that the details of the

procedure such as “as the types and amounts of chemicals to be used and the

times and temperatures for cleaning the fasteners” were protectable trade

secrets even if the general procedure was public knowledge. Id. In this case, the

district court erroneously discounted Tewari’s potential trade secrets as mere

“customization” and a “trial-and-error” process to adjust MTSR’s existing

machines.

Likewise, in Sikes (a case involving a weed whacker), we referenced and

quoted heavily from Water Services, Inc. v. Tesco Chemicals, 410 F.2d 163, 173

(5th Cir. 1969), in which the trade secret—a water purification system—“was the

application of known techniques and the assembly of available components to

create the first successful system in the industry.” 665 F.2d at 736. We further

explained that “a trade secret can exist in a combination of characteristics and

components each of which, by itself, is in the public domain, but the unified

process, design and operation of which in unique combination, affords a

competitive advantage and is a protectible secret.” Id. (quoting Imperial Chem.,

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Ltd. v. Nat’l Distillers & Chem. Corp., 342 F.2d 737, 742 (2d Cir. 1965)). While

MTSR is correct to argue that Sikes stands for the proposition that a “simple and

obvious change in an existing device or process is not a trade secret,” that

question in Sykes was one of fact for the jury to decide. 665 F.2d at 733.

As Sikes, Metallurgical Indus., Ventura Mfg., and Water Services, supra,

all demonstrate, it is of no moment that Tewari’s alleged trade secrets are

combinations of disclosed processes and technologies with other

elements—namely scavengers and gas mixtures—also known in the industry.

Tewari has raised a genuine dispute of material fact as to whether it has trade

secrets that it disclosed to MTSR, and the district court’s holding to the contrary

is in error.

3. Whether MTSR Used Tewari’s Trade Secrets

The district court originally decided Tewari raised a fact issue on this

element, but in its order on reconsideration granting MTSR summary judgment

decided there was no fact issue because Tewari did not have any trade secrets

for MTSR to use without Tewari’s consent. Because we conclude a genuine

dispute of material fact exists as to whether Tewari has any trade secrets, we

also determine that a fact issue exists as to whether MTSR used Tewari’s alleged

trade secrets, and reverse the district court’s entry of judgment on this ground.

C. Tewari’s Motion for Partial Summary Judgment

Tewari appeals the district court’s apparent failure to rule on an element

of its breach of fiduciary duty claim on its motion for partial summary judgment

on the existence and breach of fiduciary duty. Specifically, Tewari argues it is

entitled to an explicit ruling on whether MTSR owed it a fiduciary duty. The

district court spilled considerable ink explaining the applicable legal framework

for evaluating whether a fiduciary relationship exists, evaluating and

distinguishing MTSR’s proffered cases in opposition to finding a duty exists, and

explaining the factual circumstances in this case. The district court explained

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that while a trade secret owner cannot unilaterally create a confidential

relationship, “the NDA gave MTSR notice that Tewari considered the

information it was disclosing to be a trade secret and that the disclosure was

made in confidence.” It also explained that “the question raised is whether the

recipient of the information knew or should have known that the information

was a trade secret and the disclosure was made in confidence.” (emphasis added.)

The district court then evaluated the second element on which Tewari sought

partial summary judgment—that MTSR breached its duty—and determined that

there was a dispute of material fact here because MTSR argued that Tewari did

not show it any trade secrets. The district court concluded that partial summary

judgment was inappropriate because “a fact issue exists whether MTSR has

breached the fiduciary duty it owed to Tewari.” (emphasis added).

While the district court’s order could be seen as being subject to two

interpretations, the differences are mere semantics. The district court either

decided that (1) no fiduciary duty exists absent Tewari having disclosed actual

trade secrets, or (2) there was a fiduciary duty but MTSR did not breach it if

Tewari did not disclose any actual trade secrets. Under (2), the only fiduciary

duty MTSR could have owed Tewari according to the district court’s logic was to

keep Tewari’s trade secrets secret—the same duty as in (1). Under either

interpretation, Tewari’s claim—and MTSR’s alleged fiduciary duty—depends on

Tewari having actual trade secrets that it disclosed to MTSR. The district

court’s order therefore sufficiently addressed Tewari’s motion for partial

summary judgment on this issue and Tewari is not entitled to a more explicit

ruling.

D. Whether the District Court Erred by Not Sua Sponte Granting

Summary Judgment in Tewari’s Favor

Tewari argues that the district court should have sua sponte granted

summary judgment in its favor on the disclosure of at least one trade secret

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No. 10-50137

because “there is not a scintilla of evidence produced by MTSR showing that the

Tewari process, composed of other trade secrets identified and taught by Tewari,

is used or known by anyone else in the industry.” As discussed above, genuine

disputes of material fact exist as to whether any trade secrets in fact exist.

Summary judgment on this issue is therefore not appropriate.

IV. CONCLUSION

While the district court could have made its order clearer, it appears to

have properly considered Tewari’s objected-to evidence when ruling on its motion

for reconsideration. It erred by entering judgment in favor of MTSR when it

incorrectly defined Tewari’s trade secrets and failed to consider that a unique

combination of elements already publicly disclosed or generally known are

protectable as trade secrets under Texas law. It correctly denied Tewari’s

partial summary judgment claim on the existence of a fiduciary duty and did not

err when it failed to sua sponte enter judgment in Tewari’s favor.

AFFIRMED in part, REVERSED in part and REMANDED.

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Case: 10-50137 Document: 00511434822 Page: 16 Date Filed: 04/05/2011