Opinion ID: 796337
Heading Depth: 3
Heading Rank: 2

Heading: Specificity of Trade Secrets

Text: 31 The first element a plaintiff alleging misappropriation of trade secrets must prove is that the information at issue actually constitutes a trade secret. Stromback v. New Line Cinema, 384 F.3d 283, 302 (6th Cir.2004); Rothschild v. Ford Motor Co., 2 F.Supp.2d 941, 950 (E.D.Mich. 1998). For information to constitute a trade secret under Michigan law, the information must (1) derive economic value from the fact that it is not known to others who could make use of it, and (2) be the subject of efforts that are reasonable under the circumstances to maintain its secrecy. M.C.L. § 445.1902(d). Lionel does not argue on appeal that the secrecy of the information at issue was not adequately maintained; rather, it argues that MTH did not introduce evidence indicating what, precisely, constituted the trade secret. 32 Citing A.H. Emery Co. v. Marcan Products, 389 F.2d 11 (2d Cir.1968), MTH argues that design drawings and engineering plans are prima facie trade secrets. Id. at 16 ([I]t is well settled that detailed manufacturing drawings and tolerance data are prima facie trade secrets.); see also Rockwell Graphic Sys. v. DEV Indus., 925 F.2d 174, 175, 180 (7th Cir.1991). Although it concedes that the design drawings contain some non-secret information, MTH argues that the drawings contain several kinds of secret information — including tolerances (the acceptable degree to which the completed part could deviate from the design dimensions), data and reference points, clearances, pivot points, spring tensions, and specific alloys — that cannot be determined by simply measuring the parts on a manufactured engine or looking at a picture. MTH also argues that the design drawings are trade secrets even though certain elements of them may have been publicly known. 33 In 3M v. Pribyl, 259 F.3d 587 (7th Cir. 2001), the Seventh Circuit held that a plaintiff may prevail in a trade-secrets case without identifying a specific item of information that is not publicly known or readily accessible. There, the plaintiff had a valid trade secret in its operations-and-procedures manual, despite that most of the information it contained was publicly available: 34 In order to be considered a trade secret, a pattern, technique, or process need not reach the level of invention necessary to warrant patent protection. 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 protectable secret. 35 Id. at 595-96. The Seventh Circuit explicitly rejected the argument that Lionel advances before this Court: [D]efendants seem to suggest that if 3M cannot point to specific items within its manuals that are not known by the industry, then 3M cannot claim a trade secret in the combined product. We disagree. Id. at 595. Several courts have followed the Seventh Circuit's decision in 3M. See Catalyst & Chem. Servs., Inc. v. Global Ground Support, 350 F.Supp.2d 1, 9 (D.D.C.2004), aff'd 173 Fed.Appx. 825 (Fed Cir.2006) ([I]t is widely accepted that a trade secret can exist in a combination of characteristics each of which, by itself, is in the public domain.) (citation omitted); Norbrook Lab. Ltd. v. G.C. Hanford Mfg. Co., 297 F.Supp.2d 463, 483 (N.D.N.Y.2003) (citing 3M, 259 F.3d at 595-96), aff'd 126 Fed. Appx. 507 (2d Cir.2005); PRG-Schultz Intern., Inc. v. Kirix Corp., No. 03-C-1867, 2003 WL 22232771, at  (N.D.Ill. Sept.22, 2003) (same). This line of cases is consistent with Arco Industries Corp. v. Chemcast Corp., 633 F.2d 435, 442 (6th Cir. 1980), in which this Court held that under Michigan law a new combination of known steps or processes can be entitled to trade-secret protection. 36 As in 3M, the design drawings here are properly considered trade secrets even though they contain a mixture of secret information (e.g., dimensions, tolerances, and data-reference points) and non-secret information. The Seventh Circuit's reasoning is persuasive: When material such as design drawings or manuals are trade secrets based on a unique combination of both protected and unprotected material, a plaintiff should not be obligated to identify which components of the protected material is secret. Thus, the district court did not abuse its discretion in denying Lionel's motion for a new trial on this ground.