Opinion ID: 167987
Heading Depth: 3
Heading Rank: 1

Heading: Denial of Judgment as a M atter of Law

Text: W e first address Heumann’s challenges to the district court’s denial of her Rule 50 motion for judgment as a matter of law. Heumann contends that ISR offered no evidence that she disclosed confidential information that existed separate and apart from ISR’s trade secret information. According to Heumann, once the jury found that she did not misappropriate ISR’s trade secrets, the district court should have dismissed ISR’s breach of contract claim based on the confidentiality provision of the license agreement. Heumann argues that, in any event, ISR failed to present evidence that she disclosed confidential information of any kind. 5 Geerdes did not file a cross-appeal to challenge her award of attorney fees. -6- “W e review the district court’s denial [of a] motion for judgment as a matter of law de novo, applying the same legal standard as the district court.” Deters v. Equifax Credit Info. Servs., Inc., 202 F.3d 1262, 1268 (10th Cir. 2000) (citing Baty v. W illamette Indus., Inc., 172 F.3d 1232, 1241 (10th Cir. 1999)). A party is entitled to judgment as a matter of law only “if the evidence points but one way and is susceptible to no reasonable inferences supporting the party opposing the motion.” Id. (internal quotations omitted). In reviewing the record, “we will not weigh evidence, judge witness credibility, or challenge the factual conclusions of the jury.” Id. “Judgment as a matter of law . . . is appropriate only if there is no legally sufficient evidentiary basis . . . [for a claim] under the controlling law.” Id. (internal quotations omitted). “W e consider the evidence, and any inferences drawn therefrom . . . in favor of . . . the non-moving party.” Id. W e conclude that, based on the evidence at trial, a reasonable jury could find that Heumann failed to comply with the license agreement’s confidentiality provision. To establish that Heumann violated the license agreement’s confidentiality provision, the jury instructions required ISR to prove: (1) ISR’s program contained confidential information protected under the confidentiality provision of the license agreement; and (2) Heumann failed to comply with the confidentiality provision of the license agreement. Instr. No. 30, App. at 122. A s to the first element, ISR’s “Non-D isclosure and Confidentiality Agreement,” -7- signed by Heumann on N ovember 1, 1998, provides evidence that Heumann acknow ledged that she received confidential information protected by the license agreement: W hereas, Judy Heumann (“Licensee”) has received certain confidential information of Harvey Barnett, Inc. (“Barnett”) . . . relating to specialized methods, procedures and techniques for teaching infants and children water survival, swimming and associated aquatic skills and Licensee specifically acknowledges that said confidential information was received, used and has been maintained in confidence pursuant to the terms of a license agreement between Barnett and Licensee[.] App. at 36. As to the second element, the confidentiality provision in the license agreement prohibited Heumann from: (1) “divulg[ing], disclos[ing] or comm unicat[ing] to any person or organization in any manner whatsoever any information concerning any matters affecting or relating to the business and trade secrets of [ISR]”; (2) “writ[ing] for publication any article concerning Infant Sw imming Research, teaching, data, techniques, theory or trade secrets”; (3) “train[ing] . . . or endeavor[ing] to train instructors or assistants in the same or similar methods without [ISR’s written consent]”; (4) copying or reproducing ISR’s documents or training videos “in whole or in part at any time”; (5) “disclos[ing] to another person any of the methods, techniques, trade secrets or systems used by [ISR] in business”; and (6) upon termination, retaining any “materials [regarding ISR’s] business, techniques, advertising and trade secrets.” -8- Id. at 42. Upon review of the evidence presented, we conclude that, at a minimum, a reasonable jury could have found that Heumann violated those portions of the confidentiality provision which prohibited her from disclosing or comm unicating ISR’s methods and techniques that it used in its business, and from training other instructors using similar methods without ISR’s consent. The trial record establishes that, prior to joining ISR as an instructor in 1984, Heumann had no experience teaching infants and young children aquatic survival skills. Heumann herself testified that she went to ISR to become not only a better instructor, but because she found ISR’s emphasis on survival and use of stimulus control to be unique compared to other swim programs. Heumann became a master instructor in 1987 so that she could teach other potential ISR instructors. By January 2000, Heumann, along with other former ISR instructors, formed Infant Aquatic Survival to teach “swimming with a focus on survival.” Supp. App. at 529. Heumann acknowledged that over a year after she left ISR, the only changes she made to the ISR program w ere that she allowed a more relaxed environment, she involved parents more, she used more toys, and she conducted some semi-private lessons. Further, Heumann testified that she had signed three instructors to work with infants under the age of threeand-a-half and required those instructors to sign an agreement similar to ISR’s license agreement before providing them w ith her “specialized techniques and materials for training instructors.” Id. at 531. Finally, Heumann admitted that -9- since she left ISR, she had not enrolled in any programs to receive additional training to teach children to survive in the water or to train another person how to teach children to survive in the water. In sum, the record, viewed in the light most favorable to ISR, demonstrates that Heumann signed a “Non-Disclosure and Confidentiality Agreement” in which she acknowledged receiving confidential information protected by the license agreement. Heumann had no background in teaching infants to survive in water before joining ISR, and she received little or no training in that area since leaving ISR. W hen Heumann formed Infant Aquatic Survival, she did not significantly depart from the techniques and methods she learned during her sixteen years at ISR. She also trained other instructors to teach infants to survive in water, and required those instructors to keep confidential the information she provided them. This evidence is more than ample to sustain the jury’s verdict against H eumann. M oreover, we reject Heumann’s underlying premise that the jury’s finding that she did not misappropriate ISR’s trade secrets compelled a verdict that she did not breach the confidentiality provision of the license agreement. ISR’s claim for breach of the confidentiality provision is not merely a contractual restatem ent of ISR ’s statutory misappropriation of trade secrets claim. The tw o -10- claims are independent: they each contain their own unique elements which could be established by different evidence. 6 Under the jury instructions, for ISR to establish a claim for misappropriation of trade secrets, ISR had the burden to prove: (1) [t]rade secrets existed; (2) [Heumann] acquired those trade secrets from [ISR]; (3) [Heumann] used the secret information; and (4) [ISR] suffered harm as a direct and proximate result of [Heumann’s] use or disclosure of [ISR’s] trade secret or [that Heumann] gained from such use or disclosure. Instr. No. 16, App. 108. The instructions defined “trade secret” as “the whole or any portion or phase of any scientific or technical information, design, process, procedure, formula, improvement, confidential business or financial information, listing of names, addresses, or telephone numbers, or other information relating to any business or profession which is secret and of value.” Instr. No. 17, App. at 109. The instructions further informed the jury that a “trade secret” could “exist in a combination of characteristics and components each of which, by 6 W e note that even if ISR’s cause of action for breach of contract was based on misappropriation of trade secrets, it would not be superceded by ISR’s misappropriation of trade secrets claim under the Colorado Uniform Trade Secrets Act. Colorado Revised Statutes § 7-74-108 (2005) provides: (1) Except as provided in subsection (2) of this section, this article displaces conflicting tort, restitutionary, and other law of this state providing civil remedies for misappropriation of a trade secret. (2) This article does not affect: (a) Contractual remedies, whether or not based on misappropriation of a trade secret . . . . -11- itself, is in the public domain, but the unified process, design and operation which, in unique combination, affords a competitive advantage and is a protectable secret.” Instr. No. 19, App. at 111. In fact, ISR’s position throughout this litigation has been that “‘[t]he unified process, design and operation of the ISR Program, in unique combination, affords a competitive advantage and is a protectable [trade] secret.’” Harvey I, 338 F.3d at 1130 (citation omitted). The jury specifically found that ISR possessed trade secrets, but concluded that Heumann did not misappropriate those secrets. This finding did not require the jury to also conclude that Heumann complied with the license agreement’s confidentiality provision. The plain language of the confidentiality provision goes beyond the protection and disclosure of trade secrets. The provision protects several categories of information, including ISR’s trade secrets, methods, systems, techniques, materials, business secrets, theory, data, documents, training videos, and advertising. In our view, for instance, a reasonable jury could conclude that Heumann did not misappropriate ISR’s trade secrets, i.e., the ISR program as an integrated whole, and at the same time conclude that Heumann agreed to keep confidential certain techniques and methods of the ISR program, and that she violated her agreement when she trained or endeavored to train other instructors using those confidential techniques and methods. -12-