Opinion ID: 2995202
Heading Depth: 3
Heading Rank: 1

Heading: Misappropriation of 3M’s Trade

Text: Secret As noted above, the jury determined that 3M had a valid trade secret in its operating procedures and manuals, which in the course of forming and operating Accu-Tech, the defendants had misappropriated. Appellants’ primary assertion on appeal is that the evidence produced at trial was insufficient to support either of those findings by the jury, and that thus the district court erred in not granting judgment as a matter of law. Though we review the denial of a motion for judgment as a matter of law de novo, see Emmel v. Coca-Cola Bottling Co. of Chicago, 95 F.3d 627, 629 (7th Cir. 1996), our inquiry is limited to determining whether the evidence presented, combined with all reasonable inferences permissibly drawn therefrom, is sufficient to support the jury’s verdict when viewed in the light most favorable to the nonmoving party, see Goodwin v. MTD Products, Inc., 232 F.3d 600, 606 (7th Cir. 2000); see also Mangren Research and Dev. Corp. v. National Chem. Co., Inc., 87 F.3d 937, 941 (7th Cir. 1996) (in a diversity case we apply the federal standard for judgment as a matter of law). We begin by examining whether, under Wisconsin law, 3M’s operating procedures and manuals constitute a valid trade secret. According to the Wisconsin Uniform Trade Secrets Act, a trade secret is defined as information, including a formula, pattern, compilation, program, device, method, technique or process . . . [which] derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use . . . [and which] is the subject of efforts to maintain its secrecy that are reasonable under the circumstances. Wis. Stat. sec. 134.90(1)(c); see also ECT Int’l, Inc. v. Zwerlein, 597 N.W.2d 479, 482 (Wis. Ct. App. 1999). The defendants do not dispute that 3M has instituted elaborate security measures designed to maintain the secrecy of the material at issue. Rather, the crux of their argument is that the operating procedures and manuals encompass a broad category of items that are either of public knowledge, or relate solely to the manufacturing of carrier tape./2 Throughout the course of their argument, defendants press 3M to divulge what specific information contained within the more than 500 hundred pages of materials could be considered secret. In doing so, defendants 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. 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. See Synthex Ophthalmics Inc. v. Tsuetaki, 701 F.2d 677, 683 (7th Cir. 1983). There is no doubt that within the 500- plus pages of manuals at issue, there are a host of materials which would fall within the public domain. For example, 3M’s instructions on how to clean the area around its machines, and how to properly assemble a cardboard box, surely cannot be considered independent trade secrets. Were 3M to bring Accu-Tech to court, claiming misappropriation on the basis that Accu-Tech was assembling ordinary cardboard boxes in a similar manner to 3M, we would not look favorably on such a claim. Yet, when all the cleaning procedures, temperature settings, safety protocols, and equipment calibrations are collected and set out as a unified process, that compilation, if it meets the other qualifications, may be considered a trade secret. Contrary to defendants’ suggestion, 3M is not attempting to preclude Accu-Tech from folding cardboard boxes. Rather, the company is seeking to prevent Accu-Tech from using and disclosing a process which it took the company six years and considerable income to perfect. These manuals and processes, even if comprised solely of materials available in the public domain, have been created by combining those materials into a unified system which is not readily ascertainable by other means. Thus, viewing the evidence in the light most favorable to 3M, we believe there was sufficient evidence to support the jury’s finding that 3M has a trade secret in the operating procedures, quality manuals, trade manuals, process standards and operator notes for using 3M’s equipment that makes resin sheeting. Turning to the issue of misappropriation, we agree with the district court that there was sufficient evidence to support a powerful inference that defendants used 3M’s operating procedures and manuals in establishing Accu-Tech’s operations. While it took 3M six years and countless resources in order to make its carrier tape operation efficient and profitable, Accu-Tech was able to almost immediately operate its resin sheeting line effectively. Furthermore, evidence adduced at trial established that there are significant similarities between 3M’s carrier tape line and Accu-Tech’s resin sheeting line, including the use of the same or similar equipment and materials. Moreover, testimony at trial suggested that Accu- Tech was disclosing to 3M customers and competitors processes detailed in 3M’s manuals. As the district court stated, [t]he inference is virtually inescapable that defendants gained a significant head start in their operation by using the trade secret knowledge they learned from plaintiff concerning the operation and standards for the line. We agree that when this evidence, along with all the reasonable inferences that may be drawn from it, is viewed in the light most favorable to 3M, it constitutes sufficient support for the jury’s verdict. As such, we affirm the district court’s denial of Accu-Tech’s motion for judgment as a matter of law on the issue.