Opinion ID: 3037417
Heading Depth: 2
Heading Rank: 3

Heading: Mack’s Misappropriation of Trade Secrets

Text: Counterclaim Toledo’s final argument is that the District Court erred in granting judgment as a matter of law in favor of Mack on Mack’s counterclaim for misappropriation of trade secrets. On appeal, Toledo argues that Mack’s counterclaim is actually for breach of the MACSPEC 2001 license agreement, and that, under Pennsylvania’s “gist of the action” doctrine, Mack cannot recover in tort for breach of contract. The “gist 51 of the action” doctrine is “designed to maintain the conceptual distinction between breach of contract claims and tort claims [by] precluding plaintiffs from recasting ordinary breach of contract claims into tort claims.” eToll Inc. v. Elias/Savion Advertising Inc., 811 A.2d 10, 14 (Pa. Super. Ct. 2002). The focus of an analysis under the “gist of the action” doctrine is whether “actions lie from a breach of the duties imposed as a matter of social policy” or “from the breach of duties imposed by mutual consensus.” Redevelopment Auth. of Cambria County v. Int’l Ins. Co., 685 A.2d 581, 590 (Pa. Super. Ct. 1995). We agree with the District Court that Mack’s claim for misappropriation of trade secrets sounds primarily in tort, rather than contract law, and therefore the “gist of the action” doctrine does not bar Mack’s counterclaim. The Ohio Court of Appeals found that Mack took several steps independent of issuing a license agreement to insure that its dealers did not give copies of the MACSPEC 2001 software to unauthorized persons. Those steps included the use of “unlock codes” during the installation process and prominent warning screens informing users that unauthorized use would subject them to civil and criminal penalties. Mack Trucks, Inc. v. Motor Vehicle Dealers Bd., No. 05AP-768, 2006 WL 1495122, at  (Ohio Ct. App. June 1, 2006). Thus, Toledo’s duty to keep the software confidential did not arise simply from its license agreement with Mack but, instead, had roots in its independent duty to keep Mack’s trade secrets confidential, and the counterclaim can properly 52 be seen as sounding in tort.18 We therefore reject Toledo’s argument and affirm the District Court’s grant of judgment as a matter of law on the counterclaim.