Court Opinion

ID: 4108268
Source: CourtListenerOpinion
Date Created: 2016-12-19 08:07:10.017338+00
Date Added: 2024-06-11T09:23:56.948343
License: Public Domain

COLORADO COURT OF APPEALS                                      2016COA176

Court of Appeals No. 14CA1321
City and County of Denver District Court No. 13CV31457
Honorable Karen L. Brody, Judge

Hawg Tools, LLC,

Plaintiff-Appellee,

v.

Newsco International Energy Services, Inc.; Newsco International Energy
Services USA, Inc.; Newsco Directional & Horizontal Services, Inc.; and Joe
Ficken,

Defendants-Appellants.

                  JUDGMENT AFFIRMED IN PART, REVERSED
              IN PART, AND CASE REMANDED WITH DIRECTIONS

                                    Division II
                          Opinion by JUDGE BERNARD
                         J. Jones and Harris, JJ., concur

                          Announced December 1, 2016

Robinson Waters & O’Dorisio, P.C., Anthony L. Leffert, Laura J. Ellenberger,
Denver, Colorado, for Plaintiff-Appellee

Gordon & Rees LLP, John R. Mann, Thomas B. Quinn, Tamara A. Hoffbuhr
Seelman, Denver, Colorado, for Defendants-Appellants
¶1    What is a trade secret? According to a Colorado statute, it is,

 as is pertinent to this case, “the whole or any portion . . . of any . . .

 design . . . which is secret and of value.” § 7-74-102(4), C.R.S.

 2016. We conclude in this appeal that the act of keeping a design

 secret does not necessarily mean that it is a trade secret. Rather,

 the design itself must be secret; focusing on the act of protecting

 the design’s secrecy skips the first and fundamental step in the

 analytical process.

¶2    In this appeal, defendants, Newsco International Energy

 Services, Inc.; Newsco International Energy Services USA, Inc.;

 Newsco Directional & Horizontal Services, Inc.; and Joe Ficken,

 appeal the trial court’s judgment in favor of plaintiff, Hawg Tools,

 LLC, on Hawg’s claims for misappropriation of a trade secret and

 conversion. Mr. Ficken appeals the judgment against him on

 Hawg’s claim for breach of contract. We reverse the judgment as far

 as Hawg’s claim for misappropriation of a trade secret is concerned,

 but we affirm the judgment on Hawg’s claims for conversion and

 breach of contract.

                                     1
                                I.   Background

                                A.   Mud Motors

¶3     We have learned from the record that drilling operations

 typically employ a tool called a mud motor to drill for oil. (Drilling

 fluid is commonly referred to as “mud.”) During a drilling

 operation, a mud motor is inserted into a well hole. When fluid is

 pumped through the mud motor, the motor drives a drill bit, and

 the drill bit drills a hole.

¶4     A mud motor consists of a power section and a transmission.

 The power section contains a stator and rotor. (A stator is a static

 part; a rotor is a moving part.) Drilling fluid is pumped through the

 stator to turn the rotor.

¶5     The transmission consists of three parts:

       (1)   a mandrel, or a tubular shaft around which other parts

             are assembled, which is attached to the rotor to drive the

             drill bit;

       (2)   a bearing pack that allows the mandrel to turn the drill

             bit without friction; and

       (3)   a bit box that contains the drill bit.

                                       2
¶6    Bearing packs come in two types: wash bearing packs and

 sealed bearing packs. A wash bearing pack leaves the bearings

 exposed to the surrounding mud. In a sealed bearing pack, the

 bearings are lubricated by an oil bath. The oil bath is enclosed by

 seals to prevent mud from leaking in. This case involves an alleged

 trade secret concerning the design of a sealed bearing pack.

¶7    The following diagram, Figure 1, shows a typical mud motor

 with a sealed bearing pack.

     Figure 1: Schematic of a Typical Oilfield Downhole Drilling Mud Motor
     (Mud Motor Seals, Kalsi Engineering, https://perma.cc/K2JQ-M7TD)

¶8    As seen in Figure 1, a sealed bearing pack includes a pressure

 compensating piston. As drilling fluid pressure increases during

 drilling, the piston slides to compress the lubricant reservoir.

 Similarly, as the oil bath heats up when the drill is withdrawn, the

 piston slides back to expand the reservoir. In this way, the piston

 maintains equal pressure between the drilling fluid and the oil bath.

                                      3
¶9     Sealed bearing packs protect components called thrust

  bearings longer than wash bearing packs. When using a wash

  bearing pack, thrust bearings last a few hours before they break

  and then have to be replaced. But, when using a sealed bearing

  pack, the seals break first instead of the thrust bearings, and the

  seals can last days instead of hours. So the obvious advantage of a

  sealed bearing pack is that the drill runs longer before it has to be

  stopped to perform maintenance.

¶ 10   This kind of sealed bearing pack was invented in 1971.

                              B.   This Case

¶ 11   Hawg rents mud motors to oil and gas drilling companies.

  Newsco uses mud motors to provide drilling services.

¶ 12   Daniel Gallagher owned Hawg. Before he formed this

  company, he operated a similar business called New Venture. In

  2008, he asked a machinist to manufacture sealed bearing packs

  for use in New Venture’s mud motors. The machinist arranged for a

  designer, Joe Ficken, who is one of the defendants in this case, to

  design the sealed bearing packs.

¶ 13   The designer did not receive compensation for the design. He

  testified that he created it as a favor to help the machinist, a friend

                                     4
  who was having financial difficulties. The design was “simple,” and

  it took him only two days to do it. Neither Mr. Gallagher nor the

  machinist asked him to incorporate any specific features or

  customizations into the design.

¶ 14   The designer assigned his rights in the design to the

  machinist. The machinist assigned those rights to Mr. Gallagher in

  exchange for $350,000, some of which was allocated to

  manufacture a number of sealed bearing packs for Mr. Gallagher

  using the design. Mr. Gallagher later assigned his rights in the

  design to Hawg.

¶ 15   The designer continued to make changes to the design

  through June of 2011. During this time — in February 2011 — he

  accepted a job at Newsco, and he began designing a sealed bearing

  pack for his new employer.

¶ 16   Mr. Gallagher learned in 2013 that the designer had designed

  a sealed bearing pack for Newsco. After determining that the

  Newsco design was similar to the Hawg design, Mr. Gallagher filed

  this lawsuit.

                                    5
                              II.   Analysis

             A.   Hawg Did Not Establish That Defendants
                   Misappropriated a Trade Secret

¶ 17   Defendants contend that the trial court erred when it denied

  their motions for directed verdict and judgment notwithstanding the

  verdict on Hawg’s claim for misappropriation of a trade secret. We

  agree because, for the reasons that we discuss below, the evidence

  did not prove that the design of the sealed bearing pack in question

  was a secret.

¶ 18   We review a trial court’s rulings on motions for directed verdict

  and for judgment notwithstanding the verdict de novo. Vaccaro v.

  Am. Family Ins. Grp., 2012 COA 9M, ¶ 40.

¶ 19   The determination of whether a trade secret exists is a

  question of fact. Colo. Supply Co. v. Stewart, 797 P.2d 1303, 1307

  (Colo. App. 1990). In reviewing a trial court’s rulings when these

  sorts of motions concern a question of fact, “[w]e consider all the

  evidence in the light most favorable to the nonmoving party and

  indulge every reasonable inference that can be drawn from the

  evidence in that party’s favor.” Hall v. Frankel, 190 P.3d 852, 862

  (Colo. App. 2008). A motion for directed verdict or judgment

                                    6
  notwithstanding the verdict should be granted only if “no

  reasonable person would conclude that any evidence, or any

  reasonable inference arising therefrom, has been presented on

  which the jury’s verdict against the moving party could be

  sustained.” Id.; see also Boulders at Escalante LLC v. Otten Johnson

  Robinson Neff & Ragonetti PC, 2015 COA 85, ¶ 19.

¶ 20   As we noted above, and as is relevant to our analysis in this

  case, “‘[t]rade secret’ means the whole or any portion . . . of any . . .

  design . . . which is secret and of value.” § 7-74-102(4). To

  determine whether a trade secret exists, the fact finder considers,

  among other things, the extent to which the information is known

  outside the business. Colo. Supply Co., 797 P.2d at 1306. “The

  subject of a trade secret must be secret, and must not be of public

  knowledge or of a general knowledge in the trade or business.”

  Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 475 (1974); see also

  In re S & D Foods, Inc., 144 B.R. 121, 168 (Bankr. D. Colo.

  1992)(matters commonly known in a trade or business cannot be

  considered trade secrets).

¶ 21   Trade secrets can consist of a combination of elements that

  are in the public domain if the combination is unique and the

                                      7
  unified process, design, and operation of these elements afford the

  claimant a competitive advantage. Electrology Lab., Inc. v. Kunze,

  169 F. Supp. 3d 1119, 1153 (D. Colo. 2016); cf. Colo. Supply Co.,

  797 P.2d at 1306 (product formulas were not trade secrets because

  they “were not unique to plaintiff and were versions of formulas

  from products not created by or unique to the plaintiff”).

¶ 22     In this case, the general verdict form indicates only the jury’s

  conclusion that defendants misappropriated a trade secret. But the

  trial court instructed the jury on the definition of the term “trade

  secret” in accordance with section 7-7-102(4) and relevant case law.

  So the verdict demonstrates that the jury found, at least implicitly,

  that the sealed bearing pack design was secret.

¶ 23     However, our review of the record reveals that “no reasonable

  person would conclude that any evidence, or any reasonable

  inference arising therefrom, [was] presented on which the jury’s

  verdict against [defendants] could be sustained.” Hall, 190 P.3d at

  862.

¶ 24     Hawg presented ample evidence to establish that its design

  and the Newsco design were essentially the same. But we conclude

  that Hawg did not present sufficient evidence to distinguish its

                                      8
  design from other designs that were publicly available at the same

  time. In other words, the evidence in the record showed that the

  design of Hawg’s sealed bearing pack was “of public knowledge or of

  a general knowledge” in the mud motor manufacturing business,

  Kewanee Oil Co., 416 U.S. at 475, and that the design was

  commonly known in that business, see In re S & D Foods, Inc., 144

  B.R. at 168. In light of such evidence, which we now discuss, the

  record does not support a finding that Hawg’s design was secret.

¶ 25   First, Mr. Gallagher testified that the “special or unique”

  aspect of the design he commissioned was “[t]hat, if it didn’t run,

  [the designer] would be there to fix it.” This testimony indicates

  that the “secret” was that the designer was familiar with the design

  and technically competent to repair it if it broke. And Mr. Gallagher

  testified that he had not asked the designer to include any

  particular feature or customization in the design.

¶ 26   Second, Hawg’s expert witness testified at length to show the

  sealed bearing packs in the Hawg design and the Newsco design

  were the same. They had the same eight components:

       (1)   An outer bearing housing.

       (2)   A mandrel to mount a drill bit.

                                    9
(3)   A thrust bearing assembly to support the drill bit and to

      allow the mandrel to rotate inside the housing. The

      thrust bearings were lubricated by an oil bath contained

      in a lubricant reservoir. The expert testified that the

      Hawg device used a different thrust bearing assembly

      than the Newsco device. In particular, one of them used

      more rows of roller bearing elements than the other. But,

      he continued, “thrust bearings are thrust bearings are

      thrust bearings,” and using different thrust bearings did

      not change the design because they performed the same

      function.

(4)   A piston that slid along the mandrel to maintain balance

      between pressure outside and pressure inside the

      lubricant reservoir. The expert testified that the pistons

      in the two designs performed the same function. He

      stated that, although the two designs had different

      dimensions, different spacing between seals, and

      different depths of seal grooves, there was “no functional

      difference between the two.”

                             10
       (5)   A split ring assembly to clamp the thrust bearings in

             place. The expert testified that the differences in the two

             designs were immaterial because both types of split rings

             perform the same function. He stated that “[s]plit rings

             are split rings. They all serve the same function.”

       (6)   A lower seal carrier to seal the oil bath inside the sealed

             bearing assembly and provide radial support for the

             mandrel.

       (7)   A flow restrictor. The expert testified that the two

             designs used different flow restrictors that were not

             interchangeable because they were different sizes. But

             this did not change the design because both components

             performed the same function.

       (8)   A dump plug, or opening, in the outer bearing housing.

             The opening served as an exit port for drilling mud

             flowing through the device.

¶ 27   Figure 2 compares the Hawg sealed bearing pack (Figure 2a)

  and the Newsco sealed bearing pack (Figure 2b).

                                    11
              Figure 2: Comparison of Hawg and Newsco Designs

¶ 28   In evaluating whether the two designs were the same, the

  expert focused on the pressure balancing piston. But he did not

  identify any feature of the pressure balancing piston that was

  unique to the Hawg and Newsco designs. Instead, he only

  described the basic function of a pressure balancing piston:

            They both utilize the same method of
            containing oil between the lower seal carrier
            and the sliding piston and that is the key
            point, for me, that when I see how that seal
            carrier, mandrel and piston was executed in
            the design, this is why I’m saying it’s the same
            design.

            ....

                                    12
             The criteria that I used [to determine whether
             the designs were the same] rests on the fact
             that the piston is sliding along the mandrel to
             create a balanced pressure between the
             lubricating oil and the drilling mud. I’ve based
             my decision that the designs are similar on
             that mechanical aspect of the design.

¶ 29   Third, the expert testified that the Hawg design was different

  from designs that were publicly available in 2008 for the following

  reasons:

        Not all sealed bearing packs had the same eight

          components in the same configuration. But the expert did

          not give any examples. And he did not testify that only the

          Hawg and Newsco designs used these eight components in

          this configuration.

        Although some patented sealed bearing packs had a

          balanced seal arrangement like the Hawg and Newsco

          designs, some of their design elements were different. But

          he did not specify which elements were different.

        The patents in his report showed designs that were different

          from the Hawg and Newsco designs in the following ways:

                                    13
          There were differences in how they were organized. But

            he did not specify what those differences were or why

            they were significant.

          Some of the designs had extra thrust bearings. But he

            had testified earlier that the Hawg design and the Newsco

            design were the same even though they had different

            thrust bearings.

          Some designs had radial bearings. But the fact that

            some designs had a different type of bearing than the

            Hawg design does not establish that all of them were

            different.

          Some had a mandrel with a different geometry. But he

            did not explain how this made the design different. And

            again, the fact that some designs were different does not

            establish that all of them were different.

¶ 30   The expert also asserted that the patented designs must have

  been different from the Hawg design because the United States

  Patent and Trademark Office had issued patents on those designs.

  But such reasoning is not convincing because the Patent and

                                     14
  Trademark Office had not reviewed the Hawg design or compared it

  to patented designs.

¶ 31   Fourth, when asked what would be the smallest change

  necessary to produce a different design of a sealed bearing pack,

  the expert testified:

             That’s a tough question. As the designs are
             fairly well evolved, there’s not a whole lot of
             room in the tool to, to change the design.
             You’re very limited. It wouldn’t be unusual for
             different designers to come up with the same
             ideas, except not quite dimensionally the
             same. That does not constitute a different
             design. The designers may try to do things like
             change the . . . seals, change some
             dimensions, all with a view to improving sealed
             bearing longevity down hole. I’ve done similar
             things myself. I’ve tried different seals, I’ve
             tried seal vents, things of that sort, but the
             overall design didn’t change. So, as to the
             smallest element that would change the
             design, . . . they would have to get rid of the
             piston, the mandrel, and the flow restrictor and
             try something else to make it totally different.

  (Emphasis added.) Defense counsel asked if a sealed bearing pack

  without those elements would be operable. The expert responded,

  “[I]t’s conceivable that somebody could come up with something to

  change those elements. And, yes, they could conceivably come up

  with a different sealed bearing pack design. I haven’t seen it.”

                                    15
¶ 32   So, although the expert said that the Hawg design and the

  Newsco design were the same, he did not provide evidence of

  sufficient probative force to support a conclusion that the Hawg

  design of a sealed bearing pack was different from publicly available

  designs that existed before the designer had designed it. To the

  contrary, the expert’s testimony supported a conclusion that drastic

  changes would be required to create a different sealed bearing pack

  design.

¶ 33   Fifth, a defense expert compared the Hawg design to designs

  that had been publicly available at that time. One of these was

  illustrated by U.S. Patent Application Pub. No. 2003/0015352 fig.1

  (filed July 17, 2001), which we compare to the Hawg design in

  Figure 3.

                                   16
          Figure 3: Comparison of Hawg Design and Illustrative Design

¶ 34   We can see that the illustrative design includes the same eight

  components in substantially the same configuration as the Hawg

  design. Hawg did not present any evidence to show what

  variations, if any, between its design and the illustrative design

  were sufficient to establish that the designs were different according

  to the standard set by its own expert.

¶ 35   Sixth, the designer testified that he created the Hawg design

  based on an example that he had found in a handbook published

  by Kalsi Engineering. That design, shown earlier in this opinion as

  Figure 1, also appears to have the same basic components as the

  Hawg design.

                                      17
¶ 36   In summary, Hawg did not establish that its design, in whole

  or in part, was substantially different from designs that were

  publicly available at the time of its creation. We therefore conclude

  that the record lacks evidence of sufficient probative force to

  support a conclusion that the Hawg design was secret. See

  Kewanee Oil Co., 416 U.S. at 475; Hall, 190 P.3d at 862.

¶ 37   Hawg points to a lot of evidence in the record that supports its

  assertion that it took careful steps to keep its design a secret. See

  § 7-74-102(4) (“To be a ‘trade secret’ the owner thereof must have

  taken measures to prevent the secret from becoming available to

  persons other than those selected by the owner to have access

  thereto for limited purposes.”); Ruckelshaus v. Monsanto Co., 467

  U.S. 986, 1002 (1984)(“Because of the intangible nature of a trade

  secret, the extent of the property right therein is defined by the

  extent to which the owner of the secret protects his interest from

  disclosure to others.”); cf. Saturn Systems, Inc. v. Militare, 252 P.3d

  516, 521-22 (Colo. App. 2011)(in a trade secret case dealing with

  sensitive information, as opposed to a design, extensive efforts by

  the holder of the information to maintain its secrecy can be a

                                     18
  relevant factor to determining whether the information is a trade

  secret).

¶ 38   But that is not the first question that we needed to answer in

  this appeal. We had to decide instead whether sufficient evidence

  showed that the design was a secret in the first place, and we have

  concluded that the evidence on that issue was insufficient. See

  Kewanee Oil Co., 416 U.S. at 475; accord Restatement (First) of

  Torts § 757 cmt. b (Am. Law Inst. 1939)(“The subject matter of a

  trade secret must be secret.”). In other words, Hawg’s efforts to

  protect the secrecy of its design did not bear on our analysis

  because the design was not a secret in the first place. See Kewanee

  Oil Co., 416 U.S. at 475; accord Restatement (First) of Torts § 757

  cmt. b (“Matters of public knowledge or of general knowledge in an

  industry cannot be appropriated by one as his secret.”).

¶ 39   So, after reviewing all the evidence in the light most favorable

  to Hawg and after indulging every reasonable inference that can be

  drawn from that evidence in Hawg’s favor, we conclude that the

  record does not contain sufficient evidence to support the trial

  court’s decision to deny defendants’ motions for a directed verdict

  and for judgment notwithstanding the verdict on Hawg’s claim for

                                    19
  misappropriation of a trade secret. See Hall, 190 P.3d at 862. We

  therefore additionally conclude that the court should have granted

  those motions because no reasonable person would conclude that

  any evidence, or any reasonable inference arising from that

  evidence, had been presented that could sustain the jury’s verdict.

  See id. We therefore reverse the judgment in favor of Hawg on that

  claim.

           B.   Defendants Waived the Defense of Preemption

¶ 40   Defendants contend that the trial court erred when it denied

  their motion for judgment notwithstanding the verdict on Hawg’s

  conversion claim, which alleges that they “committed unauthorized

  acts of dominion, control, and ownership over the [sealed bearing

  pack] designs for their financial benefit.” Defendants assert that

  the Uniform Trade Secrets Act preempts claims for conversion of

  trade secrets. See § 7-74-108, C.R.S. 2016. We disagree, although

  we apply different reasoning than the trial court used. Negron v.

  Golder, 111 P.3d 538, 542 (Colo. App. 2004)(court of appeals may

  affirm on different grounds than those relied upon by trial court).

¶ 41   Under C.R.C.P. 8(c), a defendant waives all affirmative

  defenses and avoidances that do not appear in his or her answer.

                                   20
  Town of Carbondale v. GSS Props., LLC, 169 P.3d 675, 681 (Colo.

  2007); Duke v. Pickett, 168 Colo. 215, 218, 451 P.2d 288, 290

  (1969). But “an opposing party who fails to object to an untimely

  affirmative defense and instead chooses to litigate the merits of the

  defense in a summary judgment proceeding cannot raise a

  timeliness objection after the trial court has ruled on the summary

  judgment motion.” GSS Props., LLC, 169 P.3d at 679-80.

¶ 42   If a preemption defense concerns the choice of law to be

  applied by the trial court, and not whether the trial court has

  jurisdiction to hear the parties’ dispute, the defense can be waived.

  “If, as in most cases, the alleged preemption would simply alter the

  applicable substantive law governing the case, then preemption is

  waivable.” Id. at 682. Or, to put it another way, “where preemption

  changes only the law to be applied, rather than the forum applying

  it, preemption is an affirmative defense which will be waived unless

  timely raised.” Id.

¶ 43   In this case, defendants did not assert that the trial court was

  an improper forum for their defense. Instead, they simply

  contended that the substance of Hawg’s conversion claim was

  preempted by state statute. This was a preemption defense based

                                    21
  on choice of law. So we conclude that, not only could this defense

  be waived, but defendants waived it because they raised it for the

  first time in their motion for judgment notwithstanding the verdict.

  See C.R.C.P. 8(c); GSS Props., LLC, 169 P.3d at 681; Duke, 168

  Colo. at 218, 451 P.2d at 290; see also Fid. Nat’l Title Co. v. First

  Am. Title Ins. Co., 2013 COA 80, ¶ 51 (raising an issue for the first

  time in a post-trial motion is insufficient to preserve it for appeal);

  Miller v. Rowtech, LLC, 3 P.3d 492, 495 (Colo. App. 2000)(party

  waives defense that it first raises in a post-trial motion);

  Levy-Wegrzyn v. Ediger, 899 P.2d 230, 232 (Colo. App. 1994).

¶ 44   We recognize that, in the response to defendants’ motion for

  judgment notwithstanding the verdict, Hawg addressed defendants’

  preemption claim on the merits. But Hawg bracketed that

  two-paragraph discussion with two sentences. The first sentence

  stated that “[a]fter more than a year of litigation, extensive briefing

  on every topic imaginable, and motions for directed verdicts,

  [d]efendants for the first time claim that Hawg’s conversion claim is

  preempted by the Colorado Uniform Trade Secrets Act.” The last

  sentence said, “[h]owever, never before this juncture did . . .

                                     22
  [d]efendants raise any issue regarding the preemption or

  displacement of the conversion claim.”

¶ 45   We conclude that the first and last sentences of the discussion

  of the preemption claim preserved Hawg’s objection to the court

  considering that claim at such a late date in the proceedings. See

  GSS Props., LLC, 169 P.3d at 679-80. The substantive discussion of

  the issue was not Hawg’s only argument; it was simply an

  alternative argument.

          C.    Hawg Has Standing to Bring Its Claim Against
                  the Designer for Breach of Contract

¶ 46   The designer contends that the trial court erred when it

  rejected his assertion that Hawg lacks standing to bring suit against

  him for breach of contract based on his violation of a confidentiality

  agreement. He asserts that he executed the agreement with

  Mr. Gallagher and that Mr. Gallagher did not properly assign his

  rights under the agreement to Hawg. We disagree.

¶ 47   Standing is a question of law that we review de novo.

  Ainscough v. Owens, 90 P.3d 851, 856 (Colo. 2004). Contract

  interpretation and the validity of an assignment also present

  questions of law that we review de novo. Regency Realty Inv’rs, LLC

                                    23
  v. Cleary Fire Prot., Inc., 260 P.3d 1, 4 (Colo. App.

  2009)(assignment); Roberts v. Adams, 47 P.3d 690, 694 (Colo. App.

  2001)(contract interpretation).

¶ 48   C.R.C.P. 17(a) requires that every action “be prosecuted in the

  name of the real party in interest.” A plaintiff whose standing

  depends upon its status as an assignee must prove “a full and

  complete assignment of the claim from an assignor who was a real

  party in interest with respect to the claim.” Alpine Assocs., Inc. v.

  KP & R, Inc., 802 P.2d 1119, 1121 (Colo. App. 1990).

             [A]bsent some express reservation or limitation
             upon the interest transferred, or some other
             evidence of a contrary intent to be found
             within the transferring document, an
             assignment of all of an owner’s right, title, and
             interest in intangible personal property
             includes an assignment of any agreement
             respecting that property to the extent that
             such agreement benefits the transferee
             because of his or her ownership of the
             property.

  Thistle, Inc. v. Tenneco, Inc., 872 P.2d 1302, 1306 (Colo. App. 1993).

¶ 49   In Thistle, the plaintiff acquired ownership of certain

  proprietary data. The predecessor in title to the data had entered

  into agreements with the defendant that prohibited the defendant

  from transferring the data or making it available to any third

                                     24
  person. Id. at 1303. The division held that “[t]he right to control

  the persons who have access to . . . data is necessarily an incidental

  attribute of the right of ownership of that data. Indeed, without the

  right to such control, the right of ownership would be meaningless.”

  Id. at 1307.

¶ 50   In this case, the designer and the machinist entered into an

  Assignment Agreement with Mr. Gallagher in 2010. As is relevant

  to our analysis, the agreement read:

            Assignment. [The machinist] hereby transfers,
            assigns and conveys to Assignee, its
            successors and assigns, all of his right, title
            and interest in and to the [sealed bearing pack]
            [d]esigns, including prints, elaborations,
            explanations, illustrations and other
            instructional or directive material, inventions,
            improvements, techniques and any other
            materials possessed, developed, conceived or
            invented by [the designer] necessary to the
            design and operation of the [sealed bearing
            packs] (the “Protected Material”).

            ....

            Confidentiality. [The designer] shall not at any
            time use for [his] own benefit, or disclose to
            any person or entity any of the Protected
            Materials or any information related thereto
            (the “Confidential Information”).

            ....

                                    25
             General. . . . This Agreement will inure to the
             benefit of, and be binding upon the parties and
             their respective heirs, successors and assigns.

¶ 51   Mr. Gallagher entered into an Assignment and Contribution

  Agreement with Hawg in 2012. That agreement assigned “all of

  [Mr. Gallagher’s] right, title, and interest in and to the [s]eal[ed]

  [b]earing [p]ack [d]esign[]” to Hawg. The agreement did not

  specifically refer to the 2010 Assignment Agreement between

  Mr. Gallagher and the designer.

¶ 52   But the 2010 Assignment Agreement conveyed both the rights

  to the sealed bearing pack design and the right to control the

  designer’s disclosure of the design. The confidentiality clause

  benefited Mr. Gallagher because of his ownership of the design. So

  the right to control the designer’s disclosure of the design was

  necessarily an incidental attribute of the right of ownership. As a

  result, the assignment of all of Mr. Gallagher’s right, title, and

  interest in the design included an assignment of the confidentiality

  agreement. Id. at 1306.

¶ 53   We reject the designer’s contention that the confidentiality

  clause cannot be assigned. Cf. People v. Adams, 243 P.3d 256, 261

  (Colo. 2010)(Colorado law “disallows assignments involving matters

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  of personal trust and confidence”; a claim to treble damages under

  the Trust Fund Statute was not assignable because it was in the

  nature of a penalty); but see Matson v. White, 122 Colo. 79, 84, 220

  P.2d 864, 866 (1950)(contracts not involving personal skill, trust, or

  confidence are generally assignable without consent). The

  confidentiality clause did not involve matters of personal trust or

  confidence; it merely constrained the designer’s disclosure of

  information. And the 2010 Assignment Agreement expressly stated

  that it would “inure to the benefit of . . . the parties . . . and [their]

  assigns.”

¶ 54   We therefore conclude that Mr. Gallagher fully assigned his

  rights under the 2010 Assignment Agreement to Hawg. So Hawg

  had standing as the real party in interest with respect to its claim

  for breach of that agreement.

¶ 55   The judgment is reversed as to Hawg’s claim for

  misappropriation of a trade secret. We remand the case to the trial

  court to enter judgment in favor of defendants on that claim and to

  vacate the award of damages on that claim. The judgment is

  otherwise affirmed.

       JUDGE J. JONES and JUDGE HARRIS concur.

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