Court Opinion

ID: 9725939
Source: CourtListenerOpinion
Date Created: 2023-08-26 12:21:51.209064+00
Date Added: 2024-06-11T18:25:21.647859
License: Public Domain

BAILEY, J.,
concurring.
I concur in the result reached by the majority, but write separately to express my agreement with Fabri-Tech’s characterization of the trial court’s determination that the costing information constituted a trade secret as “questionable.” As Fabri-Tech notes in a footnote in its Brief, Fa-bri-Tech argued below that the costing information was not a trade secret because it was readily available from other sources. The trial court, however, disagreed. While Fabri-Tech calls this ruling “questionable,” Fabri-Tech, as our opinion correctly recognizes, does not challenge it upon appeal. Indeed, Fabri-Tech expressly states that “the evidence supports the finding that the only trade secret at issue here is the costing information.... ” (Fabri Tech’s Brief at 30.) I believe the issue warranted further examination.
As our opinion notes, a trade secret is information that “derives economic value ... from not being generally known to, and not being readily ascertainable by proper means by, other persons.... ” Ind. Code § 24-2-3-2. As our supreme court recognized in Amoco Production Co. v. Laird, 622 N.E.2d 912, 915-916 (Ind.1993), the term “trade secret” is extraordinarily difficult to define, and the Indiana Uniform Trade Secrets Act’s phrase “not being readily ascertainable by proper means” is ambiguous. In Amoco, the court attempted to resolve some of this ambiguity by holding that “where the duplication or acquisition of alleged trade secret information requires a substantial investment of time, expense, or effort, such information may be found ‘not being readily ascertainable’ so as to qualify for protection under the Indiana Uniform Trade Secrets Act.’ ” Id. at 919. Moreover, because trade secrets may often be comprised of elements that by themselves may be in the public domain but which, in unique combination, afford competitive advantage, “ ‘the effort of compiling useful information is, of itself, entitled to protection even if the information is otherwise generally known.’ ” Id. at 920 (quoting ISC Bunker Ramo Corp. v. Altech, Inc., 765 F.Supp. 1310, 1322 (N.D.Ill.1990)).
The facts of the Amoco case are instructive here. In that case, the Amoco Production Company (“Amoco”) assembled a team of experts to determine the potential for oil exploration in parts of Indiana, Ohio and Michigan. The team reviewed both publicly available information from the United States Geologic Survey as well as confidential information. The team then conducted microwave radar testing with over flying aircraft to detect micro-emissions associated with concentrations of underground hydrocarbons at potential sites, at a cost of $150,000. The resulting data was used to create survey maps. Further evaluation and analysis indicated some of the targeted areas would not produce sufficient quantities of oil to warrant further exploration, so development of those sites was deferred. One of the team members was disappointed at the deferral, and turned over information regarding the location of the targeted areas to another person who proceeded to secure oil and gas exploration leases for the areas in *1158question. Amoco then overruled its previous deferral, and soon learned that its work product had been divulged. In the ensuing action, the team member argued that the information passed to the third party was not a trade secret because it could have been developed by means outside of Amoco’s operations. The Indiana Supreme Court disagreed, noting that while each particular element of Amoco’s work could have been duplicated by others with publicly available information and technology, Amoco had spent considerable time, effort and money combining those elements in a unique way to develop its oil field exploration information. 622 N.E.2d at 920.
The Amoco case clearly is at one end of the trade secret spectrum in terms of time, effort and expense, and I do not think that all trade secrets must be so difficult and expensive to obtain. The costing information involved in this case, however, appears to have been developed with such moderate levels of time, effort and expense that the characterization of the information as a trade secret must be regarded as questionable. To develop the costing information, Quandt simply visited stores to learn which companies produced items with webbing or strapping components, obtained samples or specifications sheets from those companies with a simple telephone call, and developed a cost summary (including information about labor costs, material costs and markup) to prepare price quotes for the companies. The rudimentary nature of this process probably explains the fact that Quandt was never asked to sign a non-compete agreement, the absence of which would have been known by Infinity through its pre-purchase due diligence. In any event, I do not believe that Quandt’s use of a telephone and his performance of simple mathematics involved the kind of time, effort and expense required to deem the costing information, and the process by which it was obtained, “not ... readily ascertainable by proper means.... ”
Unfortunately, we may not reach the question because no party raises it upon appeal, and we may not raise issues in a civil appeal sua sponte. Daly v. Nau, 167 Ind.App. 541, 339 N.E.2d 71, 77 (1975). Because no one has challenged the trial court’s determination that the costing information constituted a trade secret, I must concur.