BondPro Corp. v. Siemens Westinghouse Power Corp.

320 F. Supp. 2d 804, 71 U.S.P.Q. 2d (BNA) 1051, 2004 U.S. Dist. LEXIS 10157, 2004 WL 1234103
CourtDistrict Court, W.D. Wisconsin
DecidedMay 28, 2004
Docket04-C-0026-C
StatusPublished
Cited by3 cases

This text of 320 F. Supp. 2d 804 (BondPro Corp. v. Siemens Westinghouse Power Corp.) is published on Counsel Stack Legal Research, covering District Court, W.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
BondPro Corp. v. Siemens Westinghouse Power Corp., 320 F. Supp. 2d 804, 71 U.S.P.Q. 2d (BNA) 1051, 2004 U.S. Dist. LEXIS 10157, 2004 WL 1234103 (W.D. Wis. 2004).

Opinion

OPINION AND ORDER

CRABB, District Judge.

This is a civil action in which plaintiff BondPro Corporation is suing defendant Siemens Westinghouse Power Corporation for the alleged misappropriation of trade secrets. Plaintiff brought the action in the Circuit Court for St. Croix County, Wisconsin; defendant removed it to this court. Jurisdiction is present. The parties are citizens of different states and more than $75,000 is in controversy. The case is before the court on defendant’s motion to dismiss the case for plaintiffs failure to state a claim on which relief may be granted.

Plaintiff set out seven claims against defendant in its complaint, but withdrew count three in its brief in response to defendant’s motion. I find that two of the claims are sufficient to state a claim; the remaining four will be dismissed.

ALLEGATIONS OF FACT

Plaintiff BondPro Corporation is a Wisconsin corporation with its principal place of business in Hudson, Wisconsin. It specializes in the design and manufacture of industrial adhesives and composites. Defendant Siemens Westinghouse Power Corporation is a Delaware corporation with its principal place of business in Orlando, Florida.

In 1994, defendant talked to plaintiff about purchasing adhesive products and services, primarily for products associated with defendant’s generator rotors. In March 2000, one of plaintiffs employees, Scott Wang, developed a new method of manufacturing “slot cell insulation” for industrial rotors. (Slot cells are U-shaped slots or channels in a metal rotor body. Slot cell insulation electrically insulates rotor windings from the rotor body.) He reduced the concept to practice. On or about March 31, 2000, plaintiff created a “male mold” to manufacture sales samples implementing its new slot cell insulation concept.

On or about March 12, 2001, Wang informed defendant’s manager of generator rotor engineering that plaintiff could produce slot cell insulation by a proprietary method. About three days later, defendant’s employee Mark Miller asked Wang for details, which Wang refused to disclose on the ground that the method was plaintiffs property, confidential and being treated as a trade secret.

On March 20, 2001, Wang documented his conception and reduction to practice activity to date on an Invention Disclosure form provided him by his attorneys.

On May 12, 2001, defendant issued a purchase order for work identified as “slot cell mold tool/new process dev” for $2000, “test rotor slot cells” for $3840 and “test charges on raw material” for $1000. The back of the purchase order contained “general terms and conditions,” stating in pertinent part:

13. INTELLECTUAL PROPERTY
A. Seller agrees to make prompt and complete disclosure to Buyer of all inventions and disclosures made or conceived as a result of Work performed under the Purchase Agreement. Seller agrees to keep necessary records supporting such inventions and discoveries and will furnish buyer upon request all such records.
B. Any invention, discovery, proprietary information, maskwork, software, system, data or report, resulting from the Work performed under the Purchase Agreement shall be the sole property of Buyer. All patents, copyrights, trade secrets, trademarks, maskworks or oth *806 er intellectual property resulting from work under the Purchase Agreement shall be property of Buyer. Buyer shall have the full right to use such property in any manner without any claim on the part of Seller and without any duty to account to Seller for such use. Seller agrees to assign to Buyer any patent or patent application resulting from Work performed under the Purchase Agreement, and to provide reasonable support for Buyer’s prosecution of such patent application.
C. The parties agree that any original work of authorship created under the Purchase Agreement is a work made for hire for purposes of copyright ownership. To whatever extent Seller has any interest in any original work or authorship created under the Purchase Agreement, Seller agrees to assign and hereby assigns its entire interest in such work to Buyer, including all rights to derivative works.

Plaintiff did not intend to transfer intellectual property rights to its method. When Wang tried to question Kevin Hazel (defendant’s generator components manager) about the terms and conditions of the purchase order, Hazel acknowledged that plaintiff owned the slot cell manufacturing method.

Wang reduced to practice the method for manufacturing slot cell insulation no later than July 15, 2001, by using the male mold and other steps to manufacture slot cell insulation. On July 15, 2001, plaintiff shipped defendant a sample of slot cell insulation made using the method of the invention. In September 2001, Wang met with Hazel to discuss the parties’ business relationship. Wang discussed intellectual property concerns and disclosed several documents that were marked as “proprietary” and contained plaintiffs trade secrets. At some time before January 2002, defendant’s employee Miller asked plaintiff for bribes for continued business with defendant. Plaintiff refused the request.

In early 2002, defendant’s employees gave plaintiff poor quality ratings and low delivery scores in retaliation for plaintiffs complaints to defendant about the parties’ business relationship, including Miller’s attempt to obtain bribes from plaintiff.

On May 31, 2002, defendant filed a United States patent application entitled Method of Making Slot Cell Insulation. The application discloses and claims plaintiffs invention but names Miller as the inventor. The application is pending.

During the course of the parties’ relationship, plaintiff provided defendant documentation about its method on the understanding that it was trade secret material, stamped “proprietary statement.” Without obtaining plaintiffs permission, defendant disclosed the information to its suppliers as part of its purchasing design specifications. Defendant never told plaintiff it had made this information available to others.

In addition to stealing the trade secrets relating to slot cells, defendant has committed fraud on the United States Patent and Trademark Office by filing patent applications on at least two other trade secrets belonging to plaintiff.

OPINION

A. Count One: Violation of Wisconsin’s Trade Secrets Act

Defendant contends that plaintiff has failed to state a claim in count one, alleging a violation of the state trade secrets act, because plaintiff has not identified the trade secrets that it says were misappropriated. Defendant’s contention is not well founded. A reading of the entire complaint makes it clear that plaintiff considers its manufacturing process for slot cell insulation to be a trade secret and *807 that this label applies to the documentation that plaintiff provided defendant about the process. This is enough information to allow defendant to frame an answer. If defendant needs more specificity, it can obtain it through discovery.

B.Coimt Two: Commercial Disparagement

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
320 F. Supp. 2d 804, 71 U.S.P.Q. 2d (BNA) 1051, 2004 U.S. Dist. LEXIS 10157, 2004 WL 1234103, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bondpro-corp-v-siemens-westinghouse-power-corp-wiwd-2004.