Cargill, Inc. v. Sears Petroleum & Transport Corp.

388 F. Supp. 2d 37, 2005 U.S. Dist. LEXIS 27087, 2005 WL 2043996
District Court, N.D. New York·Decided August 25, 2005·No. 5:03-CV-0530 (DEP)·Published·Cited by 14 cases

Opinion

DECISION AND ORDER

PEEBLES, United States Magistrate Judge.

This action arises out of a commercial dispute between Cargill, Inc. (“Cargill”), a Delaware corporation with a principal place of business in Wayzata, Minnesota and engaged principally in the manufacture and sale of agricultural, food, and industrial products and services, and defendant Sears Petroleum & Transport Corporation (“Sears Petroleum”) and its affiliate, Sears Ecological Applications Co., LLC (“SEACO”) (collectively “Sears”), both headquartered in Upstate New York and historically operating in the gasoline and industrial fuel industry, though with relatively recent efforts toward expansion into the commercial de-icing market. Central to the dispute is a patent, issued in October of 2001 and assigned to Sears Petroleum, as well as the commercial deicing invention which it teaches. At trial Sears claimed, and the jury found, that after meeting with Sears representatives to discuss the prospect of a joint venture for the development and sale of a commercial de-icing product, utilizing Sears’ technology and Cargill’s dominant position in the industry and access to rock salt from its mines, Cargill employees misappropriated trade secret information divulged during the session by Sears concerning its new, innovative liquid de-icer, and thereafter developed and marketed a pre-treated rock salt de-icing product utilizing, as an ingredient, a liquid formulation derived from Sears’ formulation, thereby infringing the claims set forth in its later-acquired patent.

In the wake of the entry of judgment based upon the jury’s verdict and certain additional findings by the court, both sides have filed post-trial motions seeking various relief. Because I find no basis to disturb either the jury’s findings or my rulings prior to, during and following the trial, -the several cross-motions seeking judgment as a matter of law (“JMOL”) notwithstanding the jury’s verdict and/or a new trial are denied. In light of my finding that this represents an exceptional case, however, I am granting Sears’ application for an award of attorney fees and nontaxable costs. 1

I. BACKGROUND

The factual circumstances surrounding the parties’ claims and defenses in this action were addressed in detail in several decisions, familiarity with which is presumed, rendered earlier in this action, including Cargill, Inc. v. Sears Petroleum & Transport Corp., 334 F.Supp.2d 197 (N.D.N.Y.2004). I will recount only so much of the background as is necessary to provide context to my rulings, including with regard to the judgment which was entered.

In or prior to 1998 David Wood, an officer and employee of defendant Sears Petroleum, set out to explore development of an improved de-icing agent which would minimize or eliminate some of the inherently undesirable traits associated with then-existing formulations, including the presence of high molecular weight organic *46 materials, phosphorus compounds and heavy metals, as well as difficulties associated with stratification during storage and the plugging of filters and nozzles resulting from product inconsistencies. To assist in the formulation of an improved deicing agent, Sears engaged the services of Robert A. Hartley, a Canadian chemist.

In December of 1998, inventors Wood and Hartley received test results from Bo-dyCote Ortech, Inc. (“BodyCote”), a Canadian laboratory retained to perform various analyses associated with their efforts, disclosing a synergistic freezing point depressive effect experienced by combining low molecular weight carbohydrates and magnesium chloride. Inventors Wood and Hartley followed this discovery with the filing of a utility patent application on January 4, 1999, and later a continuation-in-part (“CIP”) application on January 5, 2001, ultimately leading to the issuance on October 9, 2001 of United States Patent No. 6,299,793 (the ’793 patent) to inventors Wood and Hartley, and assignment of that patent to Sears Petroleum. 2

On July 29, 1999 a meeting was held in Rome, New York, where Sears Petroleum maintains its offices, between representatives of Sears, including David Wood, and Cargill, a leading commercial producer of rock salt. The purpose of that meeting was to explore the formation of a joint business relationship between the two companies to operate in the de-icing arena. Following that session, which was relatively brief, the parties met again on August 25, 1999 at Cargill’s offices in North Olmsted, Ohio to continue their discussions regarding the prospects of a joint business relationship. Prior to that second meeting, which was considerably lengthier than the earlier one, the parties entered into a written confidentiality agreement drafted by Cargill representatives, and intended to govern the exchange of information during those talks and protect the integrity of any confidential information disclosed by either of the parties.

Shortly after the 1999 meetings, Cargill began researching the use of cane molasses, a source of low molecular weight carbohydrates discussed by Wood with Car-gill representatives at the second session, as a liquid de-icing agent ingredient. These newly directed exploration efforts led to Cargill’s development of a product line bearing the ClearLane label including, inter alia, ClearLane Treated Salt and ClearLane PNS Treated Salt, two de-icers manufactured utilizing a liquid comprised of cane molasses, magnesium chloride, and other constituents as a pre-wetting agent to be sprayed onto rock salt prior to its application upon roadways and other surfaces where ice may form, in order to reduce scatter and enhance the salt’s ice melting capability. Cargill began selling the ClearLane Treated Salt products in October of 2000, and since then has experienced a significant rise in the sales of those products, to a point where in its fiscal year ending May 31, 2004 it sold 318, 140 tons of the treated salt, as compared to the 22,957 tons marketed in the first year after introduction of the new product.

II. PROCEDURAL HISTORY

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Cargill, Inc. v. Sears Petroleum & Transport Corp., 388 F. Supp. 2d 37, 2005 U.S. Dist. LEXIS 27087, 2005 WL 2043996 (N.D.N.Y. 2005).

388 F. Supp. 2d 37 (Cargill, Inc. v. Sears Petroleum & Transport Corp.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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