Dsm Dyneema, LLC v. Thagard

2014 NCBC 50
North Carolina Business Court·Decided October 17, 2014·No. 13-CVS-1686·Published·Cited by 1 cases

Opinion

DSM Dyneema,LLC v. Thagard, 2014 NCBC 50.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION

GASTON COUNTY 13 CVS 1686

DSM DYNEEMA, LLC, Plaintiff,

v.

JAMES THAGARD, Ph.D.; ORDER AND OPINION HONEYWELL SPECIALTY MATERIALS, LLC; HONEYWELL ADVANCED COMPOSITES, INC.;

and HONEYWELL INTERNATIONAL, INC.,

Defendants.

{1} THIS MATTER is before the Court upon Defendants Honeywell Specialty Materials, LLC, Honeywell Advanced Composites, Inc., and Honeywell International, Inc.’s (collectively, the “Honeywell Defendants”) Motion for Protective Order (the “Motion for Protective Order”) and Plaintiff DSM Dyneema, LLC’s (“Plaintiff”) Motion to Compel Responses to Requests for Production (the “Motion to Compel”). After review of the Motions, briefs in support of and in opposition to the Motions, and the arguments of counsel at a hearing held on October 1, 2014, the Court GRANTS in part the Honeywell Defendants’ Motion for Protective Order and DENIES Plaintiff’s Motion to Compel, each with the right to renew as specifically provided below.

McCullough Ginsberg Montano & Partners LLP by Theodore McCullough and C.

Dino Haloulos, and Bell, Davis & Pitt, P.A. by Edward B. Davis and Kevin G.

Williams for Plaintiff DSM Dyneema, LLC.

Kirkland & Ellis LLP by Craig S. Primis and Daniel A. Bress, and Erwin, Bishop, Capitano & Moss, P.A. by Joseph W. Moss, Jr., and Lex M. Erwin for

Defendants Honeywell Specialty Materials, LLC, Honeywell Advanced Composites, Inc. and Honeywell International, Incorporated.

Bledsoe, Judge.

I.

INTRODUCTION

{2} This case involves Plaintiff’s claims arising out of Defendants’ alleged misappropriation of Plaintiff’s trade secrets. The issue for decision on the Motions is whether Plaintiff has identified the trade secret information it claims has been misappropriated with sufficient particularity at this stage of the litigation to entitle Plaintiff to discovery of the Honeywell Defendants’ confidential information and trade secrets.

{3} The Honeywell Defendants contend that Plaintiff has not met its burden and, as a result, have moved for a protective order requiring Plaintiff to identify its trade secrets with greater particularity before the Honeywell Defendants are required to respond to Plaintiff’s requests for production and disclose their confidential information and trade secrets. Plaintiff contends that it has identified the misappropriated trade secrets with the sufficient particularity required under applicable North Carolina law and moves for an order compelling the Honeywell Defendants to respond to Plaintiff’s requests for production without further delay.1

1 The parties’ fact discovery deadline is currently set to expire on October 31, 2014.

II.

FACTUAL BACKGROUND

{4} Plaintiff and the Honeywell Defendants are competitors in the ballistic performance material production industry and have historically competed for United States Department of Defense contracts involving the development of fibers used in enhanced combat helmets (“ECH”). Plaintiff specifically developed its ECH designs for use in combat helmets manufactured by Ceradyne, Inc. (“Ceradyne”).

{5} In 2010, the Honeywell Defendants hired Defendant Dr. James Thagard, Plaintiff’s former chief scientist and technical leader who had previously overseen Plaintiff’s ECH program. In February 2013, Ceradyne ended its relationship with Plaintiff and awarded an ECH contract to the Honeywell Defendants.

{6} Thereafter, on August 2, 2013, Plaintiff filed its Amended Complaint in Gaston County Superior Court, asserting claims against the Honeywell Defendants and/or Defendant Thagard for misappropriation of trade secrets, tortious interference with existing and prospective business relations, tortious interference with contract, conversion, breach of fiduciary duty, breach of contract, unjust enrichment, and unfair and deceptive trade practices under N.C.G.S. § 75-1.1.

{7} Plaintiff identified its trade secret material in its Amended Complaint as follows:

[d]uring the course of his employment with DSM, Thagard was exposed to confidential and proprietary business information, trade secrets, and know-how of DSM, including, but not limited to, technical information and formulas, proprietary product development information and technical know-how regarding the Dyneema HB80 UHMWPE material and regarding the incorporation of Dyneema HB80 into helmets for optimal performance, proprietary development tools, proprietary software applications, design details, product design and application (including, but not limited to, resin types, matrix characteristics, fiber properties, number of plies, air content, stiffness, and aging), processing know-how, manufacturing know-how (including, but not limited to, creep forming, vacuum processing, deep draw, optimal temperature and pressure, and adhesives), matrix stiffness, ratio of resin to fiber, interlaminar strength, areal density, elasticity, flexural properties, tenacity, matrix interface, role of coefficient of thermal expansion, prevention of delamination and other deformation, test methods and results, marketing and sales strategies and practices, pricing and contractual details for customers, customer profits, business costing data, customer correspondence, business plans, area plans, license reviews, proposed applications, meeting minutes, marketing data, customer lists, prospect lists, competitive bid information, employee lists, and internal strengths and weaknesses, among other information (the “Trade Secrets”). DSM’s Trade Secrets also include the results of DSM’s resin and materials testing program, which include the optimal number of filaments per ply to increase performance, optimal resin types, proprietary information and technical know-how regarding optimal temperature, and proprietary information and technical know-how regarding effective pressure.

DSM’s Trade Secrets were developed, used, and expanded while Thagard oversaw DSM’s ECH Project and the development of DSM’s ECH product.

(Pl.’s Compl. ¶ 14; Pl.’s Br. Supp. Mot. Compel, p. 3–4.)

{8} In response to the Honeywell Defendants’ First Set of Interrogatories, Plaintiff provided a further narrative and a more specific description of its trade secret information as follows:

From ECH project inception to 2013, the areas of know-how that DSM shared and that are alleged to have been incorporated into, and/or to have advanced, the current ECH helmet design include, at a minimum:

1. Resin (matrix) types: their characteristics and suitability for new ballistic materials 2. Adhesives used in helmet manufacture 3. Fiber characteristics of ballistic material, as they relate to ECH production issues

4. Number of plies of UD board to be used in new ballistic materials 5. Air content of the helmet shell and its relation to ballistic performance

6. Aging of the helmet shell and its relation to air content and ballistic performance 7. Air content of plies of UD board: effect on ballistic performance

8. Air content of pressed panels: effect on ballistic performance

9. Interlaminar shear strength of a “resin-starved” system 10. Coefficient of thermal expansion of materials 11. Hardness of materials, as related to blunt trauma protection

12. Stiffness of materials, as related to blunt trauma protection and back-face deformation 13. Aging of the materials: effect on material stability 14. Ways in which manufacturing process variables were adjusted to increase helmet performance:

a. Optimal temperature range for helmet processing

b. Maximum temperature for helmet processing c. Pressure amount used for helmet processing d. Pressure type used for helmet processing e. Vacuum process technique used for helmet processing to increase helmet performance f. Combined effect of vacuum process technique and aging

g. “Deep draw” technique used for helmet processing

h. “Creep forming” technique used for helmet processing

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Dsm Dyneema, LLC v. Thagard, 2014 NCBC 50 (N.C. Super. Ct. 2014).

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