Wilson Aerospace LLC v. The Boeing Company Inc

Opinion

1 2 3

4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 WILSON AEROSPACE LLC, CASE NO. 2:23-cv-00847-JHC 8

Plaintiff, ORDER GRANTING MOTION FOR 9 RECONSIDERATION (DKT. # 133) v. 10 THE BOEING COMPANY INC, 11

Defendant. 12 13

14 I 15 INTRODUCTION 16 This matter comes before the Court on Plaintiff’s Motion for Reconsideration. See Dkt. # 17 133. Plaintiff Wilson Aerospace LLC contends that the Court erroneously dismissed with 18 prejudice Wilson’s misappropriation of trade secrets claim associated with the third iteration of 19 its specialty “Fluid Fitting Torque Device” (FFTD-3) under the Washington Uniform Trade 20 Secrets Act (WUTSA). See Dkt. # 132 at 15–16, 38; see generally Dkt. # 133. For the reasons 21 below, the Court GRANTS the motion. 22 23 24 1 II BACKGROUND 2 On August 1, 2024, the Court granted in part and denied in part Defendant The Boeing 3 Company’s motion to dismiss.1 See Dkt. ## 132, 120 (redacted). The Court dismissed Wilson’s 4 misappropriation of trade secrets claim related to the FFTD-3 under the Defend Trade Secrets 5 Act (DTSA)2 and, only for trade secrets included in Wilson’s FFTD-3 patent, dismissed 6 Wilson’s WUTSA claim with prejudice. Dkt. # 132 at 13–17, 38. In reaching this conclusion, 7 the Court considered whether Wilson had taken reasonable measures to protect the trade secrets 8 included in the FFTD-3 patent application. The Court concluded 9 To meet the definition of a trade secret, the DTSA and WUTSA both require the 10 owner of a trade secret to take reasonable steps to keep its information secret. See 18 U.S.C. § 1839(3)(A) (to constitute a trade secret, an owner must take “reasonable 11 measures to keep such information secret”); RCW 19.108.010(4)(b) (a trade secret “[i]s the subject of efforts that are reasonable under the circumstances to maintain 12 its secrecy”). It follows that a patent applicant’s failure to request the nonpublication of the application means that they have not taken reasonable steps 13 to maintain the confidentiality of the contents of the application. As a result, the information divulged in that application does not fit the definition of a trade secret. 14 See Foster v. Pitney Bowes Corp., 549 F. App’x 982, 989 (Fed. Cir. 2013) (finding that plaintiff had “the option of filing a nonpublication request with his provisional 15 patent application but chose not to do so” and therefore the ideas in his published patent application were not subject to “reasonable efforts” to maintain 16 confidentiality); Fleet Engineers, Inc. v. Mudguard Techs., LLC, 761 F. App’x 989, 994 (Fed. Cir. 2019) (placing information in a patent application is a failure to use 17 reasonable efforts to maintain secrecy). Here, David Wilson Jr. had the option of filing a nonpublication request in August 2014, and when he did not, he failed to 18 take reasonable steps to keep the information in the patent secret. Whether the information he chose to publish became public on a certain date is not a central 19 inquiry as to his “reasonable efforts” to maintain the confidentiality of these trade secrets. 20 Dkt. # 132 at 16. 21 22

1 This order incorporates the factual background as summarized in the Order Re: Motion to 23 Dismiss. See Dkt. # 132 at 2–5. 2 The previous order has a typographical error as to the “DTSA” acronym. See Dkt. # 132 at 13 24 (“Defense Technology Security Administration”). 1 Based on the above reasoning, the Court dismissed with prejudice the remaining 2 trade secret misappropriation claims under WUTSA that were contained within Wilson’s 3 August 2014 FFTD-3 provisional patent application. See id. at 38. Wilson now moves

4 the Court to reconsider this dismissal. Dkt. # 133. 5 III 6 DISCUSSION 7 Wilson requests that the Court reconsider its order “only with respect to its FFTD-3 trade 8 secret claims arising under WUTSA that were dismissed with prejudice and provide Wilson 9 leave to replead said claims[.]” Dkt. # 133 at 2. Wilson contends that the Court erred when it 10 concluded that Wilson failed to take reasonable measures to protect trade secrets contained in its 11 patent application because the Court should not have relied on two factually distinguishable 12 cases: Foster v. Pitney Bowes Corp., 549 F. App’x 982 (Fed. Cir. 2013) and Fleet Engineers, 13 Inc. v. Mudguard Techs., LLC, 761 F. App’x 989 (Fed. Cir. 2019). Wilson says that these 14 authorities are inapt because in those cases “the acts constituting misappropriation were alleged 15 to have occurred after the subject patent application was published, whereas here, Wilson has 16 alleged the trade secret misappropriation commenced in 2014, which predates the time in which 17 Wilson’s patent applications became publicly accessible.” Dkt. # 133 at 5 (emphasis in original) 18 (citing Dkt. # 102 at 24–25 ¶¶ 100–104). 19 Wilson contends that it filed its August 2014 FFTD-3 provisional patent with no 20 expectation of immediate publication, relying on the applicable regulations and statutes, which 21 provide that a provisional patent application becomes publicly available through the publication 22 of a subsequent non-provisional patent. Id. at 6 (citing 35 U.S.C. § 122(b)(2)(A)(iii); 37 C.F.R. § 23 1.14(a)(1)(iv); ICU Med., Inc. v. B. Braun Med., Inc., 224 F.R.D. 461, 462 (N.D. Cal. 2002)). 24 1 According to Wilson, “[g]iven the expectation that a provisional patent application would not be 2 published, and that a typical non-provisional patent application will not publish until 18 months 3 from the earliest filing date for which a benefit is sought, Wilson demonstrated reasonable efforts

4 by obtaining a confidentiality agreement in the 2014 PIA[.]” Id. at 7 (emphasis in original). 5 Wilson states that the information in its FFTD-3 provisional and non-provisional patent 6 applications remained confidential until March 2, 2017, when its non-provisional patent 7 application was published. Id. at 3 (citing 35 U.S.C. § 122(a), (b)(1)(A), (b)(2)(A)(iii)). Still, 8 Wilson concedes that its “trade secrets enjoyed under the 2014 PIA, up to the date of publication 9 of its non-provisional patent application, necessarily forbade Boeing from misappropriating said 10 trade secrets during that same time period.” Id. at 4 (emphasis in original). 11 Boeing takes issues with Wilson’s assessment of Foster and Fleet Engineers. Dkt. # 135 12 at 7–9. It contends that these two cases focus on the fact that alleged trade secret related

13 information was placed in a patent application when filed and “gave no indication that the timing 14 of the publication would make any difference.” Id. at 9. 15 The parties agree that once information is placed in the public domain via a published 16 patent it is no longer a trade secret because it is not “subject of efforts that are reasonable under 17 the circumstances to maintain its secrecy.” See RCW 19.108.010(4)(b); Dkt. # 133 at 4; see 18 generally Dkt. # 135. The parties disagree, however, as to whether the information in a patent 19 application loses its designation as a trade secret upon the filing of a provisional patent 20 application or upon the publishing of the related non-provisional patent. Wilson asserts that its 21 “WUTSA claims related to the FFTD-3 trade secrets are actionable up to the March 2, 2017 22 publication date” of the non-provisional patent application, while Boeing contends that Wilson’s

23 claims are actionable until August 28, 2014, the date on which Wilson filed its provisional patent 24 1 application and failed to request non-publication of that application. See Dkt. # 133 at 5; Dkt. # 2 135 at 6. 3 Upon further review, the Court agrees with Wilson. In Foster, inventor Frederick Foster

4 filed a provisional patent application in early May 2007, which detailed his concept for a virtual 5 post office box. 549 F. App’x at 984. A year later, on May 30, 2008, Foster filed a related non- 6 provisional patent application. Id. After filing his patent application, Foster began to discuss his 7 concept with the United States Postal Service (USPS) and then in September 2009—long after 8 the United States Patent and Trademark Office (USPTO) had published Foster’s non-provisional 9 patent application—Foster contacted the President of Postal Relations at Pitney Bowes regarding 10 his patented idea. Id. In early 2011, Pitney Bowes launched a website related to Foster’s 11 patented concept and Foster sued Pitney Bowes, USPS, and other John Doe defendants for trade 12 secret misappropriation.

13 Pitney Bowes moved to dismiss Foster’s misappropriation of trade secret claims under 14 Federal Rule of Civil Procedure 12(c). Id. at 985. The district court noted that Foster’s patent 15 application became public on December 4, 2008, and that “[w]hen the patent application was 16 published, it became a matter of public record” and the trade secrets contained in it were 17 “available to anyone who reviewed the application.” Foster v. Pitney Bowes Corp., No. CIV.A. 18 11-7303, 2013 WL 487196, at *6 (E.D. Pa. Feb. 8, 2013), supplemented, No. CIV.A. 11-7303, 19 2013 WL 1500683 (E.D. Pa. Apr. 12, 2013). The court concluded that Foster’s failure to prevent 20 publication meant that he failed to take reasonable steps to maintain the secrecy of his virtual 21 mailbox concept; when the USPTO published his application on December 4, 2008, the patent’s 22

23 24 1 contents lost its designation as a trade secret because it became “readily ascertainable by proper 2 means.” Id. at *7.3 3 The Federal Circuit affirmed this ruling. See Foster, 549 F. App’x at 989 (“The court 4 correctly pointed out that Mr. Foster had had the option of filing a nonpublication request with 5 his provisional patent application but chose not to do so, and that the ideas in his published 6 patent application therefore were not subject to reasonable efforts to maintain confidentiality.” 7 (emphasis added)). 8 In Fleet Engineers, defendant Tarun Surti appealed the dismissal of his misappropriation 9 of trade secrets counterclaim. Surti was the president of Mudguard Technologies and inventor of 10 a special mudflap that prevented the spray from a wheel of a vehicle on a wet roadway. 761 F. 11 App’x at 990. In July 2010, Mudguard and Fleet Engineers, a company that sells after-market 12 automobile products, entered into a distribution agreement for Surti’s mudflap. Id. A few

13 months later, this agreement was terminated, and on March 3, 2011, Surti’s non-provisional 14 mudflap patent application was published; in February 2012, Fleet Engineers released its own 15 “Aeroflap” mudflap product. Id. at 990, 994. A few months later, in April 2012, the USPTO 16 issued Surti a mudflap patent and Surti contacted counsel, claiming that the Aeroflap infringed 17 the claims of his own patent. Id. at 991. Fleet Engineers moved for a declaratory judgment of 18 noninfringement, along with other claims, and Surti responded with counterclaims for patent 19 infringement, breach of contract, and misappropriation of trade secrets. Id. The district court 20 granted summary judgment, determining that Fleet Engineers did not misappropriate Surti’s 21 trade secrets. Id. The Federal Circuit affirmed, holding in pertinent part, that any information 22

23 3 In Foster, the Eastern District of Pennsylvania and the Federal Circuit applied Pennsylvania trade secrets law, which is virtually identical to the Washington law applicable here. Compare RCW 24 19.108.010(4), with 12 Pa. Stat. and Consol. Stat. Ann. § 5302. 1 disclosed in a published patent application could not be considered a trade secret because that 2 information was not subject to “efforts that are reasonable under the circumstances” to maintain 3 its secrecy. Id. at *994.4 4 In both Foster and Fleet Engineers, the trade secret misappropriation allegations related 5 to events that occurred after the non-provisional patent applications in question had been 6 published. But here, Wilson alleges that Boeing engaged in misappropriation of trade secrets 7 before its FFTD-3 non-provisional patent application was published on March 2, 2017. 8 Although the Court relied on the broad language gleaned from Foster and Fleet Engineers in its 9 previous order, see Dkt. # 132 at 16, it now notes that neither case deals with misappropriation of 10 trade secret allegations that occurred after the filing of a provisional patent application, but 11 before information in its related non-provisional filing was made publicly accessible by USPTO 12 publication. Considering that Washington law requires a trade secret to be the subject of efforts

13 that “are reasonable under the circumstances to maintain its secrecy[,]” RCW 19.108.010(4)(b) 14 (emphasis added), and the contents of a patent application are kept confidential until publication, 15 see 35 U.S.C. § 122(a), (b)(1)(A), (b)(2)(A)(iii), it follows that the contents of the FFTD-3 16 provisional and non-provisional patent applications were subject to reasonable efforts under the 17 circumstances to maintain their secrecy up until March 2, 2017—the date of the non-provisional 18 patent application’s publication—and not when Wilson filed its initial provisional patent 19 application. 20 21 22

23 4 In Fleet Engineers, the Federal Circuit applied Michigan law, which resembles the Washington trade secrets law applicable here. Compare RCW 19.108.010(4), with Mich. Comp. Laws § 24 455.1902(d)(ii). l Therefore, Wilson’s motion for reconsideration is well taken. Wilson stated a claim for 2 acts of trade secret misappropriation as to the FFTD-3 alleged to have occurred before March 2, 3 2017, the date of the Wilson’s FFTD-3 non-provisional patent application publication. 4 IV 5 CONCLUSION

6 For these reasons, the Court GRANTS Wilson’s motion for reconsideration.

7 Accordingly, the Court VACATES its previous dismissal of Wilson’s claim of misappropriation g of FFTD-3 trade secrets under WUTSA. See Dkt. # 132 at 16, 38. The Court GRANTS Wilson

9 leave until September 18, 2024, to file a third amended complaint and replead this claim; such

10 leave is limited to the cause of action discussed above.

ll Dated this 4th day of September, 2024. CJob 4. Chur 12 John H. Chun 13 United States District Judge 14 15 16 17 18 19 20 21 22 23 24 ORDER GRANTING MOTION FOR