International Mezzo Technologies, Inc. v. Frontline Aerospace, Inc. et al

Filing 108

RULING denying 81 Motion for Summary Judgment. Signed by Magistrate Judge Stephen C. Riedlinger on 9/27/2011. (JDL)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF LOUISIANA

INTERNATIONAL MEZZO TECHNOLOGIES,
INC.

CIVIL ACTION

VERSUS

NUMBER 10-397-SCR

FRONTLINE AEROSPACE, INC., ET AL
RULING ON DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
Before the court is Defendants’ Motion for Summary Judgment.
Record document number 81.

The motion is opposed.1

Plaintiff International Mezzo Technologies, Inc. filed this
action seeking damages resulting from the alleged misappropriation
of certain designs and drawings by defendants Frontline Aerospace,
Inc. and Ryan Wood of a heat recuperator device used in aircraft
engines.

Plaintiff alleged that defendants used these designs and

drawings to obtain U.S. Patent No. 7,775,031 (‘031 Patent) and
violated terms of a nondisclosure agreement (“NDA”).
Defendants sought summary judgment dismissing the plaintiff’s
claims because the plaintiff did not own the technology at issue.
Defendants argued that evidence shows the technology was developed
while the plaintiff’s president, Dr. Kevin Kelly, was employed at
Louisiana State University (“LSU”) and that LSU regulations provide
that it is the owner of all technology or concepts of any type

1

Record document number 93.
Record document number 107.

Defendants’ filed a reply brief.

developed by university employees.

Thus, because the plaintiff is

not the rightful owner of the technology, defendants argued, it has
no

legal

right

to

assert

claims

based

on

ownership

of

the

technology.
Defendants also argued there was no valid NDA in effect at the
time the alleged trade secrets were disclosed.

Specifically, the

defendants argued that the NDA had not been properly executed when
the plaintiff sent the PowerPoint presentation, Design Report, and
Quotation – which are the documents that contained the alleged
trade secrets and/or confidential information – to the defendants.
Defendants argued evidence shows that while the parties exchanged
correspondence from January 2008 to April 2008 regarding the terms
of the NDA, the parties never actually entered into a binding NDA.
In the alternative, the defendants sought dismissal of the
plaintiff’s claim for theft of a trade secret.

Defendants argued

the plaintiff failed to show it disclosed to the defendants any of
the trade secrets identified in its discovery responses.

Without

evidence of a disclosure, defendants argued, the plaintiff cannot
show that a trade secret was misappropriated.
that

the

plaintiff’s

corporate

Defendants noted

representative

specifically

testified that it did not disclose to the defendants any of the six
alleged trade secrets identified during discovery.

Defendants

argued that any other technology concepts claimed by the plaintiff
were either too general to support its theft of a trade secret

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claim or were within the public domain.
Finally, the defendants argued the plaintiff lacks evidence to
support a claim for monetary damages.

Defendants noted that the

plaintiff failed to explain its basis for the damages identified in
its discovery responses.
Applicable Law
Summary judgment is only proper when the moving party, in a
properly supported motion, demonstrates that there is no genuine
issue of material fact and that the party is entitled to judgment
as a matter of law.

Rule 56(a), Fed.R.Civ.P.; Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 2510 (1986).

If

the moving party carries its burden under Rule 56(c), the opposing
party must direct the court’s attention to specific evidence in the
record which demonstrates that it can satisfy a reasonable jury
that it is entitled to verdict in its favor.
252, 106 S.Ct. at 2512.
metaphysical

doubt

as

Anderson, 477 U.S. at

This burden is not satisfied by some
to

the

material

facts,

conclusory

allegations, unsubstantiated assertions or only a scintilla of
evidence.
1994).

Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir.

In resolving the motion the court must review all the

evidence and the record taken as a whole in the light most
favorable to the party opposing the motion, and draw all reasonable
inferences in that party’s favor.
S.Ct. at 2513.

Anderson, 477 U.S. at 255, 106

The court may not make credibility findings, weigh
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the evidence or resolve factual disputes.

Id.; International

Shortstop, Inc. v. Rally’s, Inc., 939 F.2d 1257, 1263 (5th Cir.
1991), cert. denied, 502 U.S. 1059, 112 S. Ct. 936 (1992).
The

substantive

law

dictates

which

facts

are

material.

Littlefield v. Forney Independent School Dist., 268 F.3d 275, 282
(5th Cir. 2001).

In this case the applicable law is the Louisiana

Uniform Trade Secrets Act, LSA-R.S. § 51:1431 et seq., under which
‘“a complainant must prove (a) the existence of a trade secret, (b)
a misappropriation of the trade secret by another, and © the actual
loss

caused

by

the

misappropriation.”’

Computer

Management

Assistance Co. v. Robert F. DeCastro, Inc., 220 F.3d 396, 403 (5th
Cir. 2000), citing, Reingold v. Swiftships, Inc., 126 F.3d 645, 648
(5th

Cir.

1997).

The

statute

defines

a

“trade

secret”

as

information, including a formula, pattern, compilation, program,
device, method, technique, or process, that:
(a) derives independent economic value, actual or
potential, from not being generally known to and not
being readily ascertainable by proper means by other
persons who can obtain economic value from its disclosure
or use, and
(b) is the subject of efforts that are reasonable under
the circumstances to maintain its secrecy.
LSA-R.S. § 51:1431(4).
“Misappropriation” under statute is defined as:
(a) acquisition of a trade secret of another by a person
who knows or has reason to know that the trade secret was
acquired by improper means; or
(b) disclosure or use of a trade secret of another
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without express or implied consent by a person who:
(I) used improper means to acquire knowledge
of the trade secret; or
(ii) at the time of disclosure or use, knew or
had reason to know that his knowledge of the
trade secret was:
(aa) derived from or through a
person who had utilized improper
means to acquire it;
(bb) acquired under circumstances
giving rise to a duty to maintain
its secrecy or limit its use; or
(cc) derived from or through a person who
owed a duty to the person seeking relief
to maintain its secrecy or limit its use;
or
(iii) before a material change of his
position, knew or had reason to know that it
was a trade secret and that knowledge of it
had been acquired by accident or mistake.
LSA-R.S. § 51:1431(2).

Analysis
A review of the record and the parties’ arguments show that
disputed issues of material fact exist regarding the ownership of
the technology that forms the basis of the plaintiff’s claims.2

2

The memoranda and most exhibits in support of the
plaintiff’s motion and the defendants’ opposition are filed under
seal.
Plaintiff’s sealed memorandum and exhibits are found at
record document number 88 and the defendants’ sealed memorandum and
exhibits are found at record document number 93. For purposes of
this ruling the evidence and exhibits will not be specifically
discussed so that this ruling does not need to be filed under seal.
5

Plaintiff offered evidence that other Mezzo employees, unaffiliated
with LSU, developed the foundational technology which was adapted
by Dr. Kevin Kelly in the reports subsequently disclosed to the
defendants. Plaintiff also argued that the LSU bylaws exclude from
LSU’s

ownership

the

technology

created

circumstances presented in this case.

under

the

specific

Plaintiff also set forth

evidence challenging Dr. Kelly’s employment status with LSU at the
time the technology was developed.

Viewing this information in a

light most favorable the plaintiff, the effect the LSU regulations
on

the

technology

at

issue

is

uncertain,

may

depend

on

the

testimony of the witnesses at the trial,3 and consequently summary
judgment based on the plaintiff’s lack of ownership is thus not
warranted.
A review of the evidence also shows that the validity of the
NDA will depend on the determining the parties’ intent to be
contractually bound.

The record contains conflicting versions of

the events relevant to the alleged execution of the NDA.

Because

the determination of the parties’ intent will require weighing the
evidence and assessing witness credibility, summary judgment is not
proper.
Defendants also have not demonstrated that the plaintiff

3

Defendants have listed Peter J. Kelleher, LSU Associate Vice
Chancellor, as a witness to testify about the LSU’s intellectual
property policies, including the bylaws and memoranda concerning
intellectual property.
Record document number 101, Uniform
Pretrial Order, p. 21.
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cannot recover under the Louisiana Uniform Trade Secrets Act.
Defendants’

have

failed

to

show

that

Dr.

Kelly’s

testimony

concerning the individual disclosure of six specific trade secrets
destroys the plaintiff’s misappropriation of a trade secret claim.
Plaintiff has offered evidence that its claim is based on the
defendants’ use of various technologies which were referenced
and/or adapted in reports disclosed by Mezzo to the defendants.
Plaintiff discussed these technologies in sufficient detail and
offered evidence to establish its proprietary interest.
Defendants’ argument that the plaintiff lacks evidence to
support a claim for monetary damages is unconvincing.

Plaintiff

has shown at least the possibility of recovery of monetary damages
in the form of development costs.
Conclusion
Accordingly, the Defendants’ Motion for Summary Judgment is
denied.
Baton Rouge, Louisiana, September 27, 2011.

STEPHEN C. RIEDLINGER
UNITED STATES MAGISTRATE JUDGE

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