Pawelko v. Hasbro, Inc.

Filing 219

REPORT AND RECOMMENDATIONS recommending that Hasbro's Motion for Summary Judgment be GRANTED as to Counts II, III, V, VI and VII and DENIED as to Counts I and IV 113 MOTION for Summary Judgment filed by Hasbro, Inc. Objections to R&R due by 12/3/2018. So Ordered by Magistrate Judge Lincoln D. Almond on 11/19/2018. (Noel, Jeannine)

UNITED STATES DISTRICT COURT
DISTRICT OF RHODE ISLAND

MARISA PAWELKO
v.
HASBRO, INC.

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C.A. No. 16-00201-JJM

REPORT AND RECOMMENDATION
Lincoln D. Almond, United States Magistrate Judge

Pending before me for a report and recommendation (28 U.S.C. § 636(b)(1)(B)) is
Defendant Hasbro’s Motion for Summary Judgment. (ECF Doc. No. 113). Plaintiff Marisa
Pawelko objects to the Motion. (ECF Doc. No. 163). For the following reasons, I recommend
that Hasbro’s Motion for Summary Judgment be GRANTED in part and DENIED in part as
specified herein.
Background
In her Third Amended Complaint, Plaintiff claims to be the inventor of an “original,
innovative [crafting] product and idea” known as “Liquid Mosaic.” (ECF Doc. No. 41 at p. 1).
She describes the invention as “a one of a kind arts and crafts play system…that made it easy and
fun for children to create art projects and decorate by using a unique craft gun, with
interchangeable extrusion tips to draw different line patterns and create textures, and prefilled
removable cartridges containing a compound that sticks to multiple surfaces….” (ECF Doc. No.
163 at p. 1). On November 15, 2010, Plaintiff executed Hasbro’s standard Non-disclosure

Agreement and thereafter pitched the idea to Hasbro.1 Her presentation included participation in
a conference call, a five-page slide deck sent by email (ECF Doc. No. 41-2), and three sample craft
projects (a hat, a purse and a light switch cover) made with a prototype compound made of caulk.
(ECF Doc. No. 163 at pp. 1-2). Hasbro passed on the idea in December 2010 but told Plaintiff
that “Liquid Mosaic” was “a great concept that we’ll keep in mind for the future but the disposition
now is a pass.” (ECF Doc. No. 41 at ¶ 12). In May 2011, Hasbro returned the “Liquid Mosaic”
samples to Plaintiff. Id. at ¶ 13.
Plaintiff contends that Hasbro misappropriated her “Liquid Mosaic Submission” and used
it to develop Play Doh Plus and DohVinci, two new product lines that incorporate the elements
and features of “Liquid Mosaic.” (ECF Doc. Nos. 41 at p. 1 and 163 at p. 2). Hasbro denies such
misappropriation and disputes that the “Liquid Mosaic Submission” qualifies as a legally
protectable trade secret.
Plaintiff’s Third Amended Complaint contains seven claims against Hasbro based on this
alleged conduct: breach of the Non-disclosure Agreement, breach of the covenant of good faith
and fair dealing, breach of an implied-in-fact contract, breach of the Rhode Island Uniform Trade
Secrets Act (R.I. Gen. Laws § 6-41-1, et seq.), common law unfair competition, breach of the
federal Defend Trade Secrets Act (18 U.S.C. § 1836, et seq.), and unjust enrichment.
Plaintiff concedes that Count V (Unfair Competition) may be dismissed. (ECF Doc. No.
163 at p. 66). Plaintiff also “acknowledges” that Rhode Island does not recognize a claim for
unjust enrichment (Count VII) when an express contract exists between the parties such as in this

1

Plaintiff communicated with Hasbro at the 2009 Craft and Hobby Association Show, and Hasbro reached out
to her in October 2010. The parties entered into a “Work for Hire” Consulting Agreement on November 4, 2010 that
is not at issue in this suit.

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case. Id. at p. 67.2 As to Count III (Breach of Implied-in-fact Contract), Hasbro persuasively
argues that it fails as a matter of law because the parties executed an express contract (the Nondisclosure Agreement) that governs the same subject matter. (See ECF Doc. No. 187 at pp. 6265). The premise of Count III is that Hasbro used Plaintiff’s confidential information without her
consent and without remuneration. This is the exact same conduct underlying Plaintiff’s claim in
Count I that Hasbro breached the Non-disclosure Agreement. (See, e.g., ECF Doc. No. 41 at ¶¶
41, 42). Thus, Count III should be dismissed. Finally, as to Count II (Breach of Implied Covenant
of Good Faith and Fair Dealing), Hasbro again persuasively argues that dismissal is warranted
because the allegations in Count II are redundant of Plaintiff’s Count I breach of contract claim.
(ECF Doc. Nos. 113 at pp. 58-59 and 187 at pp. 63-65). Plaintiff effectively concedes this in her
brief. (See ECF Doc. No. 163 at p. 60).3 There is no substantive difference between the alleged
misconduct underlying Counts I and II. Both are necessarily premised on the use of Plaintiff’s
confidential information without her consent and without remuneration.

Thus, Count II is

duplicative and subsumed within Count I as a matter of law and must be dismissed. See Sauer v.
Xerox Corp., 95 F. Supp. 2d 125, 132 (W.D.N.Y. 2000).
After separating the wheat from the chaff, only Count I (Breach of the Non-disclosure
Agreement) and Counts IV and VI (State and Federal Trade Secret Misappropriation) should
remain standing. Hasbro’s Motion does not raise the issue of whether or not Plaintiff has presented

2

Plaintiff cites Mehan v. Gershkoff, 230 A.2d 867, 869-870 (R.I. 1967), as the support for her
acknowledgment. See also High Rock Westminster St. LLC v. Bank of Am., N.A., C.A. No. 13-500-WES, 2014 WL
3867699 at *2 (D.R.I. Aug. 6, 2014) (holding that unjust enrichment claims are precluded where a valid contract
governs the subject matter). Plaintiff’s reliance on a 2004 Law Review article and a distinguishable 2002 Superior
Court decision to save Count VII is unconvincing and rejected.
3

See Allstate Interiors & Exteriors, Inc. v. Stonestreet Constr., LLC, 907 F. Supp. 2d 216, 245 (D.R.I. 2012)
(dismissing a good faith and fair dealing claim because it “is limited to asserting that [the defendant] acted in a manner
that is not consistent with the purposes of the Contract” and thus “is redundant and duplicate of [the plaintiff’s] breach
of contract claim.”).

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a trialworthy claim of misappropriation. Rather, Hasbro narrowly focuses on the legal status of
the information allegedly misappropriated and argues that the “Liquid Mosaic Submission” does
not qualify as a trade secret subject to the protections of either state or federal law. In addition,
Hasbro argues that it had no contractual confidentiality obligations under Sections 6.1(A), (B) and
(E) of the Non-disclosure Agreement because the information in issue was demonstrably known
to Hasbro prior to the submission from Plaintiff, was known or generally available to the public
prior to the submission from Plaintiff and was disclosed by Plaintiff to a third party without
confidentiality required. These arguments are considered below in the context of the applicable
Rule 56 standard of review.
Discussion
A.

Summary Judgment Standard

A party shall be entitled to summary judgment “if the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”
Fed. R. Civ. P. 56(c). When deciding a motion for summary judgment, the Court must review the
evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in the
nonmoving party’s favor. Cadle Co. v. Hayes, 116 F.3d 957, 959 (1st Cir. 1997).
Summary judgment involves shifting burdens between the moving and the nonmoving parties.
Initially, the burden requires the moving party to aver “an absence of evidence to support the
nonmoving party’s case.” Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990) (quoting Celotex
Corp. v. Catrett, 477 U.S. 317, 325 (1986)). Once the moving party meets this burden, the burden falls
upon the nonmoving party, who must oppose the motion by presenting facts that show a genuine
“trialworthy issue remains.” Cadle, 116 F.3d at 960 (citing Nat=l Amusements, Inc. v. Town of
Dedham, 43 F.3d 731, 735 (1st Cir. 1995); Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581

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(1st Cir. 1994)). An issue of fact is “genuine” if it “may reasonably be resolved in favor of either party.”
Id. (citing Maldonado-Denis, 23 F.3d at 581).
To oppose the motion successfully, the nonmoving party must present affirmative evidence to
rebut the motion. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-257 (1986). “Even in cases
where elusive concepts such as motive or intent are at issue, summary judgment may be appropriate if
the nonmoving party rests merely upon conclusory allegations, improbable inferences, [or]
unsupported speculation.” Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990).
Moreover, the “evidence illustrating the factual controversy cannot be conjectural or problematic; it
must have substance in the sense that it limns differing versions of the truth which a factfinder must
resolve.” Id. (quoting Mack v. Great Atl. & Pac. Tea Co., 871 F.2d 179, 181 (1st Cir. 1989)).
Therefore, to defeat a properly supported motion for summary judgment, the nonmoving party must
establish a trial-worthy issue by presenting “enough competent evidence to enable a finding favorable
to the nonmoving party.” Goldman v. First Nat’l Bank of Boston, 985 F.2d 1113, 1116 (1st Cir. 1993)
(citing Anderson, 477 U.S. at 249).

B.

Trade Secret Status

Hasbro argues for summary judgment on Counts IV and VI because Plaintiff’s “Liquid Mosaic
Submission” does not constitute a legally-protectable trade secret under either state or federal law.
Relatedly, it argues for summary judgment on Count I because Plaintiff’s submission was not
contractually entitled to confidentiality protection under the Non-disclosure Agreement. Plaintiff
counters that summary judgment is improper because a reasonable jury could conclude that the
“Liquid Mosaic Submission” was a trade secret, was misappropriated by Hasbro and was exploited
by it for commercial gain. It is undisputed that, to constitute a trade secret, the “Liquid Mosaic
Submission” must (1) not be generally known to others who could obtain economic value from its
use; (2) not be readily ascertainable to others who could obtain economic value from its use; (3)
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derive independent economic value from remaining secret; and (4) be subject to reasonable efforts
to maintain its secrecy. (ECF Doc. Nos. 113 at pp. 23-25 and 163 at pp. 23-24).
The first task for the Court is to define the applicable lens through which the parties’
respective submissions must be viewed.4 Hasbro understandably prefers a narrower lens that
focuses on the trade secret status of the “Liquid Mosaic Submission” and excludes evidence
regarding Plaintiff’s claims of misappropriation and commercial exploitation.

In its Reply

Memorandum, Hasbro faults Plaintiff’s attempt to tell a “tale of misappropriation” in her
opposition brief which serves only to “distract” from the trade secret issue. (ECF Doc. No. 187 at
pp. 4-5). Plaintiff, on the other hand, suggests a broader lens which captures more of the evidence
regarding Hasbro’s alleged misappropriation and later product development activities. Plaintiff
posits that such evidence supports a reasonable inference that her product idea was novel and
valuable and thus entitled to trade-secret protection. In view of the Rule 56 requirements that the
evidence be liberally construed in the light most favorable to Plaintiff and that all reasonable
inferences be drawn in her favor, the Court leans towards a broader lens. See Carlson v. FedEx
Ground Package Sys., Inc., 787 F.3d 1313, 1318 (11th Cir. 2015) (“If reasonable minds could differ
on the inferences arising from undisputed facts, then a court should deny summary judgment.”);
see also Anderson, 477 U.S. at 255 (the drawing of legitimate inferences from the facts are jury
functions, not those of a judge ruling on a motion for summary judgment).
The second task is to ascertain what constitutes the “Liquid Mosaic Submission” for which
Plaintiff claims trade-secret status. Plaintiff defines the concept as a “compilation of elements”
including ideas, tools and means of execution for a variety of craft projects as follows:


A dimensional adhesive compound that sticks to multiple surfaces such as
“fabric, plastic, metal, glass, ceramic, wood, paper and more!!!”;

4

The parties have collectively submitted over 200 pages of substantive briefing and nearly 3,500 pages of
Local Rule CV 56 Fact Statements and Supporting Exhibits for the Court’s review and consideration.

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

A craft gun style applicator that extrudes dimensional adhesive compound;



The craft gun style applicator is easy to use – “just squirt n’ stick” – as the
compound is contained in a prefilled interchangeable cartridge; it also provides
a variety of options as it comes with refills, which contain different vibrant
colored compounds, even glow in the dark compound, glittery compound and
dual swirl filling that combines two different colors;



Interchangeable extruder tips, that screw onto the cartridges, and come in a
variety of shapes for creating different textures, such as frosting, and for
drawing different line patterns, such as swirly lines;



The modeling compound is a dimensional adhesive type material that comes in
different colors and effects, and can hold fine details like swirly lines;



It has many different types of use: art projects, DIY crafts, embellishing (with
beads, charms, buttons, pins, rhinestones); wearable art, and room décor.

(ECF Doc. Nos. 163 at p. 7, and 165 at ¶¶ 253-258). This collective concept was allegedly
communicated to Hasbro during the November 2010 conference call and through the slide deck
and samples. Hasbro takes issue with Plaintiff’s description and accurately observes that her
submission did not actually include any compound or material, a craft gun-style applicator, any
pre-filled cartridges or refills or any interchangeable extruder tips. (ECF. Doc. No. 188 at pp. 14). Hasbro accurately points out that Plaintiff had not invested the resources to engineer and
develop prototypes of the physical components of her submission or a marketable compound for
the crafting material. She submitted a concept consisting of a combination of elements, and the
issue is whether that concept is a legally-protectable trade secret. Hasbro also argues that
Plaintiff’s submission could not have any independent economic value as a child’s crafting product
because her samples were made with ordinary bathroom caulk which is toxic and not suitable for
the children’s market. (ECF Doc. No. 113 at pp. 47-50).
Taking those points in reverse order, the toxic caulk argument is a red herring. There is no
evidence that Plaintiff was pitching a children’s crafting idea that would ultimately be based on
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toxic caulk. “Independent economic value…does not require that the designs be completely
refined, developed, and manufactured.” Giasson Aerospace Sci., Inc. v. RCO Eng’g, Inc., 680 F.
Supp. 2d 830, 844 (E.D. Mich. 2010) (citing Learning Curve Toys, Inc. v. PlayWood Toys, Inc.,
342 F.3d 714, 726-727 (7th Cir. 2003)). In fact, Andrew Jeas, a Hasbro Product Acquisition
Manager, who met with Plaintiff about her submission, testified that Hasbro looks at inventions at
various stages and explained: “…in situations where an inventor presents something that requires
development work before it’s brought to market – it could be engineering, it could be a chemical
formulation – you know, the assumption is that Hasbro will take a look at making whatever is
presented suitable for commercial distribution. So nothing that we see is ready to go, safe, whether
it’s a compound or a model or anything.” (ECF Doc. No. 166-41 at p. 7). There is also evidence
that there were discussions both between Plaintiff and Hasbro, and internally at Hasbro, about the
possibility of developing a “kid friendly formula.” It is undisputed that Plaintiff sent a follow-up
email to Hasbro on December 6, 2010 asking if there had been “any luck figuring out a more kid
friendly formulation” and Mr. Jeas of Hasbro responded on December 17, 2010 that he “spoke
briefly with our head chemist, and after I told him about your concept, 5 he seemed confident that
there would be a way to make a formulation for the product that would meet global regulatory
requirements.” (ECF Doc. No. 165 at ¶ 275) (emphasis added).
Hasbro’s primary argument is that the “Liquid Mosaic Submission” is not a protectable
trade secret because its elements were generally known to the public and Hasbro prior to November
2010, and the compilation of such elements was readily ascertainable.6 While a “trade secret” is

5
Hasbro’s head chemist, Linwood Doane, was also subsequently involved in developing the accused products,
Play Doh Plus and DohVinci.
6

Plaintiff argues that Hasbro’s position that “Liquid Mosaic” was readily ascertainable is contradicted by its
efforts to patent the craft gun and adhesive modeling compound used in the accused products that she contends mirror
her “Liquid Mosaic” concept.

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defined by statute (R.I. Gen. Laws § 6-41-1(4)), the components of the definition are necessarily
fact driven. See Harvey Barnett, Inc. v. Shidler, 338 F.3d 1125, 1129 (10th Cir. 2003) (“Tradesecret status is a question of fact.”). Further, “a trade secret can be based in elements each of
which, by itself, is in the public domain, but the unified process, design and operation of which, in
unique combination, affords a competitive advantage and is a protectable secret.” Iconics, Inc. v.
Massaro, 266 F. Supp. 3d 449, 457 (D. Mass. 2017) (citations omitted).
The parties have submitted a mountain of evidence in connection with their respective
positions. Despite this mountain, Hasbro’s Motion presents a straight-forward issue, i.e., “whether
the evidence presents a sufficient disagreement to require submission to a jury or whether it is so
one-sided that [Hasbro] must prevail as a matter of law.” Anderson, 477 U.S. at 251-252. In
considering this issue, the Court must view the evidence and all factual inferences arising from it
in the light most favorable to Plaintiff. After doing so, it is apparent that the facts provide Hasbro
with several strong arguments but not ones that entitle it to prevail as a matter of law under Rule
56. A few examples are illustrative.
Hasbro argues that Liquid Mosaic is not a trade secret because known crafting techniques,
such as DecoDen and Puffy Paint, already incorporated all of its elements prior to Plaintiff
presenting the idea to Hasbro in November 2010. (ECF Doc. No. 113 at pp. 32-37). Hasbro’s
expert, James Scatena, identified DecoDen and Tulip Paint as examples that combined all of the
Liquid Mosaic elements. (ECF Doc. No. 166-2 at p. 9). However, Mr. Scatena was unable to
identify any example of DecoDen in his report that did so. Id. at p. 13. Also, when asked if he
knew of a product that had all of the Liquid Mosaic elements prior to November 2010, he
responded: “I know that all the elements existed. There was no product.” Id. at p. 15. At a
minimum, the totality of the evidence presented on this issue presents a factual dispute as to

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whether a product or technique existed in the public domain prior to November 2010 which
incorporated all of the Liquid Mosaic elements.
Hasbro further argues that Plaintiff’s claims fail because long before Plaintiff presented the
“Liquid Mosaic Submission” to Hasbro, it was aware of and had been developing products with
the same elements, ideas and concepts. (ECF Doc. No. 113 at p. 38). Plaintiff challenges this
assertion on several grounds. First, Plaintiff describes Hasbro’s rejection of the “Liquid Mosaic
Submission” as a “soft pass.” She points to an internal Hasbro email dated December 17, 2010
which references “liquid mosaic” and indicates “[w]e will likely be considering it down the road
but no immediate application.” (ECF Doc. No. 166-43 at p. 2) (emphasis added). An internal
reply email indicated it was a “soft pass” – “they liked the concept but it didn’t fit with their short
term [creative play] strategy.” Id. If Hasbro had already been developing this concept in-house,
a reasonable juror may question why these internal emails did not identify that as a reason for the
“pass” even if they chose not to share that internal product development information with
Plaintiff.7

Further, Hasbro’s Inventor Review Record dated November 22, 2010 reflects a

disposition code of 1 “Hold/Send in” rather than 4 “Already in house” for Liquid Mosaic. (ECF
Doc. No. 166-45 at p. 2).
As discussed earlier, Rule 56 requires the Court to look at these issues through a broader
lens and to consider the legitimate inferences a reasonable juror might draw from the totality of
the evidence and not just that focused on by the movant. There is ample circumstantial evidence
upon which a finding of misappropriation might reasonably be based, and a finding of

7
Hasbro disputes Plaintiff’s assertion that it had no concept or product similar to Liquid Mosaic in-house at
the time of her submission. It asserts that prior to November 2010, it “explored new product possibilities for its PlayDoh Product line” which included each of the elements of Plaintiff’s submission and that it “developed and sold
products that incorporated some of these ideas.” (ECF Doc. No. 188 at p. 11). Notably, Hasbro does not specifically
identify a single product in existence or under development prior to November 2010 that included all of the elements
of Plaintiff’s submission.

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misappropriation could reasonably support an inference that the misappropriated idea was novel
and valuable. For instance, although the details are disputed, it is undisputed that the three
developers of the Hasbro accused products had at least some level of prior exposure to Plaintiff’s
submission.8 Again, although the details are disputed, there is also evidence of substantial
similarities between Plaintiff’s “Liquid Mosaic Submission” and Play Doh Plus / DohVinci. In
fact, one of the Hasbro inventors of the accused products, Tom Mangiarotti,9 acknowledged these
“connections” and “parallels” during his deposition. (See ECF Doc. No. 166-42). Plaintiff also
argues that her position is buttressed by the fact that, during a July 2012 “namestorming” exercise,
the term “mosaic” was incorporated into several potential names for DohVinci even though
DohVinci (and Liquid Mosaic) is not technically used to make mosaics. These potential names
included: Mosaic Clay, Zen Mosaic, Spark Mosaic, Dohsaic,10 Mesh Mosaic, Mosaic Master and
Mosaic Mash. (ECF Doc. No. 166-57). A reasonable juror may infer that the incorporation of
mosaic into these name ideas supports a finding that Hasbro improperly used or considered the
“Liquid Mosaic Submission” in developing DohVinci.
Hasbro also contends that the “Liquid Mosaic Submission” is not a trade secret because
Plaintiff “disclosed [its] essential elements…to the public before she presented it to Hasbro.”
(ECF Doc. No. 113 at p. 50). It alleges that the disclosures were made by Plaintiff through craft

8
There is evidence that Hasbro generally limits exposure of inventor submissions to a small group to avoid
having internal designers being influenced, either consciously or subconsciously, by the content of outside
submissions. (See ECF Doc. No. 166-42 at pp. 43-44). Plaintiff contends that this practice was violated with respect
to her submission.
9

Although Mr. Mangiarotti testified that he had no recollection of attending the First Idea Review Meeting at
which Plaintiff’s submission was considered, he is copied on the agenda and identified as a “required attendee” who
“accepted” the meeting invitation. (ECF Doc. No. 166-46).
10
Tom Hamilton, one of the inventors of the accused products, testified that he might have come up with the
name “Dohsaic.” (ECF Doc. No. 166-58 at p. 7). Mr. Jeas testified that, shortly after Plaintiff’s submission, he
discussed the Liquid Mosaic “idea with Tom Hamilton, but didn’t share any materials.” (ECF Doc. No. 166-41 at p.
10). He indicates that he “had that conversation just to get a gut feel to see if he had interest” and that Mr. Hamilton
told him this “was a formulation that they were working on.” Id. at p. 11.

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show submissions, blogposts, YouTube videos and online interviews. Id. at p. 52. The disclosure
issue is a fact-based inquiry, and Hasbro has not shown that the issue is so one-sided that it could
only be resolved in its favor.
It is unclear from the voluminous submissions what Hasbro is defining as the “essential
elements” and when those particular elements were publicly disclosed. Hasbro seems to argue
that some elements were disclosed, and that other elements which were not disclosed, could be
“logically implied” or “readily ascertained” from what was disclosed. Plaintiff counters that not
all of the elements of her claimed trade secret were disclosed and any individual elements disclosed
did not contain sufficient technical detail or the totality of the specific combination of features
comprising “Liquid Mosaic” to constitute public disclosure. While Hasbro makes some strong
points, those points must be made to the trier of fact and are not sufficiently strong to meet its Rule
56 burden.
In summary, this is a factually complex case, and Hasbro has moved for summary judgment
on fact-intensive issues.

After thoroughly reviewing the parties’ respective arguments and

submissions, I conclude that it would be impossible to rule in Hasbro’s favor on this Rule 56
Motion without impermissibly viewing facts or drawing inferences in a manner more favorable to
Hasbro than Plaintiff. In addition, I conclude that the trade secret challenge made by Hasbro in
this Rule 56 Motion cannot be considered through the narrow lens suggested by Hasbro but must
be viewed in the context of Plaintiff’s proffered evidence, both direct and circumstantial, in support
of her claims of misappropriation and commercial exploitation. Although Hasbro makes several
strong arguments about the limited nature of Plaintiff’s “concept” submission, the presence of
similar techniques in the public domain, and its own independent product development activities,

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those arguments are not strong enough to support the grant of summary judgment and must be
presented to the finder of fact at trial.
C.

DTSA Effective Date (Count VI)

Hasbro makes an alternative argument for summary judgment as to Count VI. In Count
VI, Plaintiff claims that Hasbro’s actions violated the Federal Defend Trade Secrets Act of 2016,
18 U.S.C. §1836 et. seq. (“DTSA”). The DTSA applies to “any misappropriation of a trade
secret…for which any act occurs on or after the date of the enactment of [the] Act.”
“Misappropriation” under the DTSA includes both acquisition and disclosure or use of trade
secrets. 18 U.S.C. § 1839(5)(A)&(B). The DTSA was enacted on May 11, 2016. Plaintiff does
not dispute that the alleged acquisition and disclosure of her purported trade secrets initially
occurred prior to the enactment of the DTSA.

Plaintiff asserts, however, that Hasbro has

continued to violate the DTSA after May 11, 2016 through “use by improper means of [Plaintiff’s]
original and novel product and related ideas without [Plaintiff’s] consent.” (ECF Doc. No. 41 at
p. 21). Plaintiff’s “continuing use” theory rests upon the claim that the sales of Play Doh Plus and
DohVinci occurring after May 2016 constitute “misappropriation” of her trade secrets. (ECF Doc.
No. 163 at p. 52). She alleges that the “design, packaging and marketing of Hasbro’s DohVinci is
substantially derived from the trade secrets in and of the Liquid Mosaic Submission.” (ECF Doc.
No. 41 at p. 21).
The “continuing use” theory presented by Plaintiff is contemplated by the plain language
of the DTSA and has been discussed in recent case law. After reviewing these cases, the facts pled
and arguments advanced by the parties, Hasbro is entitled to entry of summary judgment on this
claim for the reasons discussed below.

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Hasbro argues that there is no claim under the DTSA because “any trade secret she may
have had would have been extinguished by public disclosures (through the filing of patents on and
sales of Play-Doh Plus and DohVinci), which occurred before the enactment of the DTSA.…”
(ECF Doc. No. 187 at p. 53). Hasbro asserts that this “pre-enactment public disclosure” forecloses
any recovery under the DTSA because once a “trade secret” is publicly disclosed, “it loses any
element of secrecy, and subsequent re-disclosures of the same information cannot constitute
another use of a trade secret.” (ECF Doc. No. 113-1 at p. 54). Hasbro notes that the first sales of
Play Doh Plus occurred in 2012, and the first sales of DohVinci occurred in 2014. Id. at p. 55.
In Attia v. Google, LLC, No. 17-cv-06037, 2018 WL 2971049, *12 (N.D. Cal. June 13,
2018), the Northern District of California concluded that a DTSA claim based upon a “continuing
use” theory could not stand where the Plaintiff alleged the continuing use of “trade secrets” that
were published before the effective date of the DTSA. The Court noted that “in order to avail
themselves of the case law permitting DTSA claims to proceed on a ‘continuing use’ theory,
Plaintiffs must plead facts to show misappropriation of trade secrets that occurred on or after the
DTSA’s effective date. That means that any alleged trade secret misappropriation or injury
occurring after May 2016 cannot be based on continued use of information that was disclosed in
patent applications published in 2012.” (emphasis in original). See also Avago Tech. U.S. Inc. v.
Nanoprecision Products, Inc., No. 16-cv-03737, 2017 WL 412524, *9 (N.D. Cal. Jan. 31, 2017)
(“Simply alleging that the same information was disclosed ‘again’ is not sufficient to avoid this
result as ‘disclosure,’ by definition, implies that the information was previously secret.”). In the
present case, Plaintiff’s “continuing use” theory falls short applying these reasonable
interpretations of the DTSA effective date provision. The facts alleged here are based on the
current “use” of alleged “trade secrets” that were disclosed via patent applications and product

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sales prior to enactment of the DTSA. Because Plaintiff is claiming the very same “trade secrets”
that were used and disclosed pre-DTSA enactment have been used and disclosed post-DTSA
enactment, Count VI fails as a matter of law, and I recommend that summary judgment enter in
favor of Hasbro.
Conclusion
For the foregoing reasons, I recommend that Hasbro’s Motion for Summary Judgment
(ECF Doc. No. 113) be GRANTED as to Counts II, III, V, VI and VII and DENIED as to Counts
I and IV.
Any objection to this Report and Recommendation must be specific and must be filed with the
Clerk of the Court within fourteen days of its receipt. See Fed. R. Civ. P. 72(b); LR Cv 72. Failure to
file specific objections in a timely manner constitutes waiver of the right to review by the District Court
and the right to appeal the District Court’s decision. See United States v. Valencia-Copete, 792 F.2d
4, 6 (1st Cir. 1986); Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603, 605 (1st Cir. 1980).

/s/ Lincoln D. Almond
LINCOLN D. ALMOND
United States Magistrate Judge
November 19, 2018

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