ATOM Instrument Corporation et al v. Petroleum Analyzer Company, LP

Filing 142

FINDINGS OF FACT AND CONCLUSIONS OF LAW. (Signed by Judge Lynn N Hughes) Parties notified. (ghassan, 4)

UNffiD STATES DISTRICT COURT

SOUTHERN DISTRICT United States District Court
OF TEXAS
Southern District of Texas

ATOM Instrument

Corporation, ct al.,

Plaintiffs,
1Jcrsus

Petroleum Analyzer Company, L.P.,
Defendant.

ENTERED

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August 16, 2018
David J. Bradley, Clerk

Civil Action H-I2-r8II

Findings and Conclusions
1.

Background.
Franek Olstowski worked for Petroleum Analyzer Company, L.P., before

becoming president and part-owner of ATOM Instrument Corporation.
ATOM and Petroleum develop, manufacture, and repair instruments for
chemical analysis of hydrocarbons. In

2002,

while working as a consultant for

Petroleum, Olstowski developed an excimer light source to detect sulfur using
ultraviolet fluorescence. He did this separately from his work at Petroleum. In
2003

and

2005,

under a non-disclosure agreement, Petroleum and he talked

about licensing his technology but did not reach an agreement. Olstowski was
awarded a patent in

2007.

Excimer is short for excited dimer. It is a combination of a noble gas and
a reactive gas that produces ultraviolet light when excited by electricity. Possible
combinations include krypton and chloride, xenon and chloride, and xenon and
bromine. An excimer detects, in this case, sulfur by making it glow. like an
excimer, :z;inc or cadmium can be used as a source of ultraviolet light.
In

2006,

Petroleum sued ATOM and Olstowski in Texas state court,

claiming ownership of the excimer technology. In their contract, Olstowski and
Petroleum had agreed to arbitrate, so the court sent them to do that. The
arbitration panel awarded Olstowski ownership of all the technology. It also held

that it is his trade secret. The panel enjoined Petroleum from claiming or using
the technology. The trial court and the court of appeals confirmed the award.
The panel, the trial court, the court of appeals, and this court have decided that
Olstowski's technology is a trade secret because in their contracts, Olstowski
and Petroleum had agreed that Petroleum would not disclose or use it.
In November of 2009, Petroleum started selling an instrument called
"MultiTek." While appealing the confirmation, Petroleum stipulated that the
MultiTek device used an excimer light source to detect sulfur using ultraviolet
fluorescence. Petroleum argued that the injunction did not prohibit its use.
On realizing that Petroleum was selling a device that used an excimer
light source to detect sulfur using ultraviolet fluorescence, ATOM and Olstowski
filed several motions in the trial court. That court denied their motion for
contempt and sanctions in February of 20 I I and granted Petroleum's motion for
a protective order inJune. In October, it granted and denied in part a motion to
enforce the injunction, explaining that the meaning of Olstowski's technology
was the same as it had been in arbitration but not deciding whether the
MultiTek used his technology. It denied ATOM and Olstowski's amended motion
to enforce and motion for sanctions in December. By that time, the issue had
become moot. By November of 2011, Petroleum had begun using a zinc lamp
instead of an excimer lamp in its MultiTek.
The question in this case is whether Petroleum used Olstowski's
technology in its MultiTek products that it sold between November
October
2.

2009

and

2011.

Jurisdiction.

This case began as an adversary action in ATOM's bankruptcy. In April
of 20 12, this court withdrew the reference. The bankruptcy plan was confirmed
in November of

2012.

Because this action was pending before the plan was

confirmed, this court retains jurisdiction.

I

ISee In re Enron Corp. Sec., 535 F'3d 325 (5 th Cir. 2008).

3.

Anarysis.
A.
Scope.
Olstowski's technology is the technology defined by the arbitration panel

in its conclusion oflaw paragraph 5:
a.

the technology and methods embodied in the
patent applications styled "Improved Ozone
Generator with Dual Dielectric Barrier Discharge,"
"Improved Closed-Loop Light Intensity Control
and Related Fluorescence Application Method,"
and "Excimer UV Fluorescence Detection";

b.

all of the accompanying drawings, blueprints,
schematics, and formulae created or drawn by
either Franek Olstowski or Virgil Stamps of the
application identified in or in support of items (A)
and (B); and

c.

issued patents or patent applications pending,
entitled "Ozone Generator with Dual Dielectric
Barrier Discharge and Methods for Using Same,"
"Improved Closed-Loop Light Intensity Control
and Related Fluorescence Application Method,"
and "Excimer UV Fluorescence Detection" (as
amended).

A TOM and Olstowski frequently claim that Olstowski's technology is any

device using an excimer light source that uses krypton-chloride specifically to
measure sulfur using ultraviolet fluorescence. That does not define the
technology but rather describes its function. ATOM and Olstowski say that this
is not a patent case but a trade secret case. That is true, but in this case, the trade

secret is the manifestation of Olstowski's idea that is contained in the patents
and patent applications described by the arbitration award.
The scope of Olstowski's technology is neither as broad nor as narrow
as the parties argue. It is not all excimer light sources to detect sulfur using
ultraviolet fluorescence, nor is it only the excimer lamps he made. It is exactly
what the panel says it is. The only question for the court is whether the
MultiTek used what the panel decided was Olstowski's technology.
B.

MultiTek.

The MultiTek used an excimer lamp that Petroleum purchased from
Heraeus Noblelight, lie. It differs in several ways from Olstowksi's lamp. It has
a hollow, cylindrical inner electrode made from a spiral of polished aluminum
and does not include an emission aperture. Olstowski's excimer lamp has an
inner electrode made from a solid rod of conductive metal, and it has an emission
aperture at the end of a quartz envelope. Both lamps use some mixture of
krypton and chloride gases, emitting a wavelength of 222 nanometers. Olstowski
never disclosed the proportion of the gases that he used, so whether the two
lamps use the same mixture is unknown, eliminating this element.

C.

Use.

ATOM and Olstowski have not proved that the MultiTek used

Olstowski's technology. They argue that the inclusion of the patent applications
in the arbitration award's definition of Olstowski's technology means that it
includes all excimer lamps to detect sulfur using ultraviolet fluorescence;
however, much of the general description of excimer-lamp technology in his
patent applications can be found in other sources. Earlier scientific articles and
patents disclose descriptions of how to use excimer technoloy to detect sulfur.
What ATOM and Olstowski have shown is that Petroleum used an excimer lamp
to detect sulfur using ultraviolet fluorescence. Petroleum agrees. What they have
not shown is that the MultiTek' s excimer lamp was sufficiently similar to
Olstowski's excimer lamp to be his technology.

The patent office rejected of much of Petroleum's patent application for
an excimer lamp using a closed-loop system because of Olstowski' s technology.
ATOM and Olstowski say that means that the MultiTek contained his

technology. Petroleum filed that application in August of 2.0 I

I,

nearly two years

after it had started using an excimer lamp in the MultiTek and a couple of
months before it would stop using it. Also, Petroleum did not use a lamp of its
own creation - it bought one from Heraeus.
Petroleum talked first with a company called Ushio about getting an
excimer lamp from it, then with Heraeus. It decided to order from Heraeus,
which already had a lamp similar to what it wanted. Petroleum gave Heraeus the
physical dimensions that the lamp had to meet and asked that it emit a
wavelength of 2.2.2. nanometers.
Petroleum set up a design team to work with Heraeus on the lamp. It
included people who either had not worked with Olstowski on excimer lamp
technology while he was at Petroleum or did not start working at Petroleum
until after Olstowski had left. Sean Rick was in charge of the team. He knew of
Olstowski's technology but was not part of the design team's substantive work.
Petroleum did not use Olstowski's technology in its development of the
lamp.2 Heraeus created the lamp using its excimer technology. Petroleum simply
tested Heraeus's prototype and asked for physical alterations and a particular
emission wavelength. Heraeus tailored the lamp to fit Petroleum's requests.
Olstowski's technology and the MultiTek are different in structure. The
MuitiTek' s inner electrode is hollow - an aluminum spiral. Olstowski's is solid
- a rod of some conductive metal. The MultiTek does not have an emission
aperture; Olstowski's does. The emission aperture concentrates the output. Not
having one allows the maximum output. Both lamps use krypton and chloride
in some proportion. Whether they use those gases in the same proportion is
unknown, because Olstowski did not tell Petroleum what ratio of krypton and
chloride he used.

2SCC

Wdlogix, Inc., 'tI. Acccnturc, L.L.P., 716 F'3d 867 (5 th Cir. 2013).

3.

Conclusion.
Petroleum did not use Olstowski's technology in its MultiTek. Franek

Olstowski and ATOM Instrument Corporation take nothing from Petroleum
Analyzer Company, L.P.
Signed on August~,

2018,

at Houston, Texas.

Lynn N. Hughes
United States DistrictJudge