M-I L.L.C. v. Q'Max Solutions, Inc. et al
Filing
111
MEMORANDUM OPINION AND ORDER granting in part and denying in part 74 MOTION for Summary Judgment as to Trade Secret Misappropriation and Breach of Contract (Signed by Judge Sim Lake) Parties notified. (aboyd, 4)
United States District Court
Southern District of Texas
ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
M-I L.L.C. d/b/a M-I SWACO,
Plaintiff,
V.
Q'MAX SOLUTIONS, INC.; Q'MAX
AMERICA, INC.; and SANJIT ROY;
Defendants.
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§
August 06, 2019
David J. Bradley, Clerk
CIVIL ACTION NO. H-18-1099
MEMORANDUM OPINION AND ORDER
Plaintiff M-I L.L.C. ("M-I") sued defendants Q'Max Solutions,
Inc.; Q'Max America, Inc. (collectively, "Q'Max"); and Sanjit Roy
("Roy") (collectively, "Defendants") alleging a number of claims,
including federal and state trade secret misappropriation claims
against Q'Max and Roy and a breach of contract claim against Roy.
Pending before the court is Plaintiff M-I LLC's Motion for Summary
Judgment as to Trade Secret Misappropriation and Breach of Contract
("M-I's Motion") (Docket Entry No. 74).
For the reasons explained
below, M-I's Motion will be granted in part and denied in part.
I.
Factual and Procedural Background
M-I developed Virtual Hydraulics
("VH") and Presspro RT
("PPRT"), which are hydraulics simulation software used in oil and
gas drilling.1 Roy worked as a developer at M-I for over 20 years.2
During his tenure at M-I Roy worked to develop VH and PPRT among
other well applications software.3
signed
an
Employee
Invention
While employed at M-I, Roy
and
Confidential
Information
Agreement, wherein he agreed as follows:
5.
I shall not, during the term of my employment or
thereafter,
disclose to others or use any
confidential technical or business information
belonging either to M-I or to a customer or client
of
M-I
except
as
authorized
in
writing,
respectively, by M-I or such customer or client.
"Confidential technical or other confidential
business information" means any information which I
learn or originate during the course of my
employment, regardless of whether it is written or
otherwise tangible that (a) is not generally
available to the public and (b) gives one who uses
it an advantage over competition.
6.
Upon termination of my employment, I shall surrender
to M-I any and all things such as drawings, manuals,
documents, photographs and the like (including all
copies thereof) that I have in my possession
relating to the business of M-I or any division or
subsidiary thereof.4
See Brief in Support of Plaintiff M-I LLC's Motion for
Summary Judgment as to Trade Secret Misappropriation and Breach of
Contract [SEALED] ("M-I's Brief"), Docket Entry No. 75, p. 11 11
SOF 4 - SOF 7. "SOF" refers to the paragraphs in the "Statement of
Undisputed Facts" in M- I's Motion. [All page numbers for docket
entries in the record refer to the pagination inserted at the top
of the page by the court's electronic filing system, CM/ECF.]
1
2
See id. at 12
1 SOF 13.
See Employee Invention and Confidential Information Agreement
(the "Confidentiality Agreement"), Exhibit 3 to M-I's Brief, Docket
Entry No. 75-3, p. 2.
4
-2-
Roy left M-I
in May
of 2014
and after a brief stint with
Weatherford, another M-I competitor, Roy joined Q'Max in April of
2015. 5
M-I alleges that before his departure Roy copied and retained
documents
containing
M-I's
confidential
information.
M-I's
forensic expert, David Cowen, concluded that Roy copied M-I files
onto various drives during his employment at M-I. 6
accepting his position at Weatherford
Notably, after
(and two days before his
departure from M-I), Roy copied a number of files to an external
drive. 7
Cowen's investigation found M-I's confidential data on
computers and external drives in Roy's possession, including on
Cowen also concluded that Roy kept a full
Roy's Q'Max computer. 8
backup of his M-I computer that contained a number of confidential
documents, including the source code for various versions of VH and
PPRT. 9
After Roy started at Q'Max he began
developing MAXSITE
Hydraulics ("MAXSITE"), a software program with the same models as
5
See Complaint, Docket Entry No. 1, p. 5
1
15.
See Expert Report of David L. Cowen (the "Cowen Report"),
Exhibit 7 to M-I's Brief, Docket Entry No. 75-7, pp. 8-10 1 23.
6
7
See id.
8
See id. at 10-11
1 25.
9
See id. at 25-26
1
39.
-3-
VH that could compete with VH.10 In this action M-I claims that Roy
used confidential documents he retained from his time at M-I to
develop MAXSITE.11
M-I's Complaint includes claims for copyright
infringement in violation of 17 U.S.C. §§
501, et seq.; violation
of the Federal Defend Trade Secrets Act, 18 u.s.c. §§
1836, et
seq.; violation of the Texas Uniform Trade Secrets Act, Tex. Civ.
Prac. & Rem. Code§§ 134A.001, et seq., against all Defendants; and
breach of contract against Roy. 12
M-I's Motion only addresses its
federal and state trade secret misappropriation claims and its
breach of contract claim against Roy. 13
I's Motion on May 2, 2019. 14
on May 9, 2019 . 15
10
11
Defendants responded to M
M-I replied to Defendants' Response
M-I filed briefing supplementing its Motion with
see M-I's Brief, Docket Entry No. 75, p. 15
1 SOF 30.
See Complaint, Docket Entry No. 1, pp. 7-15.
See id. at 7-17. Although M-I plead claims against David
Wilson in its Complaint, M-I has since voluntarily dismissed Wilson
from this action. See id.; Order Granting Plaintiff M-I L.L.C.'s
Unopposed Motion for Voluntary Dismissal of Claims Against
Defendant David Wilson Without Prejudice, Docket Entry No. 65.
12
Docket Entry No. 74, p. 1; M-I's Brief,
13 See M-I's Motion,
Docket Entry No. 75, p. 7.
See Defendants' Response in Opposition to M-I's Motion for
Summary Judgment [SEALED] ("Defendants' Response") , Docket Entry
No. 81.
14
See Reply in Support of Plaintiff M-I L.L.C.'s Motion for
Summary Judgment as to Trade Secret Misappropriation and Breach of
Contract [SEALED] ("M-I's Reply") , Docket Entry No. 85.
15
-4-
new evidence on June 28, 2019, 16 to which Defendants responded on
July 17, 2019. 17
II.
Standard of Review
Summary judgment is appropriate if the movant establishes that
there is no genuine dispute about any material fact and the movant
is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).
Disputes about material facts are genuine "if the evidence is such
that a reasonable jury could return a verdict for the nonmoving
party."
Anderson v. Liberty Lobby, Inc., 106 S. Ct. 2505, 2510
(1986).
The party moving for summary judgment must show the absence
of a genuine issue of material fact.
Exxon Corp. v.
Oxxford
Clothes, Inc., 109 F.3d 1070, 1074 (5th Cir. 1997). "If the moving
party fails to meet this initial burden, the motion must be denied,
regardless of the nonmovant's response."
Little v. Liquid Air
Corp., 37 F.3d 1069, 1075 (5th Cir. 1994) (en bane) (per curiam)
(citing Celotex Corp. v. Catrett, 106 S. Ct. 2548, 2553 (1986)).
If the moving party meets this burden, Rule 56(c) requires the
nonmovant to go beyond the pleadings and show by affidavits,
depositions, answers to interrogatories, admissions on file, or
See Plaintiff M-I L.L.C.'s Supplement With New Evidence in
Support of Motion for Summary Judgment as to Trade Secret
Misappropriation and Breach of Contract ("M-I's Supplement") ,
Docket Entry No. 105.
16
17 See Defendants' Response in Opposition to M-I's Supplement
to Motion for Summary Judgment ("Defendants' Response to M-I's
Supplement"), Docket Entry No. 109.
-5-
other admissible evidence that specific facts exist over which
there is a genuine issue for trial.
Id.
The nonmovant "must do
more than simply show that there is some metaphysical doubt as to
the material facts."
Matsushita Electric Industrial Co., Ltd. v.
Zenith Radio Corp., 106 S. Ct. 1348, 1356 (1986).
In reviewing the evidence "the court must draw all reasonable
inferences in favor of the nonmoving party, and it may not make
credibility determinations or weigh the evidence."
Reeves v.
Sanderson Plumbing Products, Inc., 120 S. Ct. 2097, 2110 (2000).
The court resolves factual controversies in favor of the nonmovant,
"but only when there is an actual controversy, that is, when both
parties have submitted evidence of contradictory facts."
Little,
37 F.3d at 1075.
III.
Analysis
M-I moves for summary judgment on its state and federal trade
secret misappropriation claims against Defendants and its breach of
contract claim against Roy.
Defendants argue that genuine issues
of fact remain as to M-I's trade secret misappropriation claims.
Defendants also argue that summary judgment is not appropriate on
M-I's breach of contract claim against Roy because Roy has raised
fact issues as to his affirmative defenses of waiver and laches.
-6-
A.
Trade Secret Misappropriation Against Defendants
In its Complaint M-I alleges that documents retained by Roy
after he left M-I contain trade secrets under both the Defend Trade
Secrets Act
( "DTSA") and the Texas Uniform Trade Secrets Act
("TUTSA"). 18
M-I argues that it is entitled to summary judgment on
its misappropriation claims because no genuine dispute of material
fact remains as to whether Roy and Q'Max misappropriated M-I's
trade secrets through wrongful acquisition, disclosure, and use. 19
Defendants disagree, arguing that disputes of material fact remain
as to (1) whether the documents relied on by M-I in its Motion
contain trade secrets and (2) whether Q'Max or Roy "used" M-I's
alleged trade secrets. 20
Because M-I's TUTSA and DTSA claims will
require proof of the same elements in this case, the court will
consider M-I's federal and state trade secret misappropriation
claims together. 21
11 40-41, 13 1
18
See Complaint, Docket Entry No. 1, pp. 10-11
19
See M-I's Brief, Docket Entry No. 75, pp. 24-26.
20
see Defendants' Response, Docket Entry No. 81, pp. 14-25.
54.
The parties do not present separate arguments addressing MFurther, as discussed in
I's claims under TUTSA and the DTSA.
detail below, TUTSA's definitions for "trade secrets," "improper
means," and "misappropriation" are functionally identical to those
in the DTSA, which is TUTSA's federal counterpart.
21
-7-
1.
Trade Secret Misappropriation Under TUTSA and the DTSA
Both TUTSA and the DTSA permit recovery of damages for trade
secret misappropriation.
Tex. Civ. Prac.
&
Rem. Code§ 134A.004;
18 u.s.c. § 1836(b)(1) (permitting recovery for trade secret
misappropriation if a trade secret is "related to a product or
service used in, or intended for use in, interstate or foreign
commerce").
"To prevail on a misappropriation of trade secrets
claim, a plaintiff must show that (1) a trade secret existed, (2)
the trade secret was acquired through breach of a confidential
relationship or discovered by improper means, and (3) the defendant
used
the trade secret without authorization from the plaintiff."
GE Betz. Inc. v. Moffitt-Johnston, 885 F.3d 318, 325 (5th Cir.
2018) (internal quotation marks omitted) (emphasis in original).
"Improper means" includes, but is not limited to, a breach of a
duty to maintain the secrecy of a trade secret.
Tex. Civ. Prac. &
Rem. Code§ 134A.002(2); 18 U.S.C.§ 1839(6). TUTSA defines "trade
secret" as:
[A] 11 forms and types of information, including business,
scientific,
technical,
economic,
or
engineering
information, and any formula, design, prototype, pattern,
plan, compilation, program device, program, code, device,
method, technique, process, procedure, financial data, or
list of actual or potential customers or suppliers,
whether tangible or intangible and whether or how stored,
compiled, or memorialized physically, electronically,
graphically, photographically, or in writing if:
(A) the owner of the trade secret has taken
reasonable measures under the circumstances to keep
the information secret; and
-8-
(B) the information derives independent economic
value, actual or potential, from not being generally
known to, and not being readily ascertainable
through proper means by, another person who can
obtain economic value from the disclosure or use of
the information.
Id. at § 134A.002(6).22
question of fact."
"Whether a trade secret exists is a
GlobeRanger Corporation v. Software AG United
States of America. Incorporated, 836 F.3d 477, 492 (5th Cir. 2016).
Texas courts weigh six factors to determine whether a trade secret
exists:
(1) the extent to which the information is known outside
of the business; (2) the extent to which it is known by
employees and others involved in the business; (3) the
extent of measures taken to guard the secrecy of the
information; (4) the value of the information to the
business and to its competitors; (5) the amount of effort
or money expended in developing the information; (6) the
ease or difficulty with which the information could be
properly acquired or duplicated by others.
Id. (citing In re Union Pacific Railroad Co., 294 S.W.3d 589, 592
(Tex. 2009)).
"A cause of action for misappropriation of trade secrets
accrues when the trade secret is actually used."
GE Betz, 885 F.3d
The DTSA' s definition of "trade secret" is functionally
identical: "the term 'trade secret' means all forms and types of
financial,
business,
scientific,
technical,
economic,
or
engineering information, including patterns, plans, compilations,
program
devices,
formulas,
designs,
prototypes,
methods,
techniques, processes, procedures, programs, or codes, whether
tangible or intangible, and whether or how stored, compiled, or
physically,
graphically,
memorialized
electronically,
photographically, or in writing." Compare 18 U.S.C. § 1839(3),
with Tex. Civ. Prac. & Rem. Code § 134A.002(6).
22
-9-
at 325-26
Altai,
(quoting Computer Associates International,
918
Inc.,
original).
S.W.2d
453,
455
(Tex. 1996))
Inc. v.
(emphasis in
Texas courts and courts in the Fifth Circuit rely on
The Restatement of Unfair Competition to determine what constitutes
"use" :
Any exploitation of the trade secret that is likely to
result in injury to the trade secret owner or enrichment
to the defendant is a "use" under this Section. Thus,
marketing goods that embody the trade secret, employing
the trade secret in manufacturing or production, relying
on the trade secret to assist or accelerate research or
development, or soliciting customers through the use of
information that is a trade secret .
. all constitute
"use."
See Restatement (Third) of Unfair Competition§ 40 cmt. c; see also
Bohnsack v. Varco, L.P., 668 F.3d 262, 279 (5th Cir. 2012) (citing
and quoting Restatement (Third) of Unfair Competition§ 40 cmt. c);
Wellogix, Inc. v. Accenture, L.L.P., 716 F.3d 867, 877 (5th Cir.
2013) (same);
Southwestern Energy Production Company v. Berry
Helfand, 491 S.W.3d 699, 722 (Tex. 2016) (defining "use" by citing
and quoting Restatement (Third) of Unfair Competition§ 40 cmt. c).
"Proof
of
trade
secret
circumstantial evidence."
misappropriation
often
depends
on
Southwestern Energy Production Company
v. Berry-Helfand, 411 S.W.3d 581, 598 (Tex. App. -- Tyler 2013),
rev'd
on
other
grounds,
491
S.W.3d
699
(Tex.
2016).
"Circumstantial evidence often requires a fact finder to choose
among opposing reasonable inferences."
-10-
Id. at 591.
2.
M-I's Trade
Defendants
Defendants
argue
Secret
that
Misappropriation
Claims
judgment
summary
against
on
M-I's
misappropriation claims is not appropriate because: (1) fact issues
exist as to whether the documents discussed by M-I in its Motion
contain trade secrets under the DTSA and TUTSA, and (2) fact issues
remain as to whether Defendants "used" the alleged trade secrets.
In its Complaint M-I bases its claims under TUTSA and the DTSA
on
"trade
secrets
in
the
components
of
M-I's
engineering
application tools VIRTUAL HYDRAULICS, VIRTUAL COMPLETION SOLUTIONS,
and PRESSPRO RT; in the computer program code of such software
applications;
proprietary
in other confidential programming code;
constants,
methods,
plans,
designs,
and in
concepts,
improvements, modifications, research data and results, and know
how related to M-I's engineering application tools, interactive
content, modeling,
databases." 23
predictive modeling, and certain proprietary
M-I's Brief only addresses trade secrets allegedly
present in a few of these documents,
including:
a slide deck
entitled "VIRTUAL HYDRAULICS, Basic Concepts," a VH Spreadsheet, a
"snapshot" of a VH signature plot, and the VIRTUAL HYDRAULICS 3.3
23
See Complaint, Docket Entry No. 1, pp. 9
-11-
1 36, 12 1 50.
Handbook Draft.
Similarities between these M-I documents and
corresponding Q'Max documents form the basis of M-I's Motion. 24
Defendants dispute whether the specific documents referenced
in M-I's Motion contain trade secrets. 25
M-I's Brief includes only
a generalized argument that VH has independent value and that M-I
reasonable
uses
efforts
to
maintain
the
secrecy
of
its
"Confidential Information. " 26 M-I fails to explain why the specific
documents referenced in its Statement of Undisputed Facts contain
trade secrets.
General arguments that VH is a trade secret and
that M-I's "Confidential Information" contains trade secrets are
not sufficient to persuade the court that a trade secret exists in
the documents upon which M-I bases its Motion.
Fact issues
therefore remain as to whether the documents relied on by M-I
contain trade secrets.
See M-I's Brief, Docket Entry No. 75, pp. 16-22 11 SOF 35 SOF 50.
24
Defendants present a number of arguments as to why the
For
documents referenced by M-I do not contain trade secrets.
example, Defendants argue that the slide deck referenced in M-I's
Statement of Undisputed Facts was presented to clients and
therefore efforts were not made to keep the information secret.
See Defendants' Response, Docket Entry No. 81, p. 18. The court
need not reach these arguments because M-I has failed to meet its
initial burden to show the absence of a genuine issue of material
fact as to whether the documents referenced in M-I's Brief contain
trade secrets.
25
26
See M-I's Brief, Docket Entry No. 75, pp. 22-23.
-12-
M-I has also failed to meet its initial burden to show the
absence of a genuine issue of fact as to whether Defendants "used"
M-I's alleged trade secrets.
M-I relies on the Cowen Report to
show that Roy and Q'Max "used" and "accessed" M-I's confidential
data.27
But the Cowen report does not prove that Defendants used
M-I's information in developing MAXSITE.
Cowen concluded that Roy
possessed and accessed M-I's confidential data during his time at
Q'Max, making his report consistent with M-I's allegations, but not
conclusive on the issue of use.28
M-I also argues that an e-mail chain between Roy and other
Q'Max employees conclusively establishes that Defendants "used" a
M-I document in developing MAXSITE.29
Chase Brignac,
a Q'Max
employee, sent an e-mail to Roy and other Q'Max employees saying
"[t] his is what I have been using to try and review a different
look for the output." 30
Attached to Brignac's e-mail was a Q'Max
document that M-I alleges contains M-I's data that was "copied and
27
See M-I's Brief, Docket Entry No. 75, pp. 24-25.
See Cowen Report, Exhibit 7 to M-I's Brief, Docket Entry No.
75-7, pp. 14-15 11 30-35, 25 1 37, 40-41 11 83-89.
28
See M-I's Brief, Docket Entry No. 75, p. 25; M-I's Reply,
Docket Entry No. 85, p. 7.
29
See E-Mail Chain Between Chase Brignac, Sanj it Roy, and Steve
Lattanzi [With Attachment], Exhibit 2 to M-I's Brief, Docket Entry
No. 75-2, pp. 2-4.
30
-13-
simply rearranged. 1131
Roy instructed Brignac to "keep playing
around" with the software outputs because they were "too close to
you know what." 32
This e-mail chain is circumstantial evidence but
is not conclusive on the issue of use.
M-I
presented
has
misappropriation:
strong
circumstantial
evidence
of
Roy downloaded confidential documents during his
time at M-I and kept those documents while working for M-I's
competitors.
M-I documents were found on Roy's Q'Max computer and
forensic analysis shows that Roy accessed M-I's confidential
documents.
Roy e-mailed Brignac instructing him to "keep playing
around" with Q'Max's software because it was too similar to "you
know what," likely referring to VH.
VH and MAXSITE also have a
similar look and similar features.33
To be entitled to summary
judgment, however, M-I would need to demonstrate the absence of a
genuine dispute of material fact as to whether Q'Max and Roy
actually
used
M-I's
documents
to
develop
MAXSITE.
While
similarities between VH and MAX.SITE may be sufficient to raise an
inference that Defendants used M-I's trade secrets, see Spear
31
See id.; M-I's Brief, Docket Entry No. 75, p. 17
1
SOF 41.
See E-Mail Chain Between Chase Brignac, Sanj it Roy, and Steve
Lattanzi, Exhibit 12 to M-I's Motion [Without Attachment], Docket
Entry No. 75-11, pp. 3-4.
32
Q'Max also points to several important differences between
VH and MAX.SITE: the two programs are written in different
programming languages, use "different graphics packages," and each
contains features that the other does not.
See Defendants'
Response, Docket Entry No. 81, pp. 22-24.
33
-14-
Marketing, Inc. v. BancorpSouth Bank, 791 F.3d 586, 601 (5th Cir.
2015), such an inference is insufficient to entitle M-I to summary
judgment.
In the cases cited by M-I,
specifically GlobeRanger and
Wellogix, the Fifth Circuit reviewed the sufficiency of evidence to
support
a
jury's
determination
misappropriated trade secrets.
Wellogix, 716 F.3d at 877.
the
circumstantial
as
to
whether
a
defendant
See GlobeRanger, 836 F.3d at 499;
A jury could conclude after reviewing
evidence
presented
that
Defendants
misappropriated M-I's trade secrets in developing MAXSITE.
But M
I's summary judgment burden is greater than the one it will
ultimately bear at trial.
For the reasons explained above, M-I has failed to satisfy its
initial burden to show that there is no genuine dispute of material
fact as to (1) whether the documents upon which M-I relies contain
trade secrets and (2) whether Defendants used M-I's alleged trade
secrets.
summary
The court will therefore deny M-I's Motion seeking
judgment
on
its
federal
and
state
trade
secret
misappropriation claims.
B.
Breach of Contract Against Roy
M-I alleges that Roy retained a number of M-I's confidential
documents after leaving M-I in violation of the Confidentiality
-15-
Agreement.34
M-I argues that the facts regarding Roy's violation
of the Confidentiality Agreement are undisputed and that it is
entitled to summary judgment against Roy.35
Roy does not deny that
he breached the Confidentiality Agreement by retaining M-I's
documents. Roy argues that M-I is not entitled to summary judgment
on its breach of contract claim against him because he has raised
fact issues as to his affirmative defenses of waiver and laches. 36
Under Texas law the elements of a breach of contract claim are
"(1) the existence of a valid contract; (2) performance or tendered
performance by the plaintiff; (3) breach of the contract by the
defendant; and (4) damages sustained by the plaintiff as a result
of the breach."
Mullins v. TestAmerica. Inc., 564 F.3d 386, 418
(5th Cir. 2009).
Texas courts recognize waiver and laches as
affirmative defenses to a breach of contract claim. "Waiver is the
intentional
relinquishment
of
a
right
actually
known,
intentional conduct inconsistent with claiming that right."
Casualty Co. v. Allied Pilots Association, 262
(Tex. 2008).
right, benefit,
or
Ulico
s. W.3d 773, 778
"The elements of waiver include (1) an existing
or advantage held by a party;
actual knowledge of its existence;
(2) the party's
and (3) the party's actual
intent to relinquish the right, or intentional conduct inconsistent
11 69-70.
34
See Complaint, Docket Entry No. 1, pp. 15-16
35
See M-I's Brief, Docket Entry No. 75, pp. 26-27.
36
See Defendants' Response, Docket Entry No. 81, pp. 25-29.
-16-
with that right."
"To invoke the equitable doctrine of
laches, the moving party ordinarily must show an unreasonable delay
by the opposing party in asserting its rights, and also the moving
party's good faith and detrimental change in position because of
the delay."
In re Laibe Corp., 307 S.W.3d 314, 318 (Tex. 2010).
Texas courts generally find that laches do not apply if a statute
of limitations applies. Graves v. Diehl, 958 S.W.2d 468, 473 (Tex.
App. -- Houston [14th Dist.] 1997, no pet.).
The Texas statute of
limitations for a breach of contract is four years.
Tex. Civ.
Prac. & Rem. Code § 16.051.
Roy argues that M-I waived its breach of contract claim by not
discovering that he breached the Confidentiality Agreement sooner.37
M-I argues that it performed forensic analysis after it realized
Roy's potential breach of contract -- specifically, after Q'Max
announced the MAXSITE sample images on its website in 2017.38
M-I
did not have an affirmative obligation to investigate whether Roy
had violated the Confidentiality Agreement when he left M-I in
2014.
The summary judgment evidence establishes that M-I did not
have actual knowledge of Roy's breach until after its forensic
investigation revealed that he had downloaded confidential M-I
documents to external drives and was still in possession of those
documents.
Roy has presented no evidence that M-I intended to
37
See id. at 27.
38
See M-I's Reply, Docket Entry No. 85, p. 11.
-17-
relinquish its breach of contract claim or that M-I engaged in
intentional conduct inconsistent with its breach of contract claim.
The evidence shows the opposite: M-I promptly filed this action
after its forensic investigation revealed that Roy had retained
documents in violation of the Confidentiality Agreement.
Roy also argues that laches applies to bar M-I's claim.
He
argues that M-I waited "just shy of 4 years" after Roy's departure
to bring its breach of contract claim against Roy. 39
He therefore
does not dispute that M-I's breach of contract claim was brought
within the applicable statute of limitations.
Roy has presented no
evidence or argument that laches should bar M-I's breach of
contract claim despite its being brought within the statute of
limitations.
The court therefore finds the doctrine of laches
inapplicable in this action.
No issues of fact remain regarding Roy's affirmative defenses
of waiver and laches, and Roy does not dispute that he breached the
Confidentiality
leaving M-I.
Agreement
by
retaining
M-I's
documents
after
Roy will therefore be liable to M-I for breaching the
Confidentiality Agreement.
Fact issues remain as to the scope of
M-I argues that it did not discover Roy's breach until 2017
and filed this action "within months of actual knowledge of a
claim." See M-I's Reply, Docket Entry No. 85, p. 12. The court
need not determine when the statute of limitations began to run
because under both parties' arguments, M-I's breach of contract
claim was brought within the applicable four-year statute of
limitations.
39
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Roy's breach,
and consequently the amount of damages M-I is
entitled to.
IV.
Conclusion
For the reasons explained above, fact issues remain regarding
M-I's trade secret misappropriation claims against Defendants.
While the court has found that Roy breached the Confidentiality
Agreement, the scope of the breach (and M-I's damages) will be
determined at trial.
Plaintiff M-I LLC's Motion for Summary
Judgment as to Trade Secret Misappropriation and Breach of Contract
(Docket Entry No. 74) is therefore GRANTED IN PART and DENIED IN
PART. 40
SIGNED at Houston, Texas, on
ugust, 2019.
SENIOR UNITED STATES DISTRICT JUDGE
Because the court's normal practice is to allow each party
to file only one dispositive motion, M-I may not file another
motion for summary judgment.
40
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