CAFC Says Design, Development Knowledge Not Sufficiently Defined in Alleged Self-Inflating Tire Trade Secrets

Today, the U.S. Court of Appeals for the Federal Circuit issued a precedential ruling in Coda Development S.R.O. v. Goodyear Tire & Rubber Co. affirming the Northern District of Ohio’s post-verdict grant of judgment as a matter of law (JMOL) to Goodyear on state trade secret and federal inventorship claims raised by Coda. The Federal Circuit ruled that Coda’s trade secret claims were either not defined with sufficient particularity or were publicly disclosed in patent applications filed by Coda, leading the appellate court to dismiss the appellant’s correction of inventorship claims as well.

Belated Attempt to Introduce Trade Secret Specificity Fails at Federal Circuit

Coda sued Goodyear in Northern Ohio alleging that Goodyear’s self-inflating tire (SIT) technology infringed upon a series of trade secrets, including the design and development of SIT pump and groove solutions, multipurpose interfaces for transporting air, and optimal locations for placing a self-inflating pump within a tire. Coda also included a claim for correcting the inventorship of U.S. Patent No. 8042586, Self-Inflating Tire Assembly. In granting JMOL, the Northern Ohio district court overturned a jury verdict awarding $2.8 million in compensatory damages and $61.2 million in punitive damages to Coda for Goodyear’s misappropriation of five alleged trade secrets.

Examining Ohio state appellate court and Sixth Circuit rulings on the Ohio Uniform Trade Secrets Act, the Federal Circuit noted that plaintiffs are required to define the protected information “with sufficient definiteness to permit a court to apply the criteria for protection” and determine if misappropriation has occurred. Although the parties disputed on appeal whether trade secret definiteness was an issue of fact or law, the Federal Circuit found that Coda did not sufficiently define its alleged trade secrets even under a reasonable jury standard.

The trade secret serving as the focus of Coda’s appeal, labelled TS 24, consisted of Coda’s knowledge of optimal pump placement, “namely, in the sidewall close to, and above, the rim where the tire cyclically deforms in response to deformation.” The Federal Circuit found that the district court correctly determined that this alleged trade secret was publicly disclosed in both a 2007 Patent Cooperation Treaty (PCT) patent application and a 2008 article published in Tire Technology, both of which disclosed the pump as being positioned within the tire’s sidewall.

Attempting to differentiate its alleged trade secret, Coda claimed that those publications did not disclose a pump positioned within a “conventional” or “standard” tire sidewall. The Federal Circuit, however, dismissed this as an “attempt to belatedly introduce additional specificity into the trade secret” demonstrating Coda’s failure to separate its purported trade secret from other information known to the trade.

No Evidence Tied Tire Pressure Test Results to Goodyear’s Development Project

Other trade secrets alleged by Coda met similar fates for lack of definition with sufficient particularity. TS 7, which covered Coda’s multipurpose air transportation interface, included a list of 10 functions performed by the interface but lacked any description of the design and development knowledge enabling someone else to develop the same interface. Trade secrets TS 11, design and development of SIT pump and groove solutions, and TS 20, design and development of SIT circulating and non-circulating variations, were similarly indefinite as undifferentiated lists of components with no disclosure of the claimed knowledge.

Even if those alleged trade secrets were valid, the district court correctly determined that no reasonable jury could find that Goodyear used them in patents allegedly disclosing the functions or components comprising Coda’s alleged trade secrets. The Federal Circuit found that the few elements identified by Coda’s expert witness as being contained within Goodyear’s patents did not support testimony that Goodyear patented “a perfect knock-off of [Coda’s] technology.” “Even if we ignore the lack of evidentiary support,” the appellate court held that Coda failed to refute Goodyear’s assertion that the alleged trade secrets were publicly disclosed by Coda’s patent applications and public presentations.

The Federal Circuit also ruled that Coda failed to prove Goodyear’s use of TS 23, development of a functional SIT as demonstrated by test results showing the tire pump generating pressure higher than the tire cavity’s pressure. At trial, the only evidence purporting to show Goodyear’s use was a 2009 email that did not contain test results indicating pressure measurements outlined in Coda’s alleged trade secret. Coda argued that Goodyear’s use of TS 23 could be reasonably inferred from the timing of its 2009 SIT development project, but the Federal Circuit dismissed this because no evidence tied TS 23 to the project, nor did any evidence show that the test results were communicated to Goodyear.

Finally, the Federal Circuit denied Coda’s claim for correction of inventorship on the ‘586 patent. On appeal, Coda’s sole challenge to the district court’s denial was that the district court improperly granted JMOL on its trade secret claims. Although the Federal Circuit’s ruling on Coda’s trade secret claims was dispositive, the appellate court found that Coda’s inventorship challenge separately failed because the jury was never asked to compare the scope of the ‘586 patent and TS 24, which identify different locations for the claimed pump assembly, so the court’s ruling did not conflict with the jury’s verdict.

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