Rivendell Forest Products, Ltd. v. Georgia-Pacific Corp., GEORGIA-PACIFIC
Citation | 31 USPQ2d 1472,28 F.3d 1042 |
Decision Date | 30 June 1994 |
Docket Number | GEORGIA-PACIFIC,No. 93-1110,93-1110 |
Parties | RIVENDELL FOREST PRODUCTS, LTD., Plaintiff-Appellant, v.CORPORATION and Timothy L. Cornwell, Defendants-Appellees. |
Court | United States Courts of Appeals. United States Court of Appeals (10th Circuit) |
Brice A. Tondre of Strate and Tondre, P.C., Wheat Ridge, CO, for plaintiff-appellant.
Gregg I. Anderson (Scott S. Havlick, with him on the briefs) of Holland & Hart, Denver, CO, for defendants-appellees.
Before KELLY and SETH, Circuit Judges, and OWEN, District Judge *.
This suit concerns an aspect of the lumber business in which both Plaintiff, Rivendell Forest Products, Inc., and the Defendant, Georgia-Pacific Corporation (G.P.), were engaged. Defendant Cornwell was employed originally by Rivendell and later by G.P. Rivendell was a wholesaler of lumber known as a "reload wholesaler" which provided lumber of the kind and sizes needed by its customers, quoted prices, and advised them as to delivery. It had a number of storage yards. G.P. was as to this aspect of its business a competitor of Rivendell.
Rivendell brought suit against G.P. for wrongful appropriation of a trade secret. The suit was also against Cornwell for a violation of confidence. The suit centers on a computer software system which Rivendell had developed over the years, and which system it asserted to be a trade secret under Colorado law. It asserts that this system enabled Rivendell to provide its customers with special service, and to manage its distribution centers as no competitor could do. This was a computer system which enabled Rivendell employees to give immediate answers to customers' questions and phone inquiries as to prices, quantities, places, and delivery time as to various lumber sizes and types without any computations which required a delay and a call back to the customer. It asserted that at the pertinent time no other wholesaler could provide such service and management, and this gave Rivendell a large advantage over its competitors including G.P. It is this software system that Rivendell asserts was its trade secret.
The Defendants filed a motion for summary judgment and the case was heard on affidavits and depositions. The trial court ultimately granted Defendant G.P.'s motion for summary judgment, 824 F.Supp. 961. It does not appear necessary to decide whether Rivendell made a counter-motion for summary judgment or only an argument in a brief.
The complaint was based on Colorado's Trade Secret Act, C.R.S. Sec. 7-74-102(4) (1986 Repl.Vol.), which provides:
C.R.S. Sec. 7-74-102(2) (Rep.Vol.1986) defines misappropriation of a trade secret as:
Our court in Telex Corp. v. I.B.M., 510 F.2d 894 (1975), and in Kodekey Electronics, Inc. v. Mechanex Corp., 486 F.2d 449 (1973), discussed the definition of "trade secrets" generally. This parallels the definition in the Colorado statutes and in Colorado Supply, both quoted above. In Telex we stated:
The Colorado court in Colorado Supply Co. v. Stewart, 797 P.2d 1303 (Colo.App.1990), set forth the several elements which can be used to identify a trade secret as follows:
There seems to be no present difference of opinion as to whether computer software is protected under the typical trade secret statutes and doctrine. See 38 Geo.Wash.Law Rev. 909.
In Kodekey we contrasted the considerations in patent law with the factors relating to trade secrets and noted that novelty and invention are not elements of the trade secret doctrines. We stated:
"
The patent law-trade secret mix in the trial court's consideration will be later considered. We also stated in Kodekey that what constitutes a trade secret is a question of fact.
This computer software system in issue, Rivendell asserts, took it nine years to develop at a cost of nearly a million dollars. Mr. Cornwell worked for Rivendell in this development, knew it well, and had a significant role although he was not a computer expert. While working for Rivendell he was contacted by an executive of G.P., and two months thereafter was hired by G.P. with a job description to develop a new computer software system for G.P. This new system had become necessary with the decision by G.P. to consolidate its entire Distribution Division which consisted of about 100 distribution centers. G.P. had no need before the consolidation decision for such a new system, and there had been none in place. After the decision to consolidate G.P. contacted Cornwell and he was offered the task to develop a system quickly to permit the consolidation.
Rivendell's system was the only one Cornwell had been familiar with, and was the only one then in the industry which could provide immediate answers on all aspects of the customers' needs. He was not a computer expert, as mentioned, but immediately after being hired by G.P. he went to work on a computer system for G.P. This system was very soon developed, and it was for all practical purposes the same as the one at Rivendell.
The trial court, in considering the summary judgment motion, acknowledged that there were essential disputed issues of fact presented as to two essential elements of Colorado's Trade Secret Act (C.R.S. Sec. 7-74-102(4) ). These elements were "the value of the information to ...
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