Coda Dev. S.R.O. v. Goodyear Tire & Rubber Co.

• Decision Date: 22 February 2019
• Docket Number: 2018-1028
• Parties: CODA DEVELOPMENT S.R.O., CODA Innovations S.R.O., Frantisek Hrabal, Plaintiffs-Appellants v. GOODYEAR TIRE & RUBBER COMPANY, Robert Benedict, Robert Allen Losey, Defendants-Appellees
• Court: U.S. Court of Appeals — Federal Circuit

916 F.3d 1350

CODA DEVELOPMENT S.R.O., CODA Innovations S.R.O., Frantisek Hrabal, Plaintiffs-Appellants

v.GOODYEAR TIRE & RUBBER COMPANY, Robert Benedict, Robert Allen Losey, Defendants-Appellees

2018-1028

United States Court of Appeals, Federal Circuit.

Decided: February 22, 2019

Boyd T. Cloern, Steptoe & Johnson, LLP, Washington, DC, argued for plaintiffs-appellants. Also represented by Charles Glaston Cole ; David Kwasniewski, San Francisco, CA.

Gregory A. Castanias, Jones Day, Washington, DC, argued for defendants-appellees. Also represented by John Charles Evans, Calvin Griffith, David Michael Maiorana, Cleveland, OH.

Before Prost, Chief Judge, Wallach and Hughes, Circuit Judges.

Prost, Chief Judge.

Plaintiffs-appellants CODA Development s.r.o., CODA Innovations s.r.o. (together, "Coda"), and Frantisek Hrabal (collectively, "Plaintiffs") filed a complaint against defendants-appellees The Goodyear Tire & Rubber Company ("Goodyear"), Robert Benedict, and Robert Losey (collectively, "Defendants") in the U.S. District Court for the Northern District of Ohio. The complaint sought correction of inventorship in several Goodyear patents and alleged, among other things, that Goodyear misappropriated Coda’s trade secrets.

The district court dismissed the complaint for failing to state a claim upon which relief could be granted, and following the dismissal, it denied Plaintiffs leave to amend their complaint. Plaintiffs appeal the district court’s dismissal and denial of leave to amend. We vacate the district court’s dismissal and remand for further proceedings consistent with this opinion.

BACKGROUND

I

The complaint alleges the following facts. Mr. Hrabal, Coda’s CEO, invented certain self-inflating tire ("SIT") technology. In 2008, General Motors representatives approached Coda and expressed interest in the technology. General Motors wanted to involve Goodyear in commercializing the technology, and Coda consented to that arrangement. General Motors then wrote to Goodyear suggesting that it contact Coda, which it did. Goodyear requested and arranged a meeting with Coda, but before the meeting took place, the parties executed a nondisclosure agreement restricting use of disclosed information to cooperation between the parties regarding the development of SIT technology.

Coda and Goodyear met for the first time on January 15, 2009, at a research facility near Frankfurt, Germany. Several Goodyear representatives participated in the meeting, including Mr. Benedict, who was responsible for Goodyear’s research and development relating to SIT technology. At this meeting, and at Goodyear’s request, Coda shared novel, proprietary, and confidential information concerning its SIT technology, including the placement of the tire’s pump tube, the design of the pressure management system, the efficiency of the leakage compensation system, and the air passageway/interface between the exterior and interior of the tire.¹ J.A. 55–56 ¶¶ 29, 31.

Some Goodyear representatives expressed skepticism about the viability of Coda’s technology. Goodyear had been disappointed before; it previously invested in a failed inflating technology called the "Cycloid." Nevertheless, Coda addressed Goodyear’s viability concerns at this meeting, and the parties agreed to continue discussions.

Goodyear contacted Coda requesting a second meeting. Mr. Benedict specifically requested to review an updated technical presentation, the latest product, testing methods, and performance results. J.A. 56–57 ¶ 34. This second meeting occurred in Prague on June 15, 2009, with Mr. Benedict and members of his team in attendance. At this meeting, Coda allowed Goodyear to examine a functional prototype of Coda’s SIT technology. Mr. Benedict requested that he and his team be allowed to spend some time alone with the prototype, during which he photographed it without permission. J.A. 57 ¶ 36.

Following the June 2009 Prague meeting, several months passed without any communication from Goodyear. Coda attempted to restart communications in November 2009, inviting Mr. Benedict to dinner to discuss the status of the proposed development project. Mr. Benedict declined, saying that "[a] meeting would be premature at this point." J.A. 58 ¶ 38 (alteration in original).

The following month, December 2009, a Goodyear employee on Mr. Benedict’s team independently contacted Coda to inquire about the status of Coda’s SIT technology in preparation for an internal Goodyear meeting. Coda explained that Mr. Benedict had surprisingly gone silent. The employee replied, saying that "during [Goodyear’s] brainstorm session, I indicated your invention matches up nicely with Goodyear’s current criteria for development and asked if we have looked into this with SIT Coda. [Mr. Benedict’s] response to this question was oddly vague." J.A. 58 ¶ 40 (first alteration in original).

Also that month, and unbeknownst to Coda, Goodyear applied for a patent entitled "Self-Inflating Tire Assembly." Goodyear’s application published on June 23, 2011, issued as U.S. Patent No. 8,042,586 (the "’586 patent") on October 25, 2011, and named Messrs. Benedict and Losey as the inventors.

Meanwhile, Coda assumed that Goodyear’s silence indicated a lack of interest in Coda’s SIT technology, or perhaps that the economic recession was inhibiting further discussions. But in September 2012, Coda received an unsolicited email from the (then ex-) Goodyear employee with whom Coda corresponded in December 2009. The email said, "I am retired now from Goodyear and see in the news today that they have copied your SIT. Unfortunate. I thought China companies were bad." J.A. 59 ¶ 44.

According to the complaint, between 2012 and 2015, eleven other patents issued to Goodyear covering assemblies and methods for assembly of pumps and other devices used in self-inflating tires. The complaint alleges that these patents have claims with limitations covering the novel, proprietary, and confidential information Coda disclosed to Goodyear.

II

Plaintiffs sued Defendants in the U.S. District Court for the Northern District of Ohio on August 9, 2015. The complaint included two correction-of-inventorship claims concerning the ’586 patent —one to add Mr. Hrabal as an inventor, the other to remove Messrs. Benedict and Losey as inventors. The complaint also included correction-of-inventorship claims to add Mr. Hrabal as an inventor on eleven other Goodyear patents (the "Alleged Jointly Invented Patents")² and a claim of trade-secret misappropriation under Ohio state law.

Defendants moved to dismiss under Federal Rule of Civil Procedure 12(b)(6). Defendants argued that for each of Plaintiffs’ correction-of-inventorship claims, the complaint failed to plead facts supporting Mr. Hrabal’s conception or co-conception of the inventions claimed in Goodyear’s patents. Defendants referenced an exhibit to their motion—a patent application of Mr. Hrabal’s published before the ’586 patent ’s filing date—and argued that the complaint’s description of Plaintiffs’ novel, confidential technology was "so unspecific that it applie[d] equally" to this publication. J.A. 273. With respect to the Alleged Jointly Invented Patents, Defendants further argued that the complaint failed to plead facts supporting collaboration. Finally, Defendants argued that Plaintiffs’ trade-secret-misappropriation claim was barred by the relevant Ohio statute of limitations because Coda should have known of its claim as of June 2011, when the application leading to the ’586 patent published.

Plaintiffs opposed. In reply, Defendants attached an article written by Mr. Hrabal that was published in November 2008 (the "Hrabal article"). J.A. 874–78. Defendants argued that the Hrabal article publicly disclosed everything the complaint alleged was novel, proprietary, and confidential (and shared with Goodyear), including the placement of the tire’s pump tube, the design of the pressure management system, the efficiency of the leakage compensation system, and the air passageway/interface between the exterior and interior of the tire. J.A. 844–45.

Plaintiffs moved the district court to strike or disregard the Hrabal article because it was outside the pleadings and was offered for the first time on reply. Alternatively, Plaintiffs requested leave to file a sur-reply addressing the new arguments based on the Hrabal article. In their request for a sur-reply, Plaintiffs argued that while the Hrabal article disclosed a location for the tire’s pump tube, that location was not the secret location disclosed to Goodyear. Plaintiffs indicated that a sur-reply would fully explain why the Hrabal article did not disclose the alleged novelty and trade secrets that Coda disclosed to Goodyear.

Nine months after briefing on the motion to dismiss concluded, the district court issued an opinion and order denying Plaintiffs’ motion to strike and granting Defendants’ motion to dismiss.

Coda Dev. s.r.o. v. Goodyear Tire & Rubber Co. , No. 5:15-cv-1572, 2016 WL 5463058 (N.D. Ohio Sept. 29, 2016) (" Dismissal Opinion "). The court denied Plaintiffs’ motion to strike because it found the Hrabal article was judicially noticeable as a "2008 public disclosure of something [Plaintiffs] now claim[ ] was secret when disclosed to Goodyear in 2009." Id. at *2. The court’s opinion did not explain why it denied Plaintiffs’ alternative request to file a sur-reply addressing the new article.

The district court then addressed Defendants’ motion to dismiss. Beginning with Plaintiffs’ correction-of-inventorship claims, the court set forth the alleged disclosures to Goodyear and found that Goodyear’s ’586 patent"actually identifies these very concepts as ‘prior art,’ " and that Mr. Hrabal’s prior, published patent application disclosed a pump tube in a side wall. Id. at *4–5. But the bulk of the court’s prior-art analysis rested on the Hrabal article. The court adopted Defendants’ mapping of the article’s contents to the complaint’s description of the elements...