Crater Corp. v. Lucent Technologies, Inc.
| Decision Date | 28 December 2007 |
| Docket Number | Case No. 4:98CV00913 ERW. |
| Citation | 625 F.Supp.2d 790 |
| Court | U.S. District Court — Eastern District of Missouri |
| Parties | CRATER CORPORATION, Plaintiff, v. LUCENT TECHNOLOGIES, INC., et al., Defendants. |
Robert Schultz, Vicki L. Little, Schultz and Little, L.L.P., Chesterfield, MO, for Plaintiff.
James H. Ferrick, III, Greensfelder, Hemker & Gale, P.C., K. Lee Marshall, Louis F. Bonacorsi, Bryan Cave LLP, St. Louis, MO, for Defendants.
This matter comes before the Court on Defendants' Lucent Technologies, Inc. and AT & T Co.'s Motion for Summary Judgment [doc. # 289].
Crater Corporation ("Plaintiff") sued Lucent Technologies, Inc. and AT & T Co. ("Defendants") in this Court, alleging that Lucent infringed Plaintiff's U.S. Patent No. 5,286,129, a patent directed to an underwater coupling device. Plaintiff also asserted state law claims against Defendants for misappropriation of trade secrets and breach of contract. This Court dismissed Plaintiff's patent infringement claims and the state law claims. See Crater Corp. v. Lucent Technologies, Inc., 1999 WL 33973795 (E.D.Mo. Aug. 25, 1999). On appeal, the dismissal of the patent claims was affirmed, but the dismissal of the state law claims was vacated and the matter remanded. Crater Corp. v. Lucent Technologies, Inc., 255 F.3d 1361 (Fed.Cir.2001). On remand, the Court determined that the government's proper assertion of the military and state secrets privilege made it impossible for Plaintiff to engage in discovery or to make out a prima facie case of misappropriation of trade secrets or breach of contract and also inhibited Defendants in defending against Plaintiff's claims. Crater Corp. v. Lucent Technologies, Inc., 2004 WL 3609347 (E.D.Mo. Feb. 19, 2004). On this basis, the Court dismissed Plaintiff's state law claims. See id.
Plaintiff appealed the dismissal of its state law claims, and the United States Court of Appeals for the Federal Circuit determined that the Court did not error in sustaining the government's assertion of the state secrets privilege, but that the Court did error in dismissing Plaintiff's state law claims. Crater Corp. v. Lucent Technologies, Inc., 423 F.3d 1260 (Fed.Cir. 2005). The Federal Circuit determined that further proceedings were required because the record in the case was not sufficiently developed to enable a determination of the effect of the government's assertion of privilege on the state law claims. Id.
The Federal Circuit remanded this suit, and has directed that the Court determine the precise nature of Plaintiff's state law claims in six specific areas:
(i) the precise trade secrets that exist in connection with the Crater coupler;
(ii) which of those trade secrets [Plaintiff] alleges were misappropriated;
(iii) whether a contract existed between [Plaintiff] and [Defendants];
(iv) if a contract did exist, its terms;
(v) which of the contract's terms [Plaintiff] alleges were breached; and
(vi) what constituted the alleged breach.
Id. The Federal Circuit stated that on remand, after the Court determines the precise nature of Plaintiff's state law claims, the Court should determine "which, if any, of the documents sought in discovery may be produced in the face of the government's assertion of the state secrets privilege." Id. at 1269.
Following remand, on August 31, 2006, Plaintiff filed a Second Amended Complaint, and Defendants responded on September 20, 2006. In Plaintiff's Second Amended Complaint, Counts 3, 4, and 6 allege claims resulting from Patent Infringement. These claims are identical to those in the Plaintiff's First Amended Complaint [doc. # 21]. These claims were dismissed from Plaintiff's First Amended Complaint in an order dated August 25, 1999 [doc. # 140], and this dismissal was upheld by the Federal Circuit. As a result, the Court dismissed Counts 3, 4, and 6 from Plaintiff's Second Amended Complaint in an order dated November 29, 2006 [doc. # 282].
Defendants' filed a motion for summary judgment [doc. #289] on April 16, 2007, seeking a grant of summary judgment on Counts 1, 2 and 5 of Plaintiff's Second Amended Complaint. This motion is pending before the Court. In order for the Court to comply with the Federal Circuit's opinion, it is necessary to determine at this juncture whether the Plaintiff has provided sufficient evidence in support of its prima facie case, and subsequently, for this Court to determine whether proof of those specific issues will require documentation protected by the state secrets privilege.
Phil French, Charles Monty and Steven Van Keuren ("Crater Principals") developed the technology underlying the Crater Coupler in the late 1980's. The Crater Coupler is a connector for fiber optics. The Crater Principals never signed an agreement among themselves to keep this technology confidential. Throughout the early development of this device, Plaintiff failed to protect its alleged confidentiality. For example, in 1988, Phil French worked with a machinist to develop a prototype of the Crater Coupler without extracting promises of confidentiality. When Plaintiff began sharing this technology with various companies in the years before Plaintiff received its patent, Plaintiff regularly sent out information concerning the technology with an unsigned nondisclosure agreement. The solicited company was free to look at the technology without signing the agreement.2
Plaintiff applied for a patent on August 7, 1991. U.S. Patent No. 5,286,129, was issued to Plaintiff on February 15, 1994. Plaintiff sent out more solicitations after the patent was issued, but dispensed with the non-disclosure agreement since it now had patent protection for the Coupler. Plaintiff felt that this information did not need to be kept confidential because it was protected by the patent. In February of 1994, Plaintiff sent about 43 solicitations to various companies in an attempt to license the Coupler. Plaintiff received less than 10 responses, and the only response that seemed promising was a response from Plast-O-Matic. Plaintiff prepared a nondisclosure agreement for Plast-O-Matic to sign, and sent this agreement with its solicitation package to Plast-O-Matic, but this one was sent before Plaintiff's patent issued. However, Plast-O-Matic responded to Plaintiff after the patent issued. Plaintiff does not know if a nondisclosure agreement was ever signed by Plast-O-Matic.
Plaintiff's solicitation packages to other third parties emphasized that since its Coupler was patented, detailed drawings and videos of the Coupler were not confidential. When Plast-O-Matic passed Plaintiff's drawings along to Defendants, Plast-O-Matic indicated that confidential markings on the drawings could be ignored because the technology now had patent protection. Plast-O-Matic's indication that any confidential markings on drawings could be ignored was consistent with Plaintiff's belief that it need not "worry about confidentiality because the device is now patented." None of the documents that Plaintiff later shared directly with Defendants were marked confidential.
The Crater Principals had weekly meetings for years to discuss their attempts to license their technology, and they took copious notes at these meetings. None of the detailed notes from any of the Crater Principals during Plaintiff's work with Defendants— including notes from the initial March 17, 1995 meeting with Defendants— indicate that Plaintiff and Defendant ever agreed on anything or that Defendants were informed that anything was confidential.3
Defendants were developing an underwater fiber optic wetmate for the federal government on a classified Naval project. An underwater fiber optic wetmate essentially is a device that connects and disconnects fiber optics beneath the sea. Defendants approached Plast-O-Matic, along with other companies, to develop connector technology for the wetmate. Plaintiff did not have a "pre-made coupler ready to go" for the application in which it believed Defendants were ultimately interested. Indeed, Plaintiff had no actual Crater Couplers in commercial use before it began its work with Defendants, did not have the capacity to manufacture and sell Couplers, had no signed license agreements for the Coupler and had no customers. Plaintiff was "developing the coupler while it was working with [Defendants]."
Before 1995, Plaintiff had never "attempted to connect a fiberoptic carrier through a Crater coupler," never "attempted to connect its coupler under the sea," and never "attempted to connect its coupler under conditions that were intended to simulate undersea conditions." Plaintiff had never tested the "use of its coupling device within a larger device" such as the wetmate that was the end goal of the Government project. Plaintiff's only experience testing the Coupler in underwater conditions consisted of putting the Coupler in the "kitchen sink." The application in which Plaintiff believed Defendants were ultimately interested was "not an application that Plaintiff had previously spent a lot of time and analysis thinking about or testing."
In January 1995, Plaintiff asked Plast-O-Matic to identify its customer. On February 7, 1995, Plast-O-Matic prepared a memorandum of understanding that it requested Plaintiff sign before it disclosed its customer. Plaintiff sent a signed agreement consistent with Plast-O-Matic's terms on February 16, 1995. On February 17, 1995, Plast-O-Matic disclosed that it was working with Defendants and thereafter Plaintiff and Defendants began working directly with each other. Plaintiff, Defendants, and Plast-O-Matic first had a joint meeting on March 17, 1995, where they discussed a number of issues relating to the project. Plaintiff cannot say for certain who was at the meeting on March 17, 1995,...
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