IMED Corp. v. Systems Engineering Associates Corp.
Decision Date | 10 July 1992 |
Citation | 602 So.2d 344 |
Parties | IMED CORPORATION, et al. v. SYSTEMS ENGINEERING ASSOCIATES CORPORATION, et al. 1910064-CER. |
Court | Alabama Supreme Court |
R. Stan Morris of Harris, Evans, Berg, Morris & Rogers, P.C., Birmingham, for appellants.
Michael C. Quillen and William H. Pryor, Jr. of Walston, Stabler, Wells, Anderson & Bains, Birmingham, and Harold F. See, Tuscaloosa, for appellees.
The United States District Court for the Northern District of Alabama certified the following questions of law to us:
(Emphasis in original.) We note that the district court made the following distinction between the first and second questions:
"The distinction between the first two questions is that, in the first instance, Lewis used or disclosed before notice, but continued to use or disclose after notice, and, in the second instance, she learned the trade secret without notice, but thereafter obtained notice and then used the secret for the first time."
The following pertinent facts were also provided by the district court for our consideration:
(Emphasis in original.)
The parties are at issue over whether Lewis can be held liable for misappropriating a trade secret under either the Alabama Trade Secrets Act, Ala.Code 1975, § 8-27-1 et seq. ("the Act"), or the common law doctrine of trade secrets, which was first recognized in Alabama in Drill Parts & Service Co. v. Joy Manufacturing Co., 439 So.2d 43 (Ala.1983). The plaintiffs maintain that if it is possible for them to state a claim against Lewis under the Act, then our inquiry need go no further; however, if it is not possible to state a claim under the Act, then, the plaintiffs argue, we must look to the common law to answer these certified questions.
Section 8-27-3 defines "misappropriation" as follows:
(Emphasis added.)
The parties disagree as to what the emphasized language above means. According to the plaintiffs, a person is liable under § 8-27-3 if he obtains information from a third person and then "discloses or uses" that information, knowing, or possessing information from which he should know, at the time of disclosure or use that the information is a trade secret and that it had been misappropriated by the third person. However, Lewis, relying heavily on the comment to § 8-27-3, insists that a person cannot be held liable under § 8-27-3 unless he knew or should have known at the time he learned the information that it had been misappropriated by the third person. We conclude that the plaintiffs correctly interpret the Act.
The fundamental rule of statutory construction is to ascertain and give effect to the intent of the legislature in enacting the statute. Words used in a statute must be given their natural, plain, ordinary, and commonly understood meaning, and where plain language is used a court is bound to interpret that language to mean exactly what it says. If the language of the statute is unambiguous, then there is no room for judicial construction and the clearly expressed intent of the legislature must be given effect. Tuscaloosa County Comm'n v. Deputy Sheriffs' Ass'n of Tuscaloosa County, 589 So.2d 687 (Ala.1991).
Section 8-27-3 is not ambiguous. It clearly states that "[a] person who discloses or uses a trade secret of another ... is liable to the other for misappropriation ... if ... [t]hat person learned the trade secret from a third person, and knew or should have known that" he was disclosing or using a misappropriated trade secret. It would require a tortured reading of the statute for us to conclude, as Lewis suggests, that a person cannot be held liable unless he knew or should have known at the time he learned the trade secret that it had been misappropriated by the third person. Our conclusion in this regard is consistent with the purpose of the act--to protect individual property rights in trade secrets and, thereby, to foster the development of new products and technology in this state. The Alabama Law Institute's committee on trade secrets law, which drafted the Act, included the following "Preface" in its proposed legislation:
The Act itself is also illustrative of its purpose. 1 The purpose underlying the Act would surely be thwarted if a person, although innocently acquiring a trade secret from a third person, could nonetheless disclose or use that trade secret with impunity after being placed on notice that the trade secret had been misappropriated by the third person. Likewise, our interpretation of the act is consistent with the common law doctrine of trade secrets, which as previously noted, was recognized approximately four years before the effective date of the Act in Drill Parts & Service Co. v. Joy Manufacturing Co., supra. Section 758B, Restatement of Torts (1939), provides:
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