Triple Tee Golf, Inc. v. Nike, Inc.

• Decision Date: 17 April 2007
• Docket Number: No. 05-10934.,No. 05-11442.,05-10934.,05-11442.
• Parties: TRIPLE TEE GOLF, INC., a Florida Corporation, Plaintiff-Appellant, v. NIKE, INC., an Oregon Corporation, Tom Stites & Associates, Inc., doing business as Impact Golf Technologies, Inc., John Thomas Stites, III, also known as Tom Stites, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

485 F.3d 253

TRIPLE TEE GOLF, INC., a Florida Corporation, Plaintiff-Appellant, v. NIKE, INC., an Oregon Corporation, Tom Stites & Associates, Inc., doing business as Impact Golf Technologies, Inc., John Thomas Stites, III, also known as Tom Stites, Defendants-Appellees.

No. 05-10934.

No. 05-11442.

United States Court of Appeals, Fifth Circuit.

April 17, 2007.

Jonathan Tad Suder, Edward E. Castro, Jr. (argued), Friedman, Suder & Cooke, Fort Worth, TX, for Plaintiff-Appellant.

Christopher J. Renk (argued), Michael Joseph Harris, J. Pieter van Es, Banner & Witcoff, Chicago, IL, Charles Gregory Pouls, Cotten Schmidt, Fort Worth, TX, for Defendants-Appellees.

Robert Daniel Martinez, Cotten Schmidt — Fort Worth, Fort Worth, TX, Bruce Judson Berman, McDermott, Will & Emery, Miami, FL, for Nike, Inc., Tom Stites & Associates, Inc. and John Thomas Stites, III.

Appeals from the United States District Court for the Northern District of Texas.

Before JONES, Chief Judge, and WIENER and BARKSDALE, Circuit Judges.

WIENER, Circuit Judge:

Plaintiff-Appellant, Triple Tee Golf, Inc. ("TTG") sued Defendants-Appellees ("Defendants"), Nike, Inc. ("Nike") and Tom Stites & Associates, Inc. d/b/a Impact Golf Technologies ("IGT") for misappropriation of trade secrets, negligent misrepresentation, breach of confidentiality, breach of implied contract, and deceptive trade practices. During discovery, the district court limited TTG's proofs on all of its claims to evidence related to the use of TTG's trade secrets in two specific Nike golf clubs, the CPR Woods and the Slingshot irons (collectively, the "accused clubs"). After discovery was completed, Defendants moved for summary judgment, contending that (1) TTG's trade secrets describe a system for weighting golf clubs that is adjustable by the user of the clubs, and (2) the accused Nike clubs are not "adjustable" at all. The district court, having determined that all of TTG's claims turned on the unlawful use of trade secrets, granted Defendants' motion and dismissed TTG's suit in its entirety.

After the judgment was entered, TTG became aware of two patent applications previously filed by Nike, describing golf clubs that are adjustable by the user of the clubs. Based on Defendants' failure to disclose these patent applications in response to TTG's discovery requests, TTG moved for relief from the earlier judgment. The district court denied this motion, stating that the patent applications were not relevant to the legal issues that it had decided. TTG now appeals the district court's limiting evidentiary order, grant of summary judgment, and denial of post-judgment relief.

I. FACTS & PROCEEDINGS

A. Background

TTG was founded by Jack Gillig to produce and market the golf clubs that he designed. In September 2000, Gillig contacted Tom Stites, a golf club designer and the founder of IGT, to inquire whether IGT would fabricate a prototype golf club for TTG based on one of Gillig's designs. Gillig and Stites met and discussed Gillig's ideas for club design. Gillig showed rough prototypes and sketches to Stites, who made photocopies of Gillig's written materials. After reviewing these materials, Stites agreed that IGT would fabricate a prototype club for TTG.

Shortly after this meeting, however, Stites was hired by Nike Golf ("Nike") as its Director of Product Creation. Stites informed Gillig that, because of Stites's new association with Nike, IGT would not be able to make the promised prototype golf club for TTG. In 2002, TTG submitted its design concepts directly to Nike, but Nike returned TTG's submission, indicating that it was not interested in developing those concepts.

While attending a golf industry trade show in February 2003, Gillig noticed that Nike's CPR Woods bore certain similarities to one of the club designs that he had shown to Stites. Gillig immediately suspected that Stites and Nike had used TTG's designs to develop the CPR Woods, and he later suspected that other of his designs had been used in Nike's Slingshot Irons and OZ T-100 putter.

TTG sued Nike and Stites in January 2004, asserting claims for (1) misappropriation of trade secrets, (2) breach of confidentiality, (3) breach of implied contract, (4) negligent misrepresentation, and (5) deceptive trade practices.¹

B. Issues Narrowed During Discovery

TTG's complaint does not specify its trade secrets in detail, instead referring generally to "ideas" and "concepts" for a "novel system of golf clubs and golfing equipment." During discovery, Defendants propounded interrogatories to TTG seeking (1) precise descriptions of TTG's alleged "trade secrets" (Interrogatory No. 1), and (2) a list of Nike clubs that TTG believed were developed using those trade secrets (Interrogatory No. 5). TTG's initial response to Interrogatory No. 1 did not provide detailed descriptions of the alleged trade secrets, but an April 2005 supplemental response identified seven specific trade secrets:

(a) The first trade secret of the Plaintiff was for an adjustable weighting system in a "hollow back" club, so the distribution of weight in the golf club head could be changed to obtain a desired flight path and distance of a golf ball. The Plaintiff contemplated this could be accomplished through one of three methods: (1) use of an existing sole plate, with a distinct weight distribution, and fixed by Allen screws or other means, could be removed or replaced by a new sole plate with a different weight distribution, (2) insertion of additional weight into the hollow of the club, or the sole, to obtain a different weight distribution, and (3) use of weighted metal bands, with a distinct weight distribution, spanning across the hollow, but inside the outside boundary of the club head, fixed by Allen screws or other means, that could be removed or replaced by a metal band with a different weight distribution.

(b) The second "trade secret" is that a peripheral band could be placed around the perimeter of the hollow to secure in place either inserted weights, as set forth in number (2) above, or the metal bands, in number (3), as set forth above.

(c) The third "trade secret" is a twenty-seven (27) point weighting system on a three dimensional x, y, and z coordinate system within the space of the "hollow back" golf club head, and secured with one of the methods set forth above. There would be three weight boxes along the front of the face, from left to right along the y axis, three weight boxes from the bottom of the club head to the top of the club head along the z axis, and three weight [boxes] from the front of the club head to the rear of the club head along an x axis, to create one or more of twenty-seven (27) weighted coordinates in the three-dimensional space of the "hollow back" club. The adjustable weights, as set forth above, would be changed in the twenty-seven (27) point weighting system to obtain different weight distributions in the club head, to alter the flight of the golf ball when struck to the accommodate the desires and needs of the golfer. At all times, the weights and weighting system would stay within the perimeter of the club, as delineated by the peripheral bands, to comply with all rules and regulations of golfing.

(d) The fourth "trade secret" is a system to analyze the swing of a golfer to determine any defect thereof, and whether the optimal striking point ("sweet spot") on the face of the golf club should be adjusted by utilizing the twenty-seven (27) point weighting system to produce the distance and flight path of the golf ball desired by the golfer. The golfer's swing would be captured by video, and then processed through a computer program, to be written and developed by qualified programmers, to analyze the golf swing, and determine the placement of the twenty-seven (27) point weighting system to correct the swing, or to produce a desired flight path or distance of the golf ball, by positioning of the optimal striking point ("sweet spot") on the face of the golf club.

(e) The fifth "trade secret" is a naming or designation system for golf clubs. Instead of designation of a "1 Wood" or a "4 Iron" or a "Pitching Wedge" or a "Putter," the golf clubs would be named or designated through lofts and description of the purpose for the club. For instance, a club may be designated as a "22° Driver," or a "26° Fairway Iron," etc.

(f) The sixth "trade secret" builds upon the concept described in the fifth "trade secret." The sixth "trade secret" is to move away from a standardized set of golf clubs with a set number of woods/drivers, a set number of irons, a set number of wedges, and a putter, with a uniform weight distribution throughout the set of clubs. The new set of golf clubs would be assembled using non-uniform/different weight distributions, as set forth above, to achieve different flight paths, distances, and purposes. The twenty-seven (27) point weighting system would be combined with different lofts to enable the golfer to choose specific clubs for specific needs and desires for his game. The golfer could choose as many, or as little a number, clubs as he wanted to complete a set of golf clubs. All of the golf clubs would be branded the same, and designated or named using the naming system set forth above. The lofts that are available to the golfer would be in 2° increments. This will, by its very nature, create golf clubs with non-standard loft. One example of this type of club, that was envisioned by the Plaintiff, was a 22° Driver.

(g) The seventh "trade secret" is the way in which all of the foregoing ideas would be marketed toward the general public as one coherent system. The first target consumer would be children and junior golfers, because there were no major golf club manufacturers who directed sets of clubs toward junior golfers. The junior golfer would be provided a set of clubs with just the basic "hollow back" golf club head. Instead of a set of golf clubs with a large number of...