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Tex App - No trade secret status due to imprecise nature of formula.

From our friends at JurisNotes.com Global Water Group, Inc. v. Atchley (Tex App 1/9/08) Decision Short Summary Global sued Atchley and Aspen Water, Inc. for misappropriation of trade secrets and related claims. The trial court entered judgment in favor of Atchley and Aspen and this court affirmed. In the 1990s, Global's predecessor created the first successful mobile self-powered, self-contained water purification system. Global's predecessor treated this system and associated products as trade secrets and required all employees to sign confidentiality agreements. Atchley was president of this entity until he resigned in 1994. In 1995, all assets of this entity were acquired by Global. In 1999, Atchley began manufacturing portable self-sustained water purification systems through his company, Aspen. While a jury found in favor of Global, the court granted the JNOV motion filed by Atchley and Aspen. It was undisputed that the steps required for water purification were commonly known. What Global claimed as its trade secrets were: 1) the formula for the compound it used in the absorption step; and 2) the sequence of the process it used to purify water. Global used KDF, a water purifying substance, and carbon in the absorption step. It was undisputed that other makers of water purification systems used both carbon and KDF. It was the particular ratio of KDF to carbon that Global asserted as a trade secret. Global, however, claimed no trade secret in any discrete formula, but rather in an approximate ratio of KDF to carbon. But there was no evidence showing that Global's formula was valuable or that it gave Global a competitive advantage. Nor was there any indication of whether Global's efforts to keep its purported trade secrets from being generally known were successful. Further, the imprecise nature of the information weighed heavily against it being a trade secret. There was no discrete formula at issue here, but only an approximate mix of two well-known substances commonly used together. That no discrete formula was claimed also raised a problem in determining whether Atchley or Aspen actually used the purported trade secret. Global did not contend that Aspen used the same formula, but only that its formula was similar. While the products were similar in certain aspects, there were also differences.

Full post as published by The Trade Secrets Vault on January 14, 2008 (boomark / email).