litigated here that would have been litigated in the 1985 action, we DENY defendants' motion for partial summary judgment to the extent that it is based on the doctrine of res judicata.
B. Statute of Limitations
Defendants also argue that plaintiff's pursuit of this action with respect to the 15 subject trade secrets is barred by the applicable statute of limitations. California Civil Code § 3426.6, which was enacted in 1985, provides as follows:
An action for misappropriation must be brought within three years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim.
Thus, with respect to any given trade secret, California law requires plaintiff to bring an action within three years after plaintiff discovered or should have discovered defendants' initial misappropriation of that trade secret (regardless of whether the initial misappropriation is characterized as a use of the trade secret or merely as a disclosure of it). Ashton-Tate, supra, 916 F.2d at 523-24; see also Whittaker, supra, 736 F.2d at 1345; Monolith Portland Midwest, supra, 407 F.2d at 292-93.
We find that plaintiff, through the exercise of reasonable diligence, should have discovered at least "disclosure" of any trade secret that was visible in the Ventritex documents that were made available to Winstrom (who was serving as plaintiff's agent) during the audit on March 17 and 18, 1986. Plaintiff cannot contend that time constraints prevented Winstrom from discovering secrets' reflected in the Ventritex documents; Winstrom elected to use only two of the four days he was given for the audit. Moreover, he was allowed to talk to Sweeney, Pless, and Philip Ball during the audit "to clarify any technological information or details concerning Ventritex's proposed implantable defibrillator." Exs. B, C to Salmon decl. Winstrom in fact did speak at length with Pless during the audit. Winstrom decl. at PP 3-4. No evidence has been presented that defendants engaged in any fraud or concealment during the audit process. We thus find that no reasonable juror could conclude other than that plaintiff, through reasonable diligence, should have discovered any of the alleged trade secrets that were disclosed in documents Winstrom could have seen during the audit process.
It follows that, if defendants can establish that an alleged trade secret was disclosed in documents available to Winstrom during the audit on March 17-18, 1986, they are entitled to prevail on their motion for partial summary judgment with respect to that trade secret, since more than three years passed between the March, 1986 audit and plaintiff's filing of the present suit in 1990.
Before specifically addressing trade secrets nos. 4 and 22, we note our puzzlement that plaintiff did not address or even acknowledge the statute of limitations issue in its opposition to defendants' motion for summary judgment. We might infer, from the so-called "fairness" arguments that plaintiff's counsel makes in his supplemental submission filed July 22, 1992, that plaintiff's counsel interpreted this court's statements during the May 19, 1992 discovery hearing as limiting defendants' motion to res judicata issues and precluding defendants from pursuing their motion on statute of limitations grounds. We hope this is not the case, as we find such a strained interpretation to be wholly unreasonable. This court clearly issued no order, written or oral, that in any way purported to reformulate defendants' motion as filed. During the May 19, 1992 hearing, the court merely asked defendants a few questions about the nature of their motion in order to equip the court to determine whether plaintiff needed additional discovery to reply to the motion. Our reference to having attempted to articulate a "skinnier version" of the summary judgment motion (see page 34 of the transcript attached to Olson's July 14, 1992 declaration), when read in context, clearly referred to our distinguishing a motion made on res judicata grounds from a motion that might be made on such substantive grounds as whether the alleged trade secrets had entered the public domain (pp. 25-26 of the transcript). No statement made during the court's conversation with defendants' counsel can reasonably be construed as an order restricting defendants from pursuing the alternate ground of statute of limitations, a ground that defendants clearly set forth in their moving papers and never withdrew.
ALLEGED TRADE SECRET NUMBER 4: AN ARRHYTHMIA CONTROL DEVICE HAVING A SWITCHED CAPACITOR COMPARATOR AS PART OF A CIRCUIT WHICH REGULATES AT LEAST ONE OUTPUT CAPACITOR VOLTAGE.
Defendants claim that this alleged trade secret is fully disclosed in documents that are Bates stamped V104895, V104977, V104978, V104979, V104980, and V104981. Defendants have not provided evidence, however, that establishes that these documents were available to Winstrom during the audit on March 17-18, 1986. With the exception of the first one (V104895), the most defendants can establish is that the documents were generated sometime between March 7, 1986 and April 9, 1986. See Cello decl. (filed July 21, 1992) PP 3-8.
Thus, undisputed facts do not establish that these documents were available to Winstrom at the time of the audit. There being no other basis in the record to determine that plaintiff discovered or, by exercise of reasonable diligence, should have discovered these documents more than three years before filing suit, we DENY defendants' motion for summary judgment on statute of limitations grounds with respect to Alleged Trade Secret #4.
ALLEGED TRADE SECRET NUMBER 22: AN ARRHYTHMIA CONTROL DEVICE HAVING A CIRCUIT DESIGN WHICH UTILIZES A SINGLE CAPACITOR BANK TO PRODUCE A MULTIPHASIC OUTPUT WAVE FORM.
Unlike the situation with alleged trade secret number four, it is clear that the documents that defendants contend "disclose" trade secret number twenty-two were generated before the Winstrom audit and were available to him.
If there were no genuine dispute that these documents in fact disclosed this trade secret, defendants would be entitled to summary judgment with respect to this secret on the basis of the statute of limitations.
We decline to grant defendants' motion on the record before us, however, because we are not confident that there is no genuine dispute about the clearly material factual issue of whether the documents on which defendants rely disclose this alleged trade secret. As noted above, plaintiff insists that this design idea, like all the others it seeks to protect in this litigation, exists as a trade secret only in the context of an implantable defibrillator; that is, plaintiff contends that the circuit design using a single capacitor bank to produce a multiphasic output wave form is a protectable trade secret only when part of an implantable defibrillator.
The Brubaker and Pless declarations on which defendants rely provide competent evidence that three Ventritex documents that were available to Winstrom during his audit disclose a circuit design that utilizes a single bank of capacitors to produce a multiphasic output wave form, but no evidence adduced by defendants directly contradicts the assertions by plaintiff's expert, Dr. Gregory Kovacs, that "the components and design features shown in these circuits are incompatible with implantable device design" (Kovacs Decl. of June 19, 1992, at 16) or that "the circuits shown are not suitable for use in an implantable device." (Id., at 18). Neither the Brubaker nor any of the Pless declarations squarely assert that the circuits described in these documents could or were intended to be used, as presented or if directly miniaturized, in an implantable device. And while Mr. Pless' Declaration of June 2, 1992, indicates (at page five) that the three documents in question were connected in some sense with both the external and the implantable devices on which Ventritex was working, it also appears from that Declaration (at page four) that the circuits reflected in these documents were not "integrated" and therefore not candidates for miniaturization, a crucial prerequisite for inclusion in an implantable device.
Defendants understandably complain about the quality of the support for the opinions by Dr. Kovacs, plaintiff's expert, that the circuits reflected in these documents were not suitable for use in or compatible with design of an implantable device. Defendants challenge Dr. Kovacs qualifications to offer such an opinion, noting, among other things, that his Declaration (executed June 19, 1992) is vague about the extent and character of his familiarity with devices used to treat cardiac arrhythmias. While Dr. Kovacs provides no substantiating or elaborating information on this point, he contends unequivocally (and without contradiction on this record) that he has "worked extensively on the design and fabrication of implantable devices which functionally stimulate peripheral nerves and record nerve impulses" and that he has "designed integrated circuits" for such devices. Given these assertions, and the fact the Mr. Kovacs has both a Ph.D. in electrical engineering and an M.D., the court cannot find that it is indisputable that Dr. Kovacs is not qualified to offer the opinions in question.
Defendants also argue that the bases for the opinions in issue here by Dr. Kovacs are so anemic and generalized that a rational trier of fact would be compelled, as a matter of law, to ignore those opinions. While we are by no means overwhelmed with the specificity of the support for his views, we decline, at this juncture, to conclude that the law mandates that they be ignored. First, we point out that Dr. Kovacs offered, in the earlier sections of his Declaration, considerable support for his opinion that there are a great many important design constraints that attach to implantable devices, and the circuitry that runs them, that do not attach to external devices. Certainly his Declaration offers evidence apparently competent to support a finding that there are very significant differences between the design parameters for external and for internal devices of this sort (e.g., efficiency considerations make components that might be useable in one environment unusable in the other). Perhaps most significantly, he also insists that many of the circuits disclosed in the relevant Ventritex documents "simply could not be miniaturized to the extent necessary for use in an implantable device." Kovacs Decl. of June 19, 1992, at page 6. While Dr. Kovacs does not set forth the reasoning that supports this view, his education and background appear to provide him with a basis for holding it. Given that education and background, as well as the fact that there is nothing on the face of his apparently relevant general discussion of the issues before us that would discredit him as a source of competent evidence, and given the failure of the declarations submitted by defendants to squarely contradict his opinions, we decline to infer that he could not support his views with a level of specificity that would prevent direction of a verdict in favor of defendants.
We add, however, that we assume that counsel for defendants will depose Dr. Kovacs soon (well in advance of the November trial) and, during that deposition, will question him about the more specific bases for his opinions. Should deposition questioning (or other discovery) expose that he can articulate no more specific bases for his reasoning than is set forth in his June 19, 1992 Declaration, the court will permit defendants promptly to reactivate their motion for partial summary judgment as it relates to trade secret number twenty-two.
For the reasons set forth above, we DENY defendants motion for partial summary judgment on the grounds of res judicata and statute of limitations.
IT IS SO ORDERED.
DATED: September 2, 1992
Wayne D. Brazil
United States Magistrate Judge