The opinion of the court was delivered by: Armstrong, District Judge.
This matter comes before the Court on (1) the Motion of defendants Aha!
Software Corporation (hereinafter "Aha!") and Greg Stikeleather for
Summary Judgment on Plaintiffs' Second, Third, Fourth, Fifth, and Sixth
Claims; (2) the Motion of Defendant Microsoft Corporation (hereinafter
"Microsoft") for Partial Summary Judgment on Counts Two and Six; and (3)
the Motion of plaintiffs Mitchell D. Forcier and Marathon Development
Corporation (hereinafter "Marathon") for Leave to file Second Amended
Complaint. Having read and considered all the papers filed in connection
with this motion, having considered the arguments advanced by the parties
and being fully informed, the Court GRANTS defendants' Motions for
Summary Judgment of plaintiffs' second, third, fourth, fifth, and sixth
claims, but DENIES defendant Aha!'s request for sanctions, GRANTS
plaintiffs' Motion for Leave to further Amend their complaint to include
certain miscellaneous allegations, but DENIES the motion to the extent
that plaintiffs seek to include a claim for tortions interference, and
GRANTS the parties request for an order permitting defendants to file
amended answers and counterclaims.
Plaintiff Mitchell D. Forcier alleges that he pioneered the development
of ink processing technology, which allows pen-based computer systems to
process electronic ink in a manner analogous to how word processing
programs manipulate typed text. (First Amended Complaint (hereinafter
"FAC") ¶¶ 14-15)
In late-1989, Forcier, through his company Marathon Development
Corporation ("Marathon"), began working as an
independent software vendor for GO Corporation ("GO"), a company
attempting to develop an operating system for pen-based computers. (FAC
¶ 16) In April of 1990 and, again, in December of 1990, Forcier
signed nondisclosure agreements with GO to protect his intellectual
property. (Forcier Dec. ¶¶ 4-6, Ex.s 1-2) The first agreement
contained no time limit, but expressly excluded from its coverage any
information that became "known or generally available to the public
through no fault" of GO. (Forcier Dec.Ex. 1) The second agreement was
signed by defendant Greg Stikeleather on behalf of GO and expressly
included a two-year time limit on its effectiveness. (Forcier Dec.Ex. 2;
Farnham Dec., Ex. A (hereinafter "Stikeleather Dec.") ¶ 4, Ex. 1) In
addition, it stated that GO had no obligations with respect to
information provided pursuant to it if (1) that information became
"generally known" through "no act or failure" on its part, or (2)
Marathon furnished the information to others without a restriction on
disclosure. (Forcier Dec.Ex. 2)
Subsequently, Greg Stikeleather left GO to form Aha! In February,
1991, he asked Forcier to join his new company. Forcier did not
immediately accept. (FAC ¶ 18) In June of 1991, however, he agreed
to disclose information to Aha! concerning "a Pen-Based Script, Text and
Drawing processor" that he had developed pursuant to a new
confidentiality agreement executed on June 21, 1991. (Forcier Dec.
¶ 11, Ex. 4; Stikeleather Dec. ¶ 5, Ex. 2) This agreement also
contained a time limit. According to its terms, the "obligation of
confidentiality [was to] expire three (3) years from the date of the last
disclosure" made pursuant to it. The agreement also expressly excluded
information that entered "the public domain" through no fault of Aha!
Greg Stikeleather signed the agreement on behalf of Aha! (Id.)
Following the execution of this document, Aha! and Forcier discussed
the possibility of Forcier's going to work for Aha! On September 17,
1991, Forcier signed a letter agreeing to become an employee of Aha!
(Farnham Dec. ¶ 3, Ex. B, 139:3-19; Forcier Dec. ¶ 18) This
agreement did not last, however, and on October 14, 1991, Forcier
terminated his relationship with Aha! (Stikeleather Dec. ¶ 7, Ex.
4; Forcier Dec. ¶ 19) Forcier did not disclose any further
information to Aha! that he considered confidential or trade secret after
October 10, 1991. (Vandenberg Dec. ¶ 1, Ex.s 2, 3 (at 43:6-13), 4
About a year later, on October 1, 1992, an international Patent
Cooperation Treaty ("PCT") patent application that Forcier had filed was
published. (Vandenberg Dec. ¶ 1, Ex. 5) That patent application
disclosed fifteen or seventeen of Forcier's alleged trade secrets.
(Vandenberg Dec. ¶ 1, Ex.s 5, 6, and 7; Lundwall Dec., Ex. B)
Forcier understood that the applications would be available for the
public to see once they were published. (Vandenberg Dec. ¶ 1, Ex. 7
at 18:18-24) Between February and May of 1993, he also sent copies of the
application to several companies, including Microsoft, Apple, and IBM,
advising them that the information contained in the application was in
"the public domain". (Id., Ex.s 8-11)
Several months later, on May 20, 1993, Aha! filed a patent application
for its InkWriter product with the U.S. Patent and Trademark Office.
(Vandenberg Dec., ¶ 1, Ex. 14) Plaintiff alleges that this
application contained seven of his trade secrets. (Lundwall Dec., Ex. B)
Then, on June 14, 1993, Aha! announced the impending release of the
InkWriter product (described as a technology to process handwriting and
edit handwritten letters and words). (Stikeleather Dec. ¶ 9, Ex. 6)
Following this announcement, the product, was the subject of numerous
newspaper articles describing its technology and functionality.
(Stikeleather Dec. ¶ 10, Ex.s 7-8)
On June 15, 1993, the U.S. Patent and Trademark Office issued Forcier a
patent (No. 5,220, 649 ("649")). (Forcier Dec. ¶ 25; Vandenberg Dec.
¶ 1, Ex. 15) That patent disclosed seventeen of Forcier's alleged
trade secrets. (Lundwall Dec., Ex. B)
On June 22, 1993, Forcier sent Aha! a letter enclosing a copy of his
PCT application and advising it of his patent. He told Aha! that it would
have to pay royalties to sell products that incorporated his patented
claims, but made no express reference to the 1991 non-disclosure
agreement or to any allegation that Aha! had violated the agreement by
using information covered by it. (Forcier Dec. ¶ 25, Ex. 10) Aha!'s
attorneys wrote back a week later denying that the company was infringing
any rights delimited in Forcier's U.S. Patent or PCT application.
(Vandenberg Dec.Ex. 17)
About one month later, on July 27, 1993, the U.S. Patent and Trademark
Office issued a second patent to Forcier (No. 5,231,698 ("698")).
(Vandenberg Dec.Ex. 18). This patent also disclosed about 17 of Forcier's
alleged trade secrets. (Lundwall Dec.Ex. B)
In October, 1993, Forcier read an article in Byte magazine reporting
that the Aha! InkWriter product was commercially available. (Vandenberg
Dec.Ex.s 19 & 20 (at 23:25); Forcier Dec. ¶ 27) He had his wife
order a copy of the software. (Vandenberg Dec.Ex. 20, 23:25) The software
arrived in November, 1993 with a 100-page user s manual and a 12-page
quick-reference guide. (Id. Ex.s 23 and 24) The inside page of the manual
indicated that Aha! had a patent pending on the product. (Id. Ex. 23,
bate stamp FOR 002764)
At some point between November 1993 and January 1994, Forcier spent a
day testing the software. Based on the results, he became concerned that
some of the information that he had disclosed had been incorporated into
the product. (Vandenberg Dec., Ex. 25, 21:5-22:7; Forcier Dec. ¶ 27)
Forcier alleges that Aha!'s InkWriter product specifically used three of
his alleged trade secrets. (Vandenberg Dec., Ex.s 25 (at 102:13-24,
103:11-14) & 36 (p. 3)). He suspected that it might use others as
well. (Id. Ex. 25 at 24:8-18, 25:24-26:8, 39:21-40)
Rather than take immediate action to protect his alleged trade
secrets, however, Forcier decided to test the software further. In order
to do so, he needed to obtain another device to run the software. He had
rented such a device previously. Now, he was advised by the AT & T
salesperson with whom he spoke that the product line was being
discontinued and the devices no longer were available. (Forcier Dec.
Accordingly, on April 15, 1994, Forcier's attorney sent Aha! a letter
stating that it appeared the device that ran the software was no longer
available and asking whether Aha! still was selling the software.
Forcier's counsel's letter said nothing about the 1991 non-disclosure
agreement or any violation of it. (Forcier Dec. ¶ 29, Ex. 11) On May
17, 1994, Aha! responded with a letter denying that its software
infringed Forcier's patents and stating that it believed the device to
run the software still could be purchased. (Forcier Dec. ¶ 29, Ex.
12) Aha!'s letter did not say whether the software still was available.
During June and July of 1994, the second version of Aha!'s InkWriter
product received further national attention. (Vandenberg Dec.Ex. 29)
Thereafter, on December 8, 1994, Aha!'s InkWriter-related international
patent application was published. (Id. Ex. 30) Forcier claims that this
application disclosed all of his trade secrets that had not previously
been published by his own patents. (Id., Ex.s 6, 7 (at 109:9-22), 36 (at
2)) By December 31, 1994, all of Forcier's alleged trade secrets had been
described either in the patents or published patent applications that he
and Aha! filed. (Id., Ex.s 7 (at 109:9-22), 36 (at 2))
Between December, 1994 and May, 1995, Aha!'s third version of the
InkWriter product received national press attention. (Id. Ex. 31) In
June, 1995, it's fourth version of the product garnered further
attention. (Id. Ex. 32) Then, on March 26, 1996, Aha! sold its InkWriter
product line and rights to its pending patent applications to defendant
Microsoft Corporation. Aba! and Microsoft publicly announced the sale in
a press release dated April 8, 1996. (Stikeleather Dec. ¶ 18, Ex.
15; Vandenberg Dec.Ex. 33) The same month, Microsoft hired two former
Aha! employees (Dan Altman and Charlton Lui) and put them to work
incorporating and developing Aha!'s ink processing technology into
Microsoft products and assisting in filing and prosecuting patent
applications related to that technology. (Lundwall Dec.Ex.s E (at 28-29,
21-33, 35-36, 58-61, 220-21) & F (at 94-99, 103-07, 127-29))
Forcier claims that he heard of the sale several months later and, only
then, realized that Aha! had not gone out of business. (Forcier Dec.
¶ 33) His attorney contacted Microsoft in July 1996 to advise it of
his claims that Aha! had misappropriated his technology and infringed his
patents. (Forcier Dec. ¶¶ 36-38, Ex.s 15-17) Forcier's attorney and
Microsoft conferred by letter and telephone but reached no agreement
concerning Forcier's claims. (Forcier Dec. ¶ 36)
In April 1999, Forcier filed suit against Aha! and Microsoft (and
others) alleging inter alia (1) misappropriation of trade secrets and
unfair competition as against both Aha! and Microsoft, and (2) breach of
contract, fraud, and constructive fraud as against Aha! (FAC ¶¶
36-57) Aha! and Microsoft filed motions for summary judgment with respect
to these claims.
Plaintiff also has filed a motion for leave to file a second amended
complaint ("SAC") so that he may add (1) a claim for tortious
interference with contract against Microsoft, and (2) clarification
concerning the relief sought against Microsoft. Microsoft opposes the
first, but not the second, proposed amendment. Microsoft and all other
parties have stipulated, however, that the defendants be permitted to file
Amended Answers and Counterclaims. They seek an order from the Court
granting them permission to do so.
A. Defendants' Motions for ...