The Fifth Circuit Court of Appeals recently vacated summary judgment in a trade secret case. Cudd Pressure Control Inc. v. Roles, No. 08-20389 (5th Cir. June 11, 2009), available at http://www.ca5.uscourts.gov/opinions%5Cunpub%5C08/08-20389.0.wpd.pdf.
Ronnie Roles worked for Cudd Pressure Control Inc. until he (and several other former Cudd employees) joined a newly-formed competing business. Cudd filed suit, alleging violations of trade secret laws. The district court granted summary judgment for the former employees on the ground that the information at issue did not constitute trade secrets.
The Court reversed the summary judgment because the former employees did not move for summary judgment on the ground it was granted on and the district court could not grant summary judgment sua sponte on a ground not requested by the moving party. The Court then examined whether summary judgment was proper on the grounds advanced by the former employees and concluded that it was not. First, summary judgment was improper on the ground that the former employees did not use Cudd’s confidential information because evidence indicated that the former employees did use this information to lure investors and to build a business plan. Second, summary judgment on the ground that Cudd failed to show damages was improper because Cudd had not had a sufficient opportunity to gather evidence regarding its damages. Thus, the Court vacated the summary judgment award and remanded the case.
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