Associated Management Services, Inc. v. Ruff, Case Number DA 17-0102, Cit. 2018 MT 182

Misappropriation of intellectual property: Infringement: Conversion: Common law: Trade secret:

Montana Uniform Trade Secrets Act (MUTSA)

The essential elements of common law conversion are: (1) a claimant’s right of possession or control over the subject personal property; (2) the intentional exercise of possession or control over the property by another inconsistent with the right of the owner and without right or consent; and (3) resulting damages to the claimant. Gebhardt v. D.A. Davidson & Co., 203 Mont. 384, 389, 661 P.2d 855, 858 (1983).

Apart from conversion, the common law further recognizes two related but distinct theories of misappropriation of intellectual property―contract-based misappropriation and property right-based tortious misappropriation. See Apfel v. Prudential-Bache Securities Inc., 616 N.E.2d 1095, 1097-98 (N.Y. 1993) (distinguishing breach of non-disclosure agreement, contract misappropriation of intellectual property, and tortious misappropriation of property right-based intellectual property). Accord Nadel v. Play-by-Play Toys & Novelties, Inc., 208 F.3d 368, 374-78 (2nd Cir. 2000) (construing Apfel).

As a specialized variant of a breach of contract theory, the elements of a claim for contract misappropriation of intellectual property are: (1) an agreement for one to communicate an idea or knowledge to another in return for valuable consideration; (2) the idea or knowledge had value to the recipient at the time of contract formation regardless of whether “grossly unequal” or of “dubious value” in relation to the consideration paid or provided in return; (3) the recipient breached the agreement; and (4) resulting damages to the claimant based on breaching party’s beneficial use of the idea or knowledge. See Apfel, 616 N.E.2d at 1097-98 (emphasizing freedom of contract and subjective assessment of value). Accord Nadel, 208 F.3d at 376-80. While a truly novel idea or knowledge is presumed to be of value to a recipient who paid or pledged valuable consideration to acquire it, an idea or knowledge need not be truly original or novel to be of value to a recipient as a matter of contract consideration. Apfel, 616 N.E.2d at 1098.

The essential elements of a property rights-based claim for tortious misappropriation of intellectual property are: (1) an idea was communicated by the claimant to another in confidence; (2) the idea was novel and original; (3) the recipient used the idea to the recipient’s benefit; and (4) resulting damages to the claimant based on the tortfeasor’s beneficial use of the idea or knowledge. See Apfel, 616 N.E.2d at 1097-98; Alevizos v. John D. & Catherine T. MacArthur Found., 764 So. 2d 8, 11 (Fla. App. 1999). An idea may give rise to a cognizable property right or interest only if novel and original. Apfel, 616 N.E.2d at 1098; Paul v. Haley, 588 N.Y.S.2d 897, 902 (N.Y. App. Div. 1992) (idea that is not novel is not cognizable as property and thus cannot be misappropriated or stolen); Downey v. Gen. Foods Corp., 286 N.E.2d 257, 259 (N.Y. 1972) (ideas are cognizable and protectable as property rights only if novel and original).

In contrast to the common law protection of intellectual property, MUTSA defines the term “trade secret” as any “information or computer software, including a formula, pattern, compilation, program, device, method, technique, or process, that: (a) derives independent economic value . . . from not being generally known. . . [or] readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Section 30-14-402(4), MCA. In pertinent part, MUTSA defines actionable “misappropriation” of a trade secret as the “disclosure or use of a trade secret of another without express or implied consent by a person who . . . used improper means to acquire knowledge of the trade secret.” Section 30-14-402(2)(b)(i), MCA. As used in § 30-14-402(2)(b)(i), MCA, and as pertinent here, “improper means” includes theft, misrepresentation, or breach of a duty to maintain secrecy.

(Montana Supreme Court, July 24, 2018, Associated Management Services, Inc. v. Ruff, Case Number DA 17-0102, Cit. 2018 MT 182, J. Sandefur)

Une violation des droits de propriété intellectuelle peut être reconnue si sont réunies alternativement les conditions de :

1 ) la théorie de la « conversion »,

2 ) la théorie de l’appropriation illicite basée sur un contrat,

3 ) la théorie de l’appropriation illicite extracontractuelle.

(Théories à distinguer de la violation d’une clause de confidentialité).

1 ) La notion de « conversion » provient de la Common law et suppose une prise intentionnelle de contrôle ou de possession illicite, par un tiers, d’un droit de propriété du lésé, provoquant un dommage.

2 ) La notion d’appropriation illicite basée sur un contrat provient de la Common law et suppose la transmission conventionnelle d’idées ou de connaissances moyennant contre-prestation (« consideration »), le bénéficiaire de la communication violant par la suite le contrat, par exemple en divulguant à des tiers ce qui lui a été communiqué, causant ainsi un dommage à son cocontractant. L’idée ou les connaissances doivent avoir une certaine valeur pour celui qui les reçoit. L’idée ou les connaissances n’ont pas nécessairement à être nouvelles ou originales.

3 ) La notion d’appropriation illicite extracontractuelle provient elle-aussi de la Common law et suppose la transmission confidentielle à un tiers d’une idée ou de connaissances nouvelles et originales, le tiers violant par la suite la confidentialité en utilisant à son profit l’idée ou la connaissance et causant ainsi un dommage.

En plus de ces théories de la Common law protégeant la propriété intellectuelle, peut s’appliquer la loi (ici de l’état du Montana) protégeant les secrets d’affaires (ce type de lois découle d’une loi uniforme et se retrouve dans d’autres états).