North Carolina Lawyers Weekly
Plaintiff claims that its scientist’s notes are trade secrets. However, the scientist left her notebook on her desk at home, where her ex-husband/competitor came to drop off their children. Plaintiff did not take reasonable steps to guard the scientist’s notes, so they do not qualify as trade secrets.
Defendants’ motion to dismiss is granted as to plaintiff’s claims for misappropriation of trade secrets and trespass to chattels; the motion is granted in part and denied in part as to plaintiff’s claims of unfair trade practices and unfair competition; otherwise, the motion is denied. The court also denies defendants’ motion to stay this action while the couple’s equitable distribution and related causes of action are litigated in district court.
Facts
Plaintiff BIOMILQ’s scientist, Dr. Strickland, was married to defendant Guiliano. The couple formed defendant 108Labs, LLC. Dr. Strickland was interested in synthesizing cell-cultured human milk outside the body. Guiliano reviewed scientific literature at Dr. Strickland’s request; however, the couple did not proceed with the project.
Dr. Strickland met Michelle Eggers in August 2019. In January 2020, Dr. Strickland and Eggers founded and incorporated plaintiff to further Dr. Strickland’s human milk project.
In March 2020, Dr. Strickland and Guiliano separated. Because of his review of scientific literature, Guiliano’s name was included on one of plaintiff’s subsequent patent applications. Plaintiff submitted several more patent applications and received two patents, but Guiliano’s name was not included on the latter applications and patents.
While dropping the couple’s children off at Dr. Strickland’s home (the former marital home, of which Guiliano was part owner) on 18 February 2022, Guiliano allegedly photographed pages of a BIOMILQ-issued notebook containing trade secret and confidential information. Defendants contend that they have contributed to the development of BIOMILQ’s technology, patents, and alleged trade secrets, and that defendants have rights in them.
Misappropriation of Trade Secrets
In order to state a claim for misappropriation of trade secrets, a plaintiff must allege that the trade secret information is subject to reasonable efforts to maintain its secrecy. G.S. § 66-152(3)(b).
Although plaintiff alleges its security measures generally and as they pertain to notebooks that Dr. Strickland has already filled, it does not allege measures taken to maintain the secrecy of the trade secrets set out in any notebook that Dr. Strickland is currently using, including the one allegedly photographed by Guiliano. Plaintiff alleges that Dr. Strickland kept her notebooks in secure locations such as (1) at BIOMILQ’s offices, (2) in a closed bag within her residence which, it alleges, she does not share with Mr. Guiliano, (3) in a closed bag together with her laptop when travelling between home and work, and (4) on her work surface at home. However, saying something is “secure” or “kept confidential” is not enough to survive a motion to dismiss without allegations of efforts to protect the misappropriated trade secrets.
The notebook at issue was protected only by a lock on the home to which Guiliano had access. Keeping the notebook in a closed bag at home, in a closed bag when travelling between work and home, or on a work surface at home, are not measures taken to maintain the secrecy of the trade secrets.
Given that BIOMILQ alleges the trade secrets contained in the notebook were highly sought after by competitors, that Guiliano was allegedly pursuing cell-cultured human milks, that Guiliano on at least some occasions brought the children to Dr. Strickland’s residence, and that Dr. Strickland was keeping the notebook unlocked in a building at least partially owned by Guiliano and to which he had access, at least on the occasions he took the children to the home, the measures BIOMILQ took to maintain the secrecy of the notebook are unreasonable under the circumstances.
Plaintiff has failed to allege reasonable measures to maintain the secrecy of the notebook and the alleged trade secrets contained therein.
Other Issues
Plaintiff alleged it has used the word mark “BIOMILQ” since at least 2020 and that defendants’ use of the mark is likely to cause confusion by misleading the public into inferring an affiliation between defendants and BIOMILQ. Plaintiff has thus sufficiently pleaded a claim for trademark infringement.
Plaintiff’s unfair trade practices and common law unfair competition claims survive to the extent they are grounded in trademark infringement but fail to the extent they are grounded in misappropriation of trade secrets.
BIOMILQ has not alleged that Guiliano dispossessed it of Dr. Strickland’s notebook; it has not alleged that the condition, quality, or value of the notebook was impaired; it has not alleged that it was deprived of using the notebook for a substantial time; and, it has not alleged that bodily harm was caused to the possessor. The pleadings do not sufficiently allege trespass to chattels.
Plaintiff requests a declaratory judgment on the parties’ respective rights to use or to exclude others from using the subject matter of certain patents. This court has subject matter jurisdiction to reach defendants’ motion as to this claim because the claim concerns ownership of certain patent rights, not the inventorship of those patents or patent applications. Further, based on plaintiff’s allegations and the exhibits to its complaint, BIOMILQ has identified and pled an actual, genuine controversy between it and defendants concerning the ownership rights of several patent applications and patents, arising out of opposing contentions regarding Dr. Strickland’s alleged assignment to BIOMILQ of her rights in them. Therefore, BIOMILQ has stated a claim for declaratory judgment.
Finally, this action was filed four days before the domestic-relations action now pending in district court. The parties and causes of action before this court differ from those in the district court action. This case does not involve the division of marital property, and even if the parties in each action were identical, BIOMILQ would not be entitled to the relief it seeks here in the district court action. The two cases are not sufficiently interrelated that a stay is warranted at this time.
Motions granted in part, denied in part.
BIOMILQ, Inc. v. Guiliano (Lawyers Weekly No. 020-013-23, 40 pp.) (Michael Robinson, J.) Dickson Phillips, Stephen Feldman and Rachel Walsh for plaintiff; Stephon Bowens, Tara Warwick and Jonathan Carnes for defendants. 2023 NCBC 13
