Imax Corporation v. Cinema Technologies, Inc. Neil Johnson

Rule of Law:

A plaintiff in a trade secret misappropriation case must identify the alleged trade secrets with sufficient particularity to separate them from general knowledge, which for complex mechanical devices requires identifying precise numerical dimensions and tolerances, not just general categories. A claim for common law unfair competition may still proceed even if a trade secret claim fails, provided there is evidence the defendant acquired the information through improper means or by inducing a breach of a duty of confidentiality.

Facts:

• Imax Corporation developed, patented, and sold 'rolling loop' projectors, a large format motion picture technology.
• To protect technology not disclosed in its patents, Imax included confidentiality provisions in its sales and lease agreements.
• After some Imax patents expired, Neil Johnson, an engineer seeking to create a competing projector, formed NJ Engineering.
• Johnson observed an Imax projector in operation at a museum and obtained a service manual that was not marked confidential.
• Johnson and his team then spent two weeks at the Great America theme park disassembling, measuring, photographing, and sketching parts of an Imax projector.
• Johnson later inspected another partially disassembled Imax projector in Buenos Aires.
• Johnson left NJ Engineering and formed Cinema Technologies, Inc. (CTI), which began marketing its own 'rolling loop' projector, allegedly developed using only public domain information.

Procedural Posture:

• Imax Corporation sued Cinema Technologies, Inc. (CTI) and Neil Johnson in the U.S. District Court, alleging misappropriation of trade secrets and unfair competition.
• During discovery, CTI served interrogatories asking Imax to 'identify the entire content of each and every trade secret.'
• After Imax provided insufficient answers, a magistrate judge ordered Imax to provide 'complete, written responses' and barred it from simply referring to documents.
• Imax filed several supplemental responses, which described its trade secrets by listing components followed by the phrase 'including every dimension and tolerance that defines or reflects that design.'
• CTI moved for summary judgment, arguing Imax had failed to identify its trade secrets with sufficient particularity.
• The district court granted summary judgment for CTI on both the trade secrets claim, because Imax failed to provide the precise numerical dimensions and tolerances, and the unfair competition claim, which the court believed was dependent on the trade secrets claim.
• Imax, as the appellant, appealed the grant of summary judgment to the U.S. Court of Appeals for the Ninth Circuit, with CTI and Johnson as the appellees.