United States Gypsum Co. v. Lafarge North America, Inc.

Majority - Hart, District Judge

No, LaFarge North America's (LNA) wallboard manufacturing method did not literally infringe USG's '635 patent claims 25, 36, and 37, particularly concerning the 'mildly agitated' foam and the order of depositing core and edge streams. However, USG may still pursue infringement under the doctrine of equivalents for claims 36 and 37, and there are factual disputes regarding the 'mildly agitated' element for all three claims. Regarding Claim 25's requirement of "voids uniformly dispersed therein" in the "resultant assembly," the court interpreted "resultant assembly" to refer only to the deposited dispersion described in the claim, not the entire wallboard, including hard edges. A person skilled in the art would understand that wallboard is manufactured with edges of different density, and claim 25 does not make claims regarding the board's edges. Therefore, LNA's production of boards with hard edges does not preclude infringement of Claim 25. For Claim 36, which describes depositing the edge stream "contiguous to one or both edges of the deposited core stream," the court found that the plain language, coupled with the order of steps recited, requires the core stream to be deposited prior to the edge stream. Since the LNA Method deposits the edge stream first, there is no literal infringement of Claim 36. However, USG may still pursue infringement under the doctrine of equivalents because the failure to explicitly assert this in discovery interrogatories was not prejudicial to defendants, as the issue was raised before the final pretrial order and defendants' own counterclaim addressed the doctrine of equivalents. Additionally, the court found the "contiguous" element of Claim 36 does not require immediate contiguity, only that the streams become contiguous as they move down the line, thus denying summary judgment on that specific point. For all claims (25, 36, and 37), the court construed "mildly agitated" as a point on an absolute scale, not a relative term meaning "less agitated than the calcined gypsum," because other claims in the patent explicitly used the relative term "agitated less." Despite this, factual disputes exist regarding whether the agitation in LNA's canister is "mild," precluding summary judgment on this element. No, USG did not engage in inequitable conduct regarding the '635 patent. Defendants failed to present sufficient evidence that the prior Sweetwater process was material to claim 13 of the '635 patent. The process's foam inlet location was alleged to be closer to the discharge, but defendants did not show that this resulted in 'less agitation' for the foam compared to the stucco/water, which is a key element of Claim 13. Without sufficient evidence of materiality, the threshold for inequitable conduct (materiality and intent to deceive) is not met for this specific prior art. Defendants' other inequitable conduct arguments were not fully developed in the summary judgment motion. No, USG's alleged trade secrets for Construction Specifications, Kettle and Mixer Drawings/Hooker Booker Blueprints, Fiberglass Feeder, Red Valve, Slotted Forming Plate, Sales Information, and Ice Cleaner will be dismissed, but claims based on Cockle Reduction Technology, Board Formulation Sheets, Power Points, the 2000 Document, certain Operating Bulletins, Gypsum Basics, Running Speed documents, Cost Documents, and the Financial Reporting Analysis Package will not be dismissed. The Construction Specifications were found not to be adequately protected as trade secrets because USG failed to show it imposed sufficient confidentiality restrictions on outside contractors; merely identifying information as 'proprietary' was insufficient. Moreover, USG failed to provide evidence that Weldon's retained copy was actually used by LNA. For the Kettle and Mixer Drawings and Hooker Booker Blueprints, USG provided no evidence that Kruzshak uploaded them to LNA's network, disclosed them to anyone at LNA, or that LNA used the information in its business. The court found no basis for awarding a royalty for mere possession without use or disclosure. Regarding the Fiberglass Feeder, there was insufficient evidence that Lutey, a former USG employee, contributed to LNA's design based on his past USG knowledge, given conflicting testimonies and the time elapsed since his USG employment. For the Red Valve system, USG failed to provide sufficient evidence that LNA used USG's purported trade secret: the intermittent restriction of slurry flow, despite LNA using a similar pinch valve. The Slotted Forming Plate technique was found not to be a trade secret because slotting metal for flexibility is common practice, and multiple groups (including other manufacturers) independently developed or knew of the technique, indicating it was generally known or easily duplicated. However, the Cockle Reduction Technology claim was not dismissed. The court inferred that defendant Yockey, a former USG employee, would have recognized that the USG employee's disclosure of the technology during an interview was contrary to a duty of secrecy, making its subsequent use by LNA a misappropriation. The Sales Information (Strategic Marketing and 2000 Business Plan) documents were found too generalized and lacking in detail to provide a competitive advantage, and USG failed to show LNA actually used the information. The Ice Cleaner technique was found not to be a trade secret because at least two other wallboard manufacturers used it, ice is commonly known for abrasive properties, and its implementation is simple, making it common knowledge and easily duplicated. For the Hose Shaker, USG failed to provide sufficient evidence that it was a USG trade secret, as it was developed by a different company (Winstone) and mentioned to Yockey by a consultant, not as proprietary USG information. Claims based on the Board Formulation Sheets were not dismissed. While merely using a spreadsheet is not a trade secret, the formulas themselves and the relationships between ingredients indicated by the sheets could be. Factual disputes remain as to whether Yockey used this information. Claims based on USG Power Points and the 2000 Document were not dismissed, as defendants conceded their utility and LNA's use, leaving only the question of whether the specific information qualified as trade secrets to be determined at trial. Other trade secrets identified by USG (certain Operating Bulletins, Gypsum Basics document, running speed documents, cost documents, and financial reporting analysis package) were not specifically challenged by defendants on summary judgment, and thus were not dismissed, but USG will bear the burden of supporting their trade secret status and use at trial. No, USG's state law claims of conversion, unfair competition, and unjust enrichment are largely preempted by ITSA if they are based solely on the misappropriation of trade secrets. However, claims for breach of fiduciary duty and inducement of breach of fiduciary duty are not preempted, nor are other civil remedies not based on trade secret misappropriation. The court noted that it is unimaginable that a party stealing property or business opportunities would get a free pass just because none of what was taken is a trade secret. Therefore, at this stage, no specific aspect of these claims will be dismissed on preemption grounds, but USG must clarify its claims for trial. No, USG's breach of contract and tortious interference with contract claims against the defendants will be dismissed because USG failed to present evidence of actual damages. Illinois law requires a showing of damages for both breach of contract and tortious interference claims, and USG's reliance on mere allegations or case law from other jurisdictions was insufficient. Specific performance was not adequately argued as a remedy. Yes, defendants LaFarge, S.A. (LSA) and Individual Defendants Hartford, Huffer, Myslinski, and Jett are subject to personal jurisdiction in Illinois for USG's claims. For LSA, sufficient control by a parent company (LSA) over its subsidiary (LNA) can establish personal jurisdiction, even without piercing the corporate veil. The undisputed evidence showed LSA's Gypsum Division (an unincorporated group run by LSA employees) exercised substantial control over LNA's budget, business decisions, employment, and provided training and technical guidance. This establishes sufficient contacts for personal jurisdiction over LSA based on LNA's business in Illinois. However, LSA is dismissed from the computer claims due to a lack of evidence of its involvement. For the Individual Defendants (Hartford, Huffer, Myslinski, Jett), personal jurisdiction is established because they allegedly engaged in intentional conduct (appropriating USG property/trade secrets, breaching fiduciary duties) aimed at a plaintiff (USG) headquartered in Illinois. Seventh Circuit precedent (Janmark, Inc. v. Reidy) supports that an intentional tort targeted at an Illinois corporation constitutes a sufficient basis for personal jurisdiction, which was not rejected by Illinois courts. However, specific claims against these individuals were dismissed on their merits. All claims against Huffer, Myslinski, and Jett are dismissed entirely. For Hartford, all claims are dismissed except for trade secret, conversion, and breach of fiduciary duty claims based on the 'information bulletins in training materials,' as he knew these were improperly obtained USG documents. The ice cleaner and safety manual claims against Hartford were dismissed for lack of trade secret status/use. Claims against Jett and Myslinski based on the Baltimore plant information were dismissed due to the information being inaccurate or lacking in trade secret quality, and the slotted forming plate claim against Myslinski failed because it was not a trade secret. The computer claims against LSA are dismissed due to lack of evidence of LSA's involvement.