United States District Court, D. Oregon, Portland Division
THE GLUTEN FREE BAKING COMPANY LLC, an Oregon limited liability company, and UNITED STATES BAKERY, an Oregon corporation, Plaintiffs/Counterclaim Defendants,
CANYON BAKEHOUSE HOLDINGS, LLC, a Missouri limited liability company, and CANYON BAKEHOUSE, LLC, a Colorado limited liability company, Defendants/Counterclaim Plaintiffs.
OPINION AND ORDER
MICHAEL W. MOSMAN Chief United States District Judge
matter comes before me on Plaintiffs' Motion for Full or
Partial Summary Judgment . After oral argument, I denied
the Motion as to Counterclaim #1 and granted the motion as to
Counterclaim #2. Minutes . I took the Motion under
advisement as to Counterclaims #3 and #4 and asked the
parties to submit by email supplemental evidence on the
circumstances under which Plaintiffs allegedly acquired the
alleged trade secrets at the start of the joint venture.
Minutes . The Court received those emails. For reasons
stated below, I DENY Plaintiffs' Motion for Summary
Judgment on Counterclaims #3 and #4.
Gluten Free Baking Company LLC ("GFBC") and United
States Bakery ("USB") and Defendants Canyon
Bakehouse Holdings, LLC ("CBH") and Canyon
Bakehouse, LLC ("CB") produce baked goods. In
October 2012, USB and CBH jointly formed and owned Northwest
Canyon Bakehouse ("NWCB"). After about a year, the
parties decided to unwind the relationship, but the unwinding
process took another year. At the end of that process, USB
acquired NWCB entirely, and renamed it GFBC. The parties
signed a License Agreement that was dated March 25, 2015 but
with an effective date of January 1, 2015. Complaint  Ex.
1 [hereinafter "License Agreement"] at 1. In that
agreement, CBH gave USB a limited license to produce and
distribute gluten-free products made or derived from
CBH's gluten-free formulas, in exchange for quarterly
royalty payments for a set period of time. See
USB makes gluten-free baked goods using derivatives from the
CBH formulas. It continues to make royalty payments under the
License Agreement. USB makes gluten-free baked goods for its
brand name (Franz) and also for private labels (e.g.,
Sam's Choice for Walmart). For private-label customers,
USB packages the bread in the customer's label at
USB's baking facility, and then delivers bread to the
customer's warehouse. The customer then delivers the
bread from the warehouse to its retail stores.
issue in this case is the information that USB disclosed to
its private-label customers. CBH alleges that USB violated
the License Agreement when it disclosed, at various times and
to various customers, the final weights and/or percentages of
some of the ingredients in the bread. CBH does not dispute
that USB may disclose a list of the ingredients, which is
required for the FDA nutrition panels. CBH also asserts that
disclosure of the final weights and percentages of some
ingredients violates state and federal trade secrets laws
(Counterclaim #3 & #4). USB moved for summary judgment
against CBH's trade secret counterclaims.
judgment is appropriate if there is no genuine dispute of
material fact, viewing the evidence in the light most
favorable to the nonmoving party. Fed.R.Civ.P. 56(a). A
genuine dispute of a material fact is "one that could
reasonably be resolved in favor of either party."
Ellison v. Robertson, 357 F.3d 1072, 1075 (9th Cir.
third counterclaim alleges that USB violated the federal
Defend Trade Secrets Act, 18 U.S.C. §§ 1836-39.
Enacted in May 2016, the Act provides a federal cause of
action to owners of trade secrets that are misappropriated
where the trade secrets are related to products used in
interstate commerce. 18 U.S.C. § 1836(b).
fourth counterclaim alleges that USB violated the Colorado
Uniform Trade Secrets Act. The federal Defend Trade Secrets
Act's misappropriation was modelled in part after the
Uniform Trade Secrets Act; the provisions relevant to this
case are quite similar. See H. Rep. No. 114-529, at
4-5, 12-14 (2016), as reprinted in 2016 U.S.C.C.A.N. 195-211.
the federal Act, a trade secret is information that the owner
has taken reasonable measures to keep secret and that derives
independent value from not being generally known to others.
§ 1839(3). Under the Colorado Act, a trade secret is
information which is secret and of value. Colo. Rev. Stat.
both Acts, "misappropriation" includes
"disclosure ... of a trade secret of another without
express or implied consent by a person who ... at the time of
disclosure ... knew . . . that the knowledge of the trade
secret was . .. acquired under circumstances giving rise to a
duty to maintain the secrecy." § 1839(5); Colo.
Rev. Stat. § 7-74-102.
Whether CBH failed to sufficiently identify ...