United States District Court, D. Oregon, Medford Division
OPINION & ORDER
D. CLARKE UNITED STATES MAGISTRATE JUDGE.
and Defendant entered into a Sales Agreement whereby
Plaintiff, in return for receiving the exclusive right to
purchase product from Defendant, agreed to minimum annual
purchase amounts. Subsequently, the parties agreed to
terminate the Sales Agreement and entered into a Settlement
Agreement. Plaintiff filed this cause of action against
Defendant seeking a determination that it has not breached
its obligations under the Sales Agreement and the Settlement
Agreement (the "Agreements"), as well as damages
for Defendant's alleged breach of duty of good faith and
fair dealing. Defendant filed counterclaims against Plaintiff
for Page 1 of 4 - OPINION & ORDER breach of contract and
misappropriation of trade secrets. This case now comes before
the Court on Plaintiffs Rule 12(e) motion for a more definite
statement as to what trade secret Defendant claims was
misappropriated (#15). For the reasons below, Plaintiffs
motion is DENIED.
Rule of Civil Procedure 8(a)(2) requires that a complaint
contain a "short and plain statement of the claim
showing that the pleader is entitled to relief." Rule
12(e) provides that "[a] party may move for a more
definite statement of a pleading to which a responsive
pleading is allowed but which is so vague or ambiguous that
the party cannot reasonably prepare a response."
Fed.R.Civ.P. 12(e). In evaluating a motion under Rule 12(e),
the proper test is to determine "whether the complaint
provides the defendant with a sufficient basis to frame his
responsive pleadings." Federal Sav. & Loan Ins.
Corp. v. Musacchio, 695 F.Supp. 1053, 1060 (N.D. Cal.
1988). Where the detail sought by a motion for more definite
statement is available through discovery, the motion should
be denied. See Beery v. Hitachi Home Elecs. (Am.)
Inc., 157 F.RD. 477, 480 (CD. Cal. 1993).
NIC alleges in its Answer and Counterclaims (#12) that
Plaintiff wrongfully reverse engineered the Wipe New product
and wrongfully used its trade secrets to make and sell Wipe
New in violation of the parties' Agreements. Plaintiff
filed this motion for a more definite statement claiming that
it could not reasonably prepare a response because it was
unclear if the alleged trade secret was a formula, an
ingredient, a specific product, or an entire product line.
Plaintiffs Reply in Support of Motion, p. 4 (#22).
pleading contains the following specific language to support
its misappropriation claim:
Paragraph 19. NIC invents and manufactures coating products
for industrial and home use. NIC's product, which is the
subject of this proceeding, contains a. secret chemical
formula and o. secret ingredient, which is kept
secret and was unknown to other companies such as Rust-Oleum.
(The secret chemical formula and secret ingredient are
hereafter collectively referred to as the "Secret
Formula"), (emphasis added).
Paragraph 20. On or about December 1, 2012, NIC executed an
Exclusive Sales Agreement with Wipe New to supply Wipe New
with a product formulated by NIC, which Wipe New would then
package and sell as a coating product called, "Wipe
New". The product supplied by NIC under the Exclusive
Sales Agreement utilizes the Secret Formula and contains the
secret ingredient. The Wipe New coating product could be
applied in the form of a wipe on application for vehicle
restoration, detailing, and general household use. The
Exclusive Sales Agreement covered applications described in
said Agreement. At some point, Rust-Oleum expressed an
interest in acquiring, by license or some other mechanism,
the right to use the "Wipe New" trademark and
brand, along with Wipe New's rights and interest in and
to the Exclusive Sales Agreement. In anticipation of this
acquisition, Wipe New and NIC entered into a new Exclusive
Sales Agreement with an effective date of September 24, 2015,
which had been reviewed and approved by Rust-Oleum.
Paragraph 28. On or about November 24, 2015, NIC learned that
Rust-Oleum had conducted Gas Chromatography-Mass Spectrometry
(GCMS) tests on Wipe New. Said test revealed to Rust-Oleum
NIC's Secret Formula, including the identity of the
review of these paragraphs in relation to Defendant's
second counterclaim for misappropriation of trade secrets,
the Court finds that Defendant has stated its claim with
enough particularity to provide Plaintiff with a sufficient
basis to frame its responsive pleading. These paragraphs
provide sufficient particularity to conclude that the trade
secrets at issue are (1) the formula used to create the Wipe
New product supplied by NIC under the Sales Agreement, and
(2) a specific secret ingredient used in that formula. Any
further detail sought by Plaintiff as to the exact makeup of
the formula and the exact alleged secret ingredient is
available through discovery. Defendant has agreed to provide
its secret formula during discovery under the terms of a
protective order in exchange for Plaintiffs current formula
so that the two formulas can be compared and evaluated by
experts. The parties are directed to review this Court's
Scheduling Order for further guidance regarding the exchange
of the respective formulas. The Scheduling Order will be
filed after a protective order has been adopted in this case.
on the foregoing, and pursuant Rule 12(e), Plaintiffs motion
for a more ...