Tewari De-Ox Systems, Inc. v. Mountain States/Rosen, L.L.C.

10-50137
February 22, 2010
Federal Court
5th Circuit
United States Court of Appeals for the Fifth Circuit

Tewari De-Ox Systems (“Tewari”) created a meatpacking method that results in an oxygenless environment, maximizing freshness. The method allegedly relied on many trade secrets, including special iron-based oxygen scavengers, special bags, and a special mixture of gases. As a result, Tewari required companies viewing demonstrations of the method to sign non-disclosure agreements.

Tewari demonstrated the method to Mountain States/Rosen, L.L.C. (“MTSR”) in this manner. However, Tewari suspected that MTSR subsequently misappropriated its trade secrets and brought suit in the United States District Court for the Western District of Texas. MTSR received summary judgment on the trade secrets claims, as the District Court held that Tewari had disclosed its trade secrets in two 2004 patent applications, and therefore no issue of fact could exist as the information was not truly secret.

The 5th Circuit reviewed the summary judgment order de novo and reversed the order. It agreed with the District Court that the pieces of information disclosed in the patent applications were no longer trade secrets, as Tewari’s patent applications were published in 2004 and were therefore no longer secret. Regardless, the court reversed the order of summary judgment on the ground that the District Court incorrectly ruled that the previously disclosed elements, when potentially combined in unique ways by Tewari,
could not be trade secrets.

Therefore, Tewari had at least raised material issues of fact as to whether or not these combinations were trade secrets and whether or not MTSR had used these combinations. As a result, summary judgment was inappropriate.

Tewari De-Ox Systems, Inc.
Mountain States/Rosen, L.L.C.
Common Law (Restatement)

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Opinion | 2011-04-05