RoadRunner Recycling, Inc. v. Recycle Track Systems, Inc.

Background

RoadRunner asserted trade-secret claims under the California Uniform Trade Secrets Act and the federal Defend Trade Secrets Act. The defendants moved for partial summary judgment, a ruling that there was no genuine dispute requiring a trial, on those claims. They did not challenge the contract claim in this motion.

The dispute concerned seven asserted trade secrets involving waste monitoring:

The court described public disclosures involving Compology’s camera technology, including a YouTube teardown video, Federal Communications Commission filings, and patent-related publications. RoadRunner acquired Compology in 2022. RecycleTrack Systems acquired RecycleSmart in 2023.

Legal standard

To prevail on a trade-secret claim, RoadRunner would ultimately have to show that it possessed a trade secret, the defendants misappropriated it, and RoadRunner suffered damage. To show that it possessed a trade secret, RoadRunner had to identify information that it owned, was not readily known, was valuable because it was not readily known, and was protected by reasonable secrecy measures.

The court focused on the first part of that inquiry: whether RoadRunner had identified trade secrets clearly enough for the defendants to defend against the claims and for a jury to decide what information had been misappropriated.

Rulings on the asserted trade secrets

Overall Waste Metering System. RoadRunner described this claim as an open-ended combination of hardware, firmware, and software that included the other asserted secrets. The court held that RoadRunner had not identified a specific combination or arrangement. Because a jury could not determine what precise combination had allegedly been taken, the court granted summary judgment on this claim.

Smart Camera Apparatus. RoadRunner initially described a generic apparatus and later expanded the claim to cover the R11, R12, and R13 camera systems, or materials found in numerous exhibits. The court held that RoadRunner had not identified a particular apparatus or combination of components in a workable way. The court therefore granted summary judgment on this claim.

Optical Assembly and Design. RoadRunner described its trial-and-error work in choosing lenses and assemblies but did not specify which features or configurations made up the claimed secret. Its expert later identified multiple assemblies with different specifications. The court held that no trade secret had been reasonably identified and granted summary judgment on this claim.

Machine-learning models. RoadRunner asserted models for detecting subpar images, analyzing container fullness, and detecting contamination. During the case, RoadRunner’s arguments shifted from the models themselves to the images and metadata produced by them. The court held that RoadRunner had either made these claims equivalent to its separate training-data claim or had not explained the difference clearly enough for a jury to determine misappropriation. The court granted summary judgment on the Sub-Par Image Detection, Contamination Detection/Content Identification Service, and Container Fullness Analysis claims.

Training data. The court found that RoadRunner’s description of this claim—images and data captured by Compology sensors installed in defendants’ containers—was sufficiently stable to give the defendants reasonable notice of the issue. But the court then interpreted the parties’ contract. It held that RecycleSmart owned all rights and title to the device data and derivative data, including the images and metadata, while Compology had only a limited, nonexclusive license to use that information for specified purposes. Because RoadRunner could not claim possession of a trade secret owned by RecycleSmart, and because RecycleSmart could not misappropriate information it owned, the court held that the training-data claim failed as a matter of law and granted summary judgment on it.

Disposition

The court granted defendants’ motion for partial summary judgment on the trade-secret claims. It did not reach the parties’ other arguments about whether the asserted information was valuable because it was not readily known. The court denied as moot RoadRunner’s request for judicial notice. Only contract claims remain in the case.