UrthTech LLC v. Gojo Industries, Inc.

Background

UrthTech asserted four claims against GOJO: breach of a license agreement, breach of a nondisclosure agreement (NDA), trade-secret misappropriation under the federal Defend Trade Secrets Act (DTSA), and trade-secret misappropriation under the Ohio Uniform Trade Secrets Act (OUTSA). UrthTech alleged that it shared information about acidic and basic antimicrobial formulations with GOJO under the NDA and later licensed patents and related technology to GOJO. It claimed that GOJO used UrthTech’s confidential information in patent applications and in products, failed to provide required notices, failed to involve UrthTech in patent filings, and failed to identify Dr. Aziz Awad as an inventor.

GOJO moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), arguing that the complaint did not plausibly state any claim. GOJO also argued that the NDA and trade-secret claims should be dismissed for lack of personal jurisdiction and improper venue, and that the DTSA claim was barred by its three-year limitations period.

Jurisdiction and venue

The court held that the license agreement’s forum-selection clause established personal jurisdiction and venue for the NDA and trade-secret claims. Those claims involved the same underlying information and events as the license-agreement claim and were sufficiently related to the license agreement and the licenses it granted. The court therefore denied GOJO’s motion to dismiss the NDA and trade-secret claims for lack of personal jurisdiction or improper venue.

The court also denied GOJO’s argument that the DTSA claim was time barred. UrthTech first asserted that claim in its First Amended Complaint filed in November 2022. Although GOJO argued that publication of an Acid Wipe patent application put UrthTech on notice in March 2019, the court concluded that the complaint did not show on its face that UrthTech should have discovered the alleged misappropriation before receiving a notice letter in March 2020.

Breach-of-contract claims

The court concluded that UrthTech plausibly alleged breaches of both agreements but failed to plausibly allege damages. Regarding the license agreement, UrthTech plausibly alleged that the patent applications involved improvements covered by the agreement and that GOJO failed to file jointly, disclose the applications before filing, identify Dr. Awad as an inventor, or provide required notice of certain improvements. Regarding the NDA, UrthTech plausibly alleged that GOJO used or disclosed confidential information without permission, including by filing and allowing publication of patent applications and marketing a sanitizing-wipe product.

But UrthTech’s damages allegations consisted only of a statement that it had suffered damages of an amount to be determined at trial and, on information and belief, at least $75,000. The court held that this was conclusory and did not explain how GOJO’s alleged breaches caused damage. The court also held that UrthTech had not adequately alleged irreparable harm or shown that the requested injunction was available. In particular, the court stated that it could not order correction of inventorship on pending patent applications as a remedy for a common-law contract claim.

The court therefore dismissed Count I, the license-agreement claim, and Count II, the NDA claim.

Trade-secret claims

The court held that UrthTech described its alleged trade secrets with enough specificity, plausibly alleged that the information had economic value because it was not generally known, and plausibly alleged that GOJO misappropriated the information. The alleged information included the FA formulation and information concerning the development and testing of basic and acidic antimicrobial formulations.

However, a trade-secret plaintiff must also plausibly allege that it took reasonable measures to keep the information secret. UrthTech alleged that it did not disclose the information outside the company and shared it with GOJO subject to the NDA. The court held that the NDA alone was insufficient and that UrthTech did not allege additional internal protections, such as limiting access to employees with a need to know, using passwords or other security measures, or requiring employees to maintain confidentiality. The complaint also alleged that UrthTech shared the FA formulation with outside researchers without stating that those disclosures were covered by confidentiality agreements.

Because UrthTech did not plausibly allege that it owned a trade secret, the court dismissed Counts III and IV, the DTSA and OUTSA claims. The court’s conclusions concerning the alleged misappropriation and the timeliness of the DTSA claim did not prevent dismissal on the separate failure-to-allege-reasonable-measures ground.

Disposition

Judge P. Castel granted GOJO’s motion to dismiss. The court dismissed all four claims and directed the Clerk to terminate the motion. The court granted UrthTech leave to file a motion to amend its First Amended Complaint within 21 days concerning only damages from the alleged NDA breach and the reasonable measures UrthTech took to protect the secrecy of its alleged trade secrets.