Judge rules for Goodyear in Coda trade secret case

AKRON—A Federal District Court Judge dismissed Coda Development S.R.O's trade secret infringement case against Goodyear, saying that the self-inflating tire trade secret infringement allegations brought by Coda were too broad and vague to be considered "secrets."

In her ruling issued March 31, Judge Sara Lioi found in favor of Goodyear on the four remaining counts of trade secret infringement, counts brought by Czech Republic-based Coda.

Specifically, Lioi noted in her decision that information related to the design, development and placement of the self-inflating tire pumps were rooted in broad industry knowledge rather than proprietary know-how. The judge decided in Goodyear's favor on three of the counts and dismissed a fourth.

A fifth count on "correction of inventorship" had been set for a bench trial, but the two sides informed the judge that they would settle that matter without further need of a trial.

"From the outset of this case, Coda's alleged trade secrets and patent conceptions have been ill-defined moving targets," Lioi wrote in her order.

Akron-based Goodyear concurred with the judge's determination on the facts of the case.

"We agree with the judge's decision that Coda disclosed no trade secrets to Goodyear and there was no misappropriation by Goodyear," the firm said in a statement. "Our team of Goodyear engineers respects the intellectual property rights of others and is committed to leading with integrity and the highest of ethical standards."

Lioi's ruling overrides a previous decision by a U.S. District Court jury, which had awarded Coda $64 million after finding that Goodyear had "willfully and maliciously" used confidential and proprietary self-inflating tire technology Coda developed.

In that decision, issued in September, the jury found Goodyear had misappropriated Coda's trade secrets in five of 12 instances in which Coda alleged wrong doing. The jury, at that time, awarded Coda $2.8 million in compensatory and $61.2 million in punitive damages.

Coda initially filed its lawsuit in 2015, alleging that the tire maker "improperly sought to deliver a technological breakthrough by misappropriating (Coda's) SIT technology" and received a patent in 2011 following the successful development of such technology on the basis of Coda's SIT.

In the lawsuit, Coda contends that in 2008, it exhibited its SIT technology at the Society of Automotive Engineers World Congress in Detroit. There, Coda said, General Motors representatives expressed interest in the technology as an original equipment solution for underinflated tires on vehicles. GM later facilitated a partnership with Goodyear to bring the technology to the market.

The partnership between Goodyear and Coda took root in 2009, and it was during this process that Coda claims Goodyear "fraudulently induced Coda to enter into a non-disclosure agreement — one  Goodyear did not ever intend to honor — under the pretense of potentially engaging in a 'development project' with Coda related to this technology."

The agreement, the lawsuit says, restricted the use of SIT technology to the cooperative efforts between the companies.

In 2012, Coda said a former Goodyear employee alerted the company to the potential use of SIT technology outside of the partnership.

Coda CEO Frantisek Hrabal and Coda sued Goodyear in the Northern Ohio court in August 2015, asking he be added to the patent as an inventor of the self-inflating tire technology, and to have two Goodyear officials removed. The suit also sought to have Hrabal listed as an inventor on 11 other Goodyear patents related to self-inflating tires.

Goodyear moved for dismissal, arguing Coda and Hrabal had failed to plead facts supporting their claims. The tire maker cited a November 2008 article by Hrabal that it said publicly disclosed everything proprietary about his invention.

Coda moved to strike the Hrabal article on the grounds it was outside the pleadings; and simultaneously, it requested leave to file a sur-reply addressing the arguments arising from the Hrabal article. The district court denied Coda's motion and granted Goodyear's motion to dismiss.

The district court ruled that the Coda complaint did not plausibly show Hrabal was the sole inventor of the technology, according to the appeals court's Feb. 22, 2019, remand. It also denied a proposed amended complaint from Coda that offered additional factual allegations, it said.

The appeals court ruled Coda's claims for correction of inventorship were plausible.

"The complaint describes Goodyear's prior failures with inflation technology," the appeals court said.

The district court also erred in saying the statute of limitations had run out under Ohio law on Coda's claims, the appeals court said.