# Ridge Corporation v. Altum LLC

> District Court, S.D. Ohio · February 3, 2023

URL: https://www.frixlaw.com/law-library/cases/10381726

## Case

- **Court:** District Court, S.D. Ohio
- **Decided:** February 3, 2023
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10381726

## Opinion text

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

RIDGE CORPORATION,

:
Plaintiff,
Case No. 2:21-cv-5915

Judge Sarah D. Morrison
v.
Magistrate Judge Elizabeth A.

Preston Deavers

ALTUM LLC, et al.,
:

Defendants.

OPINION AND ORDER
This matter arises out of dispute between Plaintiff Ridge Corporation and
Defendants Dominic Grandominico, Kyle Timothy Gaines, Greg Karst (the
“Individual Defendants”) and Altum, LLC over the alleged misappropriation of
trade secrets in violation of federal and state law. It is before the Court on
Defendants’ Motion to Dismiss (ECF No. 24), to which Plaintiff responded (ECF No.
27), and Defendants replied (ECF No. 29).
For the reasons set forth below, Defendants’ Motion is GRANTED in part
and DENIED in part.
I. BACKGROUND
Plaintiff Ridge Corporation is a manufacturing and engineering company
that specializes in thermoplastics and produces, among other things, the Dual
Coated Film Product (the “Product”). (Compl., ECF No. 1, ¶¶ 9, 13–18.) The
Individual Defendants were employed by Ridge until each resigned in 2018. (Id. ¶¶
10, 27–30). On March 15, 2019, the Individual Defendants formed Altum, LLC,
which is also a manufacturing and engineering company that specializes in
thermoplastics. (Id. ¶¶ 33–34; see also Altum Articles of Inc.,1 ECF No. 1-7.)
At the center of this dispute is Ridge Corporation’s Dual Coated Film

Product, which is an apparatus and method for bonding two dissimilar materials
using a bondable film that is coated with a chemical emulsion to facilitate adhesion.
(Compl., ¶¶ 13–18.) The Product was invented by Gary Grandominico,2 Raymond
McDonald, and the Individual Defendants while each was employed by Ridge Corp.
(Id.) On October 1, 2015, each of the inventors executed patent assignments
granting Ridge Corporation exclusive rights to the Product, the patent application
for it, and any “application derivatives.” (Id. ¶ 23; see also Patent Assignment, ECF

No. 1-2.) The next day, Ridge Corporation filed a patent application with the United
States Patent and Trademark Office (“USPTO”) for the Product. (Compl., ¶ 24.)
Ultimately, the patent application was denied for lack of invention, and Ridge
Corporation allowed the patent application to lapse. (Id. ¶ 25; see also Rejection of
Patent Application, ECF No. 24-1.) According to Ridge, abandoning the patent
prosecution was a strategic decision to pursue trade secret protection for the

continued development of the Product and its underlying technology, which is now
used in almost all of its products. (Id. ¶ 25)

1 The Court may consider matters beyond the complaint when deciding a
motion to dismiss “when the document outside the complaint is referred to or
attached to the pleadings and is integral to plaintiff’s claims.” Commercial Money
Center, Inc. v. Illinois Union Ins. Co., 508 F. 3d 327, 336 (6th Cir. 2007).

2 Gary Grandominico is the President and Chief Executive Officer of Ridge
Corporation and Defendant Dominic Grandominico’s father.
Less than a year after the Individual Defendants resigned from Ridge
Corporation, the Defendants filed a patent application with the USPTO for an
invention called the “Structural Member Consisting of Dissimilar Polymer

Materials.” (Id. ¶¶ 36–37; Altum Patent Application, ECF No. 1-10, filed March 16,
2015.) According to Ridge, this invention is “wholly derivative” of the 2015-patent
application and the Product’s underlying technology—specifically, it alleges that the
combination of functional components with other adhesion promoters in the
Defendants’ patent is a direct extension of the research performed by Karst for
Ridge Corporation in March and April of 2018. (Compl., ¶¶ 36–40, 65.)
Following discovery of the Defendants’ patent application, Ridge Corporation

filed the instant suit.
II. STANDARD OF REVIEW
Federal Rule of Civil Procedure 8(a) requires a plaintiff to plead each claim
with sufficient specificity to “give the defendant fair notice of what the claim is and
the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555
(2007) (internal alteration and quotations omitted). A complaint which falls short of
the Rule 8(a) standard may be dismissed if it fails to state a claim upon which relief

can be granted. Fed. R. Civ. P. 12(b)(6). The Supreme Court has explained:
To survive a motion to dismiss, a complaint must contain sufficient
factual matter, accepted as true, to state a claim to relief that is
plausible on its face. A claim has facial plausibility when the plaintiff
pleads factual content that allows the court to draw the reasonable
inference that the defendant is liable for the misconduct alleged. The
plausibility standard is not akin to a probability requirement, but it
asks for more than a sheer possibility that a defendant has acted
unlawfully. Where a complaint pleads facts that are merely consistent
with a defendant’s liability, it stops short of the line between
possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations and quotations
omitted). The complaint need not contain detailed factual allegations, but it must
include more than labels, conclusions, and formulaic recitations of the elements of a

cause of action. Directv, Inc. v. Treesh, 487 F.3d, 471, 476 (6th Cir. 2007).
“Threadbare recitals of the elements of a cause of action, supported by mere
conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678 (citing Twombly, 550
U.S. at 555).
III. ANALYSIS
A. Counts I and II—Misappropriation of Trade Secrets
Defendants argue that Ridge’s misappropriation of trade secrets claims must
be dismissed because the only information that Ridge identifies as a trade secret is

the Product, and Ridge cannot prove that it took reasonable steps to protect that
information due to the publicly available patent application that it filed in 2015.
(Mot., ECF No. 24, PAGEID # 223–27.) In response, Ridge argues that, despite the
information disclosed in the patent application, post-2015 developments to the
Product are trade secrets and that this information is sufficiently identified in the
Complaint. (Resp., ECF No. 27, PAGEID # 254–58.)

Ridge has brought misappropriation of trade secrets claims under the
Defense of Trade Secrets Act (Count I), 18 U.S.C. § 1839, and the Ohio Uniform
Trade Secrets Act (Count II), Ohio Revised Code § 1333. Because the acts are
similar in scope and contain nearly identical definitions of statutory terms, the
claims will be addressed together.
To state a claim for trade secret misappropriation, Ridge must first establish
the existence of a “trade secret,” defined as “all forms and types of. . . scientific,
technical, or engineering information” if (1) “the owner thereof has taken reasonable

measures to keep such information secret” and (2) “the information derives
independent economic value. . . from not being generally known. . . [or] readily
ascertainable through proper means.” 18 U.S.C. § 1839(3); see also O.R.C.
1333.61(D).
Information that is generally known, publicly available, or readily
ascertainable by skilled individuals in a plaintiff’s field is not entitled protection as
trade secret information. See Hickory Specialties, Inc. v. Forest Flavors Int’l, Inc.,

No. 99-5003, 2000 WL 687681 (6th Cir. May 19, 2000); see also Caudill Seed &
Warehouse Co. v. Jarrow Formulas, Inc., 53 F.4th 368, 381 (6th Cir. 2022).
Accordingly, Ridge is required to identify the information it claims is a trade secret
“with specificity to separate the secret from general knowledge” or other forms of
unprotected information. AtriCure, Inc. v. Jian Meng, 842 F. App’x 974, 980 (6th
Cir. 2021); see also Oakwood Lab’ys LLC v. Thanoo, 999 F.3d 892, 906 (3d Cir. 2021)

(“[T]he subject matter of the trade secret must be described with sufficient
particularity to separate it from matters of general knowledge in the trade or of
special knowledge of those persons who are skilled in the trade, and to permit the
defendant to ascertain at least the boundaries within which the secret lies.”)
(quoting Diodes, Inc. v. Franzen, 260 Cal. App. 2d 244, 252 (Cal. Ct. App. 1968)).
Ridge need not spell out the details of its trade secret to avoid dismissal, but
“it must do more than allege that it had a secret.” Trandes Corp. v. Guy F. Atkinson
Co., 996 F.2d 655, 661 (4th Cir. 1993) (citations omitted). “Beyond those outer

boundaries, however, deciding whether a plaintiff has sufficiently disclosed its trade
secrets is a fact-specific question to be decided on a case-by-case basis.” Oakwood, at
906 (citations omitted).
Ridge has given Defendants sufficient notice of the trade secret information
at issue here. In addition to identifying the Product and its underlying technology
as trade secret information (which may itself sufficiently communicate the
boundaries of its claim) Ridge’s factual allegations pinpoint the polyurethane to

polypropylene bonding research conducted by then-employee Karst in March and
April 2018 as fundamental to the patent application filed by Altum. (Compl., ¶ 39.)
Next, Ridge’s factual allegations support that this information was
protectable as a trade secret. Ridge identifies specific steps that it took to secure
information about the Product and its continued development. (Compl., ¶¶ 19–22.)
For example, the testing and other information underlying the development of the

Product was limited to a small number of Ridge employees on the central
development team. (Id. ¶ 20.) Ridge also assigned code names when discussing
different development projects with those who assisted in testing but were not part
of the central team. (Id. ¶19.) In addition, Ridge Corporation’s employee handbook
prohibited employees from sharing any sensitive, proprietary, trade secret, or
confidential information learned during the course of their employment; violations
of that policy could result in termination. (Id. ¶ 22; Ridge Corp. Employee
Handbook, ECF No. 1-1.) Finally, Ridge demonstrates that the Product’s underlying
technology derives independent economic value, as it is used in almost all of its

products. (Compl., ¶ 26.)
While Defendants are correct that the information disclosed in Ridge’s 2015
patent application is not protectable trade secret information, see Novak v.
Farneman, No. 2:10-CV-768, 2010 WL 4643002, at *4 (S.D. Ohio Nov. 9, 2010)
(Marbley, C.J.), the existence of publicly disclosed information relating to the 2015-
version of the Product does not render unprotected all future developments to the
Product or innovations involving the disclosed information. See Giasson Aerospace

Sci. v. RCO Eng’g, Inc., 680 F.Supp.2d. 830, (E.D. Mich. 2010) (“‘A trade secret can
exist in a combination of characteristics each of which, by itself, is in the public
domain, but the unified process, design, and operation of which, in unique
combination, affords a competitive advantage.’”) (quoting 3M v. Pribyl, 259 F.3d
587, 595–96 (7th Cir. 2001)); Allied Erecting & Dismantling Co. v. Genesis Equip. &
Mfg., Inc., 649 F. Supp. 2d 702, 713 (N.D. Ohio 2009) (“[W]hile, as a general

proposition, there is no trade-secret protection for secrets that are disclosed in a
patent application, numerous courts have allowed trade-secret protection for
processes or specifications related to the patented device that are not disclosed in
the patent.”) (collecting cases).
Ridge must eventually prove that the misappropriated information is distinct
from that disclosed in the patent, but the mere existence of publicly available
information relating to the Product is not a fatal flaw in its pleadings. See Hickory
Specialties, 2000 WL 687681 at * 7 (holding that failure to distinguish “secret”
information from that disclosed in a patent was fatal to trade secret claim at trial).

Because Plaintiff has identified trade secret information with specificity and
alleged sufficient factual information to demonstrate it is protected as such,
Defendants’ motion to dismiss is DENIED as to Counts I and II.
B. Count III—Breach of Patent Assignment
Defendants argue that Ridge has failed to state a claim for breach of patent
assignment because their patent and patent application fall outside the scope of the
rights assigned to Ridge Corporation in the agreement. (Mot., ECF No. 24, PAGEID

# 227–29.) Ridge responds that the rights assigned to it by the Individual
Defendants include, among other things, all patents and patent applications that
derived the 2015-patent application. (Resp., ECF No. 27, PAGEID # 258–60.)
Under federal law, patents are treated as the personal property of the
patentee whose rights in their patents and patent applications are assignable by
written instrument. 35 U.S.C.A. § 261. Although claims that arise under federal
patent law fall within the exclusive jurisdiction of federal courts, 28 U.S.C. § 1338,

“state law governs contractual obligations and transfers of property rights,
including those relating to patents.” Regents of Univ. of New Mexico v. Knight, 321
F.3d 1111, 1118 (Fed. Cir. 2003) (internal quotations omitted). Thus, the Court
applies Ohio law.3

3 The forum state’s choice-of-law rules determine which state’s substantive
law will apply. Miller v. State Farm Mut. Auto. Ins. Co., 87 F.3d 822, 824 (6th Cir.
In Ohio, “[i]f a contract is clear and unambiguous, then its interpretation is a
matter of law and there is no issue of fact to be determined.” Inland Refuse Transfer
Co. v. Browning-Ferris Indus. of Ohio, Inc., 15 Ohio St. 3d 321, 322, 474 N.E.2d 271,

272 (1984). When the language of a written contract is clear and can be given a
definite legal meaning, a court need look no further than the writing itself to find
the intent of the parties. Westfield v. Galatis, 100 Ohio St.3d 216, 219, 797 N.E.2d
1256, 1261 (2003).
In context of a patent assignment, the rights that are assigned must be
“distinctly described” with any uncertainty resolved against the assignee. Beidler v.
Davis, 72 Ohio App. 27, 34, 50 N.E.2d 613, 616 (1943). Nonetheless, “common words

appearing in a written instrument will be given their ordinary meaning unless
manifest absurdity results, or unless some other meaning is clearly evidenced from
the face or overall contents of the instrument.” Shifrin v. Forest City Enters., Inc.,
64 Ohio St.3d 635, 638, 597 N.E.2d 499, 501 (1992). See also id. (“When the terms in
a contract are unambiguous, courts will not in effect create a new contract by
finding an intent not expressed in the clear language employed by the parties.”)

In the patent assignment, the Individual Defendants assigned their “entire
and exclusive rights, title and interest in the INVENTION and the APPLICATION
(and APPLICATION DERIVATIVES)” to Ridge Corporation. (ECF No. 1-2, PAGEID

1996). Where, as here, “‘neither party argues that the forum state’s choice-of-law
rules require the court to apply the substantive law of another state, the court
should apply the forum state’s substantive law.’” Wilkes Assocs. v. Hollander Indus.
Corp., 144 F. Supp. 2d 944, 949 n.4 (S.D. Ohio 2001) (Rice, C.J.) (quoting ECHO,
Inc. v. Whitson Co., Inc., 52 F.3d 702, 707 (7th Cir. 1995)).
# 93–96.) “APPLICATION DERIVATIVES” is described in the paragraph preceding
the assignment clause:
Ridge Corporation. . . is entitled to, and is desirous of acquiring, the
entire and exclusive rights, title, and interest in the INVENTION and
the APPLICATION (and all other applications and patents derived
therefrom, such as continuing applications, in and for the United
States, its territories, and all foreign countries (“APPLICATION
DERIVATIVES”)
(Id.) “APPLICATION” refers to the 2015-patent application for the Product and
“INVENTION” refers to the “invented subject matter disclosed and/or claimed” in
that application. (Id.)
Thus, Individual Defendants assigned their rights to “all other applications
and patents derived” from the 2015-patent application. The common usage of
“derive” is “to take, receive, or obtain especially from a specified source.” Derive,
MERRIAM-WEBSTER.COM DICTIONARY, https://www.merriam-
webster.com/dictionary/derive (last visited on Jan. 19, 2023). Ridge specifically
alleges that Defendants’ patent application is “wholly derivative” of the 2015-
application. (Compl., ¶ 65.) Accordingly, Ridge’s breach of patent assignment claim
will not be dismissed.
Defendants seek a different result. They first argue that the assignment of
applications derivative is expressly limited to “continuing applications.”4 (Reply,
ECF No. 29, PAGEID # 288.) Not so. This argument ignores that “continuing

4 A “continuing application” is a “[a] patent application that is filed while the
parent application is pending and that carries on prosecution of some or all of the
original application. Continuation, continuation-in-part, divisional, and reissue
applications are all forms of continuing applications.” Patent Application, Black’s
Law Dictionary (11th ed. 2019); see also 35 U.S.C.A. § 120; 37 C.F.R. § 1.53
applications” is preceded by the modifier “such as.” Rather than indicating an
exhaustive list, “such as” is “used to introduce an example or series of examples.”
Such as, MERRIAM-WEBSTER.COM DICTIONARY, https://www.merriam-

webster.com/dictionary/such%20as (last visited Jan. 19, 2023). Thus, “continuing
applications” are simply an example of a type of application derivative that the
Individual Defendants assigned to Ridge.
Defendants next argue that their patent application did not derive from the
2015-patent application because the USPTO determined that their patent
application described an invention that was not taught, anticipated, or rendered
obvious by any prior art. (Reply, ECF No. 29, PAGEID # 288–89.) While the opinion

by USPTO is given great weight on issues of patentability, it is not determinative
here. See Kawneer Co. v. Pittsburgh Plate Glass Co., 109 F. Supp. 228, 233 (W.D.
Mich. 1952). Instead, Defendants’ argument raises a heavily fact-bound inquiry that
is inappropriate for resolution at this stage.
Finally, Defendants argue that they did not convey any rights to Ridge
because the information in the 2015-patent application was deemed unpatentable

by the USPTO. (Reply, ECF No. 29, PAGEID # 289–90.) However, this argument
ignores that the Individual Defendants also assigned to Ridge their rights to all
subsequent “applications and patents derived” from the 2015-patent application.
Viewing the complaint in the light most favorable to Ridge, USPTO’s rejection of the
2015-patent application did not change the Individual Defendants’ contractual
obligations.
As such, Defendants’ motion is DENIED as to Count III.
C. Count IV—Conversion
Defendants argue that Ridge’s conversion claim should be dismissed because
it is preempted by state law. (Mot., ECF No. 24, PAGEID # 229–230.) In response,

Ridge argues that it is permitted to plead in the alternative, so dismissal based on
preemption is premature. (Resp., ECF No. 27, PAGEID # 260–61.)
Ohio Uniform Trade Secrets Act (“OUTSA”), preempts conflicting “tort,
restitutionary, and other laws” that provide “civil remedies for misappropriation of
a trade secret.” O.R.C. § 1333.67(A). Although “[t]he Ohio Supreme Court has yet to
speak to the scope of the OUTSA’s preemption clause,” the test applied by the Sixth

Circuit is “whether the claims are no more than a restatement of the same operative
facts that formed the basis of the plaintiff’s statutory claim for trade secret
misappropriation.” Stolle Mach. Co., LLC v. RAM Precision Industries, 605 Fed.
Appx. 473, 485 (6th Cir. 2015) (internal quotation omitted); see also Sal’s Heating &
Cooling, Inc. v. BERS Acquisition Co., 2022-Ohio-1756192, ¶ 50, N.E.3d 537, 547
(Ohio Ct. App. May 26, 2022) (applying the rule adopted in Stolle). If, however, “the
state-law claim has a factual basis independent from the facts establishing the

OUTSA claim, the portion of the claim supported by an independent factual basis
survives preemption.” Stolle, at 485. (internal quotation omitted). Finally, OUTSA
preempts all claims based on misappropriation of information even if that
information may not rise to the level of a “trade secret.” Miami Valley Mobile Health
Servs., Inc. v. ExamOne Worldwide, Inc., 852 F. Supp. 2d 925, 940 (S.D. Ohio 2012)
(Rice, J.) (holding that a conversion claim is preempted on a motion to dismiss).
Here, Ridge’s conversion claim is based on the same operative facts as its
trade secrets claims. The fundamental assertion in each is that, throughout their
employment, the Individual Defendants gained access to confidential and

proprietary information underlying the development of the Product and that they
used that same information to develop their own product after leaving Ridge
Corporation. (Compl., ¶¶ 55–61, 68–72.) Because Ridge does not identify an
independent factual basis for its conversion claim, the claim is preempted by
OUTSA.
Ridge is correct that plaintiffs are generally permitted to plead in the
alterative; however, courts routinely resolve OUTSA preemption issues on a motion

to dismiss where, as here, no amount of discovery would expand the factual basis
for the common law claim beyond the factual basis of the trade secrets claim. See
Cincom Sys., Inc. v. LabWare, Inc., No. 1:20-CV-83, 2021 WL 675437, at *5 (S.D.
Ohio Feb. 22, 2021) (Marbley, C.J.) (collecting cases).
Accordingly, Defendants’ motion is GRANTED as to Count IV and Ridge’s
conversion claim is DISMISSED.

IV. CONCLUSION
For the reasons stated herein, Defendants’ Motion to Dismiss (ECF No. 24) is
GRANTED as to Count IV and DENIED as to Counts I, II, and III.
IT IS SO ORDERED.

/s/ Sarah D. Morrison
SARAH D. MORRISON
UNITED STATES DISTRICT JUDGE

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10381726. Public record. Not legal advice.