ARCONIC CORPORATION v. NOVELIS INC.

IN THE UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

ARCONIC INC., ) CIVIL ACTION NO. 17-1434

)

Plaintiff, ) JUDGE JOY FLOWERS CONTI

)

)

)

)

v. )

)

NOVELIS INC. and NOVELIS CORP, )

)

Defendants. )

OPINION

On February 25, 2019, the court ordered Arconic Inc. (“Arconic”) to show cause why

summary judgment should not be granted on Arconic’s trade secret and confidential information

claims (counts I through VI of the second amended complaint) (ECF No. 282) due to its repeated

failures to comply with court orders to identify its trade secrets and confidential information.

After extensive proceedings, the show cause order is now ripe for disposition.

I. Introduction

Arconic and defendants, Novelis Inc. and Novelis Corporation (collectively, “Novelis”),

are competitors in the aluminum industry. Ford Motor Company (“Ford”) decided to make its

popular F-150 pickup truck with aluminum, starting with the 2015 model year. Arconic’s A951

pretreatment process was selected for exclusive use in the Ford F-150 project. Ford was

unwilling to be dependent upon a sole supplier. As a condition of selection, therefore, Ford

forced Arconic to license its technology to Novelis.

In 2011 and 2012, Arconic and Novelis entered into a Confidentiality, Nondisclosure and

Limited Use agreement (“NDA”) and a technology access and license agreement (“License”)

(ECF No. 177-1, 177-2). As applicable to the present dispute, the License provided, among

other things, that Novelis could use processes that were part of general industry practices,

retained its own technology and know-how, and owned improvements it developed independent

of Arconic. License §§ 2.2.1, 2.2.2, 2.2.3. Arconic’s disclosures to Novelis took place in the

context of three patents related to the A951 process, which by reason of the public nature of

patents involved disclosures in the public domain.

Arconic initiated this lawsuit over three years ago, alleging that Novelis disclosed

Arconic trade secrets and confidential information in a Novelis patent application. Notably, the

trade secret and confidential information claims cannot be based on the A951 chemical itself –

because the specific chemical was never disclosed to Novelis. (ECF No. 269, Ex. K at 16, filed

under seal).1 Because the alleged patent disclosures involved already-public information and

Novelis’ own improvements, the court concluded (and explained clearly and repeatedly) that

before allowing Arconic to undertake extensive discovery into its competitor’s technology, it

was incumbent upon Arconic to first articulate, with specificity, what it contends are its own

trade secrets and confidential information, as opposed to general industry practices or Novelis’

authorized improvements to the process. The special master and court have engaged in repeated

efforts since the inception of this case to have Arconic identify its claimed trade secrets and

confidential information in order for the case to proceed. Arconic submitted four trade secret

identifications (“TS ID”), TS ID ##1, 2, 3 and 4.2 Each TS ID was unavailing. After TS ID #4,

1 Given the subject matter, virtually all the relevant filings of the parties are under seal. This opinion was

circulated to the parties prior to publication to ensure that no confidential information is disclosed.

2 Each trade secret was also identified, in the alternative, as confidential information (ECF No. 521-7 at

112).

the court ordered Arconic to show cause why summary judgment should not be entered on its

trade secret and confidential information claims “for failure to identify its alleged trade secrets

and confidential information with reasonable particularity, as required by numerous orders of

court.” (ECF No. 282).

After extensive filings (including Novelis’ motion to strike the voluminous submissions

Arconic made in response to the show cause order, ECF No. 330), the matters were assigned to

the special master. The special master heard oral argument on September 24, 2019, which the

court attended. On July 14, 2020, the special master filed an 81-page Report and

Recommendation (“R&R”) #33 (ECF No. 510) under seal.3 Pending before the court are

objections to R&R # 33 filed by both parties (ECF Nos. 520, 521). The court heard oral

argument by video conference on November 16, 2020. The objections to R&R #33 and

resolution of the court’s show cause order are ripe for disposition.

II. Procedural Background

The special master’s R&R #33 thoroughly recites the applicable procedural history. The

court adopts that recitation. This summary highlights some of the pertinent details.

A. Initial Proceedings

At the beginning of the case, Arconic wanted to quickly move. On November 27, 2017,

Arconic filed a motion for expedited discovery into Novelis’ alleged appropriation of its trade

secrets and confidential information to determine whether Arconic could obtain injunctive relief

(ECF No. 17). As the special master explained in R&R #33, Arconic’s apparent goal was to take

discovery, first, on what Novelis misappropriated and only later disclose what constituted a trade

3 The court very much appreciates the efforts of the special master, which went far beyond the call of

duty.

secret (ECF No. 510 at 7). Novelis opposed this motion and filed a counter-motion for pre-

discovery identification of Arconic’s trade secrets (ECF No. 31).

The court conducted an expedited, pre-answer, case management conference on

December 14, 2017. As an initial matter, the court informed the parties that appointment of an

experienced special master would be important in this complicated and contentious litigation

(Transcript, ECF No. 56). On the expedited discovery issue, Arconic argued that in the

complaint it had “already identified its trade secrets with particularity.” Id. at 6. Arconic argued

that its list of trade secrets was identical to the 22 claims in Novelis’ patent application. Id. at 10.

Arconic’s counsel identified a document that purportedly performed a detailed analysis of how

the disclosures in Novelis’ patent application linked up to where, in Arconic documents, Novelis

learned that information. Id. at 6. In response, Novelis argued that some of the disclosures in its

patent application described public information, such as Arconic’s patents, and other disclosures

in the patent application were based on inventions Novelis was entitled to make under the

parties’ license agreement.

The court did not rule on the motions. The court observed the problem was that Novelis

did not know what “it” (i.e., Arconic’s alleged trade secrets and confidential information) was.

Id. at 20. The court commented: “We’ve got to get something concrete so we can move

forward.” Id. at 22. In sum, Arconic was on notice from the court, as of December 2017, that a

clear identification of its trade secrets and confidential information was necessary before Arconic

could undertake the expedited discovery it sought.

B. TS ID #1 and R&R ## 2 and 3

On January 10, 2018, the special master heard oral argument on Arconic’s motion for

expedited discovery.4 The special master suggested that Arconic start by providing a “tailored

description” of its trade secrets and Arconic’s counsel stated “we could do that.” (ECF No. 249

at 1-2, quoting Tr. at 33, 50). Arconic’s counsel represented that a list of its claimed trade

secrets would be provided within 2 days of entry of the protective order. See R&R #2, ECF No.

69.

In R&R #2, the special master recommended that Arconic’s motion for expedited

discovery be denied and stated: “Once Arconic identifies all alleged trade secrets at issue in this

case, (either as presently claimed or as it may become amended) with sufficient particularity to

make it clear what they are, discovery can commence on both the claims and counterclaims.” Id.

at 3. The special master reiterated that she would “discuss the appropriate staging of discovery

with the parties, once the trade secrets have been sufficiently identified, and that process will

proceed efficiently.” Id. at 4. R&R #2 was adopted by the court, without objection from the

parties (ECF No. 82).

Arconic’s first trade secret disclosure (TS ID #1) was not “something concrete” or a

“tailored description.” TS ID #1 copied – verbatim -- the language of the 22 claims in Novelis’

patent application and added 3 generic “catch-all” provisions for confidential information

(including negative know-how) that former Arconic employees provided to Novelis, Novelis

shared with third parties, or Novelis used beyond its legal rights (ECF No. 76, sealed).

Novelis moved to strike TS ID #1 (ECF No. 75). Arconic renewed its motion for

expedited discovery (ECF No. 77). The special master heard oral argument on February 21,

4 The special master’s first task was to resolve the parties’ disputes and implement a protective order to

preserve confidentiality of the identification. See R&R #1, ECF #63.

2018. Arconic’s counsel conceded that TS ID #1 did not disclose anything new about its trade

secrets. It remains unclear what Arconic hoped to accomplish with TS ID #1.

On March 14, 2018, the special master filed R&R # 3, which recommended granting

Novelis’ motion for pre-discovery identification of Arconic’s claimed trade secrets (ECF No.

89). The special master noted that because several months had passed and a protective order was

in place, there was no reason for less than full disclosure of Arconic’s trade secrets and

confidential information.

R&R #3 contained four important instructions, mandating that: (1) the parties set forth

their respective claimed trade secrets and confidential information with “reasonable

particularity”5; (2) the disclosures follow the format set forth in an accompanying proposed

order and chart; (3) the parties show “good cause” for leave to file future amendments to the

5 The court defined Arconic’s duty as follows:

“Reasonable particularity” shall have the meaning as defined in Hill v. Best Medical

International, Inc., No. CIV.A 09-1194, 2010 WL 2546023, at *3 (W.D. Pa. June 24, 2010)

(“‘Reasonable particularity’ has been defined as a description of the trade secrets at issue

that is sufficient to (a) put a defendant on notice of the nature of the plaintiff's claims and

(b) enable the defendant to determine the relevancy of any requested discovery concerning

its trade secrets.”) “Reasonable particularity” means a specific list and description of the

alleged trade secrets and confidential information and not “general allegations or general

references” to categories of information or processes. See Id. at *4. Reasonable

particularity requires Arconic to identify each Trade Secret or item of Confidential

Information “with sufficient particularity so that the reader understands how each such

claim differs from public domain information—including public [] patent filings.” See

USSA v. Mitek Systems, Inc., 289 F.R.D. 244, 249 (W.D. Tex. 2013). Where an asserted

Trade Secret or item of Confidential Information is a “combination of known components”,

plaintiff must specifically describe what [the] particular combination of components is;

how these components are combined in a secret process, and how they operate in such

combination to meet the legal requisites of a trade secret. Hill, 2010 WL 2546023 at *4 n.8

(citing Struthers Sci. and Int’l Corp. v. General Foods Corp., 51 F.R.D. 149 (D. Del.

1970)).

(ECF No. 101 at 2 n.1).

claimed trade secrets; and (4) because the trade secrets and confidential information claims are

so closely inter-related, “the same identification process should apply to both.” Id. at 2, 4, 5.

Arconic conceded that much of the Novelis patent application involved information

already in the public domain. Id. at 3. The special master recognized that unique combinations

of public information can, in theory, support a trade secret claim, but found that TS ID #1 did not

explain how publicly-available claim elements were uniquely combined so as to comprise a trade

secret. Id. The special master recommended: “Arconic should be ordered to file, under seal, its

claimed trade secrets with particularity, specifically identifying which elements are in the public

domain and which are its trade secrets, including any combinations of elements claimed as a

trade secret, and setting forth what is it about such combination that meets the legal standard

stated above for combination trade secret claims.” Id. at 4. Discovery would commence once

this disclosure was made. Id.

Attached to R&R #3 was a chart to be used for Arconic’s disclosure. There were

separate rows for each claimed trade secret 1, 2, 3, etc., and each claimed confidential

information 1, 2, 3, etc. The columns required: (1) identification of the asserted trade

secret/confidential information; (2) the portion that is not in the public domain and is claimed to

be secret/confidential; (3) the portion that is in the public domain; and (4) for combinations of

public and private information, an explanation of the secret/confidential combination (ECF No.

89-1).

Arconic did not object to R&R #3. It was adopted as the opinion and order of court on

April 3, 2018 (ECF Nos. 100, 101). Novelis’ motion for prediscovery identification of the trade

secrets and confidential information was granted. The standards set forth in R&R #3 became the

law of the case.6 The “reasonable particularity” standard was adopted, which required Arconic

to identify each claimed trade secret or confidential information “with sufficient particularity so

that the reader understands how each such claim differs from public domain information—

including public [] patent filings.” (ECF No. 101 at 2-3 n.1). For combinations, Arconic was

required to “specifically describe what [the] particular combination of components is; how these

components are combined in a secret process, and how they operate in such combination to meet

the legal requisites of a trade secret.” Id.

C. Dismissal of Arconic’s claims and R&R #5

Novelis filed a partial motion to dismiss the trade secret and confidential information

claims in Arconic’s original complaint on the ground that Arconic failed to plead sufficient facts

to support such claims (ECF No. 53). On March 22, 2018, the special master issued R&R # 5,

which recommended that those counts be dismissed, albeit without prejudice to replead after

Arconic filed its TS ID in compliance with R&R #3 (ECF No. 92 at 8). The special master

recognized that under Pennsylvania law, confidential information claims may be pleaded in the

alternative “if Arconic fails to prove that its claimed trade secrets meet the legal requisites for

such a claim.” (ECF No. 92 at 14). Arconic was given the opportunity to set forth separate

claims in the second amended complaint to assert that its confidential proprietary information

was misused in connection with a breach of contract. Id. Arconic was permitted to incorporate

6 The “law of the case doctrine” developed to maintain consistency and avoid reconsideration of matters

once decided during the course of a single continuing lawsuit.” Pub. Interest Research Group of N.J., Inc.

v. Magnesium Elektron, Inc., 123 F.3d 111, 116 (3d Cir. 1997). As the United States Supreme Court

explained, a court has the power to revisit its prior decisions in any circumstance, although it should be

reluctant to do so in the absence of extraordinary circumstances. Christianson v. Colt Indus. Operating

Corp., 486 U.S. 800, 817 (1988). Arconic is not asking this court to revisit any of its previous decisions.

the TS ID chart by reference in the amended complaint. Arconic did not object to R&R #5. It

was adopted as the opinion and order of court (ECF Nos. 113, 114).

To reiterate, the court dismissed the relevant counts of Arconic’s original complaint for

failure to plead plausible trade secrets or confidential information. Arconic did not object to the

dismissal. By not objecting to R&R ## 3 and 5, Arconic admitted its duty to make pre-discovery

disclosures of its claimed trade secrets with reasonable particularity and to show good cause for

any revisions to its dsclosures. Arconic also conceded that its trade secret and confidential

information claims were properly dismissed because it failed to do so. The court emphasized

that the legal reasoning in R&R #5 “will govern future proceedings” and was the law of the case

(ECF No. 112 at 2).

D. TS ID #2 and R&R #12

On April 2, 2018, Arconic filed TS ID #2 (ECF No. 98, sealed). The special master

allowed discovery to begin in the good faith assumption that the amended complaint and TS ID

would comply with the court’s order. In retrospect, this assumption was unfounded.

Arconic’s chart purported to follow the format set forth in R&R #3, but the content was

noncompliant. Arconic described a 6-step aluminum pretreatment process and identified 43

trade secrets/confidential information. Arconic did not identify the trade secrets and confidential

information separately, as required in R&R #3. Instead, it contended that all 43 items were trade

secrets but, in the alternative, the same 43 items constituted confidential information. (ECF No.

98 at 21-22). Instead of explaining how each combination of steps constituted a trade

secret/confidential information, Arconic conclusorily stated that “each individual piece of

information for one step of the process, when combined with the other steps of the process,

forms a unique trade secret.” Id. Arconic did not identify what portions were not in the public

domain. To the contrary, the chart stated that many of the 6 steps (for example, cleaning,

etching, rinsing, drying) were generally known to the extent described in a Petition to Institute

Derivation Proceeding of U.S. Patent Application No. 15/142,384, dated November 2, 2017. Id.

Arconic did not claim any trade secrets relating to the sixth step, drying. Id. Arconic did not

describe how each of the rows in the chart constituted a unique trade secret; most of the entries

on the chart simply said “see above.” Arconic stated that it was not disclosing every variation of

the steps and again asserted generic, catch-all categories. Novelis moved to strike TS ID #2.

The special master considered further briefing and oral argument. In August 2018, the

special master issued R&R #12 (ECF No. 147) and proposed order (ECF No. 149), which

recommended that TS ID #2 be stricken. The special master noted that some of the discrete

disclosures7 in TS ID #2 would be acceptable: “Arconic followed the format and provided the

needed information for the majority of the Trade Secret Identification—to which Novelis does

not object—and must provide the same information for each combination trade secret it claims in

the case.” (ECF No. 147 at 3). The special master explained that Arconic failed to provide the

required information about the public and private aspects and uniqueness of each combination

trade secret claimed. Id. at 2-3. The special master also noted that inclusion of three broad

catch-all categories frustrated any limitations on discovery or the claims and again recommended

that the catch-all categories be dismissed, as incompatible with the reasonable particularity and

good cause standards. Id. at 4. Arconic was given an opportunity to file TS ID #3.

Arconic did not object to R&R #12. It was adopted as the opinion and order of court on

August 21, 2018 (ECF No. 156). TS ID #2 was stricken.8 The court reiterated: “a party must be

7 Arconic does not contend that discrete components are its trade secrets; rather, it argues the

combinations of the entire process are its trade secrets (ECF No. 521 at 15).

8 Arconic’s efforts to resuscitate TS ID #2 now, more than 2 years later, see ECF No. 521 at 5-6, are

without merit.

able to identify its own trade secrets conveyed to the party that must defend the case.” (ECF No.

149, adopted by ECF No. 156).

E. The second amended complaint and R&R #18

On May 8, 2018, Arconic sought leave to file a second amended complaint9 to restate the

trade secret/confidential information claims that had been dismissed. The special master

considered briefing and oral argument and on August 31, 2018, issued R&R #18 (ECF No. 161),

which recommended that Arconic be granted leave to file an amended complaint consistent with

R&R #5. In other words, leave to file the amended complaint was premised on the condition that

Arconic would disclose its trade secrets and confidential information with reasonable

particularity. On September 18, 2018, the court adopted R&R #18, to which no objections were

filed (ECF No. 171). In retrospect, the court should have denied leave to amend, or held the

motion in abeyance, until Arconic filed a proper TS ID.

On September 21, 2018, Arconic filed the second amended complaint (ECF No. 177),

which is its operative pleading in this case. The second amended complaint incorporates by

reference TS ID #2 (ECF No. 177 ¶¶ 106, 112, 118, 124, 130, 145). Arconic asserts 7 claims, 6

of which merely restate its original trade secret and confidential information claims separately:

(1) breach of license agreement – misappropriation of trade secrets against Novelis Inc.; (2)

breach of license agreement – misuse of confidential information against Novelis Inc.; (3) breach

of non-disclosure agreement – misappropriation of trade secrets against Novelis Corp.; (4)

breach of non-disclosure agreement – misuse of confidential information against Novelis Corp.;

(5) misappropriation of trade secrets pursuant to 18 U.S.C. § 1831; (6) misappropriation of trade

secrets pursuant to Pennsylvania law; and (7) declaratory judgment regarding the Ion Exchange

9 Arconic’s first amended complaint was stricken, with Arconic’s consent, because Arconic failed to seek

leave of court to file it (ECF No. 112).

Patent, No. 6,020,030. Novelis filed an amended answer and counterclaims.10 (ECF No. 254,

filed under seal). Counts I through VI are subject to the “show cause” order. Count VII will

remain in the case.

F. TS ID #3 and R&R #20

In response to R&R #12, on August 30, 2018, Arconic served TS ID #3 (ECF No. 163,

sealed). TS ID #3 consisted of a 76-page chart in which Arconic claimed 568 trade secrets. In

the columns for identifying public and private elements and uniqueness, the responses were

formulaic and unhelpful at best. Arconic merely stated that the process, in its entirety, was not in

the public domain; no further details were provided. Arconic did not explain or identify how any

combination of known and unknown steps constituted a trade secret or confidential information

other than a conclusory statement: “The specific combination set forth in this trade secret is

unique.” Arconic made no attempt to explain how the 568 trade secrets differed from each other;

almost every line of the chart simply stated “see above.” Novelis moved to strike TS ID #3.

The special master considered briefing and oral argument. During the oral argument,

Arconic’s counsel disclosed that TS ID #3 contained almost 300 duplicate entries. (Transcript,

ECF No. 543 at 89). Arconic also conceded that portions of each claimed trade secret were in

the public domain and that it had not stated what those portions were. Id. at 96. The special

master expressed dismay at the vast expansion of the claimed trade secrets and believed it made

the case unmanageable. Id. at 26, 89. It bears repeating that the case had been pending for

10 On February 7, 2019, Novelis was given leave to file amended counterclaims to assert antittrust

violations by Arconic (ECF No. 252). The court explained that Novelis’ failure to comply with the

deadline to amend pleadings in the case management order was excused because Arconic did not timely

produce a Technology Access & License Agreement between Arconic’s predecessory, Alcoa, Inc., and

Chemetall US, Inc. dated October 29, 2012 (the “Chemetall Agreement”). Id. at 3.

almost a year; this was Arconic’s third opportunity to identify its trade secrets and confidential

information; the information is within Arconic’s own knowledge; and the claims in the second

amended complaint incorporate the TS ID by reference.11

On October 18, 2018, the special master filed R&R #20 (ECF No. 209). The special

master explained that TS ID #3 fell “woefully short” of providing the disclosures required by this

court’s prior orders (ECF No. 209 at 1). In the R&R, the special master recounted the efforts to

obtain a particularized identification of the claimed trade secrets/confidential information in this

case. The special master noted that “Arconic is in possession of the information needed to

articulate its own trade secrets” and also received the benefit of 6 months of discovery from

Novelis. Id. The special master found that Arconic’s chart “does not even begin to meet this

Court’s order” to explain how each claim met the standards to qualify as a trade secret. Id. The

special master explained that many of the alleged trade secrets were based on a combination of

publicly known elements and Arconic failed to explain what made each one unique and why.

The special master did not invoke a “three strikes and you’re out” rule. Instead, the

special master gave Arconic a fourth (albeit very narrow) bite at the apple. Discovery was

suspended. The special master provided very precise instructions about Arconic’s required

disclosures. Before depositions would resume, Arconic was required to describe individually

each and every trade secret it claimed as to each element. Id. at 3. Arconic was instructed to

resubmit the “same chart” with the duplicates crossed out. Id. at 7. In addition, Arconic was

instructed to update its interrogatory responses “with the required information about each

separate individual trade secret of the 288 now asserted.” Id. (emphasis in original).

11 Although the second amended complaint incorporated TS ID #2, which was stricken, the court

construes its orders permitting Arconic to resubmit other TS IDs as allowing those TS IDs to be

incorporated by reference in the second amended complaint as well.

The special master resolved several disputes to guide Arconic’s required responses to

interrogatories and urged Arconic to consider reducing its list to assert only those trade secrets

that were significant and provable. Id. For each trade secret, Arconic was required to provide

“an individually composed answer as to each element of each numbered alleged trade secret in

genuine, non-boilerplate English narrative prose.” Id. The rationale was that if the chart

formatting somehow prevented a full explanation, Arconic could use the interrogatory responses

to (finally) identify what the “it” (i.e., the trade secret/confidential information) really was.

The special master cautioned that if Arconic’s responses were “mere boilerplate” and did

not include an explanation of what makes each trade secret unique, the depositions would not

resume. The special master reiterated: “No blanket answers, such as ‘same as above’ or ‘see

above’ will be deemed to be satisfactory.” Id. at 10.

Once again, even in light of the criticisms contained therein, Arconic did not object to the

relevant R&R. The court adopted R&R #20 as the opinion and order of court (ECF No. 212).

To repeat, the woeful failure of TS ID #3 and the clear instructions for TS ID #4 became the law

of the case.

G. TS ID #4 and R&R #28

On November 2, 2018, Arconic submitted TS ID #4, which consisted of a revised chart,

interrogatory responses and summary slides. (ECF No. 269, Ex. K, filed under seal). The TS ID

#4 chart contained certain information in bold (largely involving concentration levels,

temperature and time ranges, etc.). For reasons unknown and difficult to fathom, Arconic did

not abide by the explicit instructions set forth in R&R #20. Instead, Arconic (1) submitted a new

chart with additional information, rather than the “same chart” with duplicates removed; and (2)

framed its interrogatory responses in terms of parameters, rather than identifying with

particularity, in clear English sentences, why each of the 288 individual trade secrets was unique.

The special master commented: “Now, more than a year into the case, it remains unclear what, if

any, Arconic’s trade secrets are.” (ECF No. 249 at 6). The special master described Arconic’s

submission of TS ID #4 as “deliberate non-compliance with the clear mandate of [R&R #20].”

(ECF No. 249 at 6).

Novelis objected that Arconic was attempting to change its claimed trade secrets without

good cause and that the 16 parameters are not unique and protectable trade secret combinations.

Novelis also objected to Arconic’s proposal to reduce its trade secret disclosure to a 1-page table

of parameters. In particular, Novelis argued that it was improper to inflate 16 parameters into

288 combinations because Arconic never alleged it disclosed any of the 288 combinations to

Novelis.

On January 24, 2019, the special master issued R&R #28, captioned “Scheduling

Briefing on Whether Arconic’s Trade Secret Identification Should Be Stricken” (ECF No. 249).

R&R #28 recommended that the November 2, 2018 chart be stricken as unauthorized. The

special master recommended that Novelis be given leave to file a motion to strike the remainder

of TS ID #4. R&R #28 set forth a briefing schedule for that purpose. The special master

directed the parties to focus on the sufficiency of the August 30, 2018 chart from TS ID #3

(without duplicates) and the November 2, 2018 interrogatory responses. Id. Arconic was

expressly prohibited from making a TS ID #5. Arconic filed objections to R&R #28.

H. The “show cause” order (ECF No. 282)

Upon review of Arconic’s objections to R&R #28, it appeared to the court that Arconic

again failed to comply with the court’s orders to identify its trade secrets/confidential

information. On February 25, 2019, the court issued an opinion which stated:

This case has been plagued, virtually from the beginning, by Arconic’s

unwillingness, or inability, to describe precisely what secret or confidential

information Novelis allegedly disclosed. Arconic contends in its objections that the

problem is primarily a formatting misunderstanding. The court cannot agree.

Arconic’s failure to identify its trade secrets and confidential information is a

substantive flaw that may be fatal to the merits of its claims.

ECF No. 282 at 1 (emphasis added). The court reviewed the procedural history of Arconic’s

previous failures to identify, as set forth in the R&Rs to which Arconic did not object.

The court determined that further briefing limited to the issue of striking TS ID #4, as

recommended in R&R #28, would not materially advance the litigation. Even if TS ID #4 were

stricken, the underlying trade secrets and confidential information claims would still exist,

discovery would remain stayed, and additional proceedings would be necessary about whether to

permit Arconic to submit a TS ID #5, to consider sanctions for Arconic’s noncompliance, or to

otherwise allow the case to proceed. The court invoked Rule 56(f) as a procedural mechanism

to resolve the underlying claims in counts I-VI of the second amended complaint. The purpose

of the show cause order was clearly stated in the opinion:

It appears to the court that Arconic’s claims based on alleged trade secrets or

confidential information must fail as a matter of law. The claims were previously

dismissed, without objection by Arconic, subject to renewal if Arconic made an

identification with reasonable particularity. (ECF Nos. 113, 114). It appears that

Arconic did not do so.

Id. at 6 (emphasis added).

The show cause order stated, in its entirety:

AND NOW this 25th day of February, 2019, in accordance with Federal

Rule of Civil Procedure 56(f), the court gives Arconic, Inc. (“Arconic”) notice and

the opportunity to show cause why summary judgment should not be entered in

favor of defendants Novelis Inc. and Novelis Corp. (collectively, “Novelis”) on

counts I, II, III, IV, V and VI of the amended complaint (ECF No. 177) for failure

to identify its alleged trade secrets and confidential information with reasonable

particularity, as required by numerous orders of court. Count VII of the amended

complaint would remain in the case.

The objections to special master R&R # 28 are DENIED WITHOUT

PREJUDICE to reassert if the claims remain viable.

(ECF No. 282).

Pursuant to Rule 56(f), Arconic was given notice and a reasonable time to respond.

Arconic was given a full opportunity to show the court where in its previous submissions,

including its interrogatory responses, it had identified any trade secrets or confidential

information with the reasonable particularity required by the court’s orders.

I. Arconic’s response to the show cause order and R&R #33

Given the procedural status, it was clear that the show cause order was focused on

Arconic’s failure to identify properly its trade secrets. Instead of responding by showing where

it had properly identified its trade secrets and confidential information, Arconic submitted a

wealth of new information to the court about the merits of its underlying claims (Arconic’s

“post-show cause submissions”) (ECF Nos. 300-306). Novelis filed a motion to strike the vast

majority of these voluminous filings (ECF No. 330). The matters were referred to the special

master.

In May 2019, the Arconic attorneys who prepared TS ID ## 1-4 were replaced. The

special master considered extensive briefing about the show cause order. On September 19,

2019, the special master held an oral argument, which the court attended. At that argument,

Arconic’s new counsel conceded that TS ID #4 did not abide by the strictures set forth in R&R

#20 and agreed that he would not have done it that way. (Transcript, ECF No. 521-7 at 68).

Arconic explained that its post-show cause submissions are evidence about the merits of

summary judgment, and did not constitute an attempt to make a TS ID #5 (ECF No. 521 at 37-

38). The special master commented that Arconic’s effort to focus on the merits of its claims,

without addressing its failure to identify them, was improper. (ECF No. 521-7 at 22-25). The

special master explained, correctly, that the operative verb in the show cause order was

“identify” and that Arconic’s task was to show where, in all the information it submitted,

Arconic identified a cognizable trade secret. Id.

Arconic acknowledged at the oral argument before the special master that none of its

post-show cause submissions were necessary if “the exercise” was to show the court the

evidence of how its identification of trade secrets/confidential information met the reasonable

particularity standard. (ECF No. 521-7 at 36). Counsel explained that those submissions were

designed to prevent waiver of Arconic’s rights on the merits of summary judgment. (ECF No.

521-7 at 39).

In R&R #33, the special master conducted a thorough, 81-page analysis. The special

master reiterated that the show cause order focused on “identification,” not the merits, and

“cannot genuinely be read any other way.” (ECF No. 510 at 21). The special master adhered to

her previous recommendation that the November 2, 2018 chart contained in TS ID #4 should be

stricken. The special master stated:

Likewise, no party acting in good faith could interpret Report & Recommendation

No. 20’s instruction to submit the “same chart” (deduplicated) as authorization to

submit a new chart supplying additional information. The Special Master will not

repeat its prior recommendation to strike the unauthorized chart submitted in Report

& Recommendation No. 28; however, the recommendation stands on an even

stronger platform now than it did when made.

(ECF No. 510 at 27 n.3); see Id. at 56 n.12 (“the Special Master does not drop the

recommendation that it be stricken”). The special master nevertheless gave Arconic the benefit

of the doubt and engaged in a granular analysis of the entire TS ID #4 (including the chart). The

special master concluded that Arconic failed to identify any trade secrets, but that certain of the

ranges and concentrations set forth in various parameters could be sufficient to identify

confidential information. Id. at 57-61.

In sum, the special master made the following recommendations:

(1) counts I, III, V and VI (the trade secret claims) be denied leave to be filed;

(2) in the alternative, counts I, III, V and VI be stricken due to Arconic’s repeated refusal to

follow the court orders to identify its trade secrets with particularity;

(3) counts II and IV (the confidential information claims) be granted leave to be filed in part

and deemed sufficiently identified to proceed as limited in R&R #33; and

(4) Novelis’ motion to strike Arconic’s post-show cause submissions (ECF No. 330) be

granted.

Both parties filed objections to R&R #33. Arconic adheres to its argument that the

court’s show cause order directed the parties to address whether its claims were cognizable on

the merits. Arconic also argues that the disclosures in TS ID #2 met the reasonable particularity

standard because they would have been understandable to a person of ordinary skill in the art

(“POSITA”) and that although “admittedly imperfect,” it substantially complied in good faith

with the court’s orders (ECF No. 521 at 2). Novelis objects to the recommendation that portions

of the confidential information claims be allowed to proceed. Novelis contends that summary

judgment on counts I to VI in their entireties is warranted on several independent grounds: (1) as

a Rule 37 sanction; (2) for failure to meet the conditions for amending the claims; and (3) due to

the substantive lack of a cognizable trade secret or confidential information.

III. Legal Standards

A. Summary Judgment

Summary judgment is the time to “put up or shut up.” Berckeley Inv. Grp., Ltd. v. Colkitt,

455 F.3d 195, 201 (3d Cir. 2006) (“the non-moving party must rebut the motion with facts in the

record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral

argument.”). A court will grant summary judgment if there is no genuine dispute over material

facts and a party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a).

A fact is material if a dispute over it “might affect the outcome of the suit under the

governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Unnecessary or

irrelevant factual disputes will not preclude summary judgment. Jasmin v. New Jersey Econ.

Devlopment Auth., No. CV 16-1002 (FLW), 2020 WL 3411171, at *5 (D.N.J. June 22, 2020)

(citing Anderson, 477 U.S. at 249-50). A dispute is “genuine” only if a reasonable jury could

decide the dispute in favor of the party opposing summary judgment. Id. (citing Anderson, 477

U.S. at 251). The question is whether “the evidence presents a sufficient disagreement to require

submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.”

Id. (citing Anderson, 477 U.S. at 251-52). The party opposing summary judgment must “do

more than simply show that there is some metaphysical doubt as to the material facts.”

Matsushita Elec. Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). It must point to

evidence in the record demonstrating that “a rational trier of fact” could find in its favor. Id. at

587; Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986) (“Rule 56(e) requires the nonmoving

party to go beyond its pleadings ... [and] designate specific facts showing that there is a genuine

issue for trial.”); Anderson, 477 U.S. at 257 (noting that a party resisting summary judgment

“must present affirmative evidence in order to defeat a properly supported motion”).

To defeat summary judgment, a party must make a showing sufficient to establish the

existence of every element essential to its case. Celotex, 477 U.S. at 322. If that party cannot

make a sufficient showing with respect to any essential element, entry of summary judgment is

appropriate. “[A] complete failure of proof concerning an essential element [on which the party

will bear the burden at trial] ... necessarily renders all other facts immaterial.” Id. at 323.

B. Trade secrets claims

Counts I through IV of the second amended complaint assert breach of contract claims.

To prevail on a breach of contract claim under Pennsylvania law, the plaintiff must establish: (1)

the existence of a contract, including its essential terms, (2) a breach of a duty imposed by that

contract; and (3) resultant damages. Hill v. Best Med. Int'l, Inc., No. CA 07-1709, 2011 WL

5082208, at *25 (W.D. Pa. Oct. 25, 2011) (citing Williams v. Nationwide Mut. Ins. Co., 750 A.2d

881, 884 (Pa. Super. Ct. 2000)). In counts I through IV, Arconic alleges that Novelis breached

contractual duties by disclosing Arconic’s trade secrets and confidential information.

Counts V and VI assert misappropriation of trade secrets claims under federal and state

law. The elements of a misappropriation claim under the Defend Trade Secrets Act, 18 U.S.C. §

1832 et seq. (“DTSA”), are: (1) the information was a trade secret (i.e., not generally known in

the industry), (2) it was misappropriated (i.e., stolen, rather than developed independently or

obtained from a third party), and (3) it was used in the defendant's business. NEXT Payment

Sols., Inc. v. CLEAResult Consulting, Inc., No. 1:17-CV-8829, 2020 WL 2836778, at *10 (N.D.

Ill. May 31, 2020). Courts apply the same legal standards to claims under the Pennsylvania

Uniform Trade Secrets Act (“PUTSA”) because the DTSA and PUTSA “essentially protect the

same type of information.” Freedom Med. Inc. v. Whitman, 343 F. Supp.3d 509, 518 (E.D. Pa.

2018) (quoting Teva Pharm. USA, Inc. v. Sandhu, 291 F.Supp.3d 659, 675 (E.D. Pa. 2018)). A

threshold element in each of these claims is the need to identify each trade secret asserted with

particularity.

As explained in Big Vision Private Ltd. v. E.I. DuPont De Nemours & Co., 1 F. Supp. 3d

224 (S.D.N.Y. 2014), aff'd sub nom. Big Vision Private Ltd. v. E.I. du Pont de Nemours & Co.,

610 F. App'x 69 (2d Cir. 2015), “[t]he requirement of particularity exists for the simple reason

that a defendant must know what constitutes a plaintiff's trade secret, so that it does not infringe

upon that trade secret.” Id. at 257. At the time of disclosure, there must be sufficient specificity

for the party to whom the secret is revealed to understand the contours of the claimed trade secret

information so it does not transgress its boundaries. Id. at 258 (citing Sit–Up Ltd. v.

IAC/InterActiveCorp., No. 05 Civ. 9292(DLC), 2008 WL 463884, at *11–12 (S.D.N.Y. Feb. 20,

2008)). Specificity is also required during the litigation, so that the defendant can defend against

the claims, the court can oversee discovery, and a jury can render a verdict. Id. The court

explained this continuing need for specificity:

A corollary requirement of specificity for claimed trade secrets is inferable from

this holding: If a particular piece of information, or a formula, is not entitled to

trade secret protection because it is “so vague and indefinite” at the time it is

divulged, then it cannot be granted protection as a trade secret by a court during

litigation if it is “vague and indefinite.” Specificity is required at the moment of

divulging so that the party to whom the secret is revealed understands the contours

of the secret information and does not inadvertently or purposefully transgress its

boundaries. Similarly, specificity is required before the court so that the defendant

can defend himself adequately against claims of trade secret misappropriation, and

can divine the line between secret and nonsecret information, and so that a jury can

render a verdict based on a discriminating analysis of the evidence of disclosure

and misappropriation.

Id. at 258 (quoting Sit-Up Ltd., 2008 WL 463884, at *11-12).

A plaintiff must identify its trade secrets “with a reasonable degree of precision and

specificity” that is “particular enough as to separate the trade secret from matters of general

knowledge in the trade or of special knowledge of persons skilled in the trade.” Id. at 258-59

(quoting Dow Chem. Canada, Inc. v. HRD Corp., 909 F.Supp.2d 340, 346 (D. Del. 2012)). It is

not sufficient for a party to simply argue that a person skilled in the art would have known what

the trade secrets were; rather, a party must identify how its claimed trade secrets are different

from what was generally known in the art and the defendant’s own knowledge. See Id. at 259-60

& n. 42 (plaintiff “made virtually no effort to identify its alleged trade secret with particularity at

the time of disclosure, and did nothing to separate its alleged trade secret from [defendant’s] own

contributions” or its “considerable prior knowledge.”). In other words, a party cannot prove that

the other party breached its contractual duties if it cannot identify what trade secrets it disclosed

to the other party. Those concerns are heightened when the parties’ contracts specifically permit

the other party to use general industry practices and improvements it independently developed.

Id. at 259-60 & n.42.

C. Rule 37 sanctions

Federal Rule of Civil Procedure 37(b)(2)(A) provides, in relevant part, that if a party fails

to obey an order to provide or permit discovery, the court where the action is pending may issue

further just orders, including “(v) dismissing the action or proceeding in whole or in part.” Fed.

R. Civ. P. 37(b)(2)(A). Dismissal with prejudice is a drastic sanction that must be used as a last

resort. Poulis v. State Farm Fire & Cas. Co., 747 F.2d 863, 869 (3d Cir. 1984). The “Poulis

factors” guide a court's analysis about whether dismissal is an appropriate sanction. The factors

are: (1) the extent of the party's personal responsibility; (2) the prejudice of the adversary caused

by the failure to meet scheduling orders and respond to discovery; (3) a history of dilatoriness;

(4) whether the conduct of the party or the attorney was willful or in bad faith; (5) the

effectiveness of sanctions other than dismissal, which entails an analysis of alternative sanctions;

and (6) the meritoriousness of the claim or defense. Id. at 868. It is not necessary that all factors

be met before imposing a sanction. Ware v. Rodale Press, Inc., 322 F.3d 218, 221 (3d Cir. 2003)

(“Each factor need not be satisfied for the trial court to dismiss a claim”).

IV. Discussion

This case is three years old. The court’s order to show cause why summary judgment

should not be granted on Arconic’s trade secret/confidential information claims is now ripe for

decision. The court gave Arconic notice and one last chance to show cause why summary

judgment should not be entered for “failure to identify” its alleged trade secrets and confidential

information with reasonable particularity (ECF No. 282). Instead of seizing the opportunity to

point out through evidence where it identified its trade secrets and confidential information,

which is an essential element of each claim at issue, Arconic attempted to change the subject and

discuss the overall merits of claims on which it failed to make a proper identification. Arconic

failed to respond directly to the court’s show cause order.

Arconic’s litigation conduct is inexplicable. Arconic seemingly shared substantial

information about its A951 process with Novelis. The court explained that before allowing

Arconic to undertake extensive discovery into its competitor’s technology, it was incumbent

upon Arconic to first articulate, with reasonable particularity, what it contends are its own trade

secrets and confidential information, as opposed to general industry practices or Novelis’

authorized improvements to the process. Arconic agreed to the applicable legal standards, and

the court dismissed without prejudice its trade secrets and confidential information claims.

Arconic represented that a proper disclosure would be made. Despite numerous attempts and

increasingly explicit instructions from the court, however, Arconic has been unwilling or unable

to do so. Arconic’s failures to comply with the court’s orders became more glaring as the case

progressed.

A. Trade Secrets claims

In R&R #33, the special master recommends retroactive denial of leave to amend the

trade secrets claims12, or alternatively, that the trade secrets claims be stricken as a sanction for

failure to comply with the court’s orders.

1. Summary judgment is appropriate

a. The show cause order was clear

In the show cause order, Arconic was given “notice and the opportunity to show cause

why summary judgment should not be entered in favor of defendants Novelis Inc. and Novelis

Corp. (collectively, “Novelis”) on counts I, II, III, IV, V and VI of the amended complaint (ECF

No. 177) for failure of Arconic to identify its alleged trade secrets and confidential information

with reasonable particularity, as required by numerous orders of court.” (ECF No. 282)

(emphasis added).

The problem, as the court and special master pointed out on numerous occasions, was

that Arconic did not make an “identification” with reasonable particularity. The show cause

order did not invite submissions about the overall merits of Arconic’s claims on any other of the

elements of the claims. All parties knew that merits resolution as a whole was premature

because discovery had been stayed. The burden was on Arconic to come forward with evidence

of one essential element of its claims, i.e., the identification of its trade secrets. See Big Vision, 1

F. Supp.3d at 259-60. The initial hurdle, which Arconic failed to clear, was simply

identification of its alleged trade secrets with reasonable particularity.

12 The court concludes that granting summary judgment in favor of Novelis, rather than retroactive denial

of leave to amend the complaint, is the appropriate procedural mechanism. Novelis filed an answer to the

second amended complaint and count VII will remain in the case. The court permitted Arconic to point to

evidence outside the pleadings (i.e., its TS IDs and interrogatory responses) to show where it made an

identification in compliance with the court’s orders. Arconic was given notice and a full opportunity to

respond to the Rule 56(f) order.

Arconic argues that the court “directed the parties to brief summary judgment on whether

the trade secrets alleged by Arconic were cognizable.” (ECF No. 521 at 1). Arconic contends

that the court “expressed concern about the merits” and points to the court’s decision to not strike

its TS ID#4, as recommended by the special master. During the oral argument in September

2019, the special master clearly rejected this argument and explained that Arconic misinterpreted

the court’s show cause order. Arconic continues to advance its mistaken reading.

The show cause order identified the problem clearly as Arconic’s “failure to identify” its

trade secrets with reasonable particularity (ECF No. 282). The accompanying opinion provided

additional explanation: “This case has been plagued, virtually from the beginning, by Arconic’s

unwillingness, or inability, to describe precisely what secret or confidential information Novelis

allegedly disclosed.” Id. at 1. Arconic recognized that the court’s concern involved the TS IDs

because it argued that the problem was primarily a “formatting misunderstanding.” Id. The

court rejected this excuse and put Arconic on notice that its “failure to identify its trade secrets

and confidential information is a substantive flaw that may be fatal to the merits of its claims.”

Id. The opinion extensively reviewed the procedural history of Arconic’s previous efforts to

identify its trade secrets and confidential information and summarized:

It appears to the court that Arconic’s claims based on alleged trade secrets or

confidential information must fail as a matter of law. The claims were previously

dismissed, without objection by Arconic, subject to renewal if Arconic made an

identification with reasonable particularity. (ECF Nos. 113, 114). It appears that

Arconic did not do so.

Id. at 6 (emphasis added). The opinion explained that both parties were entitled to submit

a brief and all supporting evidence “to show cause why summary judgment should not be

granted in favor of defendants on counts I-VI of the amended complaint based on

Arconic’s failure to identify cognizable trade secrets. Id. at 7 (emphasis added). Arconic

could not have reasonably interpreted the show cause order as addressing the overall merits

of the underlying claims, as opposed to the identification with reasonable particularity of

the trade secrets and confidential information. 13

The term “cognizable” means “capable of being judicially heard and determined” or

“capable of being known.” https://www.merriam-webster.com/dictionary/cognizable, last visited

November 20, 2020. The reference to “evidence” in the accompanying opinion, in context, was

clear. Arconic was not limited to the pleadings; it was given the opportunity to point to evidence

anywhere in its voluminous filings, including its TS IDs and interrogatory responses, to show

that it had identified with reasonable particularity its trade secrets and confidential information.

The information was in Arconic’s own possession and no discovery from Novelis was needed for

Arconic to identify what Arconic was claiming were its own trade secrets and confidential

information. If Arconic cannot even identify its trade secrets, Arconic certainly cannot establish

where it disclosed those trade secrets to Novelis with reasonable particularity to make its trade

secrets claims cognizable.

The reference to “fatal to the merits” was a warning of the severe consequences, i.e., that

summary judgment could be entered against Arconic. The parties could not have addressed the

merits of other elements of the claims because – as they well knew -- discovery had been stayed

until an identification with reasonable particularity was made. If no trade secrets are identified

with reasonable particularity, there is no need for further merits inquiry. Because Arconic bears

13 In its briefing, Arconic asserts that identification with reasonable particularity is a gatekeeping

discovery rule, not a substantive element of a trade secret claim (ECF No. 521 at 13). That failure to

identify, however, is also fatal to the merits of a trade secret claim. In other words, if no trade secret is

disclosed with reasonable particularity, then not only will no discovery be possible, it is also fatal to the

merits of the claim. NEXT Payment, 2020 WL 2836778, at *11 (“The failure to define the trade secrets

with specificity, and the failure to separate the secrets from the non-secrets, meant that the claim could

not survive. A party cannot bring a misappropriation claim without adequately describing what was

stolen.”).

the burden on that matter, its failure to establish this essential element means that its trade secrets

claims must fail as a matter of law.

In the September 2019 oral argument, the special master explained (correctly) the intent

of the show cause order (Transcript, ECF No. 521-7). In R&R #33, the special master reiterated

that the show cause order focused on identification and genuinely could not be read any other

way. If Arconic was truly confused, Arconic and its experienced counsel could have sought

clarification. It did not do so, even after the special master rejected Arconic’s position. No

clarification was necessary.

b. Arconic failed to sufficiently identify its trade secrets

The court turns now to the substance of the show cause order. Despite the special

master’s guidance, Arconic’s objections to R&R #33 do not make a serious attempt to point to

evidence showing how its previous TS IDs complied with the court’s orders or identified any

trade secrets with reasonable particularity. Instead, Arconic persists with its contention that the

show cause order invited briefing on the overall merits. TS ID ## 1, 2 and 3 were stricken,

without objection by Arconic, and are not applicable.14 Arconic represents that its post-show

cause filings do not constitute a TS ID #5. Only TS ID #4, therefore, is still in the case. Arconic

does not make a serious effort to defend it. The court concludes that Arconic did not properly

identify its trade secrets.

TS ID #4 does not comply with the court’s orders and violates the explicit directions in

R&R #20 in several important ways. Arconic did not object to R&R #20; it was adopted as the

opinion and order of the court; and it is the law of the case. Arconic did not submit the “same

14 In R&R #28, the special master permitted consideration of the August 3, 2018 chart from TS ID #3.

For the reasons set forth in R&R #20, that chart is woefully inadequate.

chart” (without duplicates), as ordered. Instead, it submitted a new chart that contained

voluminous new information in the columns about what was public, what was private, and what

made each secret unique. Arconic did not seek leave to include this information in the chart or

attempt to show good cause why it had not previously disclosed this new information in TS ID

##1, 2 or 3.

The interrogatory responses in TS ID #4 were also noncompliant. Instead of identifying

each and every claimed trade secret, with clear explanations about why each was unique,

Arconic provided one generic interrogatory response that described its trade secrets/confidential

information in terms of 16 “parameters,” which were essentially the 6-step process further

delineated. During oral argument before the special master, Arconic conceded that the 16

parameters did not constitute trade secrets or confidential information. (Transcript, Nov. 13,

2018 at 8) (“We are not claiming the parameters as any trade secret, so that’s very simple.”)

(ECF No. 554, Ex. H).

Despite the special master’s urging that Arconic focus on a limited number of important

and provable secrets, Arconic continued to claim every permutation of the combination of 16

parameters as a trade secret. See ECF No. 521 at 15 (Arconic is not asserting the individual

components separately as trade secrets; it is asserting that the entire process described constitutes

its trade secret). Instead of explaining how portions of a combination of steps created each

separate, specific trade secret, Arconic simply referred back to and incorporated its generic

response. (ECF No. 521-6, Ex. 2 at 39-40). This incorporation was in direct contravention of

the court’s order that “[n]o blanket answers, such as ‘same as above’ or ‘see above’ will be

deemed to be satisfactory.” R&R #20 at 10.15 Arconic’s counsel conceded that TS ID #4 did not

15 Arconic’s counsel’s contention during the November 16, 2020 oral argument that the court endorsed

the use of “see above” is rejected.

abide by the strictures set forth in R&R #20 and that he would not have done it that way.

(Transcript, ECF No. 521-7 at 68). These are not mere formatting errors. There still is no clear

explanation or evidence about what unique, secret, economically-valuable trade secrets of

Arconic were disclosed to Novelis, even considering the TS ID #4 chart and the responses to

interrogatories.

In this case, Arconic contends that Novelis breached contractual duties and

misappropriated its trade secrets by making various disclosures in a Novelis patent application.

It is now clear that Arconic is not claiming any of the 6 steps or 16 parameters of the process as a

trade secret. Instead, Arconic is attempting to claim every permutation and combination of those

parameters as its trade secrets. Arconic, however, has been unable to identify, or submit

evidence of, where it put Novelis on notice of any of the 288 combination trade secrets it is now

claiming. For combinations, Arconic was required to describe specifically not only what the

particular combination of components was, but also how those components were combined in a

secret process, how the combination operated to meet the legal requisites of a trade secret, and

how each claimed trade secret combination differed from every other claimed trade secret.

Arconic never explained where it disclosed any of the claimed 288 combinations to Novelis. As

Novelis pointed out, various pieces of information were disclosed at different times, in different

contexts, to different people. (Tr. at 86, ECF No. 521-7). Arconic never explained where it

disclosed to Novelis a full combination or put Novelis on notice that Arconic claimed any

particular combination as its trade secret. Arconic never explained the difference between its

trade secrets and the general skill in the art or Novelis’ pre-existing knowledge. Arconic never

explained how any of the 288 claimed trade secrets was distinct and qualified for protection. In

sum, Arconic did not put Novelis or the court on notice of what its trade secrets were. See Big

Vision, 1 F. Supp.3d at 258 (“Specificity is required at the moment of divulging so that the party

to whom the secret is revealed understands the contours of the secret information and does not

inadvertently or purposefully transgress its boundaries.”).

The most analogous decision located in the court’s independent research is NEXT

Payment. In that case, the plaintiff was given several opportunities to identify its trade secrets,

but instead of narrowing the trade secrets, it expanded them to include various combinations.

2020 WL 2836778, at *7, 12. The court held that the plaintiff failed to satisfy the essential

element of the prima facie case that its information qualified as a trade secret, rather than

something generally known in the industry. Id. The court stated: “Claiming that everything was

a trade secret – without identifying anything with specificity – meant that nothing was

protected.” Id. at 11 (citing IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 583 (7th Cir.

2002)). The court granted summary judgment in favor of the defendant and explained:

The failure to define the trade secrets with specificity, and the failure to separate

the secrets from the non-secrets, meant that the claim could not survive. A party

cannot bring a misappropriation claim without adequately describing what was

stolen. And it was not the Court's job to parse out the trade secrets from the public-

facing functions.

Id. The court reiterated that a plaintiff must do more than just identify a kind of technology and

invite the court to hunt through the details to find items meeting the definition of a trade secret.

Id. at 15. The court concluded: “There is no question of fact for a jury if the plaintiff has not

offered enough specificity to support a verdict by a reasonable jury.” Id.

The same analysis discussed in NEXT Payment applies here. Summary judgment in favor

of Novelis is appropriate because, despite numerous opportunities, Arconic never identified its

trade secrets with specificity or separated its claimed trade secrets from the admittedly public

information or Novelis’ own knowledge. Novelis cannot misappropriate trade secrets if it

developed the information itself. Instead, Arconic expanded the number of its claims to cover

every permutation of steps/parameters related to the aluminum pretreatment field. By

“[c]laiming that everything was a trade secret – without identifying anything with specificity – [

] nothing was protected [by Arconic].” Id. at 11. Arconic did not establish that it had any trade

secrets. Arconic did not identify its claimed trade secrets with reasonable particularity and failed

to establish that it disclosed any trade secret to Novelis. In sum, as in NEXT Payment, because

Arconic did not engage in a serious effort to pin down its trade secrets despite numerous

warnings, its trade secrets claims must fail as a matter of law. Id. at *16. After multiple efforts to

“nail the jello to the wall,” see id. at *13, the court is left with the distinct impression that

Arconic’s real trade secret is the composition of the A951 chemical itself – which Arconic never

disclosed to Novelis. No reasonable jury could find in favor of Arconic on its trade secrets

claims and summary judgment must be granted in favor of Novelis with respect to counts I, III,

V and VI of the second amended complaint.

c. Other contentions

The court will respond briefly to Arconic’s other contentions. Instead of defending TS

ID #4, Arconic attempts to resuscitate TS ID #2. In the Declaration of Dr. Matthew Wagenhofer

(ECF No. 304-9, sealed), Arconic tries to show that a POSITA would have known from TS ID

#2 what the trade secrets/confidential information were, and the same “trade secrets” (in contrast

to the explanatory information) are claimed in TS ID ## 3 and 4. (ECF No. 521 at 34-37). There

are at least three problems with this argument. First, TS ID #2 was stricken, without objection

by Arconic. Arconic did not attempt to reassert or revise the 43 trade secrets claimed in TS ID

#2; instead, it changed positions drastically to assert 288 combination trade secrets in TS ID ## 3

and 4. There is no basis to go back to TS ID #2 – Arconic continues to assert that it has 288

combination trade secrets. Second, a “reasonable particularity” standard was adopted, which

required Arconic to identify each claimed trade secret or confidential information “with

sufficient particularity so that the reader[s] [i.e., the court and defendants] understand[] how

each such claim differs from public domain information—including public [] patent filings.”

(ECF No. 101 at 2-3 n.1) (emphasis added). This level of disclosure – to which Arconic did not

object – is necessary to enable the court and special master to oversee discovery and for Novelis

to be able to know how to respond to discovery requests. Big Vision, 1 F. Supp.3d at 258. Third,

reverting to TS ID #2 would not address prejudice. More than 2 years have passed, in which the

court expended great efforts to address TS ID ## 3 and 4 and Novelis incurred substantial legal

fees. Rewinding the clock to TS ID #2 would be prejudicial and would violate Federal Rule of

Civil Procedure 1 (requiring the “just, speedy, and inexpensive determination of every action”).

Despite four opportunities, the TS IDs never identified the trade secret claims based on

discrete pieces of technical information. Instead, Arconic continued to claim all permutations

and combinations of steps/parameters involving that information. See ECF No. 521 at 15

(Arconic is not asserting the individual components separately as trade secrets; it is asserting that

the entire process described constitutes its trade secret).

Arconic’s primary contention at the November 16, 2020 oral argument was that the

“trade secrets” did not change since TS ID #2; only the information about public availability and

uniqueness was added (ECF No. 554 at 2). This contention is without merit, for two reasons.

First, if the trade secret is defined to be simply the “six-step process,” as Arconic now suggests

(Id. at 10) or the 16 parameters, then its trade secret claims must fail because Arconic admitted

that the 6-step process and 16 parameters are not secret. Second, the information about public

availability and the uniqueness of each claimed combination is not ancillary to the trade secret

identification. From the beginning of this case, Arconic was required to describe and disclose

each combination trade secret with sufficient particularity to allow this case to move forward.16

The information about what made each claim confidential and unique was inherent in, and

essential to, each trade secret disclosure. See R&R #3. Arconic was well aware of these

requirements and cannot excuse its failure to comply with these aspects of the court’s orders. In

sum, Arconic failed to identify its trade secrets with the required specificity and therefore, as a

matter of law, summary judgment must be granted in favor of Novelis on the trade secret claims

set forth in counts I, III, V and VI of the second amended complaint.

2. In the alternative, dismissal of the trade secrets claims as a sanction is

warranted

A sanction of dismissing the trade secrets claims at counts I, III, V and VI is certainly

appropriate in light of Arconic’s failures to comply with this court’s orders and is an

independent, alternative rationale for the court’s decision.

Arconic’s failure to comply with numerous court orders requiring it to identify its trade

secrets to allow discovery to proceed certainly falls within the scope of Federal Rule of Civil

Procedure 37(b)(2)(A). In R&R #33, the special master explained why the sanction of dismissal

of the trade secret claims was warranted.17 The special master’s R&R #33 and the court’s show

cause order did not specifically reference Rule 37 or the Poulis factors. Arconic fully briefed the

16 See, e.g., R&R #3 (“To be sure, it is possible for a trade secret to be a unique combination of publicly-

available elements. See, e.g., Imperial Chem. Indus. v. Nat'l Distillers & Chem. Corp., 342 F.2d 737 (2d

Cir. 1965) (“A trade secret can exist in a combination of characteristics and components, 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 and is a protectable secret.). But without identifying which

particular claim elements represent trade secrets or how publicly-available claim elements are uniquely

combined so as to comprise a trade secret, Arconic’s list of its first twenty-two alleged trade secrets does

not inform the Court what it is that represents its allegedly misappropriated trade secrets.”) (ECF No. 89

at 3).

17 The confidential information claims, which the special master recommended survive, will be separately

addressed.

issue of dismissal of its trade secret claims as a sanction in its objections to R&R #33. Both

parties thoroughly briefed the application of the Poulis factors in this case. See In re Asbestos

Prod. Liab. Litig. (No. VI), 718 F.3d 236, 247 (3d Cir. 2013) (“concerns that are present when a

district court dismisses a case sua sponte without giving the plaintiff an opportunity to present

arguments against dismissal are lessened when dismissal is a result of a fully briefed motion.”).

Arconic was clearly on notice since February 2019 that the court viewed its TS IDs as deficient.

The court now turns to the Poulis factors, 747 F.2d at 868, which guide a court's analysis about

whether dismissal is an appropriate sanction.

a. Extent of the party's personal responsibility

In R&R #33, the special master explained that the litigation strategy was driven by the

client, Arconic. The court agrees. In-house counsel participated in all the proceedings before the

court and the special master. TS ID #3 was submitted after a lengthy interview with Arconic

personnel. (ECF No. 543 at 88-91). The initial attorneys were not replaced until after TSID #4.

Thus, Arconic bears primary responsibility for the repeated violations of the court orders. The

first factor supports the sanction of dismissal of the trade secrets claims.

b. Prejudice to the adversary

Novelis is prejudiced by being forced to incur substantial litigation costs and by the delay

of the overall case. The briefing and argument about Arconic’s admittedly noncompliant TS IDs

was extensive and, given the number of attorneys involved on both sides, necessitated a costly

litigation strategy. In addition, Novelis was required to engage in discovery based on the court’s

affording Arconic multiple opportunities to identify its trade secrets. Time is also a factor.

Although Arconic originally sought expedited discovery, after the filing of Novelis’ antitrust

counterclaims, Arconic is now on the defensive. In the antitrust counterclaims, Novelis argues

that it is paying inflated, unlawful royalties to Arconic.18 The discovery delays resulting from

Arconic’s failures to identify its trade secrets/confidential information are preventing resolution

of the entire case. The second factor favors the sanction of dismissal of the trade secrets claims.

c. History of dilatoriness

Arconic demonstrated a history of dilatoriness.19 It had four bites at the apple. For its

fourth try, the special master gave very clear instructions. Arconic failed to comply. This factor

favors the sanction of dismissal of the trade secrets claims.

d. Willfulness or bad faith

The court concludes that Arconic’s conduct was willful. There is simply no other

reasonable explanation for its continued efforts to “hide the ball.” This factor favors the sanction

of dismissal of the trade secrets claims.

e. Effectiveness of sanctions other than dismissal

Based upon the fruitlessness of its extensive efforts to date to obtain a proper TS ID, the

court does not think that any alternative sanctions other than dismissal would be effective or cure

the prejudice suffered by Novelis. This factor favors the sanction of dismissal of the trade secret

claims.

f. Meritoriousness of the claim

With respect to the final factor, Arconic’s trade secrets claims lack merit and would not

survive summary judgment, for the reasons articulated above. A party cannot succeed on a trade

secrets claim if the party cannot identify with reasonable particularity what its trade secrets are.

NEXT Payment, 2020 WL 2836778, at *11. The flaws in Arconic’s TS IDs go to the heart of the

18 Novelis’ motion to file partial summary judgment on this issue remains pending before the court.

19 Arconic’s dilatory conduct was not limited to the TS IDs. Arconic also delayed production of the

Chemetall Agreement for 5 months (ECF No. 252 at 3).

lack of substantive merit. See In re Asbestos, 718 F.3d at 248. Indeed, Arconic previously

consented to the dismissal of its claims and the second amended complaint incorporates by

reference the TS ID. This factor favors the sanction of dismissal of the trade secrets claims.

In sum, applying the Poulis factors, dismissal with prejudice of the trade secret claims as

a sanction under Rule 37(b) for Arconic’s failure to abide by the court’s orders is warranted and

appropriate. See Demodulation, Inc. v. United States, 122 Fed. Cl. 652, 659 (2015) (dismissal of

all trade secret claims “entirely warranted” where plaintiff “was given multiple chances to

correct and amend its responses, and its conduct was not merely the product of a

misunderstanding of the Court's orders.”). The sanction of dismissal of Arconic’s trade secrets

claims at counts I, III, V and VI of the second amended complaint pursuant to Rule 37 is

warranted.

3. Conclusion about the trade secrets claims

There is no genuine dispute of material fact about the failure of Arconic to properly

identify cognizable trade secrets and Novelis is entitled to judgment on the trade secrets claims

as a matter of law. Novelis is therefore entitled to summary judgment on counts I, III, V and VI

of the second amended complaint. In the alternative, the trade secrets claims are dismissed with

prejudice as a sanction pursuant to Rule 37.

B. Confidential information claims

Arconic maintains that its confidential information claims are cognizable.20 Novelis

contends that the confidential information claims should be stricken for failure to comply with

20 Although Arconic objected to the special master’s “sua sponte re-writing” of its confidential

information claims (ECF No. 521 at 23), counsel confirmed at the November 16, 2020 oral argument that

Arconic does not oppose the special master’s recommendation that some aspects of the confidential

information claims may proceed.

the court’s orders, for the same reasons as the trade secrets claims. The special master

recommended that narrow portions of the confidential information claims survive.

Arconic contends that the 288 trade secrets and 288 confidential information claims are

identical and are asserted in the alternative. None of the TS ID’s identified any distinctions

between Arconic’s trade secrets and its confidential information. See Transcript, ECF No. 521-7

at 112 (Arconic’s counsel explaining that the trade secrets and confidential information in TS ID

#4 are “the same 288”); TS ID #2 (explaining that all 43 items were trade secrets, but in the

alternative, the same 43 items constituted confidential information) (ECF No. 98 at 21-22). This

court’s orders require that the same legal standards (i.e., reasonable particularity, good cause and

explanatory information) be applied to identification of both the trade secret and confidential

information claims. See R&R #3 at 4 (because the trade secrets and confidential information

claims are so closely inter-related, “the same identification process should apply to both.”).

The confidential information claims, both substantively and procedurally, however, stand

on a slightly different footing. The substantive law governing confidential information claims is

less demanding. Information need not rise to the level of a trade secret in order to qualify for

protection. “A misappropriation of confidential information claim, also known as ‘procuring

information by improper means,’ is defined as follows: the procurement, by improper means, for

the purpose of advancing a rival business interest, of information about another’s business.”

Revzip, LLC v. McDonnell, No. 3:19-CV-191, 2020 WL 1929523, at *11 (W.D. Pa. Apr. 21,

2020) (citing Pestco, Inc. v. Ass'd. Prods., Inc., 880 A.2d 700, 708–09 (Pa. Super. Ct. 2005)); see

Restatement (First) of Torts § 759 (“One who, for the purpose of advancing a rival business

interest, procures by improper means information about another's business is liable to the other

for the harm caused by his possession, disclosure or use of the information.”). Although the

PUTSA preempts tort law for misappropriation of trade secrets, courts continue to recognize a

separate tort of conversion regarding confidential or proprietary information. Hill v. Best Med.

Int'l, Inc., No. CA 07-1709, 2011 WL 5082208, at *15 (W.D. Pa. Oct. 25, 2011).

Procedurally, Arconic was specifically authorized to plead separately its confidential

information claims. In R&R #5, the special master recognized that under Pennsylvania law,

confidential information claims may be pleaded in the alternative “if Arconic fails to prove that

its claimed trade secrets meet the legal requisites for such a claim.” (ECF No. 92 at 14). Arconic

was given the opportunity to set forth separate claims in the second amended complaint to assert

that its confidential proprietary information was misused in connection with a breach of contract.

Id. In addition, because the special master recommended that portions of the confidential

information claims survive, Arconic did not have the same opportunity or incentive to dispute

the appropriateness of Rule 37 sanctions for the confidential information claims. In sum, even

though summary judgment is granted in favor of Novelis with respect to the trade secrets claims,

or in the alternative they are dismissed with prejudice, the court must separately consider

whether the confidential information claims survive.

The TS ID #4 chart contained certain information in bold (largely involving

concentration levels, temperature and time ranges, etc.). At the oral argument before the special

master, Arconic contended that the information in bold should be regarded as its confidential

information. (Tr. at 63, ECF No. 521-7) (the “secret sauce” is the bolded information). The

special master concluded that although Arconic disclaimed the parameters as trade secrets, some

of those parameters might constitute confidential information (R&R #33, ECF No. 510 at 55).

The special master undertook a detailed analysis of the bolded information, noting that Arconic

failed to provide such an analysis. Id. The specific items identified by the special master as

potentially supporting a confidential information claim (ECF No. 510 at 57-61) will not be

restated in this opinion. The parties did not raise targeted objections about the analysis

conducted or items identified by the special master.

The court concludes that the narrow aspects of Arconic’s confidential information claims,

as identified by the special master, may proceed. The allegation that Novelis may have disclosed

some of Arconic’s confidential information, in breach of its contractual duties, cannot be

resolved as a matter of law. The confidential information claims will proceed on the narrow

basis identified in R&R #33. Discovery shall commence forthwith and shall be completed as

expeditiously as possible. Novelis’ objections to R&R #33 will be DENIED.

C. Novelis’ motion to strike

Arconic’s post-show cause submissions (ECF Nos. 300-306) are much ado about

nothing. Arconic submitted thousands of pages in a premature effort to answer a strawman

question the court never asked – namely, whether Arconic could defeat a hypothetical summary

judgment motion on the overall merits. If a party, despite three years and four attempts, cannot

even identify with reasonable particularity its own trade secrets, there is no possible way for

those trade secrets to be adjudicated on the merits. The nonsensical nature of Arconic’s

approach in its post-show cause submissions is amplified by the fact that discovery on the overall

merits of the claims was not completed.

Arconic acknowledged at the oral argument before the special master that its post-show

cause submissions were unnecessary if “the exercise” was to show the court the evidence of how

its identification of trade secrets/confidential information met the reasonable particularity

standard. (Transcript, ECF No. 521-7 at 36). Counsel explained that those submissions were

designed to prevent waiver of Arconic’s rights on the overall merits of summary judgment.

(Transcript, ECF No. 521-7 at 39).

As the court and special master explained, the “exercise” required by the show cause

order is focused on the identification of Arconic’s trade secrets with reasonable particularity and

not the overall merits of Arconic’s claims. Arconic’s post-show cause submissions (ECF Nos.

300-306), therefore, are not relevant and will not be considered by the court in resolving the

show cause order. Novelis’ motion to strike those filings (ECF No. 330) will be GRANTED.

This aspect of R&R #33 is adopted as the opinion and order of the court, as supplemented herein.

V. Conclusion

In accordance with the foregoing, R&R #33 is adopted as the opinion and order of the

court, as supplemented and modified herein, which includes the grant of summary judgment in

favor of Novelis with respect to Arconic’s trade secrets claims. Arconic’s objections to R&R

#33 (ECF No. 521) will be DENIED and Novelis’ objections to R&R #33 (ECF No. 520) will be

DENIED. Pursuant to the show cause order (ECF No. 282), partial summary judgment will be

entered on counts I, III, V and VI of the second amended complaint in favor of Novelis and

against Arconic. Summary judgment will not be entered on the aspects of counts II and IV

identified by the special master. Count VII of the second amended complaint will remain in the

case. Novelis’ motion to strike Arconic’s post-show cause submissions (ECF No. 330) will be

GRANTED.

An appropriate order follows.

Dated: December 9, 2020

/s/ Joy Flowers Conti

Joy Flowers Conti

Senior United States District Judge