# ETIMINE USA INC. v. YAZICI

> District Court, W.D. Pennsylvania · March 24, 2021

URL: https://www.frixlaw.com/law-library/cases/10416465

## Case

- **Court:** District Court, W.D. Pennsylvania
- **Decided:** March 24, 2021
- **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/10416465

## How later opinions describe it (automated extraction)

- holding that a court may consider an “undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss if the plaintiffs claims are based on the document”
- holding that a court may consider a “document integral to or explicitly relied upon in the complaint”

## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA

ETIMINE USA INC.,
Plaintiff, Civil Action No. 2:20-cv-713
Vv. Hon. William S. Stickman IV
GOKHAN YAZICI and YZC CONSULTING
LTD.,
Defendants.

MEMORANDUM OPINION
WILLIAM S. STICKMAN IV, United States District Judge
Plaintiff Etimine USA Inc. (“Etimine USA”) filed its Amended Complaint against
Defendants Gokhan Yazici (“Yazici”) and YZC Consulting Ltd. (“YZC”) (collectively,
“Defendants”) alleging an action for (a) violations of the Defend Trade Secrets Act (“DTSA”), 18
U.S.C. § 1836 (Counts I, ID); (b) violations of the Pennsylvania Uniform Trade Secrets Act
(“PUTSA”), 12 Pa. C.S.A. § 5301 (Counts V, VI); (c) breach of contract (Counts II, IV); and (d)
conversion (Counts VII, VIII). CECF No. 18, § 8). Defendants moved to dismiss the Amended
Complaint under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) for failure to state a claim
upon which relief may be granted. (ECF No. 20). For these reasons, the Court denies Defendants’
Motion.
FACTUAL AND PROCEDURAL HISTORY
Etimine USA is a distributor of boron products including mineral ores, boric acid, sodium
borates and other products. (ECF No. 18, § 15). Etimine USA ships its products from the Republic
of Turkey for use in interstate and foreign commerce. (/d.). Boron products are used globally in

various industries including agriculture, cleaning, metallurgy, ceramics, wood protection, glass,
insulation, textile fiberglass and energy. (Ud. § 16). According to Etimine USA, “[t]he global
reserves of boron are limited and, thus, the boron mining industry is an extremely competitive and
limited market... .” (Ud. 17).

Etimine USA employed Yazici for several years as its General Manager beginning in 2003.
Ud. 41). Yazici also served on Etimine USA’s Board of Directors. (Ud. 419). During his
employment, Yazici had access to all company information including Etimine USA’s proprietary
information (e.g., logistics, distribution information, production costs and sales margins), which
also belonged to Etimine USA’s holding company and other subsidiaries globally. Ud. 21). The
information included logistical expertise necessary for Etimine USA’s pricing of its products for
its U.S. and multi-national customers. (/d.). Etimine USA’s profit margins rely heavily on its
logistics network, and the logistics information is vital for its competitive edge. (/d.).
The proprietary information, which Etimine USA provided to Yazici during his
employment, allowed Etimine USA to compete in the limited boron market. (Ud. {§ 23, 24). The
information derived actual or potential economic value from it not being known to nor readily
ascertainable by other persons, including Etimine USA’s competitors. Ud. 24). . According to
Etimine USA, the proprietary information “would be of significant value to competitors in the
industry.” (d.).
In February 2012, Etimine USA and Yazici entered into the Employment Agreement for
Yazici’s continued employment as Etimine USA’s President and Chief Executive Officer. (Ud.
426). The Employee Agreement provided:
[Yazici] agrees, during and subsequent to the Term of this Agreement, not to make
or use, for his own benefit or the benefit of any party other than the Company, nor
to divulge to anyone other than duly authorized personnel or representatives of the
Company, any information or knowledge relating to the business, business methods

or techniques of the Company, including, but not limited to, information about
accounting procedures, sales prospects, customers’ or suppliers’ lists, bidding
formula, sales, profits, costs, systems, concepts or similar matters owned by or
known to the Company, except to the extent that the same generally known to the
public or recognized as standard practice in the businesses in which the Company
is engaged or is otherwise known to or disclosed to Executive by a third party not
bound by any covenant of confidentiality.
Executive and the Company agree that any breach or evasion of the terms of this
Section 8 will result in immediate and irreparable harm to the Company. Therefore,
in the event of any controversy concerning the rights or obligations of the parties
under this Section 8, the Company shall be entitled to obtain an injunction and/or
specific performance as well as any other legal or equitable remedy necessary in
order to compel compliance with this Section 8. Such remedies, however, shall be
cumulative and nonexclusive and shall be in addition to any other remedy or
remedies to which the Company may be entitled.
(Id. §29). The Employee Agreement required Yazici to return all Etimine USA property, in any
form, to Etimine USA upon the termination of his employment. (/d. 30).
In 2013, Etimine USA distributed an Employee Handbook with a letter from Yazici
welcoming all new employees. (/d. J] 31-33). The Employee Handbook required employees to
maintain the information of Etimine USA in strict confidence:
Protecting our company’s information is the responsibility of every employee. Do
not discuss the company’s confidential business or proprietary business matters, or
share confidential, personal employee information with anyone who does not work
for us such as friends, family members, members of the media, or other business
entities.
(Ud. § 34). Etimine USA required its employees, at the end of employment with Etimine USA, to
return all information to Etimine USA and reserved the right to pursue legal action for any
violations of its exit policies. Ud. Jf 34, 36).
Yazici left Etimine USA in January 2017 and later filed a complaint, styled Yazici v.
Etimine USA, Inc., No. 17-010331, against Etimine USA in Court of Common Pleas of Allegheny
County, Pennsylvania (“Post-Employment Lawsuit”). Ud. J] 37-38).

In November 2018, Etimine USA and Yazici entered into a Separation Agreement,
resolving the Post-Employment Lawsuit. (Id. 439). Yazici agreed to not share any of Etimine
USA’s proprietary information with any third parties. Ud. 40-42).
Soon after, Yazici formed YZC Consulting Ltd. Ud. | 43). Etimine USA alleges Yazici,
through his work with YZC, disclosed and used Etimine USA’s proprietary information for his
benefit and the benefit of Etimine USA’s competitors. Ud. 4/47). One of Etimine USA’s direct
competitors hired a former sales agent of Etimine USA who informed the direct competitor that
Yazici was unhappy with Etimine USA. (/d. §§ 49-50). The direct competitor arranged a meeting
with Yazici and YZC where Yazici divulged Etimine USA’s proprietary information, including
customers’ information, profit margins, logistics information, logistical matrixes and details of its
global sourcing and distribution network. Ud. §§ 51-52). A different, former Etimine USA
employee also attended the meeting. (/d. 753). Sometime after the meeting, YZC provided
consulting services to the direct competitor. Ud. 455). Defendants disclosed Etimine USA’s
proprietary information throughout its consultation services with the direct competitor, which the
competitor knew was proprietary information. (Ud. {J 56-57).
STANDARD OF REVIEW
A motion to dismiss filed under Federal Rule of Civil Procedure (“Rule”) 12(b)(6) tests the
legal sufficiency of the complaint. Kost v. Kozakiewicz, 1 F.3d 176, 183 (3d Cir. 1993). A plaintiff
must allege sufficient facts that, if accepted as true, state a claim for relief plausible on its face.
See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007); see also Ashcroft v. Iqbal, 556 U.S.
662, 678 (2009). A court must accept all well-pleaded factual allegations as true and view them
in the light most favorable to a plaintiff. See Fowler v. UPMC Shadyside, 578 F.3d 203, 210 Gd
Cir. 2009); see also DiCarlo v. St. Marcy Hosp., 530 F.3d 255, 262-63 (3d Cir. 2008). Although

a court must accept the allegations as true, it is “not compelled to accept unsupported conclusions
and unwarranted inferences, or a legal conclusion couched as a factual allegation.” Baraka y.
McGreevey, 481 F.3d 187, 195 (3d Cir. 2007) (citations omitted).
The “plausibility” standard required for a complaint to survive a motion to dismiss is not
akin to a “probability” requirement but asks for more than sheer “possibility.” Iqbal, 556 US. at
678 (citing Twombly, 550 U.S. at 556). In other words, the complaint’s factual allegations must
be enough to raise a right to relief above the speculative level, on the assumption that all the
allegations are true even if doubtful in fact. Twombly, 550 U.S. at 555. Facial plausibility is
present when a plaintiff pleads factual content that allows a court to draw the reasonable inference
that a defendant is liable for the misconduct alleged. Jgbal, 556 U.S. at 678. Even if the
complaint’s well-pleaded facts lead to a plausible inference, that inference alone will not entitle a
plaintiff to relief. Jd at 682. The complaint must support the inference with facts to plausibly
justify that inferential leap. Id.
Generally, a court may not consider an extraneous document when reviewing a motion to
dismiss. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir. 1997). If parties
present matters outside the pleadings and the court does not exclude them, the motion must be
converted to a motion for summary judgment. See Fed. R. Civ. P. 12(d). When reviewing the
sufficiency of a complaint, however, a court may consider attachments to it without converting the
motion into one for summary judgment if they are integral to the allegations in the complaint and

are authentic. See In re Burlington, 114 F.3d at 1426 (holding that a court may consider a
“document integral to or explicitly relied upon in the complaint”); ALA, Inc. v. CCAIR, Inc., 29
F.3d 855, 859 (3d Cir. 1994) (same); Fallon v. Mercy Cath. Med. Ctr. of Se. Pa., 877 F.3d 487,
493 (3d Cir. 2017) (same); Fed. R. Civ. P. 10(c) (“A copy of a written instrument that is an exhibit

to a pleading is a part of the pleading for all purposes.”); see also Pension Ben. Guar. Corp. v.
White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (holding that a court may consider
an “undisputedly authentic document that a defendant attaches as an exhibit to a motion to dismiss
if the plaintiffs claims are based on the document”).
ANALYSIS
I. Plaintiff’s Claims Are Not Precluded by the Separation Agreement.
Under the Separation Agreement entered into by both parties after the Post-Employment
Lawsuit, the limited release applies to those claims “arising out of, based on, or relating in any
way to any acts omissions ..., including the claims asserted in the [Post-Employment Lawsuit]
but excluding any claims premised upon (i) fraud, (ii) violation of law, or (iii) violation of this
Agreement.” (ECF No. 21-1, { 3(e)). The Court should “interpret a release so as to discharge only
those rights intended to be relinquished. The intent of the parties must be sought from a reading
of the entire instrument, as well as from the surrounding conditions and circumstances.” Vaughn
vy. Didizian, 648 A.2d 38, 40 (Pa. Super. 1994); see also Fortney v. Callenberger, 801 A.2d 594,
597 (Pa. Super. 2002) (admonishing that releases should be strictly construed “so as not to bar the
enforcement of a claim that had not accrued at the date of the execution of the releases’).
Pennsylvania! contract law recognizes the “firmly settled” point that “the intent of the
parties to a written contract is contained in the writing itself.” Bohler-Uddeholm Am., Inc. v.
Ellwood Grp., Inc., 247 F.3d 79, 92-93 (3d Cir. 2001) (quoting Krizovensky v. Krizovensky, 624
A.2d 638, 642 (Pa. Super. 1993)). When parties’ intent is clear, a court need not “resort to extrinsic
aids or evidence.” Rather, the meaning of a clear and unequivocal written contract “must be
determined by its contents alone.” Jd When interpreting a release, Pennsylvania courts

' Pennsylvania law governs the Separation Agreement. See (ECF No. 1, ff 9, 10).

“traditionally determine[] the effect of a release using the ordinary meaning of its language and
interpret[] the release as covering ‘only such matters as can fairly be said to have been within the
contemplation of the parties when the release was given.’” Vaughn, 648 A.2d at 40 (quoting
Dublin by Dublin v. Shuster, 598 A.2d 1296, 1298-99 (Pa. Super. 1991)). The Court may consider
documents attached to a motion to dismiss without converting to a motion for summary judgment
if the plaintiff refers to the documents or the documents “are central to the claim... .” Gagliardi
v. Fisher, 513 F. Supp. 2d 457, 471 (W.D Pa. 2007).
The Court may consider the Separation Agreement in the Motion to Dismiss without
converting it into a motion for summary judgment as Etimine USA referenced the document in its
Complaint and Defendants have incorporated it in their motion. Its contents are central to whether
Etimine USA may bring forth this action.
Defendants declare that the Separation Agreement precludes Etimine USA’s assertions
because the Separation Agreement releases Defendants of all claims before the effective date of
the Separation Agreement. (ECF No. 21, pp. 7-8; ECF No. 21-1). Etimine USA contends that its
claims do not arise out of nor are they related to the claims asserted in the employment lawsuit.
(ECF No. 28, pp. 13-15). The Court agrees. Defendants read the Separation Agreement much
too broadly. Etimine USA puts forward five reasons for why the Separation Agreement does not
prevent this litigation. First, Etimine USA’s claims are unrelated to the Post-Employment Lawsuit.
(id. at 14). Second, Defendants and Etimine USA agreed to extend all provisions preventing the
dissemination of proprietary information. (/d.). Third, the Separation Agreement included an
exception for violating laws such as misappropriation under DISA and PUTSA, conversion and
any violations of the Separation Agreement itself. (/d. at 14-15). Fourth, Yazici had a continuing

duty to refrain from sharing Etimine USA’s proprietary information. (/d. at 15). Finally, YZC
was not a party to the Separation Agreement. (/d.).
A party’s duty to refrain from misappropriating trade secrets does not expire after
termination from employment. See Pittsburgh Logistics Sys. Inc. v. LaserShip, Inc., 2019 WL
2443035, at *9 (W.D. Pa. June 12, 2019) (determining, regardless of contract language, that a
former employee has a continuing duty to refrain from misappropriating trade secrets of the former
employer). The Separation Agreement explicitly states, “Employee will not disclose to any third
parties any of the trade secrets and other confidential proprietary information of the Company
....” (ECF No. 21-1, 48). Later in the document, the parties agreed that any other enforceable
agreement not in conflict with the Separation Agreement “shall remain in effect and the terms of
this Agreement shall be in addition to such other such agreements.” (Ud. § 10). The Court holds
that the Separation Agreement does not bar Etimine USA’s current action against Defendants.
I. Plaintiff Adequately Pled Claims for Misappropriation of Trade Secrets under Both
DTSA and PUTSA (Counts I, I, V, VI).
Although DTSA and PUTSA use different wording to define a trade secret, both protect
the same type of information. They define trade secrets similarly as information that: (a) the owner
has taken reasonable means to keep secret; (b) derives independent economic value, actual or
potential, from being kept secret; (c) is not readily ascertainable by proper means; and (d) would
be of economic value to others who cannot readily access it. 18 U.S.C. § 1839(3); 12 Pa. C.S.A.
§ 5302.
Pennsylvania courts consider these factors for determining whether information is a
protected trade secret:
(1) the extent to which the information is known outside of the company’s business;
(2) the extent to which the information is known by employees and others involved
in the company’s business; (3) the extent of the measures taken by the company to
guard the secrecy of the information; (4) the value of the information to the

company and its competitors; (5) the amount of effort or money the company spent
in developing the information; and (6) the ease or difficulty with which the
information could be acquired or duplicated legitimately by others.
Bimbo Bakeries USA, Inc. v. Botticella, 613 F.3d 102, 109 (3d Cir. 2010). Pennsylvania courts
recognize that trade secrets “may consist of any formula, pattern, device or compilation of
information ....” SI Handling Sys., Inc. v. Heisley, 753 F.2d 1244, 1255 (3d Cir. 1985) (citing
Restatement of Torts § 757 cmt. B (1939)).
“Misappropriation” under the DTSA means:
(A) acquisition of a trade secret of another by a person who knows or has reason to
know that the trade secret was acquired by improper means; or
(B) disclosure or use of a trade secret of another without express or implied consent
by a person who-—
(i) used improper means to acquire knowledge of the trade secret;
(ii) at the time of disclosure or use, knew or had reason to know that the
knowledge of the trade secret was—
(I) derived from or through a person who had used improper means
to acquire the trade secret;
(II) acquired under circumstances giving rise to a duty to maintain
the secrecy of the trade secret or limit the use of the trade secret; or
(III) derived from or through a person who owed a duty to the person
seeking relief to maintain the secrecy of the trade secret or limit the
use of the trade secret; or
(iii) before a material change of the position of the person, knew or had
reason to know that—
(I) the trade secret was a trade secret; and
(II) knowledge of the trade secret had been acquired by accident or
mistake[.]
18 U.S.C. § 18396).

Under the DTSA, the term “improper”:
(A) includes theft, bribery, misrepresentation, breach or inducement of a breach of
a duty to maintain secrecy, or espionage through electronic or other means; and
(B) does not include reverse engineering, independent derivation, or any other
lawful means of acquisition|.]
18 U.S.C. § 1839(6).
A claim for misappropriation of trade secrets need not be pleaded with
particularity. See Ideal Aerosmith, Inc. v. Acutronic USA, Inc., Civ. A. No. 07-1029, 2007 WL
4394447, at *8 (W.D. Pa. Dec.13, 2007) (finding the plaintiff's complaint sufficient to overcome
a Rule 12(b)(6) motion to dismiss). Moreover, whether a plaintiff has taken sufficient measures
to protect its trade secrets is a question of fact more appropriately determined with a fully
developed record. Cir. Pointe Sleep Assocs., LLC v. Panian, No. CIVA 08-1168, 2009 WL
789979, at *3 (W.D. Pa. Mar. 18, 2009). Courts routinely have found that DISA and PUTSA
protect things such as customer lists, pricing, marketing strategies and financial projections. See,
e.g., Mallet & Co. v. Lacayo, Civ. No. 19-1409, 2020 WL 6866386, at *7 (E.D. Pa. Nov. 23, 2020)
(finding DISA and PUTSA protect formulas, customer information, certifications, supply source,
internal manuals, pricing and volume data); Freedom Med. Inc. v. Whitman, 324 F. Supp. 3d 509,
522 (E.D. Pa. 2018) (pricing information); BIEC Intern., Inc. v. Global Steel Servs., 791 F. Supp.
489, 544-46 (E.D. Pa. 1992) (customer lists, cost and price plans, marketing strategies, financial
projections, terms of customer accounts).
Courts have denied motions to dismiss for less complex things such as pricing and
marketing strategies. See AlterG, Inc. v. Boost Treadmills LLC, No. 18-CV-07568-EMC, 2019
WL 4221599, at *1 (N.D. Cal. Sept. 5, 2019) (granting in part and denying in part the defendants’
motion to dismiss). The Northern District of California in AlterG examined a claim for trade secret
misappropriation for the development of a treadmill. Jd. at *1—2. The court found, as for AlterG’s
10

pricing and marketing strategy trade secret, AlterG had pled with sufficient specificity to overcome
the defendants’ motion to dismiss. Jd. at *6. But AlterG’s trade secret involving the alteration of
commercial treadmills was highly technical. /d. at *5—6. The court bifurcated its decision because,
unlike pricing and marketing strategies, technical matters demand more specificity. Id
Accordingly, the court granted the defendants’ motion to dismiss for its more technical trade
secret. Id.
Etimine USA suggests that it need not plead the specifics of the trade secrets with any
greater particularity and the Court agrees. Etimine USA, in its Complaint, outlines its trade secrets
to include logistical and pricing information. (ECF No. 21-1, §§ 21, 23). Etimine USA describes
its procedures for protecting its trade secrets including the implementation of policies outlined in
the Employee Handbook, computer security including password protections and. firewalls,
procedures for transmitting and storing information, employee training and other measures. □□□□
4 25). As these claims do not involve a high degree of technicality, the Court finds Etimine USA
has pled with sufficient specificity to overcome Defendants’ motion to dismiss.
Ill. Plaintiff Adequately Alleged Claims for Breach of Contract (Counts III, IV).
To state a breach of contract claim, Pennsylvania law requires that a plaintiff allege a valid
contract, its breach and ensuing damages. See Ironshore Specialty Ins. v. Conemaugh Health Sys.,
Inc., 423 F. Supp. 3d 139, 150 (W.D. Pa. 2019). Defendants’ only argument is that Etimine USA
has not alleged specific damages to support its breach of contract claim. (ECF No. 21, pp. 17-19).
But Etimine USA need not speculate specific damages for now. Wachovia Bank, N.A. v. Ferretti,
935 A.2d 565, 572 (Pa. Super. 2007). “Damages are only speculative if the uncertainty concerns
the fact of damages rather than the amount.” Liberty Bank v. Ruder, 587 A.2d 761, 765 (Pa. Super.
1991). In Liberty Bank, the Pennsylvania Superior Court reversed the trial court’s dismissal and
held that the plaintiff did not have to prove specific damage amounts at the pleading stage. Id.
11

Etimine USA has alleged that because Yazici has breached his Employment and Separation
Agreements, it has suffered immediate irreparable harm including the loss of goodwill. (ECF No.
28, p. 22). The Court finds that Etimine USA need not specify more in its claim for damages.
IV. Plaintiff Adequately Alleged Claims for Conversion (Counts VII, VIII).
To state a claim for conversion of a trade secret, a plaintiff must allege that (1) it owns
secret; (2) the trade secret was communicated to the defendant within a confidential
relationship; and (3) the defendant used the trade secret to the plaintiffs detriment. Teva Pharms.
USA, Inc. v. Sandhu, 291 F. Supp. 3d 659, 680 (E.D. Pa. 2018) (citing Am. Hearing Aid Assocs. v.
GN Resound N. Am., 309 F. Supp. 2d 694, 705 (E.D. Pa. 2004)). Etimine USA has alleged enough
to implicate a misappropriation of a trade secret and, accordingly, for conversion of a trade secret.
Etimine USA alleges that it communicated its trade secrets to Yazici as part of its confidential
relationship. Etimine USA has alleged that Defendants have used the trade secret to its detriment.
For these reasons, the Court finds Etimine USA has sufficiently pled for a claim of conversion of
a trade secret.

12

CONCLUSION
For all these reasons, Defendants’ 12(b)(6) Motion to Dismiss (ECF No. 20) will be denied.
An Order of Court will follow.”
BY THE COURT:

2A — AAW
WILLIAM S. STICKMAN IV
_ UNITED STATES DISTRICT JUDGE
3 | 24|
Dated

? Etimine USA has requested, and Defendants have challenged, a claim for exemplary damages or
an award of attorneys’ fees and costs. The Court will entertain such a motion should it be filed.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10416465. Public record. Not legal advice.