United States District Court, D. Montana, Missoula Division
W. Molloy, District Judge.
3, 2017, Plaintiff GTAT Corporation's ("GTAT")
received a temporary order restraining former employee
Defendant Chad Fero ("Fero") from accessing, using,
disclosing, or making available to any person or entity other
than GTAT, any of GTAT's confidential, proprietary, or
trade secret documents, data, or information. (Doc. 8.) On
May 16, 2017, a hearing was held on whether that temporary
restraining order should be turned into a preliminary
injunction. (See Minute Entry, Doc. 18.) At that
hearing, the parties presented testimony and evidence and the
temporary restraining order was extended for ten days pending
a judicial determination on the issuance of a preliminary
has not shown, for the purposes of a preliminary order, that
Fero likely used its trade secrets and that an injunction is
warranted while the case progresses.
a technology company that offers equipment and technology in
the solar and electronics industries. (Compl., Doc. 1 at
¶ 5.) Part of GTAT's business is devoted to
technology and equipment utilized in the polysilicon process,
a raw material used primarily in the solar industry. Hearing
Tr. 15 (Gum). The polysilicon portion of its business is
based out of Missoula, Montana. Hearing Tr. 14 (Gum). The
defendant, Fero, began working for GTAT in 2006 as an
engineer and eventually as a director of both the technology
and development divisions. Hearing Tr. 155 (Fero). In his
position, Fero was involved with the research and development
of GTAT's polysilicon technology. Id.
general processes for producing polysilicon are generally
known, see Hearing Tr. 23 (Gum), over the last
decade GTAT has engaged in research and development to create
its own proprietary polysilicon process. The two primary
components of the polysilicon process are hydrochlorination,
or turning of metallurgical-grade silicon into gas, and
chemical vapor deposition ("CVD"), the purification
and redeposition of that gas. Hearing Tr. 16-17 (Gum). GTAT
is a market leader in hydrochlorination technology, and about
half of the world's poly silicon is made from
trichlorosilane made from GTAT's technology. Hearing Tr.
17 (Gum). In the context of relative capacity, GTAT's
technology and equipment has a capacity of approximately 250,
000 metric tons of trichlorosilane per year while the closest
leading competitor is on the order of 150, 000 metric tons.
Id. Similarly, in relation to CVD, the products
marketed and sold by GTAT are capable of approximately 1, 000
metric tons of polysilicon production per year and the
closest competition is around 600 to 700 metric tons. Hearing
Tr. 18 (Gum).
to Jeffery Gum, Director of Global Sales for GTAT, it took
GTAT almost a decade and millions of dollars to develop the
knowledge and equipment used in its polysilicon process.
Hearing Tr. 19-26 (Gum); Ex. 1. With its knowledge and
expertise, GTAT offers its clients complete "basic
engineering packages" ("BEPs"), or blueprints,
and equipment packages for the establishment of polysilicon
plants. Hearing Tr. 27 (Gum); Exs. 2, 3 (sealed). Although
GTAT does not manufacture the equipment, it works with
fabricators around the world to produce equipment that is
provided directly to the client. Hearing Tr. 30 (Gum).
treats all of the information, materials, and equipment
surrounding its polysilicon process as confidential and
proprietary, and requires sales material be labeled
accordingly. Hearing Tr. 46-47 (Gum). As described by Mr.
Gum, the alleged trade secrets at issue here fall into three
"buckets, " the (1) materials of construction, (2)
internal components, and (3) specific processes involved in
the polysilicon process. Hearing Tr. 33-34; see also
Doc. 21 (sealed).
time he was hired, Fero signed a Confidentiality Agreement,
agreeing to keep confidential technical and business
information acquired by GTAT, even after his employment
ended. (See Doc. 5-2 at 3-8.) Fero was also aware of
the GTAT's Code of Conduct, which specifies that
employees must protect the confidentiality of GTAT's
intellectual property and proprietary information.
See Hearing Tr. 46 (Gum explaining that Fero would
review his sales presentations to ensure they did not contain
September 2016, Fero left his employment with GTAT. Hearing
Tr. 159 (Fero). Shortly after his employment ceased, he
entered into a consulting agreement with GTAT and worked in
that capacity until early January 2017. Hearing Tr. 53 (Gum).
No exit interview was performed. Hearing Tr. 160 (Fero).
Since leaving GTAT, Fero has been operating a polysilicon
technology business under the name "Ferosilicon."
See Hearing Tr. 170 (Fero). While Fero is not bound
by a non-compete provision, GTAT alleges that Fero could not
have "independently developed the chemical processes,
equipment designs, and engineering specifications he is now
offering without using any of GTAT's trade secret
information." (Doc. 1 at ¶ 30.)
presents various evidence in support of its belief that Fero
misappropriated its trade secrets, focusing primarily on a
$10 million deal with a Chinese company that had been in
development since October 2015 and was expected to close in
April 2017. See Ex. 4 (sealed). When Mr. Gum arrived
to close the deal he was informed by the Chinese company that
it could no longer proceed at the $10 million price because
Fero had offered "essentially the same technology and
equipment at a much lower price." Hearing Tr. 60 (Gum).
GTAT was only able to make a sale of a BEP, not an entire
technology and equipment package, for approximately $750,
000. Hearing Tr. 80-81 (Gum).
seeking a preliminary injunction "must establish that
[it] is likely to succeed on the merits, that [it] is likely
to suffer irreparable harm in the absence of preliminary
relief, that the balance of equities tips in [it]s favor, and
that an injunction is in the public interest."
Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7, 20 (2008). A plaintiff only need raise "serious
questions going to the merits" so long as the balance of
hardships tips sharply in the plaintiffs favor and the
remaining two Winter elements are met. Alliance
for the Wild Rockies v. Cottrell, 632 F.3d 1137, 1131
(9th Cir. 2011).
raises the following claims: (1) misappropriation of trade
secrets under the Defend Trade Secrets Act, 18 U.S.C. §
1836, et seq.; (2) misappropriation of trade secrets
under the Montana Uniform Trade Secrets Act, Mont. Code Ann.
§ 30-14-401, et seq.; (3) breach of the
Confidentiality Agreement; (4) breach of the implied covenant
of good faith and fair dealing; (5) intentional interference
with business relations; and (6) punitive damages. (Doc. 1.)
GTAT's request for a preliminary injunction appears to
rest solely on its claims for misappropriation of trade
secrets and breach of the ...