June 2007
Indiana Supreme Court to Hear Trade Secret Appeal
By Lisa Moran McMurdo
The Indiana Supreme Court recently granted transfer in Bridgestone Americas Holding, Inc. v. Mayberry, a dispute involving the discovery of the tire manufacturer's trade secret formula for one of the rubber compounds used in the manufacture of its tires.
The case, filed in Madison County, Indiana, involves allegations that the Firestone tire at issue failed as a result of some defect and caused the August 2001 accident in which Harmony Wigley was killed. In discovery the plaintiff asked Firestone to produce the formula for the rubber compound used to make the steel belts ("skim stock") in the tire. Firestone objected to plaintiff's request and moved the trial court for a protective order to prohibit disclosure of its rubber compound formula on the grounds that it was a trade secret. The trial court denied the motion and ordered Firestone to produce the formula.
Firestone filed an interlocutory appeal to the Indiana Court of Appeals, arguing that its rubber compound formula is a trade secret as defined by the Indiana Uniform Trade Secrets Act, and that the plaintiff had not satisfied her burden under Trial Rule 26(C)(7) to warrant disclosure of that trade secret information. In affirming the trial court's order, the Court of Appeals articulated for the first time the standard to be applied for the discovery of a trade secret under Indiana law. Adopting the standard advocated by Firestone, the Court of Appeals held that lower courts must balance the requesting party's need for the information against the harm that would result from disclosure of that trade secret information. This same standard is applied by numerous state and federal courts across the country. The appellate court then held that plaintiff had satisfied this new test.
Firestone then filed a Petition to Transfer with the Indiana Supreme Court. Although supporting the standard articulated by the Court of Appeals in its decision, Firestone contends that the appellate court offered no clear guidance on how the balancing test should be applied or what showing was required to satisfy the burden imposed by that test. The Indiana Supreme Court, which grants transfer in only a small percentage of the petitions filed, granted Firestone's petition in March. While each case before the Court is different and must be considered on its own merits, the Indiana Supreme Court historically has vacated or reversed the lower court's order in the vast majority of cases to which it has granted transfer. Oral argument on the appeal is scheduled in May. Kenneth J. Moran and Lisa Moran McMurdo assisted Firestone with the appellate briefing, along with Mark Merkle and Marc Quigley of Krieg DeVault in Indianapolis, Indiana.
For further information, please contact the author, Lisa Moran McMurdo.