Trade Secret Misappropriation Claim Cannot Be Dismissed As Time-Barred Or Factually Implausible Merely Because Misappropriations Occurred Repeatedly Over Twenty Years

In ABB Turbo Systems AG v. TurboUSA, Inc., No. 14-1356 (Fed. Cir. Dec. 17, 2014), the Federal Circuit reversed the district court's dismissal of a trade secret misappropriation claim because the district court relied on judgments about the timeliness of the claim and the presence or absence of reasonable protections for the trade secrets that went beyond what is authorized at the complaint stage.

ABB Turbo Systems AG and ABB Inc. (collectively "ABB") design, produce, and sell exhaust gas turbochargers and turbocharger parts, primarily for use in large, ocean-going vessels and in power plants. According to ABB, Johan Franken ("Hans") previously worked for ABB but stopped working for ABB in 1986 to found TurboNed Service B.V. ("TurboNed") and compete with ABB in the market for parts and servicing of ABB-sold turbochargers. Hans established TurboUSA, Inc. ("TurboUSA") in the 1990s, and a son of Hans, Willem Franken ("Willem"), became the president of TurboUSA.

ABB initiated a patent infringement action against TurboUSA and TurboNed in 2012. Subsequently, ABB amended its complaint to add claims of trade secret misappropriation and civil conspiracy to misappropriate trade secrets under Florida law, and to join Hans and Willem Franken as defendants for those claims. Among other things, ABB alleged in its amended complaint that Hans and TurboNed paid one ABB employee for ABB's confidential information and TurboUSA hired a former ABB employee who stole ABB's confidential data. ABB alleged that its secrecy maintenance efforts included imposing confidentiality and nondisclosure obligations on ABB employees that have access to ABB's trade secrets, marking documents as confidential, and restricting physical and electronic access by third parties to trade secrets.

After ABB stipulated to the dismissal of bankrupt TurboNed, the remaining defendants filed motions to dismiss the entire amended complaint under Fed. R. Civ. P. 12(b)(6). The defendants also argued that the trade secret and conspiracy claims should be dismissed because they were time-barred by a Florida statute that requires that a trade secret claim be brought within three years. The district court granted the motions as to ABB's trade secret and conspiracy claims, reasoning that ABB's claims were filed too late because ABB claimed misappropriation of its secrets over a period of nearly thirty years or, given the scope of the alleged misappropriations, it was unlikely the trade secrets were...