The United States District Court for the Eastern District of Michigan recently ruled a motion to exclude evidence of an expert in a trade secret misappropriation case.  In the case, Plaintiffs allege that Defendants misappropriated 17 of Plaintiffs’ trade secrets and used that information to secure multi-million dollar contracts to build fluid bed reactors for foreign firms.  Not only did the Plaintiffs and Defendants each get an expert, but they also agreed to a court-appointed expert.  The motion underlying this decision was brought by Plaintiffs based upon Defendants’ expert opinions, and it highlights the importance of Federal Rules of Evidence 702-704 in trade secret misappropriation cases involving experts, like many do.
The Court held that Defendants’ expert opinion as it related to the Plaintiff’s second, fourth, and eighth claimed trade secrets were inadmissible.  In particular, the Court found that the expert lacked the requisite amount of care in determining that calculations related to the reactor’s diameter and height, and thus his scientific method was insufficient under FRE 702.  Finally, as it related to the combination claim that the reactor design will work as promised, the Court excluded again under FRE 702 because there was simply too great of a gap between the data and the expert opinion, especially where the expert did not test his theory, acknowledged that his conclusion depends on variables that he did not determine, and acknowledged that he does not know what the reactors’ fluidization regime is.
In addition, the Court held that conclusions that Plaintiffs’ “claimed trade secrets [a]re not trade secrets according to the legal definition” was inadmissible.  In doing so, the Court recognized that “expert testimony about what constitutes a trade secret” is “clearly inadmissible,” since it is “not the expert’s role to instruct the jury on the applicable law.”
Yes experts help win and lose trade secret misappropriation cases.  However, they, alone, do not decide what is or is not a trade secret.

Dow Corning Corp. v. Jie Xiao, 2013 WL 992773 (E.D. Mich. Mar. 13, 2013).


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