United States District Court, S.D. Texas, Houston Division
M-I L.L.C. d/b/a M-I SWACO, Plaintiff,
Q'MAX SOLUTIONS, INC.; Q'MAX AMERICA, INC.; and SANJIT ROY; Defendants.
MEMORANDUM OPINION AND ORDER
LAKE SENIOR UNITED STATES DISTRICT JUDGE.
M-I L.L.C. ("M-I") sued defendants Q'Max
Solutions, Inc.; Q'Max America, Inc. (collectively,
"Q'Max"); and Sanjit Roy ("Roy")
(collectively, "Defendants") alleging a number of
claims, including federal and state trade secret
misappropriation claims against Q'Max and Roy and a
breach of contract claim against Roy. Pending before the
court is Plaintiff M-I LLC's Motion for Summary Judgment
as to Trade Secret Misappropriation and Breach of Contract
("M-I's Motion") (Docket Entry No. 74). For the
reasons explained below, M-I's Motion will be granted in
part and denied in part.
Factual and Procedural Background
developed Virtual Hydraulics ("VH") and Presspro RT
("PPRT"), which are hydraulics simulation software
used in oil and gas drilling.  Roy worked as a developer at M-I
for over 20 years. During his tenure at M-I Roy worked to
develop VH and PPRT among other well applications
software. While employed at M-I, Roy signed an
Employee Invention and Confidential Information Agreement,
wherein he agreed as follows:
5. I shall not, during the term of my employment or
thereafter, disclose to others or use any confidential
technical or business information belonging either to M-I or
to a customer or client of M-I except as authorized in
writing, respectively, by M-I or such customer or client.
"Confidential technical or other confidential business
information" means any information which I learn or
originate during the course of my employment, regardless of
whether it is written or otherwise tangible that (a) is not
generally available to the public and (b) gives one who uses
it an advantage over competition.
6. Upon termination of my employment, I shall surrender to
M-I any and all things such as drawings, manuals, documents,
photographs and the like (including all copies thereof) that
I have in my possession relating to the business of M-I or
any division or subsidiary thereof.
left M-I in May of 2014 and after a brief stint with
Weatherford, another M-I competitor, Roy joined Q'Max in
April of 2015. 
alleges that before his departure Roy copied and retained
documents containing M-I's confidential information.
M-I's forensic expert, David Cowen, concluded that Roy
copied M-I files onto various drives during his employment at
Notably, after accepting his position at Weatherford (and two
days before his departure from M-I), Roy copied a number of
files to an external drive. Cowen's investigation found
M-I's confidential data on computers and external drives
in Roy's possession, including on Roy's Q'Max
computer. Cowen also concluded that Roy kept a full
backup of his M-I computer that contained a number of
confidential documents, including the source code for various
versions of VH and PPRT. 
Roy started at Q'Max he began developing MAXSITE
Hydraulics ("MAXSITE"), a software program with the
same models as VH that could compete with VH. In this
action M-I claims that Roy used confidential documents he
retained from his time at M-I to develop MAXSITE.11 M-I's
Complaint includes claims for copyright infringement in
violation of 17 U.S.C. § 501, et seq.; violation of the
Federal Defend Trade Secrets Act, 18 u.s.c. § 1836, et
seq.; violation of the Texas Uniform Trade Secrets Act, Tex.
Civ. Prac. & Rem. Code§ 134A.001, et seq., against
all Defendants; and breach of contract against
Roy. M-I's Motion only addresses its
federal and state trade secret misappropriation claims and
its breach of contract claim against Roy. Defendants
responded to M-I's Motion on May 2, 2019. M-I replied
to Defendants' Response on May 9, 2019 . M-I filed
briefing supplementing its Motion with new evidence on June
28, 2019,  to which Defendants responded on July
Standard of Review
judgment is appropriate if the movant establishes that there
is no genuine dispute about any material fact and the movant
is entitled to judgment as a matter of law. Fed.R.Civ.P.
56(a). Disputes about material facts are genuine "if the
evidence is such that a reasonable jury could return a
verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 106 S.
Ct. 2505, 2510 (1986).
party moving for summary judgment must show the absence of a
genuine issue of material fact. Exxon Corp. v. Oxxf ord
Clothes, Inc., 109 F.3d 1070, 1074 (5th Cir. 1997).
"If the moving party fails to meet this initial burden,
the motion must be denied, regardless of the nonmovant' s
response." Little v. Liquid Air Corp., 37 F.3d
1069, 1075 (5th Cir. 1994) (en bane) (per curiam) (citing
Celotex Corp. v. Catrett, 106 S.Ct. 2548, 2553
(1986)). If the moving party meets this burden, Rule 56(c)
requires the nonmovant to go beyond the pleadings and show by
affidavits, depositions, answers to interrogatories,
admissions on file, or other admissible evidence that
specific facts exist over which there is a genuine issue for
trial. Id. The nonmovant "must do more than
simply show that there is some metaphysical doubt as to the
material facts." Matsushita Electric Industrial Co.,
Ltd. v. Zenith Radio Corp., 106 S.Ct. 1348,
reviewing the evidence "the court must draw all
reasonable inferences in favor of the nonmoving party, and it
may not make credibility determinations or weigh the
evidence." Reeves v. Sanderson Plumbing
Products, Inc., 120 S.Ct. 2097, 2110 (2000). The court
resolves factual controversies in favor of the nonmovant,
"but only when there is an actual controversy, that is,
when both parties have submitted evidence of contradictory
facts." Little, 37 F.3d at 1075.
moves for summary judgment on its state and federal trade
secret misappropriation claims against Defendants and its
breach of contract claim against Roy. Defendants argue that
genuine issues of fact remain as to M-I's trade secret
misappropriation claims. Defendants also argue that summary
judgment is not appropriate on M-I's breach of contract
claim against Roy because Roy has raised fact issues as to
his affirmative defenses of waiver and laches.
Trade Secret Misappropriation Against Defendants
Complaint M-I alleges that documents retained by Roy after he
left M-I contain trade secrets under both the Defend Trade
Secrets Act ("DTSA") and the Texas Uniform Trade
Secrets Act ("TUTSA"). M-I argues that it is
entitled to summary judgment on its misappropriation claims
because no genuine dispute of material fact remains as to
whether Roy and Q' Max misappropriated M-I' s trade
secrets through wrongful acquisition, disclosure, and
use.Defendants disagree, arguing that
disputes of material fact remain as to (1) whether the
documents relied on by M-I in its Motion contain trade
secrets and (2) whether Q'Max or Roy "used"
M-I's alleged trade secrets. Because M-I's TUTSA
and DTSA claims will require proof of the same elements in
this case, the court will consider M-I' s federal and
state trade secret misappropriation claims together.
Trade Secret Misappropriation Under TUTSA and the
TUTSA and the DTSA permit recovery of damages for trade
secret misappropriation. Tex. Civ. Prac. & Rem.
Code§ 134A.004; 18 § 1836(b)(1) (permitting
recovery for trade secret u.s.c. misappropriation if a trade
secret is "related to a product or service used in, or
intended for use in, interstate or foreign commerce").
"To prevail on a misappropriation of trade secrets
claim, a plaintiff must show that (1) a trade secret existed,
(2) the trade secret was acquired through breach of a
confidential relationship or discovered by improper means,
and (3) the defendant used the trade secret without
authorization from the plaintiff." GE Betz. Inc. v.
Moffitt-Johnston, 885 F.3d 318, 325 (5th Cir. 2018)
(internal quotation marks omitted) (emphasis in original).
"Improper means" includes, but is not limited to, a
breach of a duty to maintain the secrecy of a trade secret.
Tex. Civ. Prac. & Rem. Code§ 134A.002(2); 18 U.S.C.
§ 1839(6). TUTSA defines "trade secret" as:
[A] 11 forms and types of information, including business,
scientific, technical, economic, or engineering information,
and any formula, design, prototype, pattern, plan,
compilation, program device, program, code, device, method,
technique, process, procedure, financial data, or list of
actual or potential customers or suppliers, whether tangible
or intangible and whether or how stored, compiled, or
memorialized physically, electronically, graphically,
photographically, or in writing if:
(A) the owner of the trade secret has taken reasonable
measures under the circumstances to keep the information
(B) the information derives independent economic value,
actual or potential, from not being generally known to, and
not being readily ascertainable through proper means by,
another person who can obtain economic value from the
disclosure or use of the information.
Id. at §
134A.002(6). "Whether a trade secret
exists is a question of fact." GlobeRanger
Corporation v. Software AG United States of America.
Incorporated, 836 F.3d 477, 492 (5th Cir. 2016).
courts weigh six factors to determine whether a trade secret
(1) the extent to which the information is known outside of
the business; (2) the extent to which it is known by
employees and others involved in the business; (3) the extent
of measures taken to guard the secrecy of the information;
(4) the value of the information to the business and to its
competitors; (5) the amount of effort or money expended in
developing the information; (6) the ease ...