may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Dennis E. Hogan,
Minnesota Mining and Manufacturing Company,
Filed April 15, 1997
Hennepin County District Court
File No. 953300
Herbert C. Davis, Herbert C. Davis, Chartered, 4043 Brookside Avenue, St. Louis Park, MN 55416 (for Appellant)
David C. Forsberg, Michael J. Kane, Briggs and Morgan, P.A., W2200 First National Bank Building, 332 Minnesota Street, St. Paul, MN 55101 (for Respondent)
Considered and decided by Crippen, Presiding Judge, Peterson, Judge, and Mansur, Judge.[*]
Appellant disputes a summary judgment dismissing his suit against respondent Minnesota Mining and Manufacturing Company ("3M") for compensation related to 3M's development of an electronic dental anesthesia device. We affirm.
Between 1983 and 1989 appellant publicized various aspects of his technique at conferences and in the media. In 1989, appellant demonstrated his system to a 3M technical advisor with hopes that 3M would acquire his patent and pay him royalties on nerve stimulation units and electrodes that 3M sold. Appellant also indicated that he wanted consulting fees and recognition as the developer of the technique. In July 1990, appellant and his lawyer met with 3M representatives, including 3M's patent counsel. 3M told appellant that his patent was "thin," in other words, it did not protect well against design of alternative devices, thus rendering it ineffective against competition. In light of this concern, 3M offered to pay appellant consulting fees but did not offer to acquire his patent rights. Eventually, appellant sent 3M a digest of consulting meetings to show that he had spent 48 hours consulting for 3M. He understood he would be paid $60 per hour for consulting services. 3M sent appellant a check for $2,880 for his consulting services, but the check was never cashed. In 1992, 3M introduced its own nerve stimulation device that appellant has not challenged as an infringement of his patent.
In February 1995, appellant brought an action against 3M alleging trade secret violations, fraudulent misrepresentation, promissory estoppel, and breach of contract. The trial court granted 3M summary judgment on all counts, concluding (a) that appellant failed to indicate how 3M stole any trade secrets due to the fact that the "secrets" alleged were generally known or readily ascertainable, (b) that appellant failed to present evidence of any agreement or representation such as to create a genuine issue of material fact on claims of misrepresentation, promissory estoppel, or breach of contract, and (c) that 3M paid appellant for his services and there is no evidence otherwise to support his breach of implied contract claim. Appellant challenges the trial court's summary judgment but also argues that the court erred in its discovery rulings and by denying his motion to amend his complaint to add a claim for punitive damages.
1. Trade Secret Misappropriation
Rather than seek a federal remedy for patent infringement, appellant claims in this suit that 3M has violated the Uniform Trade Secrets Act by misappropriating his trade secrets. Minn. Stat. § 325C.01-.08 (1996). A cause of action for trade secret misappropriation is actionable when specific information is kept secret, is misappropriated, and is wrongfully used by another. Jostens, Inc. v. National Computer Sys., Inc., 318 N.W.2d 691, 701 (Minn. 1982). The trial court concluded that there was no evidence to contradict the fact that appellant had promoted his practice publicly such that his approach was widely known or ascertainable. The record supports this determination.
Appellant disclosed his electronic anesthesia techniques and system through television appearances, newspaper articles, and public speeches. Some of these disclosures involved mere demonstrations of his practices that did not reveal his technique, but he acknowledges publicly describing his technique while assuming that he was protected by his patent. Appellant also volunteered this information to 3M with his consulting services, attempting to persuade 3M to acquire his patent.
Appellant also argues that Electro-Craft Corp. v. Controlled Motion, Inc., 332 N.W.2d 890, 900 n.11 (Minn. 1983), requires that the issue of whether information is generally known or readily ascertainable is a question of fact. But a court may determine a question of fact by summary judgment if it appears to involve no genuine issues. Electro-Craft characterized the issue as one of fact in the context of a review after trial proceedings had been conducted, and it did not address the question of whether the issue might be resolved by summary judgment. The trial court did not err by granting summary judgment on appellant's trade secret claim.
2. Representation-Based Claims
Appellant alleges three causes of action that are premised on his contention that his 1989 dealings with Dr. Joos at 3M resulted in a promise of compensation that 3M must honor even though it declined to purchase his patent. All three causes of action require that appellant show that there is a genuine issue of fact on his claim that a material agreement or representation occurred.
An intentional misrepresentation claim requires, among other things, that appellant show that a defendant made a representation that was false. M.H. v. Caritas Family Servs., 488 N.W.2d 282, 289 (Minn. 1992). In order to establish a promissory estoppel claim, appellant must show, among other things, that 3M made a clear and definite promise. Ruud v. Great Plains Supply, Inc., 526 N.W.2d 369, 372 (Minn. 1995) (citing Cohen v. Cowles Media Co., 479 N.W.2d 387, 391 (Minn. 1992)). Finally, with respect to appellant's claim regarding breach of an express or implied contract, appellant must show either the existence of an agreement or an unjust enrichment of 3M that resulted from some wrongdoing, presumably the disregard of a commitment to appellant. Holman v. CPT Corp., 457 N.W.2d 740, 745 (Minn. App. 1990) (citing First Nat'l Bank v. Ramier, 311 N.W.2d 502, 504 (Minn. 1981)).
A review of the record shows that appellant met with employees of respondent numerous times in 1989 and 1990. Although respondent was optimistic about developing an electronic device with appellant, appellant acknowledges that 3M was to study the feasibility of the patent and that 3M ultimately determined that the patent had no value.
Appellant contends that the assurances made to him in 1989 by 3M's technical advisor, Dr. Joos, constituted an agreement to compensate him for his techniques in using a dental anesthesia device. Appellant testifies that he was encouraged by Joos after telling him that he wanted 3M to acquire his patent, pay royalties on sales, pay consulting fees, and give him recognition as the developer of the technique.
Appellant struggles to demonstrate that his patent sale negotiations were separate from negotiations for compensation for his technique. The record before the court does not permit that distinction. It shows instead that the sale of the patent was the focus of the negotiations. Appellant is fully aware that he did not have an agreement to sell the patent. He has no factual basis to contend that he dealt separately for compensation in exchange for information on his techniques.
The record shows no material issue of fact on appellant's understanding as to what had to occur before respondent agreed to compensate Hogan beyond consulting fees. Appellant understood that 3M would compensate him if it marketed his "concept" and an anesthesia method based upon "his patent and technique." He testified that the "concept" was the one disclosed in his patent, described in his World Medical Conference speech, demonstrated on television, and described in newspaper articles. These facts indicate that appellant was aware of the contingent nature of any agreement between himself and respondent. Accordingly, the trial court's grant of summary judgment on the issue of fraudulent misrepresentation was correct.
Similarly, the record does not support appellant's claim for promissory estoppel. Appellant alleges that Dr. Joos told him that 3M had an interest in reaching an agreement with him. According to appellant, Joos told him that "3M would come up with an agreement that was satisfactory" to appellant. Appellant testified that he understood Joos to mean that 3M was agreeable to his desires and committed itself to give him what he had requested. Although considered in the light most favorable to appellant, Joos's alleged comment to appellant is not sufficiently clear and definite to support a promissory estoppel claim. Accordingly, the trial court properly granted summary judgment on appellant's promissory estoppel claim.
A claim of implied contract exists if the provider of services can show that the recipient was unjustly enriched in the sense that the term "unjustly" could mean illegally or unlawfully. Holman, 457 N.W.2d at 745. An action for unjust enrichment may rest on failure of consideration, fraud, or mistake, or "situations where it would be morally wrong for one party to enrich himself at the expense of another." Anderson v. DeLisle, 352 N.W.2d 794, 796 (Minn. App. 1984), review denied (Minn. Nov. 8, 1984).
There is no evidence in the record showing that respondent obtained information from appellant through illegal or unlawful means. Appellant argues that Tate v. Scanlan Int'l, Inc., 403 N.W.2d 666 (Minn. App. 1987), review denied (Minn. May 28, 1987), supports his theory of recovery. But in Tate, the jury found that the plaintiff's idea was disclosed with the understanding that it was confidential, her idea was not covered by a patent, and the defendant impliedly or expressly agreed to compensate the plaintiff if it profitably marketed a product using her idea. Id. at 669-70.
Taking the facts in the light most favorable to appellant, it is evident that appellant recognized that whether or not he would receive royalties for 3M's use of an electronic dental anesthesia system hinged on the company's favorable assessment of his patent. In the absence of such a favorable assessment, appellant is limited to the compensation expressly agreed to between him and 3M for his consulting services. Therefore, the trial court correctly granted summary judgment on appellant's claim for breach of contract.
Appellant pleads that there should be some triable cause of action because he made a contribution to 3M and 3M has made a substantial profit from marketing its own anesthesia device. He cites the testimony of Dr. Joos who stated that he "felt bad" for Dr. Hogan. Whether appellant can establish equities on his behalf is not compelling in his attempt to show a legal cause of action. Because appellant has not shown a genuine issue of material fact on the existence of an agreement to compensate him beyond consulting fees, the trial court properly dismissed all three representation-based claims.
3. Discovery and Motion to Amend Complaint Rulings
Appellant argues that because of erroneous discovery rulings by the trial court, he did not have all of the necessary evidence at the time of the summary judgment motion. Appellant relies on Anderson by Anderson v. Shaughnessy, 519 N.W.2d 229, 233 (Minn. App. 1994), rev'd in part on other grounds, 526 N.W.2d 625 (Minn. 1995), for the proposition that summary judgment should not be granted when an opposing party has been unable to complete relevant discovery through no fault of its own.
Appellant's arguments are untimely and are waived because appellant did not move the trial court pursuant to Minn. R. Civ. P. 56.06 for a continuance to gather additional discovery to fortify his opposition to summary judgment. Vosbeck v. Lerdall, 245 Minn. 164, 167-68, 72 N.W.2d 371, 374 (1955) ("Where there has been no attempt to comply with [Rule 56.06], the disposition of the motion for summary judgment must be determined on the pleadings, affidavits, and depositions before the court at the hearing thereon."); see also Boulevard Del, Inc. v. Stillman, 343 N.W.2d 50, 52 (Minn. App. 1984) (granting summary judgment when party failed to submit affidavit stating reasons why he needed a continuance under Rule 56.06).
Absent a clear abuse of discretion, the trial court's discovery rulings will not be disturbed on appeal. Shetka v. Kueppers, Kueppers, Von Feldt & Salmen, 454 N.W.2d 916, 921 (Minn. 1990). Because the record does not indicate a clear abuse of discretion on the part of the trial court and because appellant did not file a Rule 56.06 motion at the time respondent brought its summary judgment motion, appellant has not shown cause for reversal of the trial court's summary judgment.
Appellant also argues that the trial court erred by denying his motion to amend his complaint to add a claim for punitive damages. In light of our determination that appellant has not shown any genuine issues of material fact to survive summary judgment, we need not reach this issue.
[ ]* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
[ ]1 To determine whether or not information can be deemed a trade secret as defined by the Uniform Trade Secrets Act, Minn. Stat. § 325C.01, subd. 5, the Minnesota Supreme Court has set out the following three elements to determine trade secret status: (1) the information must not be generally known or readily ascertainable; (2) the information must derive independent economic value from secrecy; and (3) plaintiff must make reasonable efforts to maintain secrecy. Electro-Craft Corp. v. Controlled Motion, Inc., 332 N.W.2d 890, 899-901 (Minn. 1983). In order for a trade secret to have independent economic value, it must be delineated with specificity. See Jostens, Inc. v. National Computer Sys., Inc., 318 N.W.2d 691, 699 (Minn. 1982).
[ ]2 Hogan testified in his deposition as follows:
Q. But didn't you understand that 3M would have to look pretty hard before they would buy [the patent] and continue to investigate. And whatever they did would depend to some extent on what their investigation disclosed; isn't that right?
A. I would think so.
Q. So what you understood then was that somewhere down the road 3M would look at your patent and decide whether or not they wanted to take an assignment or a license; is that right?
A: That there would be an agreement.
Q. And if they chose not to take any assignment or license then there wouldn't be any agreement; isn't that right?
A: That could happen too.
[ ]3 Appellant's understanding is further evident in his October 1991 letter to 3M in which he wrote, "If and when 3M decides that the product I have developed is suitable for marketing and has secured FDA approval, we will negotiate a royalty for the use of my patent."
[ ]4 The prospective nature of the parties' agreement is further illustrated by appellant's questioning of Dr. Joos.
Q. But it was important to Doctor Hogan that * * *
A. The money and the recognition for it and to be involved in the development and to help in the training; Those were always; yeah.
Q. Those were the things he had talked about with you.
A. This is the general thing, yes.
Q. And this is the thing that you had more or less assured him that would probably happen?
A. These are the things that we would have hoped would happen, yes.