Court Favors Callaway Golf in Trade Secrets Case

Jul 16, 2004

A federal court in Delaware has granted Callaway Golf Co.’s motion for summary judgment, finding little evidence that Callaway misappropriated trade secrets from Dunlop Slazenger Group Americas, Inc. when it hired away one of Dunlop’s chemists.
In the early 1990s, Dunlop began developing a three-piece, cast polyurethane-covered golf ball for the high-end of the gold ball industry. In the m id-1990s, the suit alleges, Callaway began hiring employees with experience in polyurethane golf ball technology, including the Dunlop chemist, to develop its own new golf ball.
Dunlop described the chemist as an “inventor and formulator for Dunlop’s cast polyurethane golf cover system.” The chemist’s work even resulted in the filing of an invention disclosure, which was filed with Dunlop’s research and development department.
In its claim, Dunlop argued that the chemist had access to information concerning the “use of polyurethane materials for manufacturing polyurethane-covered golf balls,” information that Dunlop alleges was confidential and proprietary and constituted protected trade secrets.
For its analysis, the court turned to two questions: would a reasonable fact finder conclude that Dunlop’s allegations constitute trade secrets and are Dunlop’s misappropriation claims sufficient to withstand the motion.
Answering the first question, the court wrote: “Because Dunlop has failed to put forth any evidence that it experimented with PPDI in connection with the formulas set forth in the February 1997 patent application and (the chemist’s) notebooks and progress reports, and Callaway has submitted evidence that it arrived at its final golf ball cover formulations independently, … Dunlop, has not established the existence of a trade secret.”
As for the second question, the court found that “because the ingredients used in the Dunlop and Callaway formulas are not substantially similar, no reasonable fact finder could find that Callaway’s polyurethane golf balls were substantially derived from the formulas and processes described in the patent application and (the chemist’s) Dunlop notebooks.”
Callaway Golf Co. v. Dunlop Slazenger Group Americas, Inc., D.Del., Civil Action No. 01-669-KAJ, 5/13/04


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