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Synergetics USA, Inc. v. Alcon Laboratories

July 9, 2009

SYNERGETICS USA, INC., PLAINTIFF,
v.
ALCON LABORATORIES, INC. AND ALCON, INC., DEFENDANTS.



The opinion of the court was delivered by: Denise Cote, District Judge

OPINION & ORDER

The question presented through this motion for summary judgment is whether a party may assert its trade secret misappropriation claim under New York's continuing tort doctrine where it knew before the expiration of the limitations period that its trade secret had been stolen and that its competitor had been using the trade secret to develop and market products that compete with its products. In this case, it may not.

BACKGROUND

Much of the relevant background is provided in this Court's Opinion and Order of February 23, 2009, Synergetics USA, Inc. v. Alcon Laboratories, Inc., 2009 WL 435299 (S.D.N.Y. Feb. 23, 2009), familiarity with which will be assumed. Only the facts necessary to a resolution of the pending motion are described here. The undisputed facts of record, or, where disputed, taken in the light most favorable to defendants Alcon Laboratories, Inc. and Alcon, Inc. (collectively, "Alcon"), establish the following.

Both Alcon and plaintiff Synergetics USA, Inc. ("Synergetics") manufacture, market and sell instruments and accessories used in vitreoretinal surgery, which is surgery on the inside of the eye. Synergetics has sued Alcon for antitrust violations, alleging illegal tying and predatory pricing.

In response, Alcon has now alleged that sixteen years ago Synergetics misappropriated its trade secrets. Alcon asserts that in 1992, Greg Scheller ("Scheller") one of the founders of Synergetics, "stole" product drawings from Alcon's predecessor, Infinitech, which was located in Missouri. Scheller was an Infinitech employee and copied Inifinitech product drawings as he left the company to found Synergetics. Infinitech's Director of Manufacturing Rick McBride ("McBride") witnessed the theft and immediately told Steve Collins ("Collins"), an owner of Infinitech.

Alcon acquired Infinitech in 1998.*fn1 Alcon admits that in 1999 it had knowledge of similarities between its products and Synergetics's products. That same year, it created a "Product Equivalence Guide," which lists multiple Synergetics products with their Alcon equivalents. Alcon's counterclaim asserts that Synergetics used the information that Scheller stole to create products that compete with Alcon. In 2002, Alcon executive Paul Hallen ("Hallen") brought to the attention of Alcon's attorneys that a Synergetics "device seemed to be violating our intellectual property."

Synergetics filed this action on April 16, 2008, and Alcon filed its counterclaim as Infinitech's successor-in-interest based on this 1992 theft on June 23, 2008. After the parties conducted discovery related to the counterclaim, Synergetics moved on February 13, 2009 for summary judgment on the counterclaim on the ground that it is time-barred; this motion was fully submitted on May 12. For the reasons below, Synergetics's motion is granted; and Alcon's April 24 motion for partial summary judgment on the counterclaim*fn2 is denied.

DISCUSSION

Summary judgment may not be granted unless all of the submissions taken together "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party bears the burden of demonstrating the absence of a material factual question, and in making this determination the court must view all facts in the light most favorable to the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Sista v. CDC Ixis N. Amer., Inc., 445 F.3d 161, 169 (2d Cir. 2006). When the moving party has asserted facts showing that the non-movant's claims cannot be sustained, the opposing party must "set forth specific facts showing that there is a genuine issue for trial," and cannot rest on the "mere allegations or denials" of the movant's pleadings. Fed. R. Civ. P. 56(e); accord Sista, 445 F.3d at 169.

This Court is exercising its supplemental jurisdiction over Alcon's state law claims pursuant to 28 U.S.C. § 1367. A federal court considering state law claims under supplemental jurisdiction applies the choice of law principles of the state in which the court sits. N. Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 43 (2d Cir. 1999). New York applies a "borrowing statute," N.Y. C.P.L.R. Section 202, for actions filed by a non-resident. Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 710 (2d Cir. 2002). In such actions, New York applies the shorter of the statute of limitations between New York and the place where the cause of action accrued.

An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.

N.Y. C.P.L.R. § 202. Since the theft occurred in Missouri, the claim must be timely under both New York and Missouri statutes of limitation.

Under New York law, a misappropriation of trade secret claim must be brought within three ...


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