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Bimbo Bakeries USA, Inc. v. Sycamore

United States District Court, D. Utah, Central Division

March 29, 2017

BIMBO BAKERIES USA, INC., Plaintiff,
v.
LELAND SYCAMORE, TYLER SYCAMORE, WILD GRAINS BAKERY, LLC, and UNITED STATES BAKERY, INC., Defendants.

          SEALED MEMORANDUM DECISION AND ORDER DENYING DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

          David Nuffer District Judge.

         Plaintiff Bimbo Bakeries (Bimbo) filed this case against multiple Defendants principally alleging that the Defendants misappropriated Bimbo's trade secrets for making bread. Two of the Defendants, Tyler Sycamore (Tyler), and his business, Wild Grains Bakery, LLC (Wild Grains), (collectively referred to as Defendants), moves for summary judgment on all of Bimbo's claims against them. These claims include: (1) trade secret misappropriation, (2) trade dress infringement, and (3) trade dress dilution. For the reasons stated in this order, Defendants' motion for summary judgment is DENIED in its entirety.

         UNDISPUTED FACTS..................................................................................................................2

         LEGAL STANDARD.....................................................................................................................5

         DISCUSSION.................................................................................................................................5

         Trade Secret Misappropriation...................................................................................................5

         1. The Defendants Have Not Shown Bimbo's Purported Trade Secret is Generally Known. ................................6

         2. Bimbo's Combination of Well-Known Processes is Specific and Unique......................7

         3. There Are Disputed Facts About Whether Tyler Misappropriated the Trade Secret.......8

         Trade Dress Infringement and Dilution......................................................................................9

         ORDER.........................................................................................................................................11

         UNDISPUTED FACTS

         Leland Sycamore ("Leland") invented the process and formula - including the elements constituting the alleged trade secrets at issue - for making Grandma Sycamore's Home-Maid Bread ("Grandma Sycamore's") in 1979 at Aaron Bakery.[1] Leland used packaging for Grandma Sycamore's that was substantially similar to packaging his successor, Bimbo, still uses to sell the bread today.[2] Leland received federal trademark protection for part of the packaging's design in 1999.[3]

         When Leland's son, Tyler, was 14 years old, he worked for his father's company.[4] It is, however, disputed whether Tyler was actually involved in making Grandma Sycamore's bread.[5] Bimbo claims that, through years of working Tyler well aware of the working at the company, Tyler was well aware of the process for baking Grandma Sycamore's bread. Tyler, however, asserts that he was merely involved in simple tasks such as slicing bread and has no knowledge of the process for making the bread.[6]

         In 1998, Leland sold Grandma Sycamore's rights to one of Bimbo's predecessors-in- for ___[7] The purchase was___.[8] As part of the transaction, Leland executed a nondisclosure agreement, which requires, among other things, him to keep confidential and refrain from using Grandma Sycamore's production formulations, manufacturing processes, and trade secrets.[9]

         Bimbo asserts trade secret protection over the production process of Grandma Sycamore's white bread.[10] Bimbo claims that the production process is composed of the compilation of___[11], ___[12]___, [13]___[14]

         Bimbo claims that Tyler, through his previous business Wild Grains, misappropriated its trade secrets and trademarks associated with Grandma Sycamore's white bread.[15] Tyler claims he could not misappropriate Grandma Sycamore's alleged trade secret because he had no knowledge of the production process for making the bread.[16]Although it is disputed whether Tyler had this knowledge, there is evidence that Jeremy Faull, the production manager at Wild Grains, learned the process for making the bread from the previous owner of Grandma Sycamore's, Leland.[17]

         For a period of three months, Wild Grains sold bread named Grandma Ernilie's to United States Bakery (U.S. Bakery).[18] Bimbo asserts that U.S. Bakery infringed on Grandma Sycamore's trade dress and that the Defendants are also liable as contributory infringers.[19]

         In May 2013, Faull went to work for U.S. Bakery.[20] Bimbo also claims that Faull improperly misappropriated Grandma Sycamore's recipe for making white bread to U.S. Bakery.[21]

         LEGAL STANDARD

         Summary judgment is appropriate if "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law."[22] A factual dispute is genuine when "there is sufficient evidence on each side so that a rational trier of fact could resolve the issue either way."[23] In determining whether there is a genuine dispute as to material fact, the court should "view the factual record and draw all reasonable inferences therefrom most favorably to the nonmovant.[24]

         The moving party "bears the initial burden of making a prima facie demonstration of the absence of a genuine issue of material fact and entitlement to judgment as a matter of law."[25]

         DISCUSSION

         Defendants move for summary judgment on Bimbo's claims for (1) trade secret misappropriation, (2) trade dress infringement, and (3) trade dress dilution. As the moving party, it is the Defendants' burden to show that there are no disputes of material facts and that they are entitled to judgment as a matter of law. Each challenged claim will be addressed in this order, as well as the reasoning for denying summary judgment.

         Trade Secret Misappropriation

         The Defendants raise three arguments for dismissal of Bimbo's trade secret misappropriation claim. They argue first that Bimbo does not have a protectable trade secret; second, that Bimbo has not defined its trade secret with specificity; and third, that even if Bimbo has a trade secret, Tyler and Wild Grains did not misappropriate it. The order will address each of the Defendants' arguments and the reasons the arguments fail on summary judgment.

         1. The Defendants Have Not Shown Bimbo's Purported Trade Secret is Generally Known.

         Bimbo asserts trade secret protection over the compilation of ___.

         Utah has adopted the Uniform Trade Secrets Act. Under the act, a trade secret can be a "compilation" that "derives independent value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use."[26] "A compilation can be made up of known elements, if the combination itself is outside the general knowledge and not ascertainable by proper means."[27] The Tenth Circuit has been clear that when the plaintiff asserts trade ...


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