IP Law Daily, TRADE SECRETS—10th Cir.: Metal distributor’s trade secret misappropriation claims against former employee and competitor properly dismissed, (Apr 23, 2025)

By Saurabh Kashyap, B.A., LL.B., LL.M.

District court correctly found that the plaintiff failed to identify trade secrets with particularity or demonstrate that alleged confidential information was not readily ascertainable.

The U.S. Court of Appeals for the Tenth Circuit affirmed a federal district court’s summary judgment ruling in favor of an individual and his employer, Ace Alloys, LLC, rejecting claims of trade secret misappropriation and civil conspiracy brought by the individual’s former employer, Double Eagle Alloys, Inc. The appellate court held that Double Eagle’s failure to identify its alleged trade secrets with sufficient particularity, coupled with a lack of evidence establishing the confidentiality of the information downloaded by the individual, warranted dismissal of all claims as a matter of law (Double Eagle Alloys, Inc. v. Hooper, No. 24-5089 (10th Cir. Apr. 22, 2025)).

Background. The plaintiff/appellant, Double Eagle, and the defendant/appellee Ace Alloys are specialty metals distributors catering to the oil-and-gas industry. They purchase and resell high-performance alloys, including materials that meet pump-shaft-quality (PSQ) specifications. Ace Alloys is a direct competitor of Double Eagle. The co-defendant, Michael Hooper, previously Inside Sales Manager at Double Eagle, resigned after nearly a decade and joined Ace Alloys. Before departing, Hooper downloaded 2,660 digital files from his company computer to a personal device, prompting Double Eagle’s litigation.

Double Eagle filed this lawsuit alleging that the downloaded materials contained three categories of trade secrets: (1) PSQ specifications for specific alloys such as 718 and K500, (2) pricing data and models including machining costs, margins, and customer-specific pricing strategies, and (3) customer drawings submitted for quoting custom parts. It asserted claims under the Defend Trade Secrets Act (DTSA), the Oklahoma Uniform Trade Secrets Act (OUTSA), a common law misappropriation theory, and civil conspiracy.

District court granted summary judgment to the defendants on all claims. Although Double Eagle filed its own motion for partial summary judgment on liability, the district court concluded that the company had failed to identify its trade secrets with particularity. The court also found that the alleged confidential information was either publicly disclosed, commonly used in the industry, or originated from customers rather than Double Eagle. Without any remaining torts, the civil conspiracy claim was also dismissed. Double Eagle appealed.

PSQ specifications not protected. On appeal, Double Eagle argued that its PSQ specifications were developed through a compilation of customer preferences and internal data, affording it a competitive edge. The Tenth Circuit rejected the claim, noting substantial overlap between Double Eagle’s PSQ specifications and those of its customers and competitors. The appellate court cited evidence that Double Eagle had publicly posted elements of its specifications online and that similar specifications from other companies were easily accessible.

The court also found that Ace Alloys developed its own nearly identical PSQ specifications before Hooper’s departure, undermining Double Eagle’s claim of misappropriation. Referencing TLS Mgmt. & Mktg. Servs., LLC v. Rodríguez-Toledo, 966 F.3d 46 (1st Cir. 2020), the court held that publicly available or readily ascertainable information cannot constitute a trade secret. The appellate court concluded that Double Eagle failed to distinguish trade-secret elements from general industry knowledge or to offer evidence showing how minor variations in specifications conferred economic value.

Pricing model lacked evidentiary support. The court separately evaluated Double Eagle’s claim that its pricing model—including target margins, material costs, and customer-specific strategies—qualified as a trade secret. While acknowledging that pricing strategies may in some circumstances be protectable, the appellate court found that Double Eagle had failed to present evidence of any proprietary algorithms, confidential methodologies, or unique market advantages.

The court noted that customers routinely received Double Eagle’s prices and were not bound by any confidentiality agreements restricting disclosure. Drawing on Garvey v. Face of Beauty LLC, 634 F. Supp. 3d 84 (S.D.N.Y. 2022), the appellate court reiterated that pricing must be demonstrably confidential and provide a competitive advantage to warrant trade secret status. Affidavits submitted by Double Eagle’s executives were found to be conclusory and unsupported by detail regarding the uniqueness or development effort behind the pricing model.

Customer drawings not owned by plaintiff. Double Eagle also contended that customer drawings in the downloaded files were protectable trade secrets. The Tenth Circuit disagreed, stating that Double Eagle failed to show it owned these drawings or that they were not readily obtainable from the customers themselves. The appellate court found that distributors like Ace Alloys routinely receive similar drawings directly from customers, and that Double Eagle had not introduced evidence of contractual restrictions governing the use of such materials.

Referencing Allstate Ins. Co. v. Fougere, 79 F.4th 172 (1st Cir. 2023), the court explained that ownership of the information is a prerequisite to asserting a DTSA claim. Because Double Eagle was not the originator or rightful owner of the customer-submitted designs, it could not maintain a federal trade secret claim on that basis. Nor did the drawings qualify as confidential information under Oklahoma law due to their routine dissemination and lack of protective measures.

Common law misappropriation claim also failed. Double Eagle argued that even if its trade secrets failed under the statutory definitions, its business information was at least confidential and protected under common law. The court rejected this claim, citing American Biomedical Grp., Inc. v. Techtrol, Inc., 374 P.3d 820 (Okla. 2016), for the proposition that such claims require a showing of secrecy and that the information is not generally known or used in the industry.

The appellate court again faulted Double Eagle for not identifying with specificity which of the 2,660 files contained confidential information, or how such information conferred a competitive advantage. While Double Eagle relied on general security policies and employee handbooks, the court found no evidence linking those policies to the specific materials at issue or proving that reasonable efforts were taken to protect their secrecy.

No triable issue on civil conspiracy. Double Eagle’s civil conspiracy claim was also dismissed, as it was contingent upon the success of at least one underlying tort. The Tenth Circuit affirmed that, because all trade secret and misappropriation claims were properly dismissed, no actionable tort remained to support a conspiracy theory. The court noted that under Oklahoma law, civil conspiracy is not an independent cause of action and must be anchored to an underlying wrong.

Conclusion. Thus, the Tenth Circuit affirmed the district court’s grant of summary judgment in its entirety. It held that Double Eagle failed to produce evidence that would allow a reasonable jury to find that its alleged trade secrets and business information were protectable under either federal or state law. Without sufficient particularity, ownership, or proof of secrecy, Double Eagle’s claims could not proceed to trial.

The Case is No. 24-5089.

Judge: Phillips, G.

Attorneys: Jason S. Taylor (Conner & Winters LLP) for Double Eagle Alloys, Inc. Ryan A. Ray (Norman Wohlgemuth LLP) for Michael Hooper and Ace Allys, LLC.

Companies: Double Eagle Alloys, Inc.; Ace Allys, LLC

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