## Facts

- Austin R. Baer developed “continuous pinless hinge” technology and held multiple patents, including U.S. Patent No. 4,976,008, which claimed adding bearing inserts above and below each thrust bearing to reduce friction.
- The Stanley Works, lacking Roton’s technology, explored acquiring Roton in 1989 and entered a written confidentiality agreement to review Roton’s business and manufacturing information.
- Stanley obtained access to Roton’s proprietary technical and business information through facility visits and record reviews conducted under the confidentiality agreement.
- The acquisition did not occur; Roton was later acquired by another company and became Roton Barrier, Inc.
- Stanley subsequently developed and marketed its own continuous pinless hinges.
- Roton alleged Stanley used confidential information obtained during acquisition negotiations to design its hinge and plan its market entry, and also alleged infringement of the ’008 patent.

## Issues

1. Whether Stanley misappropriated Roton’s trade secrets disclosed under the confidentiality agreement and, if so, whether actual damages, exemplary damages, attorney fees, and injunctive relief were proper under Illinois law.
2. Whether the ’008 patent was nonobvious and whether Stanley’s hinge infringed (including under the doctrine of equivalents), supporting willfulness, enhanced damages, fees, and an injunction.
3. Whether the district court’s injunction (including a four-year ban on participating in the continuous pinless hinge business) and its fee awards were legally and factually supportable, and whether prejudgment interest was proper.

## Decision

- Affirmed trade secret misappropriation and the award of actual damages.
- Reversed exemplary (punitive) damages on the trade secret claim.
- Vacated trade secret attorney fees and the trade secret injunction; remanded for a more specific and narrower injunction and reconsideration of fees.
- Affirmed that the ’008 patent was valid (nonobvious).
- Reversed the finding of infringement of the ’008 patent, including under the doctrine of equivalents.
- Vacated patent willfulness, treble damages, attorney fees, and patent-based injunctive relief.
- Affirmed prejudgment interest.
- Disposition: affirmed in part, reversed in part, vacated in part, and remanded.

## Legal Principles

- Trade secret liability may be established where confidential business and technical information, disclosed under a confidentiality agreement and not readily ascertainable by proper means, is used by the recipient to compete.
- Under Illinois law, exemplary damages for trade secret misappropriation require conduct meeting a high culpability threshold (e.g., “outrageous” conduct reflecting evil motive or reckless indifference), not merely wrongful use.
- Trade secret injunctions must describe prohibited disclosures or uses with reasonable detail and must be tailored to prevent misuse of identified secrets rather than broadly barring lawful competition.
- Under the doctrine of equivalents, infringement requires that differences between the accused product and the claimed invention be insubstantial; substantial structural and functional differences defeat equivalence.
- When infringement is not proven, findings and remedies dependent on infringement (willfulness, enhanced damages, fee shifting, and patent-based injunctive relief) cannot stand.
- Prejudgment interest may be awarded to compensate for the time value of money lost due to proven wrongful conduct, subject to the trial court’s discretion.

## Conclusion

The Federal Circuit upheld trade secret liability and actual damages but rejected punitive damages and required a narrower, more specific trade-secret injunction and reconsideration of fees; it also held the ’008 patent valid yet not infringed, eliminating infringement-based enhanced remedies while leaving prejudgment interest intact.


Roton Barrier, Inc. v. The Stanley Works, 79 F.3d 1112 (Fed. Cir. 1996)