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Certainteed Corp. v. BIPV, Inc.

United States District Court, E.D. Pennsylvania

May 1, 2017

BIPV, INC., Defendant.


          SCHILLER, J.

         All seemed sunny when CertainTeed and BIPV forged a business deal to work on solar panels. The parties entered into four agreements: two nondisclosure agreements, a private label supply agreement, and a purchase order in which CertainTeed bought products from BIPV.

         BIPV now accuses CertainTeed of misappropriating its trade secrets and breaching both nondisclosure agreements and the purchase order. CertainTeed accuses BIPV of breaching the purchase order. Presently before the Court is CertainTeed's motion for summary judgment. For the reasons that follow, the Court concludes that BIPV breached the purchase order and lacks a protected trade secret, and so enters judgment in CertainTeed's favor on those claims. There are disputed facts, however, concerning whether CertainTeed breached the two nondisclosure agreements. Therefore, the Court will deny summary judgment on those claims.


         A. CertainTeed and BIPV Meet

         CertainTeed is a worldwide building materials manufacturer that makes solar roofing panels. (Statement of Undisputed Facts of CertainTeed Corp. [CertainTeed Facts] ¶ 1.) BIPV, which was founded by Ronald Gangemi, designs, develops, and sells roofing panels that use solar power generating cells. (Id. ¶ 2.)

         Since as early as 2009, BIPV, beginning with its predecessor-in-interest, Sun Energy, built and sold a building integrated photovoltaic solar panel that would mount to a roof alongside shingles and tiles. (Id. ¶ 4.) This panel generated electricity similar to traditional solar panels, but BIPV's panel could be installed alongside asphalt shingles. (Id. ¶ 6.) BIPV marketed and displayed its panel at the Solar Power International Trade Show trade show in California on October 12, 2010. (Id. ¶ 9.) CertainTeed first encountered BIPV at the trade show when two CertainTeed representatives met Gangemi. (Id. ¶ 11.) The parties discussed BIPV's design and the possibility of entering into a business relationship. (Id. ¶ 12.)

         B. The Agreements

         Subsequent to this meeting, CertainTeed and BIPV entered into four written agreements.

         The first agreement was a nondisclosure agreement dated October 28, 2010. The parties desired a business relationship concerning “Roof Integrated Photovoltaic Products and Associated Components and Accessories and Development Thereof.” (Mot. for Summ. J. of CertainTeed Corp. [the “CertainTeed Summ. J. Mot.”] Ex. J [the “2010 nondisclosure agreement”].) The agreement recognized that both parties had confidential information that would have to be revealed to the other side during their discussions. (Id.) Specifically, the parties noted that “[i]n the course of discussions between the parties relating to the Project, each party has disclosed or may disclose to the other party certain of its proprietary know-how and other confidential information.” (Id.) Confidential information included “information regarding customers, suppliers and business arrangements, technical and business data, know-how, processes, designs and ideas.” (Id.) Confidential information also encompassed “information relating to the Project, including the details thereof and the fact that the Project is under consideration.” (Id.) The parties agreed that confidential information would not be disclosed to third parties “[e]xcept with the prior written consent of the disclosing party or as specifically provided herein.” (Id.) Moreover, confidential information could only be used for purposes of the project the parties hoped to undertake. (Id.)

         The 2010 nondisclosure agreement included four “permitted exceptions” to disclosure of confidential information. Under exceptions one and two, a recipient of confidential information “shall be under no obligation” with respect to that confidential information if the confidential information “[became] generally available to the public other than as a result of a breach of this Agreement by the Recipient, ” or if the confidential information was known to the recipient at the time of disclosure. The third and fourth exceptions applied if the confidential information was received by the recipient “on a non-confidential basis from a third party who had a legal right to make such disclosure, ” or “is subsequently developed by the Recipient or any of its affiliates without the use of such Confidential Information.” (Id.) The agreement was “governed by and construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania.” (Id.)

         The second agreement was a private label supply agreement dated August 23, 2011. Pursuant to this agreement, CertainTeed agreed to buy from BIPV Sun Energy Shingles and Flashing Components “in accordance with [CertainTeed's] firm purchase orders.” (CertainTeed Summ. J. Mot. Ex. K [the “private label supply agreement”].) The private label supply agreement continued until either party provided ninety days of notice in writing that it was terminating the agreement. (Id.) The private label supply agreement also stated that BIPV warranted to CertainTeed that BIPV's products “shall be free from defects in material and workmanship.” (Id.)

         The third agreement was a nondisclosure agreement dated January 6, 2012. The parties signed this agreement “[i]n connection with [CertainTeed's] consideration of a possible transaction involving BIPV, Inc.” (CertainTeed Summ. J. Mot. Ex. L [the “2012 nondisclosure agreement”].) Pursuant to the 2012 nondisclosure agreement, CertainTeed agreed to keep as confidential certain “Evaluation Material” which BIPV furnished to CertainTeed. (Id.) The definition of “Evaluation Material” excepted information that: (1) CertainTeed already possessed that was not subject to a previous nondisclosure agreement; (2) was or became “generally available to the public other than as a result of a disclosure” by CertainTeed in violation of the 2012 nondisclosure agreement; (3) became available to CertainTeed through third parties on a non-confidential basis; or (4) was “independently developed by [CertainTeed] without use of the Evaluation Material.” (Id.) The 2012 nondisclosure agreement was to last until that transaction between the two companies was consummated or two years after the date of the letter, whichever happened first. (Id.) The agreement was to be construed in accordance with the law of Pennsylvania. (Id.)

         The final agreement at issue here is a January 31, 2012 purchase order. According to the purchase order, BIPV agreed to supply CertainTeed 4, 320 units of “Apollo PV Sun Energy Shingle 52W Std Cel” for $393, 120.00. (CertainTeed Summ. J. Mot. Ex. M [the “purchase order”].) CertainTeed soon thereafter began to receive reports that the panels purchased from BIPV were catching fire on some customers' roofs shortly after installation. (CertainTeed Facts ¶ 17.) CertainTeed investigated these reports, finding that the majority of the failures originated in the junction box. (Id. ¶¶ 18-19.) CertainTeed maintained that its investigation “conclusively ruled out other potential causes for the failure of the APOLLO I Panels, including faulty installations, rodents, weather or other force majeure reasons.” (Id. ¶ 20.) CertainTeed concluded that the fires were caused by a defect in BIPV's design of the junction box, which differed from standard designs in the industry. (Id. ¶ 22.) On April 26, 2013, CertainTeed wrote a letter to Gangemi informing him that “due to the major quality issues that we have had with the product, we will not be purchasing any more product from BIPV Inc. and are cancelling the existing PO.” (CertainTeed Summ. J. Mot. Ex. P [the “April 26, 2013 letter”].) CertainTeed claims that BIPV has not reimbursed it for any of the panel failures, and that the repairs and replacements of those panels have cost $271, 437.24. (CertainTeed Facts ¶¶ 25-26.) Following replacement of the junction box, there have been no panel failures. (Id. ¶ 27.)

         C. Procedural Background

         On January 7, 2016, CertainTeed sued BIPV in this Court, seeking a declaration that CertainTeed did not breach the 2010 or 2012 nondisclosure agreements and did not misappropriate any of BIPV's alleged trade secrets. CertainTeed also alleged that BIPV breached the purchase order when BIPV provided CertainTeed with defective products. BIPV answered and filed a counterclaim against CertainTeed in which it claimed that CertainTeed breached the Lanham Act, violated the Pennsylvania Uniform Trade Secrets Act, breached the 2010 and 2012 nondisclosure agreements, and breached the purchase order.

         D. Trade Secrets and Confidential Information

         BIPV claims that CertainTeed misappropriated its trade secrets. CertainTeed counters that there are no trade secrets here due to BIPV's disclosures and the fact that BIPV's alleged trade secrets can be reversed engineered.

         Gangemi is the listed inventor on five abandoned patent applications for building integrated photovoltaic panel designs: (1) “System and Method for Mounting Photovoltaic Cells, ” published on March 2, 2006; (2) “Roof Mounting Bracket for Photovoltaic Power Generation System, ” published on December 16, 2010; (3) “Roof Mounting Bracket for Photovoltaic Power Generation System, ” published on December 16, 2010; (4) “Roof Mounted Photovoltaic System with Accessible Panel Electronics, ” published on September ...

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