Free Brief in Opposition to Motion - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-617-LTB-BNB POLYROCK TECHNOLOGIES, LLC, a Colorado limited liability company, Plaintiff, v. GENERAL STEEL DOMESTIC SALES, LLC, et al. Defendants. P A N IFS OPPOSITION TO L I TF ' D F N A T ' O N MO I NF RP O E T V O D R E E D N SJ IT TO O R T C I E R E

The rules of civil procedure permit discovery concerning any matter relevant to the claim or defense of a party. Despite this clear directive, defendants ask the Court to assess the merits of Poy oks lm in order to narrow the discovery to which PolyRock is entitled. The Court l c'c i s R a should reject df dn ' e nat request as procedurally improper and lacking in substantive merit and e s r u e e nattfl r pn tP l oks ed g i o e i df dn o u y e odo oy c'pni d cvery. qr e s l s R n s Defendants also claim that they cannot fully r pn t P l oks i oe wt u e od o o R c' d cvr i ot s y s y h further detail concerning the trade secrets at issue in this litigation and claim to be concerned about revealing their own claimed trade secrets in responding to P l oks oy c'discovery requests. R These assertions are hollow and improperly interposed to delay and harass. The subject

d cvr r us se i om t naot e nat o npout Defendants do not need i oe e et ek n r ao bu df dn ' w rdc . s y q s f i e s s i om t n cne i P l oks t d sc n r ao ocr n oy c' r e er to understand or formulate responses. f i ng R a ets Defendants' purported confidentiality concerns are likewise plainly insincere. The Protective Order, agreed upon by defendants, provides ample protection for the production of confidential information.

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The Court hu dn df dn 'm t ni i ete adr u edf dn t sol ey e nat o o n t n r y n e i e nat o d e s i s it qr e s po p y n fl r pn tP l oks ed g i oey rm t ad u y e odo o R c'pni d cvr. l l s y n s BACKGROUND 1. On July 19, 2005, PolyRock filed its Second Amended Complaint in this action. PolyRock alleges that through an asset foreclosure it owns proprietary information and technology used to manufacture molded polyurethane siding or building panels that replicate the appearance, color and texture of natural stone or brick. (2A Cplt. ¶¶ 1, 9 ­ 10.) 2. PolyRock alleges that defendants obtained the proprietary technology in confidence f m P l oks r eesr r o R c' pe cs -in-ownership after entering into confidentiality agreements not to o y d o use the information for any purpose other than evaluating a potential business relationship between the parties. (2A Cplt. ¶¶ 22-23.) 3. P l okspeeesr i l e t por t yt ho g t df dn during o R c' r cs d c sd h rpia e nl y o e nat y d o so e er c o e s their visits to a prototype manufacturing facility. Defendant Demarest took notes of the visit and subsequently reported to the other defendants concerning what he had seen. (CD0938-939 (notes); CD0181-0182 (report).)1 4. On July 1, 2005, PolyRock served combined interrogatories and requests for production on defendants General Steel, Genstone and Knight (collectively) and on July 25 on defendant Dema s T ee i oe r us a t sb co df dn ' o o. r t hs d cvr e et r h uj t f e nat m t n e. s y q s e e e e s i 5. On August 18, 2005, the Court held a Scheduling Conference pursuant to Fed. R. Civ. P. 16. Although defendants w r i ps s o o P l oks i oe r us fr ee l e n os s n f oy c' d cvr e et o svr e ei R s y q s a weeks prior to the hearing, they did not, either in the proposed Scheduling Order or at the Scheduling Conference, suggest any modification to the sequence in which discovery would be
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PolyRock has designated the notes of the visit (CD-0938 ­99 " etc dC ni n a ­ 3) R sie of etl rt d i A T R E S E E O L " usato h t m o t Po cv O dr T O N Y ' Y S N Y pr ntt e s fh rt t e re u e r e ei . 2

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conducted or claim inability to respond to the pending discovery requests without receiving fr edtlcne i P l oksr e er s ut r e i ocr n o R c't d sc t h as ng y a e. 6. Because P l oksdiscovery requests seek information that one or more of the o R c' y parties deemed confidential, and recognizing that the parties would likely be called upon to produce proprietary information at other points during the course of this action, the parties negotiated a proposed Protective Order. On August 22, wt P l oks osn defendants i o R c' cnet h y , moved for a et s no t eor pn t P l oks i oe w i t pr negotiated n x ni fi t e od o o R c'd cvr h eh a ies e o m s y s y l e t the Protective Order. On September 2, the parties jointly moved for entry of an agreed

Protective Order covering the production and handling of proprietary and confidential information produced during discovery. On September 8, 2005, the Court entered the Protective O dr i cr i m d i t n t t pre'agaeand separately ordered defendants to re wt e a oic i s o h a i l ug h tn f ao e ts n provide discovery responses by September 15. 7. The Protective Order provides extensive protection for confidential material, including a" of etl l e t t etc distribution of information so designated and C ni n a e l h r r t d i" v a sis requires that it can be ue slyfrproe o t scs;a" etc dC ni n a ­ sd o l o upss f h ae e i R sie of etl rt d i A T R E S E E O L "l e t ta t ds nt nsget pr i ol ot T O N Y ' Y S N Y e l h , s h ei ao ugs , e t n u ide v a e g i s ms y s counsel and one in-house lawyer (as well as experts and the Court) to view the information so ds nt ;n a N w R sie Mae ­A T R E S E E O L "ee t tsi id ei a d ad " e etc d tr T O N Y ' Y S N Y l lh il t g e rt t v a me to outside counsel, experts and the Court and strictly limits even the ability to duplicate for cusl i e a ue one sn r l s material so designated. See Protective Order ¶¶ 8-10. The provisions of ' tn the Protective Order apply to interrogatory responses as well as documents or things produced in discovery and information or materials designated under the Protective Order must be returned or destroyed at the conclusion of these proceedings. Id. ¶¶ 2, 4, 22.

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8. On September 19 (following a further extension of time), defendants served their objections and responses to the subject discovery. Defendants filed the instant motion on the same day. Although they had ample prior opportunity to do so, defendants first asserted that t yw r ual t r pn t P l oks i oe without further information concerning h e e nb o e od o oy c' d cvr e e s R s y P l oksr e er in their September 19 motion for protective order. o R c't d sc ts y a e 9. D f dn bodyr ue or pn t P l oks i oe o t bs o t i e nat ral e s t e od o o R c' d cvr n h ai fh r e s f s y s y e s e motion for protective order. Defendants Genstone, General Steel and Knight (collectively

" es n df dn "objected and did not respond to e h o P l oks i i e oa r s G nt e e nat ) o e s i tf oy c'n en r gt i ; g R n tr o e the only interrogatory to which these defendants did not object asked for their record retention policies. (See Ex. A.2) The interrogatories to which the Genstone defendants refused to respond include those asking: (i) whether defendants manufacture products out of polyurethane that are designed, intended or marketed as achieving the look of rock, stone, stucco or brick (I.1, 6); (ii) the identity of the person who invented or developed the process that defendants currently use to manufacture such products (I.2); (iii) all persons having knowledge of the process or method for manufacturing any such products (I.3); (iv) the identity of anyone who has manufactured such products for defendants (I.4); (v) the sales revenue and profit on such products (I.7); (vi) the first date of sale of such products (I.8); and (vii) the identity of the person w o r a d e nat m ren m t iso sc pout(9. See Ex. A.) h pe r df dn ' a t g a r lfruh rdc I ) ( pe e s ki ea s. 10. The Genstone df dn a o oj t t m n o P l oks r us for e nat l b c d o ay f o R c' e et e s s ee y q s production on the basis of their protective order motion. The Genstone defendants objected
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Defendants fail to comply with D.C.COLO.LCivR 37.1, requiring that a " o o udr e. . m t n ne FdR i Civ. P. 26 or 37 directed to interrogatories or requests under Fed. R. Civ. P. 33 or 34 or to responses thereto shall set forth verbatim the interrogatory, request, and response to which the m t n s i c d P l ok cod g aahs e nat d cvr r pne a E o o id et . o R c acri l tce df dn ' i oe e oss s xhibits i r e" y ny t e s s y s A adB hr o w i cn i P l oksr us addf dn 'r pne a i u i n e t h h otn o R c' e et n e nat e oss t s e n e, c a y q s e s s s df dn ' o o. e nat m t n e s i 4

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entirely to Requests 4, 8, 9, 10, 16 and 17, which sought: (i) patents or patent applications covering polyurethane products intended to achieve the look of rock, stone, stucco or brick (R.4); (ii) documents describing the process used to manufacture such products (R.8); (iii) documents identifying the inventor of the method defendants use to manufacture such products (R.9); (iv) documents showing the sales of such products (R.10); (v) purchase orders for such products (R.16); and (vi) documents reflecting customer reactions to such products (R.17). 11. The Genstone defendants also objected in part to several additional production requests, based upon their protective order motion, and agreed to produce only documents r an t t " es n po c" h h hy ec b a "o pii ]h eeto Ma 20 e t g o h G nt e rj t w i t dsr e s cm r[ g t vn f y 03 li e o e, c e i sn e s and later that same year, whereby Aragon [defendn D m r t cm ay m nf t e at e a ss o pn] aua u d e' cr sample random rock panels, sample rock ledgers, sample random rock corners, sample brick panels and sample wall panels, and delivered said material to Genstone, for evaluation by pt tl es n cs m r"(Ex. A at 10.) The production requests in response to which the o n aG nt e ut e . ei o o s Genstone defendants agreed to produce only materials relating to the Genstone project (Requests 6, 11, 12-15, 18 and 20) sought: (i) communications concerning manufacturing or techniques

for manufacturing from polyurethane products designed, intended or marketed as achieving the look of rock, stone, stucco or brick (R.6); (ii) marketing and sales materials for such products (R.11); (iii) agreements concerning the manufacture of such products (R.12, 14);

(iv) communications concerning the manufacture of such products (R.13); (v) samples of such products (R.15); (vi) documents concerning disputes between defendants concerning the manufacture, sale or proprietary rights in such products (R.18); and (vii) photos or video recordings depicting such products (R.20). (Ex. A.)

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12. Defendant Demarest asserted similar objections to those of the Genstone defendants. He objected on the basis of his protective order motion to six of P l oks seven oy c' R interrogatories, providing no response to Interrogatories 2 ­4, which asked: (i) whether

Demarest currently manufactures any products from polyurethane that are designed, intended or marketed as achieving the look of rock, stone, stucco or brick (I.1); (ii) for a brief description of any such products and the process used to manufacture them (I.2); and (iii) whether Demarest has any patent applications pending or issued patents or has taken any other measures to protect intellectual property relating to such products or the process to manufacture them (I.3, 4). D m r tpoi d a l id r pne wt r pc t t " es n Po c ol to e a s rv e e d i t e os, i e et o h G nt e rj t ny me s h s e o e" , interrogatories 6 and 7, which asked for: (i) identification of products that Demarest has

produced or offered for sale containing polyurethane and designed, intended or marketed as achieving the look of rock, stone, stucco or brick (I.6); and (ii) the first date of manufacture and sale of such products (I.7). (Ex. B.) Demarest responded without objection only to Interrogatory 5, which asked him to identify anyone to whom he disclosed the proprietary technology that he saw when visiting the prototype manufacturing plant o P l oks r eesr (Id.) f oy c'pe cs . R d o 13. Demarest likewise refused to produce documents, other than those relating to the Genstone project, in response to Requests 6, 7, 9, 12, 13, 17-19, 20 and 22, seeking: (i) documents describing products that Demarest manufactures that are designed, intended or marketed as achieving the look of rock, stone, stucco or brick (R.6); (ii) documents describing D m r t e ott ds no m nf t e uhpout(. ;i) patents covering such e a ss f r o ei r aua u sc rdc R7 (iany e' f s g cr s ) i products (R.9); (iv) documents identifying the inventor or source of methods used to manufacture such products (R.12); (v) marketing materials for any such products (R.13); (vi) samples of such products (R.17); (vii) sales of such products (R.18); (viii) customer

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responses to such products (R.19); (ix) documents relating to any dispute among defendants concerning such products (R.20); and (x) photos or videos of such products (R.22). (Ex. B.) 14. As the result of their objections and self-imposed limitations, defendants failed to provide any information or produce any documents describing products that they currently offer or plan to produce. D f dn ' e slor pn t d cvr wt r pc t cr n o e nat r ua t e od o i oe i e eto ur t r e s f s s y h s e planned products includes the methods and processes used to manufacture such products, the intellectual property rights that defendants have asserted in such products, sales figures, product samples and marketing materials promoting the products. In addition, the Genstone defendants have refused to provide information concerning manufacturing processes, intellectual property protection and sales figures not only for their current products but also for any products that they ee m nf t e o of e fr a .A so nbl , e nat oj t n adae p t vr aua u d r f r o sl s hw e w df dn ' b cos n tm t o cr ed e o e s ei t s limit their discovery responses lack merit and should be overruled. ARGUMENT Defendants first ask the Court to limit their discovery obligations because certain information at issue in this case allegedly cannot constitute protectible trade secrets. The Court should decline de nat procedurally deficient request to determine merits issues concerning f dn ' e s the scope of PolyRoc' t d sc t T esoeo d cvr i dt m ndb t pre' ks r e er s h cp f i oe s e r i a e. s y e e y h ai e ts claims and defenses. Defendants cannot deprive PolyRock of the procedures and protections of Rules 12 and 56 by seeking an ad hoc determination of merits issues in connection with their discovery motion. But even if defendants could properly seek a merits ruling in their pending motion, their arguments ignore material factual disputes and misstate applicable law and must be denied for this reason as well.

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Defendants feign inability t r pn t P l oks i oe r us ut P l ok o e od o o R c' d cvr e et n l o R c s y s y q s i y further details the trade secrets at issue in this case. Defendants, who have previously failed to raise this issue despite ample opportunity, do not need and are not entitled to receive the information they seek in order to respond to the pending discovery requests. Finally, defendants disingenuously argue t tt y cno r pn t P l oks h h a e ant e od o o R c' s y discovery requests for fear of revealing their own trade secrets to a competitor. The Protective Order, entered after detailed and extensive review and negotiation between the parties, provides a p po co frr e er i om t n i l e dr g i oey D f dn ' m l rt t n o t d sc tn r ao d c sd ui d cvr. e nat purported e ei a e f i so n s e s confidentiality concern is a sham and confirms that their motion is interposed for improper purposes of delay and harassment, j ty g n w r o aonyses n cs tP l ok u i i a a a ft re'f ad ot o o R c. sf n d t e s y I. DEFENDANTS CANNOT OBTAIN A RULING ON THE EXTENT OF P L R C ' T A ES C E SI AD S O E YMO I N O Y O KS R D E R T N IC V R TO . Defendants argue that they must be permitted to limit their discovery responses because t y"ot d t t o R c cno pr et d sc t lm frm tr d c sdi a h cn n" h P l ok ant us r e er c i s o ae i l e n e e a y u a e a ts s o European patent application and because defendants believe that they never agreed (and are not otherwise obligated) to maintain in confidence or avoid using trade secret information of a financial nature obtained from PolyRock. (Mot. at 4, ¶ 7.) Defendants thus seek, in a motion for a protective order brought under Rule 26, a determination that certain aspects of Pol oks y c' R claims lack merit and cannot be pursued. The procedural rules do not provide for merits dt m nt n i t cus o dc i d cvr m t n ad e nat m t n aso t s e r i i sn h or f ei n i oe o os n df dn ' o o f lfrh e ao e e dg s y i e s i i i reason alone, as further explained below. Rule 26(b) provide t t [] ts a otnd cvr r a i aym tr t ts sh " a i m y b i i oe e r n n ae ... h i a p re a s y gdg t a r eatoh c i o df s o ay a y FdR CvP 2() ) T e l d g df eh e vntt lm r e ne f n pr . e. . i .6b( . h p ai s e n t l e a e t" . 1 e n i e pre' lm addf ss Cory v. Aztec Steel Building, Inc., 225 F.R.D. 667, 673 (D. Kan. a i c i s n e ne. ts a e

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20) dc i poe soeo d cvr bsduo c i sp di p i i' cm ln . 05 (ei n rpr cp f i oe ae pn lm l n ln fs o p i ) dg s y a e a tf at R l ac udrR l 2()i "ral cnt e"adad cvr r us i "os e d e vny ne u 6b s body osud n e e r i oe e et s cni r s y q de r eatfhr i` yps b i 'hth i om t nsught may be relevant to the claim or e vn it e s a os it t t n r ao o l e n i ly a e f i df s o aypr . Id. at 672. When the discovery sought appears relevant, the party e ne f n a y e t" resisting the discovery has the burden to establish the lack of relevance. Id. at 672-73 (resisting party must show that discove r us d"osnt o ewt nt soeo r eac a r e et de o cm i i h cp f e vne s y q e h e l defined under Fed. R. Civ. P. 26(b)(1), [or] ... io sc m ri le vne hth pt tl s f uh a n r eac t t o n a ga l a e ei harm occasioned by discovery would outweigh the ordinary presumption in favor of broad d cvr" i oe ) s y. Rule 26 nowhere suggests that the Court can decide issues concerning the merits of claims in addressing the scope of discovery. Instead, motions directed at the merits of claims must be brought under Rules 12 or 56 and are subject to the procedural safeguards and standards afforded by those rules, including the requirements that a Rule 12(b)(6) motion can be granted only if there is no set of facts under which plaintiff could prevail, Ruiz v. McDonnell, 299 F.3d 1173, 1181 (10th Cir. 2002), and a Rule 56 motion only if there are no material issues of disputed fact and the movant shows entitlement to judgment as a matter of law, Diaz v. Paul J. Kennedy Law Firm, 289 F.3d 671, 674-5 (10th Cir. 2002). T e orsol r ue e nat h C uthu e s df dn ' d f e s invitation to decid t m rs f o R c' c i s their motion for protective order. See e h e to P l oks lm on e i y a Velasquez v. Frontier Medical, Inc., 229 F.R.D. 197, 201 nn.2-3 (D.N.M. 2005) (declining to decide on discovery motion whether employees were similarly situated for purposes of di r i t nc i bcued cvr m t nw snt t apor t vh l t dc e a s i n i lm eas i oe o o a o " e prpie eie o ei " c m ao a s y i h a c d merits issue); CHARLES ALAN WRIGHT, ARTHUR R. MILLER & RICHARD L. MARCUS, FEDERAL

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PRACTICE

AND

PROCEDURE § 2008 (2d ed. 1994) ( i oe i ntob dn dbcueit " s vr s o t e ei eas Dc y e

r a so c i o df s t ts e g hlne a i uf i t) e t t a lm r e neh ibi caegd sn fc n " le a e a n l s ie . Even if the Court were inclined to undertake a summary judgment style merits analysis in dc i df dn ' o o,hirequest t l it sb cm tr f o R c't secret ei n e nat m t n t r dg e s i e o i th uj t ae o P l oksr m e e t y ade claims would fail. Strong legal authority and issues of fact prevent defendants from obtaining a sm a dt m nt n t tayo P l okstrade secrets disclosed in a foreign patent u m r e r i i h n f oy c' y e ao a R application were not thereafter protectible. Colorado, whose decisional law applies to the state l apc o p i i' c i s recognizes that protection exists for misappropriation of a set f ln fs lm , w s a tf a information based upon breach of confidence. Kodekey Electronics, Inc. v. Mechanex Corp., 486 F.2d 449, 455 (10th Cir. 1973 (aesc t rt t ni aa s "r c o f t ad ) t d er po co s gi t be h f ah n r e ei n a i r r es l m as feri ao e s er " Ovation Plumbing, Inc. v. Furton, 33 P.3d e e ni e en o l n g nt r sc t ; ph b a n h' e) 1221, 1224 (Colo. App. 2001) (same, citing Restatement of Torts § 757). Confidentiality

obligations can be express (as in the case of a confidentiality agreement concerning the disclosure of information) or implied from the circumstances of disclosure. RESTATEMENT (FIRST) OF TORTS § 757(b), cmt. j (1939) ( " whether or not there is a breach of contract, the rule stated in this Section [757(b)] subjects the actor to liability if his disclosure or use of another's trade secret is a breach of the confidence reposed in him by the other in disclosing the secret to h " i ). m The Courts widely recognize that where information is disclosed to defendants

confidentially, it is no defense for defendants to contend after the fact that they could have learned the information elsewhere. ROGER M. MILGRIM, MILGRIM ON TRADE SECRETS, § 1.01[1] at 1-1 ( aycutwlr et t "ob d oe e df s o `ul'nom t nw e 9 " n or i e c h cbl -tgt r e ne fpb c i r ao hr m s lj " e e h e i f i e the defendant has procured the trade secret in question from plaintiff, and not from public sucs) or " e .Applying this principle, the Supreme Court of Colorado has protected information

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disclosed pursuant to an obligation of confidentiality even though the information had been publicly disclosed (as defendants here allege) in a foreign patent application. Julius Hyman & Co. v. Velsicol Corp., 123 Colo. 563, 605-06, 233 P.2d 977, 999-1000 (1951) (disclosure of trade sc ti ap ct n fr a n i G et ra ad t roe n on i "i nteeeh er sn plaoso pt t n r Bii n o e fr g cute d o r i t e i i es a tn h i rs d lv e i i da df dn hr f m t icn at l n f ui y b gt n ntoue ln fs n v ul e nat e r h r ot c a ad i c r ol ao" o t s p i i' di e s e o e r u d a i i a tf trade secrets). Whether particular subject matter constitutes a trade secret also raises an issue of fact that is widely recognized as inappropriate for summary determination prior to trial. Ovation

Plumbing, 33 P.3d at 1224 ( acntu s t d sc ts qet n fat) The disputes " tost e ar e er ia uso o f . . Wh it a e i c" o f tht e nat m t ni p ct i l et et t n nt eo ayt d sc t f a t df dn ' o o m la s n u h x n ad a r f n r e er s c a e s i i e cd e e u a e disclosed in the foreign patent application to which they cite; the extent to which the application was known in the trade or industry at the time of the disclosure to defendants, see RESTATEMENT (FIRST) OF TORTS § 757, cmt. b; t i pco t t i l ue n o R c't d sc tlm ; h m at fh d c sr o P l oksr e er c i s e a so y a e a and whether defendants knew of or saw the patent application at issue before they sought and obtained the confidential disclosures from PolyRock. Defendants similarly cannot obtain a merits determination on their contention that the pre' of etly gem n d ntx n t f ac lnom t n PolyRock alleges in a i cni n at ar et i o et d o i ni i r ao. ts d ii e s d e n a f i the Second Amended Complaint that the proprietary information defendants received in cni ne ad m sprpie i l e " nni i om t n cne i P l oks of ec n i por t n u d f ac l n r ao" ocr n oy c' d a ad c d i a f i ng R business. (E.g., 2A Cplt. ¶¶ 2, 53, 3 D f dn ' nupr d ru ethth pre' 32, 13. e nat uspot a m n t t a i ) e s e g a e ts confidentiality agreement does not cover such information cannot be sustained. The

cni n at ar m n cvr " fr ao r an t t dvl m n ad auat i " of etly ge et oe d i om t n e t go h ee p etn m nf u n d ii e s e n i li e o c rg o t pouto P l oks r eesr (2A Cplt. ¶ 22.) Financial information including, for fh rdc f o R c'pe cs . e s y d o

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example, information about manufacturing costs, falls squarely within this definition or, at the least, a factual dispute exists precluding a summary decision on the applicability of the confidentiality agreements to such information. Moreover, even if there were no express

contractual obligation of confidentiality concerning financial information, defendants had an implied obligation not to misappropriate information received in confidence from PolyRock. RESTATEMENT (FIRST)
OF

TORTS § 757(b). Accordingly, even if the Court were to review the

m rso P l oksc i frm sprpii o cni n a f ac li om t n i e t f oy c' lm o i por t n f of etl i ni n r ao n i R a a ao d i n a f i deciding df dn ' i oe m t n df dn ' ru etht uhi om t ncno b e nat d cvr o o, e nat a m n t sc n r ao ant e e s s y i e s g a f i t sb co P l oksr e er claims would fail. h uj t f o R c't d sc e e y a et In sum, defendants cannot avoid their discovery obligations by attacking the merits of P l oksc i s Is a, oy oki etl t d cvr o a m tr r eatoi o R c' lm . nt d P l c s n td o i oey n l ae e vn t t y a e R ie s l ts l s claims. Because the discovery requests subject to defedn ' o o se r eatnom t n nat m t n ek e vn i r ao s i l f i (as discussed below), defendants' motion fails and the Court should deny it. II. DEFENDANTS D N TN E F T E S E II A I NO P L R C ' O O E D U H R P C FC T O F O Y O KS TRADE SECRETS TO PROVIDE DISCOVERY RESPONSES. Although defendants contend that t yne fr e seict no P l okst d h ed ut r pc i i f o R c' r e e h f ao y a secrets in order to respond to the pending discovery requests, they fail to identify any reason supporting this demand. A review of the discovery requests at issue plainly shows that

defendants do not need any further information in order to respond. Defendants claim that they cannot respond to interrogatories asking for basic information about defendants and their own products, including: (i) (ii) whether defendants manufacture products out of polyurethane that are designed, intended or marketed as achieving the look of rock, stone, stucco or brick; an identification or brief description of such products;

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(iii) identification of the claimed inventor and those with knowledge of the process or method that defendants use to manufacture such products; (iv) whether defendants have any patent applications pending or issued patents covering their manufacturing process or method; (v) identification of anyone who has manufactured such products for defendants;

(vi) the sales revenue and profit on such products; (vii) the first date of sale of such products; and (viii) t i n t o t pr nw opea ddf dn ' a en m h d ty fh e o h r r e nat m r t g aterials for such e ei e s pe e s ki products. (Supra at 4, 6, ¶¶ 9, 12.)P l okseus fr rdco t w i df dn oj t o R c'r et o pout n o h h e nat b clikewise y q s i c e s e seek information aot e natad e nat o n rdc , budf dn n df dn ' w pout including: e s e s s (i) (ii) documents describing df dn ' o ue aea ic l t ebi i pout e nat pl r hn rf i s n u d g rdc e s y t tia o ln s and the process used to manufacture them; communications and agreements concerning manufacturing or techniques for manufacturing such products;

(iii) documents identifying the inventor of the method defendants use to manufacture such products; (iv) product samples or photos or video recordings of products; (v) patents or patent applications covering such products;

(vi) purchase orders for and documents showing the sales of such products; (vii) documents reflecting customer reactions to such products; and (viii) documents concerning disputes between defendants concerning the manufacture, sale or proprietary rights in such products. (Supra at 4-7, ¶¶ 10, 11, 13.) The requested information is relevant to show whether the manufacturing process that df dn ue w sdr e f m P l okspoes whether there is any evidence of e nat s a e vd r e s i o o R c' rcs y , i eedni et n f e nat poes whether df dn cm ui t P l oks n pnetn n o o df dn ' rcs and d v i e s e nat o m n a d o R c' e s ce y process to those who developed their process. S c f t s r ov ul r eato oy oks uh a o a bi s e vn t P l c' cr e o y l R

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claims that defendants misappropriated its trade secrets. Similarly, the requested information concerning product orders, sales and customer reactions is relevant to establish damages. Although defendants claim to be unable to respond to the discovery at issue unless they r e e ut rpc i t n f o R c't d secrets, they fail to explain why they need such e i fr e seic i o P l oksr e cv h f ao y a further details in order to provide information about their own products and practices. Defendants admit that they understand and are able to provide the information that PolyRock seeks with respect to the so-cld G nt e rj tudr kn n 03 T e is no reason to ae " es n po c ne ae i 20. hre l o e" t believe that defendants are unable to similarly respond with respect to information regarding products that they currently manufacture. The more l i l xl ao fr e nat r us for more information is that they o c ep nt n o df dn ' e et ga a i e s q hope to delay these proceedings and, when u i a l r u e t r pn t P l oks lm ty e i d o e od o o R c' t e qr s y discovery, to avoid giving complete information and instead tailor their responses based upon their evaluation of the extent to which their manufacturing processes utilize PolyRock' t d sr e a secrets. D f dn 'n n t cue e yiso nb t if l edsi hv gP l oks e nat i eto as dl s hw y h rau , ep e ai oy c' e s t a e ir t n R discovery requests since July, to claim inability to respond without fr e dtlo P l oks ut r e i f oy c' h as R trade secrets until the (substantially extended) September 19 due date for their discovery responses. Defendants failed to raise the issue at the August 18 Scheduling Conference (at w i t pre hdt opr n yt bi m tr o d cvr sqec gt t C ut h h h a i a h pot i o r g ae f i oe euni o h ors c e ts e ut n ts s y n e ' attention) and have made no effort to serve discovery requesting the information that they claim to need. ( e nat i etoc a dl ifr e ei ne b t icn ne asro o D f dn 'n n t r t e y sut r v ecd y h r ot ud s t n f e s t ee a h d e i ei cni n at cne snr pni t P l oks i oeydsi t et o t areed of etly ocr i e od g o oy c' d cvr ep e h n y fh g d ii n s n R s t e r e Protective Order, as discussed below.)

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D f dn ' rpslotl t io nd cvr r pne bsduo a oe pc i e nat pooat ao h r w i oe e oss ae pn m r seic e s ir e s y s f i n f ao o P l okst d sc t i afox-guarding-the-henhouse procedure utterly d ti t n f oy c' r e er s s e ic i R a e inconsistent with the adversary process. PolyRock is not required to rely uo df dn 'e pn e nat sl e s f analysis to obtain evidence to support its claims. PolyRock is instead entitled to discover relevant evidence (and information about products allegedly manufactured using

misappropriated trade secrets is unquestionably relevant t P l oks lm ) and then seek a o oy c' c i s R a decision from an impartial finder of fact (not defendants) concerning the extent to which df dn ' rdc a bsd pn m sprpii o P l oksr e er s e nat pout r ae uo a i por t n f o R c't d sc t e s s e a ao y a e. Defendants a ocm lnt t o R c' d cvr r us a oe ybodwt l o p i h P l oks i oe e et r vr ra i s a a y s y q s e l h respect to the products of defendants about which PolyRock seeks information. The discovery requests seek information about products "ei e,n ne o m re da ah v g look ds nd i edd r a t s ci i the g t ke en o rc,t es co r r k and having "oyr hn" a primary constituent. (Exs. A, B.) foks n,t c o bi " o u c pl e ae as ut Defendants, who use similar language in their marketing materials, cannot credibly contend that the description is vague or that they do not understand it. (See Ex. C (Genstone brochure advertising that its products " ci eh l k f R c, t eSuc o Bi ")Defendants A h v t o o: ok So , t o r r k) e e o n c c . likewise cannot complain that the products about which PolyRock seeks information are ie vn t P l oks lm . The products at issue bear a close resemblance to the products r l ato oy c'c i s re R a that PolyRock markets (and showed defendants how to manufacture) and defendants themselves admit that they sell their products in competition with PolyRock. (2A Cplt. ¶ 28; Mot. at 7, ¶ 13.) In sum, df dn f loso t thyne fr e dtl cne i P l oks e nat a t hw h t e s i a e ed ut r e i ocr n o R c' h as ng y trade secrets to respond to the pending discovery requests. Because the matters upon which PolyRock seeks discovery easily satisfy the broad relevance standard of Rule 26 and defendants

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fail to carry their burden to show that the discovery should not be permitted, the Court should dn df dn ' o o ii ete . ey e nat m t nnt n r y e s i s it III. D F N A T ' P R O T D CONFIDENTIALITY CONCERNS ARE A EE D N S U P R E SHAM. D f dn 'i l ru etadoe ut r revealing of the true motivation underlying e nat f a a m n n n fr e e s n g , h their motion, is that they fear competitive harm if required to produce information to PolyRock about their products and manufacturing processes. When defendants raised the same issue more than a month ago, the parties negotiated and moved for entry of a proposed Protective Order (entered by the Court on September 8) that all parties agreed provided adequate protection for confidential information disclosed during these proceedings. The Protective Order, among other things, allows defendants to restrict distribution of confidential, proprietary or trade secret i om t nt P l oks one adi otd epr.(Supra at 3, ¶ 7.) In light of the n r ao o oy c' cusl n t u i xe s f i R s se t availability of such protection, which defendants themselves sought and agreed was sufficient, df dn ' s ro o cni n at a a aiuo w i t ao d cvr further shows e nat as t n f of etly s bs pn h h o vi i oe e s ei d ii s c d s y that their protective order motion is made for the improper purposes of harassing PolyRock and to delay these proceedings. I t s c cm t cst C ut hu dn df dn ' o o fr rt t eodr n h e i u s ne,h orsol ey e nat m t n o po cv re e r a e d e s i ei . Moreover, pursuant to Fed. R. Civ. P. 26(c) and 37(a)(4), the Court should require defendants to r m us P l oks t re'f s costs incurred in responding to their motion. e br o R c'aonyse and i e y t e CONCLUSION F r lo t r sn s t ,h C ut hu dn df dn ' o o fr rt t e o a fh e os te t orsol ey e nat m t n o po cv l e a ad e d e s i ei odrni ete adet a odr eu i df dn t r m us P l oks es re i t n r y n n r n re r in e nat o e br o R c' f and s it e q rg e s i e y e costs in responding to their motion.

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DATED: October 7, 2005

Respectfully submitted

s/ John A. DeSisto John A. DeSisto FEATHERSTONE DESISTO LLP 600 17th Street, Suite 2400 Denver, Colorado 80202 Telephone: (303) 626-7100 Facsimile: (303) 626-7101 E-mail: [email protected] E-mail: [email protected] Attorneys for Plaintiff PolyRock Technologies, LLC

CERTIFICATE OF SERVICE I hereby certify that on October 7, 2005, I electronically filed the foregoing with the Clerk of Court using the CM/ECF system, which will send notification of such filing to the following e-mail addresses: Susan M. Hargleroad Pendleton, Friedberg, Wilson & Hennessey, P.C. [email protected] Kurt S. Lewis Lewis Scheid LLC [email protected]

s/ John A. DeSisto

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