Applied Energy Loses Home Court Advantage in Trade Secret Case

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Applied Energy Technologies, Inc. (AET) is a Michigan startup that makes racking systems for solar panels. 

In May of 2009, AET sued Solar Liberty Energy Systems, Inc. (Solar Liberty), a Buffalo, New York solar panel distributor and installer, seeking a declaratory judgment that AET had not breached a non-disclosure agreement (NDA) the parties had entered into.  The suit was filed in U.S. District Court for the Eastern District of Michigan.

According to the complaint (applied_energy_complaint.pdf), an AET predecessor-in-interest called Latitude Energy Structures, LLC (LES) agreed to design certain ballasted solar panel racking systems for Solar Liberty, and the two parties signed the NDA (applied_energy_complaint_Ex A.pdf) in connection with the agreement.

The complaint alleges that LES presented several new design concepts to Solar Liberty in late 2008 and a prototype of a design in early 2009.  Subsequently, LES assigned all its rights to AET, and Solar Liberty told AET that it had decided to use a racking system from a another supplier.

According to the complaint, while both parties were at the American Solar Energy Society’s National Solar Conference the President of LES told some prospective AET customers that AET stole LES’s proprietary racking system design. 

A subsequent letter from LES’s attorney accused AET of violating the NDA by misappropriating and publicly disclosing LES’s proprietary designs in AET’s racking system.  AET filed the suit shortly thereafter.

LES moved to dismiss or transfer venue to the Western District of New York.  In August, the court granted the motion (applied_energy_order_transfer.pdf) because the NDA provided that any action would be brought “in the home jurisdiction of the other party.”

AET moved for reconsideration of the decision, and last month the court denied the motion (applied_energy_order_reconsideration.pdf), finding no “palpable defect” in its August ruling.  So the case will move to LES’s home court in western New York.

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Eric Lane

Eric Lane, the founder and principal of Green Patent Law, is an intellectual property lawyer and registered U.S. patent attorney in New York and is a member of the bar in New York and California. Eric has more than two decades of experience working with wind, solar PV, CSP, biofuels, and geothermal, energy storage technologies, carbon capture and sequestration, medical devices, data communications, mechanical, chemical, internet and software.