nMotion, Inc. v. Environmental Tectonics Corp.

nMotion, Inc. (plaintiff) wanted to acquire flight-simulation-game software known as Pro Pilot, but nMotion needed a partner to assist in the acquisition. Environmental Tectonics Corporation and sister company ETC-PZL Aerospace Industries, SP (collectively, ETC) (defendants) designed, manufactured, and sold airplane-flight-simulation software, including a General Aviation Trainer (GAT). nMotion approached ETC about partnering to acquire Pro Pilot and made a business proposal that Pro Pilot could be used to enhance certain visual aspects of the GAT. During meetings between nMotion and ETC representatives, ETC signed nondisclosure agreements that prohibited ETC from disclosing or using nMotion’s confidential information. nMotion and ETC never finalized an agreement to partner in the Pro Pilot acquisition, but ETC subsequently bought Pro Pilot alone. nMotion later learned that ETC planned to release an updated simulator called GAT 2, which incorporated Pro Pilot’s code. nMotion brought an action against ETC in federal court in Oregon, asserting that ETC had stolen nMotion’s idea to acquire Pro Pilot and use Pro Pilot to enhance the GAT. nMotion asserted that ETC had breached the nondisclosure agreement by using nMotion’s ideas. In response, ETC argued that any ideas or information used by ETC had been contained in nMotion’s initial publicly made business proposal to ETC, which was not subject to the nondisclosure agreement. nMotion never identified any specific confidential information that it had disclosed to ETC beyond the terms of the business proposal. In addition to nMotion’s breach-of-contract claim, nMotion also asserted an unfair-competition claim against ETC based on Oregon’s corporate-morality doctrine. The district court granted summary judgment in ETC’s favor on both claims, finding that (1) nMotion had not shown a breach of the nondisclosure agreement because nMotion could not identify specific confidential information shared with ETC, and (2) the corporate-morality doctrine was obsolete following the enactment of the Oregon Uniform Trade Secrets Act. nMotion appealed.