Lubricant formula trial goes to jury in Missoula — American Eagle wins lawsuit

Jerry Lindman invented a special oil he thought could be his ticket to fortune, but he needed someone to market it for him.

Brad Heckerman, CEO of American Eagle Instruments Inc. of Missoula, thought Lindman’s oil might be his ticket, too. TekLube, as Lindman called it, was safe to use on dental equipment, which AEI manufactures, and it could be sterilized along with the instruments in a high-heat autoclave.

By ERICKA SCHENCK SMITH of the Missoulian

http://missoulian.com/articles/2004/02/13/news/local/news05.txt

In 1996, the two men entered into an agreement. American Eagle Technologies, a spinoff of American Eagle Instruments, would market the oil.

By all accounts, things were going fairly well for at least a few years. Lindman’s consulting fees from American Eagle Technologies rose from $48,000 a year to $72,000. American Eagle Technologies scored a deal with Kraft Foods to provide lubrication for the equipment at its San Leandro, Calif., plant.

But in the fall of 2001, before the Kraft project was finished, Lindman left and took the formula for TekLube with him. He said his contract was up and that the formula was a trade secret to which American Eagle never had the rights. He started negotiations with another company.

American Eagle sued. A federal court trial started this Monday in Missoula; and, as of late Thursday evening, the jury was still out.

American Eagle claimed that Lindman, or his company Clinical Technologies Inc., had broken three separate contracts, then willfully and maliciously misappropriated trade secrets by discussing the formula with Nowear Technologies.

Lindman countersued, saying that American Eagle violated contracts and interfered with his business relations.

Along the way, Lindman was ordered to file the formula with the court. He filed a false report the first time around, and U.S. District Judge Donald Molloy issued a no-bond warrant for his arrest. Ultimately, he filed the true formula.

But American Eagle attorney Donald C. Robinson said it was just one example of Lindman’s deceit.

Another example – Robinson contended and Lindman strongly disputed – was the business contracts themselves.

Lindman and his wife, Sue, both said they believed they entered a five-year contract with American Eagle. They had the documents to prove it, in the original envelope and signed by all parties.

American Eagle says it was a 10-year contract. The company had the documents, again signed by all parties.

Robinson said the five-year documents were drafts trotted out by Lindman.

Lindman said he never believed he was signing a 10-year agreement with clauses requiring him to turn over the formula if the American Eagle Technologies board of directors asked. In his countersuit, he also contended that if it was a 10-year agreement, American Eagle should have been paying him for the past two years.

And then there was the matter of what American Eagle was supposed to get out of the deal.

Lindman said they bought the rights to use his product, TekLube. They never had the right to the technology behind it. And the products the company sold under the names ProForm and Friction Relief, were merely variations of TekLube, meaning they had no rights to the technology behind them, either.

Heckerman said that wasn’t the way he understood it at all. First off, he said ProForm and Friction Relief were different enough from TekLube to make them separate products. In addition, he said he thought American Eagle was buying "a process" – in other words, the technology.

The four-day trial was full of scientific explanations of the products and, in general terms, the process behind their making.

But what it all came down to, attorneys for both side said in their closing arguments, was whom the jury should believe.

Robinson compared Lindman to a Las Vegas magician.

Lindman’s attorney Fred Simpson implied that American Eagle sued just to get its hands on the formula.

The jury heard evidence supporting both and had to decide which was the most likely.

Reporter Ericka Schenck Smith can be reached at 523-5259 or at [email protected]

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Missoula company wins lawsuit

By The Associated Press – 2/15/04

http://helenair.com/articles/2004/02/15/montana/a10021504_02.txt

MISSOULA (AP) — A federal jury has awarded a Missoula company nearly $1.3 million in its civil case against a former employee over a special lubricating oil.

American Eagle Instruments Inc. filed the suit against Jerry Lindman, his wife Sue and their company, Clinical Technologies Inc.

The jury found that the Lindmans and their company had violated several business agreements with American Eagle, including misappropriation of the TekLube technology that Lindman invented.

Lindman and American Eagle, which makes dental instruments, entered into an agreement in 1996 whereby a spinoff division called American Eagle Technologies would market the lubricant invented by Lindman.

American Eagle marketed the lubricant and paid Lindman consulting fees as high as $72,000 per year. The agreement also led to a large deal with Kraft Foods to provide lubrication at the company’s San Leandro, Calif., plant.

However, before that deal could be completed, Lindman and American Eagle parted ways. Lindman took the TekLube formula with him, claiming that his contract was up and that TekLube was a trade secret that American Eagle had no rights to.

American Eagle then sued, claiming the Lindmans and their company violated three different contracts and misappropriated trade secrets by discussing the formula with another company.

The jury found in American Eagle’s favor on every claim.