Larry R. Moore v. KULICKE & SOFFA INDUSTRIES, INC. On Appeal From the United States District Court For…

PRECEDENTIAL
Filed February 3, 2003
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 02-1466
LARRY R. MOORE,
Appellant
v.
KULICKE & SOFFA INDUSTRIES, INC.
On Appeal From the United States District Court
For the Eastern District of Pennsylvania
(D.C. No. 98-cv-5582)
District Judge: Honorable J. Curtis Joyner
Submitted Under Third Circuit LAR 34.1(a)
November 5, 2002
Before: BECKER, Chief Judge, McKEE and HILL*
Circuit Judges.
(Filed: February 3, 2003)
WILLIAM A. MILLER, ESQUIRE
2390 E. Camelback Rd., Suite 225
Phoenix, Arizona 85016
Counsel for Appellant
_________________________________________________________________
* The Honorable James C. Hill, United States Circuit Judge for the
Eleventh Circuit Court of Appeals, sitting by designation.
WILLIAM J. LEHANE, ESQUIRE
WILSON M. BROWN, III, ESQUIRE
LORI A. JACKSON, ESQUIRE
AMY B. MINER, ESQUIRE
Drinker Biddle & Reath, LLP
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103
Counsel for Appellee
OPINION OF THE COURT
BECKER, Chief Judge:
This is a trade secret misappropriation case arising under
our diversity jurisdiction and governed by Pennsylvania
law. At trial, the defense to the misappropriation claim was
the "independent development" of the allegedly
misappropriated technique. This appeal by plaintiff-

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appellant Larry R. Moore ("Moore") from a judgment entered
on a jury verdict in favor of the defendant Kulicke & Soffa
Industries, Inc. ("K&S") presents the vexing question
whether, in Pennsylvania trade secret law, independent
development is an affirmative defense so that the proponent
(here K&S) bears not only the burden of production but
also the risk of non-persuasion, or whether raising the
defense only shifts onto the proponent the burden of going
forward, with the risk of non-persuasion remaining with the
plaintiff. Although the question is close and difficult, we
believe that Pennsylvania would conclude that only the
burden of production is shifted when the defendant raises
independent development, and that the ultimate burden of
persuasion remains on the plaintiff to prove that the
defendant did not arrive at a technique similar to the trade
secret through its own independent development. Since
Moore’s appeal challenges the jury instruction, and this is
what the District Court charged, we will affirm the
judgment.
I.
K&S is a manufacturer and marketer of wire bonding
equipment to companies involved in making computer
2
chips for use in connecting the extremely small wires from
semiconductor terminals to other components of computer
chips. In 1981, Moore, an engineer, submitted a technical
paper to a K&S consultant discussing a specific design
approach and methodology for achieving greater speed and
accuracy for the type of wire bonding machines that K&S
manufactured. After reviewing the paper, K&S informed
Moore that it had no interest in the information contained
in his proposal. However, some time later, Moore learned
that K&S was using in its equipment a wire-bonding
technique that he believed was similar to the technique and
information contained in the paper he had submitted.
Moreover, Moore asserted that K&S had also obtained a
patent using information similar to that contained in the
proposal he had submitted to K&S.
Moore thereupon brought an action against K&S in the
District Court for the Eastern District of Pennsylvania,
setting forth a claim for trade secret misappropriation
under Pennsylvania state law and a federal claim for
copyright infringement. At the conclusion of the trial, the
District Court instructed the jury:
If you find that the plaintiff has proven by a fair
preponderance of the evidence that the defendant used
the plaintiff ’s trade secret, and that the defendant did
not arrive at the relevant wire bonding technique
through independent invention, then you should find
in favor of the plaintiff. On the other hand, if you
determine that the wire bonding technique used by the
defendant was developed through defendant’s own
independent efforts and invention, then you must find

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in favor of the defendant.
Perhaps responding to the statement of counsel for K&S
that "[b]urden of proof is a little slippery here," the District
Court had vocalized some concern about where to place the
burden of proving independent development, representing
that it had adopted the jury instruction proposed by K&S
but "without the burden of proof on there." However, the
language of the jury charge placed the burden of proving
independent development on the plaintiff: As noted above,
the District Court asked the jury, in the charge, to consider
whether "the plaintiff has proven by a fair preponderance of
3
the evidence that the defendant used the plaintiff ’s trade
secret, and that the defendant did not arrive at the relevant
wire bonding technique through independent invention ."
(emphasis added). Moreover, the Court, in the generalized
portion of the charge, placed the burden of proof on Moore.1
Thus, under the Court’s trial procedure, the burden of
production shifted to K&S to present some evidence of
independent development, but Moore, under the charge,
retained the burden of proving independent development by
a preponderance of the evidence.
Ultimately, the jury answered "no" to the following
interrogatory:
Do you find that Plaintiff has proven by a
preponderance of the evidence that he owned a trade
secret which was disclosed in confidence to Defendant
which Defendant was not entitled to use or disclose
without Plaintiff ’s permission?
Although the interrogatory did not specifically mention
independent development, the District Court had instructed
the jury in the charge, set forth supra, to consider whether
K&S independently developed the technique as part of its
determination of whether the defendant "used" the
plaintiff ’s trade secret. By answering "no" to this
interrogatory, the jury thus rendered a verdict for K&S on
the trade secret misappropriation claim. Moore moved for a
new trial under Rule 59 of the Federal Rules of Civil
Procedure, which the District Court denied. This appeal
followed.2
_________________________________________________________________
1. The District Court instructed the jury that Moore had to prove his
case by a preponderance of the evidence, showing the following:
First the plaintiff had valuable trade secrets. Second, the plaintiff
communicated the trade secrets to the defendant in confidence and
the defendant violated that confidence and misappropriated the
trade secrets.
Third, the defendant actually used the secret information in breach
of that confidence. And, fourth plaintiff suffered harm as a direct
and proximate result of the defendant’s use of the plaintiff ’s trade

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secrets.
2. It is fundamental that to make out a claim for the misappropriation of
a trade secret under Pennsylvania law, the plaintiff must establish the
4
The District Court had jurisdiction pursuant to 28 U.S.C.
S 1332 and 28 U.S.C. S 1338. We have appellate jurisdiction
_________________________________________________________________
existence of a trade secret and the disclosure of that secret in a
confidential relationship, see discussion in text infra. K&S asserts that
any error in the jury instruction was harmless because the jury
answered "no" to the interrogatory addressing the existence of a trade
secret and its disclosure. This interrogatory read:
Do you find that Plaintiff has proven by a preponderance of the
evidence that he owned a trade secret which was disclosed in
confidence to Defendant which Defendant was not entitled to use or
disclose without Plaintiff ’s permission?
Because the jury answered "no" to this question, it never reached the
interrogatory that implicated independent development:
Do you find that Plaintiff has proven by a preponderance of the
evidence that the Defendant misappropriated Plaintiff ’s trade
secret?
The viability of this position depends on K&S’s theory that the jury
found that Moore had not demonstrated that his technique was a trade
secret or that he did not disclose it to K&S -- the first two elements of
trade secret misappropriation which must be shown before independent
development is ever reached. However, the initial question posed to the
jury included an inquiry into whether K&S was entitled to use Moore’s
trade secret, and the jury charge, set forth in the text, linked
independent development to the element of use. "Use" is tied to
independent development because the tort of trade secret
misappropriation prohibits the wrongful use of another’s trade secret;
the defendant did not purloin the trade secret if it independently
developed the technique. See discussion in text infra.
The interrogatory appears to have conflated the first three elements of
trade secret misappropriation. In other words, the District Court did not
ask the jury to specify whether it answered "no" because it found that
Moore’s technique was not a trade secret, or because he had not
disclosed the trade secret to K&S in a confidential relationship, or
alternatively because K&S had not "used" the trade secret since it
independently developed the same technique. Morever, the District Court
charged the jury about "independent development" in the context of
discussing both of the interrogatories,
In both two and three [the interrogatories set forth], if your answer
is no, obviously the plaintiff has not met his burden of proof. . . . Let
me instruct you now on the essential elements of a trade secret.
Thus, because the jury may have considered whether K&S had
independently developed the technique in answering the interrogatory,
we conclude that the alleged error in jury charge was not harmless.

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5
pursuant to 28 U.S.C. S 1291. We exercise plenary review
where the District Court erred in formulating or applying
the proper legal precept regarding the burden of proof in a
jury instruction. See Hook v. Ernst & Young, 28 F.3d 366,
370 (3d Cir. 1994) ("Where a jury charge is attacked for
legal error we must determine whether ‘the charge[taken]
as a whole fairly and adequately submits the issues in the
case to the jury.’ We will reverse ‘only if the instruction was
capable of confusing and thereby misleading the
jury.’ "(quoting Bennis v. Gable, 823 F.2d 723, 727 (3d Cir.
1987)) (alteration in original) (citation omitted)).
II.
A.
At the risk of carrying coals to Newcastle, we discuss
briefly the dual meaning of the term "burden of proof." We
note that "[t]he two distinct concepts [embodied in the term
‘burden of proof ’] may be referred to as (1) the risk of
nonpersuasion, sometimes called the ‘burden of
persuasion,’ and (2) the duty of producing evidence (or the
burden of production), sometimes called the burden of
going forward with the evidence." Fleming James, Jr. &
Geoffrey C. Hazard, et al., Civil Procedure S 7.12 (5th ed.
2001). These two concepts can be distinguished by the fact
that "[u]nlike the burden of persuasion, the burden of
production can shift back and forth between parties during
the trial." Larry L. Teply & Ralph U. Whitten, Civil
Procedure 855 (2d ed. 2000).
At the outset of a trial, the plaintiff has both the burden
of production and the burden of persuasion for each
element of the prima facie case. Once the plaintiff has met
this burden, the defendant may proceed with an affirmative
defense. At this point, the defendant has both the burden
of production and the burden of persuasion for the
affirmative defense. Often, "courts have confused the ideas
of affirmative defense and negation by affirmative proof."
Fleming James, Jr. & Geoffrey C. Hazard, et al., Civil
Procedure S 4.5 (5th ed. 2001). A denial, as opposed to an
affirmative defense, will simply shift the burden of
6
production to the defendant to present evidence that would
tend to rebut the plaintiff ’s case, while the burden of
persuasion remains with the plaintiff. If the defendant
cannot meet its burden of going forward by presenting
some evidence, the plaintiff has met its burden of
persuasion. But if the defendant presents some evidence to
support the denial, the fact-finder weighs the evidence,
bearing in mind that the plaintiff retains the ultimate
burden of persuasion. K&S asserts that alleging
independent development is a denial which shifts the
burden of production but not the burden of persuasion to

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the defendant. In contrast, Moore would have us conclude
that independent development is an affirmative defense and
K&S has both the burden of production and persuasion.
B.
1.
Under Pennsylvania law, the prima facie elements of the
tort of misappropriation of a trade secret are derived from
the Restatement (First) of Torts S 757. Van Products Co. v.
General Welding & Fabricating Co., 419 Pa. 248, 258, 213
A.2d 769, 774 (1965).3 Those elements are as follows: (1)
the existence of a trade secret; (2) communication of the
trade secret pursuant to a confidential relationship; (3) use
of the trade secret, in violation of that confidence; and (4)
harm to the plaintiff.4
_________________________________________________________________
3. The Restatement (First) of Torts S 757 states:
one who discloses or uses another’s trade secret, without a privilege
to do so, is liable to the other if (a) he discovers the secret by
improper means, or (b) his disclosure or use constitutes a breach of
confidence reposed in him by the other in disclosing the secret to
him.
Van Products, 213 A.2d at 774 n. 4.
4. The elements of a claim for misappropriation of a trade secret are
usually stated in terms of the employer’s burden. See Van Products, 213
A.2d at 775. ("To be entitled to equitable relief, the burden was on [the
employer] to show: (1) that there was a trade secret, or, as in the case
at bar, a secret process of manufacture; (2) that it was of value to the
7
K&S contends that evidence of independent development
rebuts the third element of the prima facie case: that the
defendant "used" the plaintiff ’s trade secret. It bases this
contention on the meaning of "use" within the context of
trade secret law. The tort of trade secret misappropriation
provides inventors and owners with a state law based
alternative to the patent system. See Van Products, 213
A.2d at 778 ("The inventor is put to his election; he can
keep his secret hidden and run the risk of independent
discovery by others, or he can disclose his secret to the
world . . . and receive in return from the government a
monopoly for 17 years."). Thus, unlike the patent system,
which provides a remedy for any use of a technique similar
to the patented technique, trade secret misappropriation
protects against the wrongful use of the trade secret itself;
it is the defendant’s theft of the plaintiff ’s idea that this tort
attempts to prevent. In other words, the element of"use"
refers to improper use.
Independent development thus appears to be strongly
linked to the "use" element in trade secret misappropriation
cases because if the defendant developed the idea without

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reference to the trade secret, it did not purloin the
plaintiff ’s idea. Moreover, Milgrim’s treatise on trade secrets
includes a discussion of "independent development" under
the broader heading of "Wrongful Use or Disclosure." 4
Milgrim on Trade Secrets S 15.01[1][d][v] (2002). Milgrim
writes:
If defendant is not possessed of the training and skills
necessary to develop a secret process independently,
defendant’s use of the plaintiff ’s process is likely to be
presumed wrongful in the absence of convincing proof
to the contrary. Conversely, where defendant is
possessed of substantial capacity to independently
_________________________________________________________________
employer and important in the conduct of his business; (3) that by
reason of discovery or ownership the employer had the right to the use
and enjoyment of the secret; and (4) that the secret was communicated
to [the employee] while he was employed in a position of trust and
confidence, under such circumstances as to make it inequitable and
unjust for him to disclose it to others, or to make use of it himself, to the
prejudice of his employer.") (alterations in original) (citations omitted)).
8
derive matter claimed secret by plaintiff, plaintiff may
retain the burden of proving that defendant in fact
misappropriated plaintiff ’s matter. Id.
In our view, it makes sense to tie independent development
to the "use" element of trade secret misappropriation. If
there is proof that the defendant independently developed a
technique that resembles the trade secret, then the
defendant did not "use" the trade secret.
2.
Because independent development is so closely linked to
whether the defendant used the plaintiff ’s trade secret,
K&S maintains that it is not an affirmative defense under
Pennsylvania law and that K&S does not have the burden
of persuasion. In support of this position, K&S argues that
affirmative defenses are generally distinguished from other
denials primarily by the fact that "affirmative defense[s] will
require the averment of facts extrinsic to the plaintiff ’s
claim for relief." 5 Standard Pennsylvania Practice 2d
S 26.51 (2001); see also Falcione v. Cornell School Dist., 383
Pa.Super. 623, 557 A.2d 425 (1989). We understand K&S’s
argument to be that because independent development is
simply a denial of the fact that it used Moore’s technique,
and not an argument extrinsic to the facts alleged by Moore
-- for example the expiration of the statute of limitations --
we should conclude that independent development is not
an affirmative defense. Under this taxonomy, once the
defendant has asserted independent development, the
burden of production simply shifts to the defendant, but
the defendant retains the burden of persuasion. 5 On the
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5. Rule 8(c) of the Federal Rules of Civil Procedure lists the following as
affirmative defenses:
[A]ccord and satisfaction, arbitration and award, assumption of risk,
contributory negligence, discharge in bankruptcy, duress, estoppel,
failure of consideration, fraud, illegality, injury by fellow servant,
laches, license, payment, release, res judicata, statute of frauds,
statute of limitations, waiver, and any other matter constituting an
avoidance or affirmative defense.
Most of the defenses listed in Rule 8(c) are consistent with K&S’s
argument that affirmative defenses are distinguished from denials by the
fact that they require the pleading of facts extrinsic to the plaintiff ’s
cause of action.
9
other hand, Moore contends that the burden of proof of
independent development -- including the burdens of
production and persuasion -- should be placed on the
defendant and that independent development should be
effectively considered an affirmative defense. He maintains
that Pennsylvania courts often place the burden of proof on
the party that has the best access to information which
could prove or disprove a fact, and here K&S has better
access to information which could prove it independently
developed the technique. See Gen. Elec. Corp. v. Human
Relations Comm’n, 469 Pa. 292, 306-07, 365 A.2d 649, 657
(1976) (noting that pragmatic considerations dictate that
party with access to facts should bear burden of proof).
Moreover, Moore contends that independent development
should be considered an affirmative defense because courts
generally favor placing the burden of proof on the party who
must prove a positive rather than the party who must prove
a negative. 8 Standard Pennsylvania Practice 2dS 49:65
(2001) (noting that it is the general rule that"the party
having the negative of an issue will [not] have the burden
of proof on such issue").
3.
In predicting Pennsylvania state law, we are guided by
principles that are well-settled, though not always easy to
apply. Where the highest court has not ruled on the issue,
"we must consider ‘relevant state precedents, analogous
decisions, considered dicta, scholarly works, and any other
reliable data tending convincingly to show how the highest
court in the state would decide the issue at hand.’ "
Nationwide Mut. Ins. v. Buffetta, 230 F.3d 634, 637 (3d Cir.
2000) (quoting McKenna v. Ortho Pharm. Corp., 622 F.2d
657, 663 (3d Cir. 1980)). Since the Pennsylvania Supreme
Court has not addressed the independent use doctrine, and
the Superior Court has not either, (although Falcione, see
supra, does provide useful guidance) we must look
elsewhere. Both parties cite to a number of cases in which
Pennsylvania law is arguably interpreted by non-
Pennsylvania courts; they also cite cases interpreting the
doctrine of independent development under other states’
laws. None of these cases is binding and there appears to

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10
be no consensus on the issue, although we cite a number
of them in the margin.6 We also note that the authors of the
major treatises dealing with trade secret misappropriation
come to different conclusions about which party has the
ultimate burden of proving independent development. 7 We
_________________________________________________________________
6. While some other federal courts appear to have held that independent
development is not an affirmative defense under Pennsylvania law, many
of them do not clarify whether they are referring to the burden of
production or the burden of persuasion, so it is sometimes difficult to
determine the holding. See e.g. Greenberg v. Croydon Plastics Co., Inc.,
378 F.Supp. 806, 815-16 (E.D. Pa. 1974) ("This inference [that
defendants used the plaintiff ’s trade secret] may be over come by a
showing by defendants that they arrived at the flavoring method
independently. . . . we conclude that plaintiffs have proved by a fair
preponderance of the evidence that the defendants did not arrive at the
. . . method through independent investigation."); but see Henry Hope X-
Ray Prod., Inc. v. Marron Carrel, Inc., 674 F.2d 1336, 1341 (9th Cir.
1982) (interpreting Pennsylvania law and concluding that "[w]here the
plaintiff shows . . . manufacture of a closely similar device by the
defendants, the burden shifts to the defendant to show that, at the time,
it could have arrived at the process by independent invention,
inspection, or reverse engineering").
Courts interpreting independent development under the trade secret
misappropriation laws of other states have come to differing results. Bolt
Associates, Inc. v. Alpine Geophysical Associates, Inc., 365 F.2d 742,
749-750 (3d Cir. 1966) (interpreting New Jersey law, which is also based
upon the Restatement (First) of Torts S 757, and finding that "a heavy
burden of persuasion rests upon one so charged to show that the
production was the result of independent development and not from the
use of information confidentially reposed"); but see Pioneer Hi-Bred Int’l
v. Holden Foundation Seeds, Inc., 35 F.3d 1226, 1241 (8th Cir. 1994)
(noting in a case brought under Iowa trade secret misappropriation law
that "[t]he court’s . . . discussion of ‘burden shifting’ merely expresses its
appreciation of the fact that once [the plaintiff] produced convincing
evidence of misappropriation, [the defendant] was obligated to provide
persuasive evidence of lawful derivation. . . . The court’s procedure can
simply be read as an allocation of the burdens of going forward with the
evidence").
7. Milgrim appears to believe that asserting independent development
simply shifts the burden of going forward to the defendant. See 4
Milgrim on Trade Secrets, S 15.01 [1][d][v] (2002) ("[W]here defendant is
possessed of substantial capacity to independently derive matter claimed
secret by plaintiff, plaintiff may retain the burden of proving that
11
will therefore make our holding based on the general
principles of what constitutes an affirmative defense under
Pennsylvania law.
III.

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A.
We conclude that Pennsylvania courts primarily
distinguish affirmative defenses from other denials by the
fact that affirmative defenses require the averment of facts
extrinsic to the plaintiff ’s claim for relief. For example, in
Falcione, the Superior Court of Pennsylvania found that the
avoidance of liability because of the rescission of a contract
was an affirmative defense that must be pleaded as such
under the heading of "New Matter" because it is "clearly
extrinsic to the plaintiff ’s claim for relief." 557 A.2d at 428;
see also Watson v. Green, 231 Pa. Super. 115, 119, 331
A.2d 790, 792 (1974) ("New Matter properly contains
averments of facts only if they are extrinsic to facts averred
in the complaint."). The Superior Court reasoned that
affirmative defenses must be pled separately because they
raise a new set of facts. By placing those facts under the
separate heading "New Matter," the plaintiff will be on
notice that it must address a new set of facts.
_________________________________________________________________
defendant in fact misappropriated plaintiff ’s matter."). However, in a
footnote for this proposition, Milgrim cites to Anaconda Co. v. Metric Tool
& Die Co., 485 F.Supp. 410, 418-419 (E.D. Pa. 1980). In the view of the
opinion writer, who was also the author of Anaconda, the text of that
opinion is not authority for the proposition that alleging independent
development simply shifts the burden of going forward to the defendant.
On the other hand, Callmann writes "when the defendant has had
access to the trade secret, the burden is on him to establish an
independent development defense." 2 R. Callmann, The Law of Unfair
Competition, Trademarks and Monopolies S 14.40 (4th ed. 1993).
However, Callmann’s authority is underwhelming. For example, the
treatise cites to Henry Hope for this proposition, a case in the U.S. Court
of Appeals for the Ninth Circuit, in which the court relied on Greenberg,
a case from the District Court for the Eastern District of Pennsylvania
interpreting Pennsylvania law, the difficulties of which are laid out supra
in footnote 6.
12
Further support for this proposition can be found in the
term "New Matter," which itself suggests that affirmative
defenses require the establishment of a separate set of
facts. See 5 Standard Pennsylvania Practice 2d S 26:50
(2001) (" ‘New Matter’ is a matter which, taking all the
allegations of the complaint to be true, is nevertheless a
defense to the action, and includes affirmative defenses."
(citing Pisiechko v. Diaddorio, 230 Pa. Super. 295, 299-300,
326 A.2d 608, 610 (1974))). Moreover, 5 Standard
Pennsylvania Practice 2d S 26.51 (2001) lists the following
illustrations of "[a]verments of a defendant which are
intrinsic to the cause of action pleaded by the plaintiff [that]
do not constitute a new matter":
A defense that the defendant city was operating a
vehicle "under an emergency" was not an affirmative
defense, but a denial of the plaintiff ’s assertion of
negligent operation and was not properly pleaded as a

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new matter. An allegation that the defendant was not
in control of premises and that a third person was in
control and an averment that an oral contract did not
exist and that a written one with different terms did
were denials and should not have been pleaded as new
matter. In an action to recover a balance due from a
former employer, deductions claimed in the answer for
credits unauthorized by the defendant but allowed to a
customer by the plaintiff, were not new matters.
(citations omitted).
From this we conclude that affirmative defenses in
Pennsylvania law require the establishment of facts
extrinsic to the plaintiff ’s complaint. Considering the
analysis above about the extrinsic nature of affirmative
defenses and concluding that independent development is
inextricably linked to whether the defendant "used" the
plaintiff ’s trade secret, we believe that Pennsylvania would
hold that independent development is not an affirmative
defense, but that it only shifts the burden of going forward.
B.
Our analysis does not end here since the extrinsic fact
requirement is not the only basis on which a countervailing
13
argument is termed an affirmative defense. See Fleming
James, Jr. & Geoffrey C. Hazard, et al., Civil Procedure
S 4.5 (5th ed. 2001) ("These factors [that determine whether
an argument should be considered an affirmative defense]
include a formal test, the analytic distinction between
negation of a fact and the avoidance of it by other facts,
relative accessibility to the evidence, convenience . . . , a
desire to place handicaps against disfavored but permitted
defenses, and the opposing party’s need for special
notice."). However, we conclude that the Pennsylvania
Supreme Court would not hold that independent
development is an affirmative defense because of"a desire
to place handicaps against disfavored but permitted
defenses." Id. Indeed Pennsylvania law already makes it
difficult for the plaintiff to recover under the tort of trade
secret misappropriation, suggesting that Pennsylvania
would continue to favor the defendant in the trade secret
context.
For example, in Van Products, the Supreme Court of
Pennsylvania limited the first element of trade secret
misappropriation: the requirement that the plaintiff possess
a trade secret. The Court held that under Pennsylvania law,
there is no trade secret if, "at the time of disclosure or use
by a misappropriator, the allegedly secret information could
have been ascertained by inspection of sold articles or by
reverse engineering." Henry Hope, 674 F.2d at 1341 (citing
Van Products, 213 A.2d at 779 in which the Pennsylvania
Supreme Court concluded that the Court of Appeals for the
Seventh Circuit was incorrect when it held that
"Pennsylvania will not deny recovery merely because the

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design could have been obtained through inspection."
(quoting Smith v. Dravo Corp., 203 F.2d 369, 374 (7th Cir.
1953))); see also Den-Tal-Ez, Inc. v. Siemens Capital Corp.,
389 Pa.Super. 219, 247, 566 A.2d 1214, 1228 (1989)
(calling into question the validity of Smith after Van
Products, which "has been construed to have adopted the
‘property’ view of trade secrets and to have shifted the
emphasis from whether the conduct of the defendant
conformed to its confidential relationship with the plaintiff
to a close analysis of whether the information was truly a
trade secret").
14
The fact that Pennsylvania places the emphasis on
whether the trade secret was truly a secret even when there
is evidence that the defendant acted improperly-- in a way
that other jurisdictions do not -- suggests that the
Supreme Court would place the burden of proving
independent development on the plaintiff for policy reasons.
See e.g. New York Spool Corp. v. Industrial Paper Tube, 160
A.D.2d. 194, 195, 553 N.Y.S.2d 164 (1st Dept. 1990) (citing
cases in which "it was no defense that the defendants could
have arrived at similar processes through independent
analysis that was theoretically possible but never actually
undertaken"); A.O. Smith Corp. v. Petroleum Iron Works Co.
of Ohio, 73 F.2d 531, 538-39 (6th Cir. 1934) ("The mere fact
that the means by which a discovery is made are obvious
. . . cannot . . . advantage the competitor who by unfair
means, or as the beneficiary of a broken faith, obtains the
desired knowledge without himself paying the price in
labor, money, or machines expended by the discoverer.").
On the other hand, it is true that Pennsylvania courts
will often place the burden of proof on the party that has
better access to facts that would prove or disprove the
defense. See Barrett v. Otis Elevator Co., 431 Pa. 446, 452-
53, 246 A.2d 668, 672 (1968) ("If the existence or non-
existence of a fact can be demonstrated by one party to a
controversy much more easily than by the other party, the
burden of proof may be placed on that party who can
discharge it most easily."). Admittedly, in the case at bar,
K&S has the best access to information which could prove
or disprove that it independently development a technique
similar to Moore’s trade secret. However, Pennsylvania
courts have also held that "[t]he mere fact that the
employer is in possession of facts relating to employment
decisions is not reason to discard the normal requirement
that complainants prove their own cases." Commonwealth
Dept. of Transp. v. Pennsylvania Human Relations Comm’n,
510 Pa. 401, 413, 508 A.2d 1187, 1193 (1986). The fact
that K&S has better access to the information does not
weigh heavily in our analysis because Rule 26 of the
Federal Rules of Civil Procedure requires that the
defendant, upon request, turn over relevant information to
the plaintiff during the discovery process. Moreover, by
shifting the burden of going forward to K&S, we are assured
15

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that K&S must present some evidence of independent
development to succeed.
Additionally, Pennsylvania courts are often reticent to
place upon a party the burden of proving a negative. See
Barrett, 246 A.2d at 673 ("The burden of proof may be
placed on the party who must prove the existence of a fact
rather than on the party who must prove its non-
existence."). However, we conclude that this policy is
counterbalanced by "the normal requirement that
complainants prove their own cases." Commonwealth Dept.
of Transp., 508 A.2d at 1193. See also U.S. Gypsum Co. v.
Birdsboro Steel Foundry & Mach. Co., 160 Pa. Super. 548,
557, 52 A.2d 344, 348-49 (1947) ("But where a negative is
essential to the existence of a right, the party claiming the
right generally has the burden of proving such negative."
(citation omitted)); 8 Standard Pennsylvania Practice 2d
S 49:65 (2001) ("Where, however, proof of a negative is
essential to show the existence of a right, the party
claiming the right ordinarily has the burden of proving the
negative. Thus, where the plaintiff, in showing negligence in
the operation of a railroad train, relies on the fact that the
train whistle was not sounded, the plaintiff has the burden
of proving the negative." (citations omitted)).
In other words, where proving a negative "lie[s] at the
foundation of plaintiff ’s right of action," the burden of proof
will remain with the plaintiff. Carl v. Grand Union Co., 105
Pa. Super. 371, 376, 161 A. 429, 431 (1932). Since
independent development is inextricably linked to"use" in
trade secret misappropriation, we conclude that it is
necessary to disprove independent development -- when
raised -- in order to meet the burden of proving the
element of use.
C.
In sum, while there are some indications that the
Pennsylvania Supreme Court would conclude that
independent development is an affirmative defense, the
more persuasive factors suggest that raising independent
development simply shifts the burden of production to the
defendant. In particular, Pennsylvania courts seem to
16
distinguish affirmative defenses from denials by the fact
that affirmative defenses require the averment of facts
extrinsic to the plaintiff ’s complaint. However, independent
development is intrinsic to whether the defendant "used"
the plaintiff ’s trade secret, supporting the conclusion that
independent development is not an affirmative defense.
Pennsylvania law also suggests that the courts would not
place the burden of proving independent development on
the defendant for policy reasons; the Pennsylvania Supreme
Court has already made it difficult for plaintiffs to recover

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in a claim for trade secret misappropriation. Although the
defendant has better access to the facts to prove
independent development, this is not a strong factor in
favor of making independent development an affirmative
defense here considering that the plaintiff can gain access
to the defendant’s information through discovery. Finally,
while Pennsylvania courts do not generally place the
burden of proof on a party that must prove a negative, we
note that this factor is counterbalanced by the requirement
that a party must prove a negative where it is essential to
establish the existence of a right. Since independent
development is essential to whether the defendant"used"
the plaintiff ’s trade secret, we conclude that the plaintiff
must disprove independent development in order to make
out the elements of the tort of trade secret
misappropriation.
Thus, when we consider the factors which aid in
determining whether an argument must be pled as
affirmative defense -- the analytic distinction between
negation of a fact and the avoidance of it by other facts,
relative accessibility to the evidence, convenience . . . a
desire to place handicaps against disfavored but permitted
defenses, and the opposing party’s need for special notice,
see Fleming James, Jr. & Geoffrey C. Hazard, et al., Civil
Procedure S 4.5 (5th ed. 2001) -- it appears that
independent development is not an affirmative defense
under Pennsylvania law.
IV.
Our decision is buttressed by K&S’s analogy to
"independent creation" in copyright law where the ultimate
17
burden of proving independent development by a
preponderance of the evidence remains on the plaintiff. Like
the doctrine of independent development, under
independent creation a defendant can show that it did not
steal the plaintiff ’s copyrighted material by presenting
evidence that it developed the idea without reference to the
copyrighted material. In Keeler Brass Co. v. Continental
Brass Co., the Court of Appeals for the Fourth Circuit, in
concluding that the doctrine of independent creation in
copyright law only shifts the burden of production to the
defendant, explained "the distinction between rebuttable
inferences and shifting burdens of proof ":
When a plaintiff successfully creates a presumption, he
not only satisfies his burden of going forward but also
shifts that burden to the defendant. The defendant
then must rebut the presumption to satisfy his burden
of going forward. If the defendant fails to introduce
sufficient evidence to rebut the presumption, the
plaintiff might prevail on the strength of the
presumption. When the defendant introduces sufficient
rebuttal evidence, however, the fact finder then will
consider all of the evidence on the issue. Regardless of

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these proof schemes, the burden of persuasion
normally remains on the plaintiff for his claim
throughout the trial.
862 F.2d 1063, 1066 (4th Cir. 1988). The Court of Appeals
for the Ninth Circuit similarly explained that independent
creation only shifts the burden of going forward to the
defendant in Granite Music Corp. v. United Artists Corp.,
532 F2d 718, 723 (9th Cir. 1976), affirming the holding of
Overman v. Loesser, 205 F.2d 521, 523 (9th Cir. 1953) in
which the Court stated:
The burden of proof, i. e., the risk of non-persuasion,
remains on the plaintiff throughout the presentation of
the case, unless it is declared to be elsewhere by
statute or practice. In a suit for copyright infringement
the plaintiff must prove that his copyrighted
composition has been copied by the defendant, that is,
he has the burden of establishing the requisites of the
case. The plaintiff may, however, create an inference of
copying by establishing access to the allegedly
18
infringed work by the defendant and similarity or
identity between disputed works. But, although there is
evidence in the case from which an inference of
copying could be drawn, the defendant may rebut it by
proof of his prior composition. Since proof of prior
composition requires an affirmative offering of evidence
by the defendant, there occurs what may be referred to
as a shift in the duty of "going forward."
Moore asserts that independent development is just as
analogous to the concept of "fair use" in copyright law as it
is to independent creation, and fair use is an affirmative
defense. 2 McCarthy on Trademarks and Unfair
Competition S 11:49 (4th ed. 2002) ("Fair use is an
affirmative defense."); Campbell v. Acuff-Rose Music, Inc.,
510 U.S. 569, 590 (1994) (holding that since fair use is an
affirmative defense, the proponent carries the burden of
proof). Fair use is defined as "a privilege in others than the
owner of a copyright to use the copyrighted material in a
reasonable manner without his consent, notwithstanding
the monopoly granted by the copyright." 2 Paul Goldstein,
Copyright: Principles, Law and Practice S 10.1 (1989). Fair
use assumes that the defendant used the copyrighted
material, but provides a limited excuse. Thus, fair use
requires extrinsic facts about the reasonable use of the
copyrighted material. Independent creation, in contrast, is
more like independent development -- it is substantially
the same concept in the copyright context. Independent
creation is a denial that the defendant "used" the
copyrighted material; instead the defendant created the
idea without reference to the copyrighted material.
V.
For the foregoing reasons, the District Court’s charge to

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the jury placing the ultimate burden of proving independent
development on the plaintiff was correct. We will therefore
affirm the judgment.
19
HILL, Circuit Judge, concurring:
I concur in that part of the panel opinion affirming the
judgment of the district court. I do not join in the
discussion of the burdens of proof, persuasion and
production of evidence on the issue of the defendant’s "use"
of plaintiff ’s trade secret and the district court’s instruction
to the jury in this regard. I do not because I believe that
this discussion is unnecessary.
The judge instructed the jury that there are four essential
elements of a trade secret claim: first, that the plaintiff had
a trade secret; second, that he communicated this secret to
the defendant in confidence and the defendant was not
entitled to use it without his permission; third, that the
defendant did use the secret without permission; and
fourth, that the plaintiff suffered damage as the result.
In this case, the jury was asked a series of interrogatories
corresponding to these elements. It answered "No" to the
following interrogatory:
Do you find that Plaintiff has proven by a
preponderance of the evidence that he owned a trade
secret which was disclosed in confidence to Defendant
and which Defendant was not entitled to use or
disclose without Plaintiff ’s permission?
In so doing, the jury closed the door on plaintiff ’s
misappropriation of trade secret claim. No further
examination of the claim was necessary. The plaintiff failed
to prove the first element of his claim -- that he had a trade
secret which he disclosed to the defendant.
The panel opinion, however, examines a different element
of plaintiff ’s claim -- whether the defendant
misappropriated plaintiff ’s trade secret by actually using it
in developing its own product. Since the jury found there
was no trade secret communicated to the defendant, I do
not see the necessity of discussing whether the defendant
wrongfully used the non-existent trade secret
communicated to it.
The panel explains in footnote 2 why it felt compelled to
undertake this discussion. The panel believes that the
district court’s instruction as to the defense of"independent
20
development" of the defendant’s product could have
influenced the jury’s answer to interrogatory #2 because
that interrogatory inquired as to the defendant’s

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entitlement to use plaintiff ’s secret (asking whether the
defendant was "entitled to use the secret"). The panel
believes that this construction of the interrogatory
"conflates" the elements of the existence and
communication of the trade secret with the wrongful use of
the trade secret in a way which does not allow us to know
exactly what the jury found when it answered "no" to this
question.
I believe, however, that the issues of independent
development and use of the plaintiff ’s trade secret are
mutually exclusive. If the defendant developed a product
independently, it did not use the plaintiff ’s trade secret. If
the defendant used the plaintiff ’s trade secret, then it did
not independently develop its own product. Therefore, the
instruction as to independent development, whether correct
or not, would have had no effect whatsoever on the issue of
use vel non.
So, in my view, the case is simple. The jury found the
very first criterion for a trade secret claim not to exist. The
case is over. I concur in the judgment affirming.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
21

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