Clearwater Sys. Corp. v. Evapco, Inc.

Clearwater Sys. Corp. v. Evapco, Inc.

Opinion

MEMORANDUM OF DECISION

Clearwater Systems Corporation ("Clearwater") seeks to enjoin EVAPCO, Inc. ("EVAPCO") and John W. Lane from using Clearwater's trade secrets concerning [*2]  the non-chemical treatment of water used in heating and cooling systems. Clearwater's claim for injunctive relief was tried to the court over approximately four days. ¹ Pursuant to Rule 52 of the Federal Rules of Civil Procedure, the court's findings of fact and conclusions of law are set forth below.

I. Background

A. Water Treatment

The temperature of many large buildings is controlled by circulating water. For example, the temperature of a building can be lowered by chilling water outside the building in a "cooling tower" and then circulating the cooled water through the building so it can absorb the building's ambient heat. Similarly, a building's temperature can be raised by heating [*3]  water in a "boiler" and then circulating the heated water through the building so that the building's air absorbs the heat from the water.

In these systems - collectively known as "heating, ventilation, and air-conditioning" systems or "HVAC" systems - the same water is constantly recirculated, with only small amounts of water being drained from or added to the system. Because the same water is used over and over again, it is crucial to a system's functioning that the water be kept free of contaminants. In particular, chemical and biological contaminants can cause (a) scale, i.e., buildup of matter on the surfaces of the system, which can foul the working of the system; (b) rust, i.e., oxidation of the metallic components of the system, which can decrease their efficiency; and (c) biological hazards, such as bacterial growth, which can pose health risks to people in the cooled or heated building.

In order to prevent the problems of scale, rust, and biological hazards, the water used in HVAC systems must be treated to prevent the buildup of chemical and biological contaminants. In the majority of HVAC systems, water is treated with various chemicals that inhibit scale, rust and biological [*4]  growth. Nevertheless, there is a market for the non-chemical treatment of water because some believe non-chemical treatment is cheaper and more environmentally friendly than chemical treatment.

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