Appeals court: Tama company's trade secrets lawsuit against Pella Corp. should go to trial

Economic Indicators Associated Press

A Tama designer and builder of equipment used in factories to make products should get a trial to determine whether window manufacturer Pella Corp. stole trade secrets, the Iowa Court of Appeals said Wednesday.

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Deimco Finishing Equipment of Tama alleged in a 2008 lawsuit that Pella Corp. engineers disassembled Deimco-designed industrial finishing equipment and made their own version. Deimco said that's a violation of Iowa's Trade Secrets Act.

Deimco said it provided the equipment to Pella Corp. under contract, reserving the ownership rights of the design. The company is suing for misappropriation of trade secrets and breach of contract.

In 2013, Tama County Judge Marsha Beckelman dismissed the lawsuit concluding that Deimco had not taken reasonable steps to maintain the secrecy of the device design because it displayed equipment at trade shows, gave tours of its facility where equipment was on display and posted drawings on its website.

Deimco countered that nothing confidential about its machines could be learned in those settings.

Appeals court justices concluded Deimco had raised legal issues significant enough for a jury to decide. It ruled similarly on the breach of contract issue.

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They pointed out in their decision that Pella Corp. internal emails showed the company was concerned about its decision to take apart the Deimco machine and copy it.

Pella attorney Randall Kahnke said in a statement that the company hasn't yet decided whether to ask the Iowa Supreme Court to review the appeals court decision.

The appeals court ruling means the case returns to district court for additional motions and proceeds toward trial.

"Pella believes it acted ethically and confidently awaits the opportunity to tell its story," Kahnke said.

Deimco's attorney did not immediately return messages.

Pella makes windows and doors for new and existing homes. It is a family-owned privately held company based in Pella with about 6,000 employees in 10 manufacturing plants in the United States.

Deimco, a small privately held company, makes finishing equipment for a variety of industries and recently completed a 10,500-square foot expansion at its headquarters in Tama.