Full opinion text
MEMORANDUM OPINION SETTING FORTH FINDINGS OF FACT and CONCLUSIONS OF LAW DAVIS, District Judge. In this diversity action, plaintiff/counterclaim-defendant, Contract Materials Processing, Inc. (“CMP”), alleged in its amended complaint, inter alia, claims for breach of contract, conversion, and misappropriation of trade secrets in connection with three related agreements, a “Technology Transfer Agreement” (“TTA”), “Sales Agency Agreement” (“SSA”), and a “Research Development Agreement” (“RDA”). CMP sought damages exceeding $7 million from defendant/counterclaim-plaintiff, Ka-taLeuna GmbH Catalysts (“KataLeuna”) and other entities. With respect to the TTA, CMP alleged that KataLeuna had misappropriated certain unidentified trade secrets that were embodied in technology that was transferred from CMP to Kata-Leuna pursuant to the TTA. KataLeuna denied liability and subsequently alleged several counterclaims. It is one of those counterclaims that is adjudicated in this opinion. Although CMP properly requested a jury trial as to all issues properly to be tried before a jury, for reasons fully stated on the record over the course of several hearings, I concluded that KataLeuna’s counterclaim for rescission of the TTA was an equitable claim not subject to jury trial, and that the recision claim could be tried with no adverse impact upon CMP’s right to a jury trial as to its claims for breach of the SSA and RDA. Accordingly, I bifurcated the counterclaim for purposes of trial. I conducted a 13-day bench trial beginning on February 10, 2003, and concluding on July 17, 2003. In seeking the equitable remedy of recision, KataLeuna alleged that CMP had breached the TTA and was unjustly enriched because the technology transferred under the agreement was demonstrably ineffective and/or unpatentable because the technology was not new and unobvious. KataLeuna sought restitution in an amount exceeding $3 million. For the reasons discussed herein, I find and conclude that, because CMP knowingly and/or recklessly misrepresented material facts surrounding the likely effectiveness of the technologies that were transferred to Ka-taLeuna pursuant to the TTA, and because CMP specifically breached contractual warranties that were critical to KataLeu-na’s execution of the TTA in the first instance, recision is wholly warranted and is an appropriate remedy. I. Background A brief recitation of the factual context in which the dispute surrounding KataLeu-na’s counterclaim for recision arises will frame the issues for decision; a full statement of the procedural history of the case is contained in two earlier opinions. See Contracts Materials Processing, Inc. v. KataLeuna GmbH Catalysts, 164 F.Supp.2d 520 (D.Md.2001)(granting in part and denying in part cross-motions for summary judgment); Contract Materials Processing, Inc. v. Kataleuna GmbH Catalysts, 222 F.Supp.2d 733 (D.Md.2002)(in-terloeutory award of attorney’s fees to KataLeuna). CMP is a Maryland corporation providing services to the chemical industry. In particular, it has expertise in the manufacture of additives and catalysts that aid in refining petroleum. KataLeuna is a German corporation that is also involved in the chemical industry. From 1995 until January 1997, Dr. P. Kenerick Maher (“Maher”) was the Chairman of KataLeuna. During that time, 25.2% of KataLeuna was owned by an arm of the German government, the BvS, and 74.8% of KataLeuna was owned by defendant Tricat. Defendant Tricat, previously dismissed from this action, is a German corporation, a holding company, that was managed by Maher during the period relevant to this dispute. Tricat is a wholly owned subsidiary of Tricat Industries, Inc. (“TII”), an American corporation. As of January 1, 1997, Tricat divested itself of all its interest in KataLeuna. TCP, another German corporation, is a wholly owned subsidiary of defendant Tricat. It was formed approximately at the same time that Tricat ceased to hold any interest in KataLeuna. Maher is the managing director of TCP. In October 1995, pursuant to the TTA, CMP transferred its entire right, title and interest in certain technology to defendant KataLeuna pursuant to the TTA. See infra findings 58-61. The TTA provides as follows in part: [CMP] is the owner of, or has rights to, the Technology .... [CMP] desires to sell and [KataLeuna] desires to buy the Technology upon the terms and conditions hereinafter described .... Subject to the terms and conditions of this Agreement, [CMP] shall sell, assign, convey and transfer to [KataLeuna] [CMP’s] entire right, title and interest in and to the Technology, including without limitation the right to make, use and sell the same anywhere in the world .... Kat. Exh. 80 at 1, 5. Thus, through the TTA, CMP transferred to KataLeuna CMP’s entire FCC additives business and related intellectual property, including but not limited to patent applications that CMP had filed, CMP’s business plan relating to the FCC additives business, customer information, testing procedures, and manufacturing processes. In exchange, CMP received 5,000 shares of Tricat Industries, Inc.’s stock, $1.9 million at closing, and a supplemental payment of up to $7.6 million. See infra findings 63-66. The supplemental payment component was to be calculated based upon the gross margin generated by KataLeuna and its subsidiaries’ FCC additives business. The gist of the parties’ dispute is whether the technology transferred to KataLeu-na comported with certain warranties attested to by CMP in the TTA and whether, more generally, the technology otherwise had genuine economic value. What is clear, both explicitly and implicitly as a theme running throughout the parties’ dealings and the progress of this case, is that KataLeuna elected to protect itself in this multi-million dollar deal by undertaking a level of “due diligence” well below what would otherwise have been expected, and elected to rely instead on express and implied warranties and guaranties provided by CMP itself. Manifestly, it was CMP’s highly risky decision to provide such warranties, in the form of affirmations to KataLeuna under the penalties of perjury (by virtue of CMP’s agreement that representations made to the United States Patent and Trademark Office within relevant patent applications should be deemed to have been made to KataLeuna directly). Thus, as disclosed by the within findings and conclusions, CMP, fully represented by independent counsel, made warranties and representations as to critical terms of the TTA that were profoundly ill-advised under the circumstances. In any event, in January 1998, CMP initiated this action in a pre-emptive fashion. In its complaint, CMP alleged various breach of contract claims, demanding damages in excess of $7 million. Defendants moved to dismiss the case; on October 5, 1998, treating that motion as a motion to quash service, I granted the motion and required CMP to comply with the Hague Convention in effecting service on the German entities. Thereafter, on December 9, 1998, CMP filed its amended complaint. The amended complaint alleged, among other things, claims for misappropriation and conversion. In due course, further preliminary motions were filed. In ruling on Tricat’s motion to dismiss for lack of personal jurisdiction and on all defendants’ motion to dismiss certain counts of the amended complaint, I concluded as a matter of. law that “[i]t is undisputed that, pursuant to the [Tjechnology [Tjransfer [Ajgreement, CMP assigned all of its right, title and interest in the subject matter of the technology to KataLeuna. Accordingly, [CMP] had no legitimate right to possess [the Technology] . Moreover, CMP’s argument that it possesses an equitable security interest is unavailing.” August 11, 1999, Memorandum Opinion at 14. Nevertheless, ’although I dismissed the claims for conversion, I reasoned that “[i]n light of the liberal spirit pervading the pleading requirements under the Federal Rules of Civil Procedure,” the misappropriation claims would remain in the case. Id. at 12. A long and highly contentious period of discovery then ensued. After the close of discovery, in an opinion filed on September 18, 2001, I entered summary judgment in favor of defendants as to CMP’s misappropriation claims. Specifically, I reasoned as follows, in pertinent part: Here, CMP argues that KataLeuna, TCP and Tricat have misappropriated CMP’s trade secrets, namely the Technology. However, CMP has failed to generate any evidence demonstrating ; that the Technology qualifies as a trade secret under the Act. Nor has CMP provided any detail or description of what it claims to be trade secrets. Without sufficient detail, I am unable to determine whether specific technology concerns trade secrets. Although it was not necessary for CMP to disclose all of the details of its trade secrets, it had to do more than merely note that the Technology involved trade secrets. [Trandes Corp.. v. Guy F. Atkinson Co., 996 F.2d 655, 661. (4th Cir.1993) ]. Without such evidence, no reasonable jury could find that the Technology was not generally known or readily ascertainable by proper means. Nor could a reasonable jury conclude that the Technology derives independent economic value from its secrecy. Defendants further argue that the CMP’s misappropriation claims fail because CMP chose not to keep the Technology á secret, thus failing the second element of a trade secret. [MD. CODE ANN., COM. LAW II § ll~1201(e)(2) (2002) (The Maryland Uniform Trade Secrets Act) ]. Under the Act, a misappropriation occurs when one acquires secret information by improper means or discloses the secret information without express or implied consent by a person who used improper means to acquire the information. § ll-1201(c). Again, CMP utterly fails to meet its burden to demonstrate that it took any steps to maintain the secrecy of the Technology. None of the agreements restrict Kata-Leuna from disclosing the information. In fact, the R & D Agreement only requires CMP, the research organization, to maintain secrecy and confidentiality. No similar restriction is placed on KataLeuna. Because CMP has failed to demonstrate that CMP took any reasonable steps to ensure the secrecy of the technology, CMP cannot claim this information as trade secrets under the Act. In addition, not only has CMP failed to demonstrate that it took reasonable steps to maintain the secrecy of the technology, CMP has also failed to establish that any defendant misappropriated the Technology. Proving misappropriation of secret information would require CMP to show that defendants used improper means to acquire from CMP information currently in the defendants’ possession or that the information was improperly disclosed to others. See § ll-1201(b). The entirety of CMP’s misappropriation claim hinges upon its allegation that KataLeuna transferred the Technology to Tricat and TCP. Completely absent, however, is any evidence that the alleged transfer was improper. The record clearly shows that CMP voluntarily transferred its “entire right, title and interest in and to the Technology, including without limitation the right to make, use and sell the same anywhere in the world .... ” Technology Transfer Agreement at § 3. Thus, I shall grant defendants’ motion for summary judgment on counts V, VIII and XII of the Amended Complaint. Contracts Materials Processvng, Inc., 164 F.Supp.2d at 533-35 (footnotes omitted). Subsequently, defendants filed, and I granted, a motion for an award of attorney’s fees. Contract Materials Processing, Inc. v. KataLeuna GmbH Catalysts, 222 F.Supp.2d 733 (D.Md.2002). After determining that the remaining claims should be bifurcated, see supra n. 2,1 conducted a bench trial on KataLeuna’s counterclaim for recision. My findings of fact and conclusions of law are set forth herein. II. Findings of Fact A. Background of Corporate Entities (Findings 1-12) B. Fluid Catalytic Cracking Process (Findings 13-51) i. Fluid Catalytic Cracking Operating Procedures (25-33) ii. FCC Additive: SOx Emissions Control Additives (34-41) iii. FCC Additive: Combustion Promoter (42-49) iv. FCC Additive: Octane Enhancers (50-51) C. Technology Transfer Agreement (Findings 52-316) i. Unambiguous Provisions and Implementation Thereof (52-71) ii. TTA Representations and Warranties (72) iii. The Inventive Process Leading to the SOx A Patent Application (73-87) • Testing by the Research Triangle Institute (88-126) • CMP’s Knowledge (Regarding SOx A) Prior to Execution of the TTA (127-135) • Expert Opinion that CMP’s Zinc Ti-tanate SOx Emissions Control Additive Technology (SOx A) Is Not Effective to Reduce Sulfur Emissions (136-150) • SOx Effectiveness (and alternative Hydrotalcite SOx formula) (151-172) iv. The Inventive Process Leading to the Combustion Promoter B Patent Application (173-188) • Early Commercial Trials of Combustion Promoter B (189-221) • Commercial Trial of Combustion Promoter B at Mobil Oil (222-257) • Akzo Testing of Combustion Promoter B (258-271) • Expert Analysis of Combustion Promoter B (272-307) • Effectiveness of Combustion Promoter B (308-316) D. Patent Prosecution Histories (Findings 317-417) i. The SOx A Patent Application (326-352) ii. The Combustion Promoter B Patent Application (353-369) iii. The Octane Enhancer Application Patent Application (370-398) iv. Hydrotalcite Patents and Technology (399-41Ó) E. History of KataLeuna and the Technologies after Execution of the TTA (Findings 411-417) F. Rescission (Findings 418-443) A. Background of Corporate Entities 1. KataLeuna is a German company located in Leuna, Germany. Tr. at 438. . 2. KataLeuna has been engaged in the research, development, production, and sale of certain types of catalysts for many years. Id. 3. On February 10, 2003, KataLeu-na was not registered to do business in Maryland. Tr. at 1 0-13. 4. Tricat Industries, Inc. (“TII”) is an Oklahoma corporation having its principal place of business in Maryland. CMP Exhibits (“CMP Exh.”) 103 (McDaniel Employment Agreement), 207 (P.K. Maher letter to Dr. Meyer). 5. TII was formed by Dr. P. Kener-ick Maher (“Maher”) in 1992. CMP Exh. 45 (1998 TII Business Plan). 6. Dr. Edwin Albers (“Dr. Albers”) formed CMP in 1987. Tr. at 291, 296-97. 7. Dr. Albers received a B.S. in physical chemistry from Clarkson University in 1952 and a Ph.D. in physical chemistry from Rensselaer Polytechnic Institute in 1961. Tr. at 292-93. 8. CMP is a Maryland corporation with its principal place of business in Baltimore. Tr. at 290. 9. CMP has been engaged for more than 15 years in providing highly specialized services to the chemical and petrochemical industries on a worldwide basis, including certain types of additives, catalysts, technical consulting, research and development services, analytical services, new process and product development, and technical sales. CMP Exh. 41 (Cativco Business Plan); Tr. at 31-32; 43-44. 10. In September 1993, J. Gary McDaniel (“McDaniel”), a professional acquaintance of Dr. Albers, became CMP’s Vice President of Sales and Marketing on a part-time basis. Tr. at 31-32. 11. While employed by CMP, McDaniel played a significant role in the further development of CMP’s FCC additives technologies and CMP’s comprehensive business plan relating to CMP’s FCC additives business. Tr. at 43-58. 12. At all times relevant to this case, Dr. Albers has been CMP’s president and sole shareholder. Tr. at 291-92. B. Fluid Catalytic Cracking Process 13. In the early 1990s, CMP became interested in fluid catalytic cracking (“FCC”) additives and the FCC additives business. Tr. at 34-44. 14. By 1992, CMP asserts, it had accumulated a significant amount of market information and developed several new and unique technologies relating to FCC additives and the FCC additive business. CMP Exhs. 4,1, 42 (Advantage Additive Business Plan); Tr. at 1376-77. 15. Fluid catalytic cracking is a process involved in oil refining where heavy gas oil products are converted into lighter end, more valuable products like gasoline, diesel fuel, and jet fuel. Tr. at 34-35 (McDaniel). 16. The fluid catalytic cracking process typically takes place in large FCC units. Tr. at 35; KataLeuna Exhibit (“Kat. Exh.”) 330 (Diagram). 17. An FCC unit is comprised of “two separate vessels.” Tr. at 35-36; Kat. Exh. 330. 18. One vessel is called the “reactor” and the other vessel is called the “regener-ator.” Id. 19. An FCC unit uses a catalyst to break the heavy gas oils into the lighter products. Id. 20. The catalyst actually cracks the gas oils into smaller pieces. Id. 21. FCC catalysts are chemical compounds that cause a chemical reaction to occur, but are not themselves changed (or consumed) by the chemical reaction. Tr. at. 37; Zeller Tr. at 5. 22. FCC catalysts are utilized, among other things, in connection with the refinement of petroleum. Tr. at 36-37. 23. FCC additives are often utilized in an FCC unit to maximize the efficiency, productivity, and effectiveness of the fluid cracking catalysts in the overall refining process. Tr. at 37-42. 24. Common functions of FCC additives (including combustion promoters, SOx additives, and octane enhancers-discussed infra) are to promote the combustion of carbon monoxide to carbon dioxide in the “dense phase” of the regenerator, to assist in capturing and controlling/reducing SOx emissions, and to increase octane levels. Id. i. Fluid Catalytic Cracking Operating Procedures 25. The FCC unit utilizes a combination of heat, gases (e.g., hydrogen and oxygen), and catalysts to cause the cracking of certain molecular bonds to increase the yield of high quality oil products. Tr. at 34-38. 26. The FCC process starts with crude oil that comes into the refinery and initially goes through several “minor processes” during which various contaminates such as salt, are removed or “broken out” through distillation; a gas oil byproduct remains. Tr. at 36-37; Kat. Exh. 880. 27. The gas oil byproduct from distillation is then fed into the FCC unit through the oil feed. Id. 28. A hot FCC catalyst is fed into the reactor from the regenerator and meets the gas oil feedstock. Id. 29. When the gas oil and the catalyst make contact in the reactor, the reactions break the big molecules into smaller molecules that are then fed to other parts of the refinery. Id. 30. As a result of the chemical reactions in the reactor of the FCC unit, the catalyst becomes “coked up” and is black because it is covered with carbon deposits. Id. 31. In order to continue using the catalyst in subsequent reactions in the reactor, the carbon must be removed. Id. 32. The catalyst is, thus, filtered from the FCC reactor back into the regenerator, where the carbon is burned off with a current of air and the catalyst is heated. Id. 33. The catalyst circulates through the regenerator where it is cleaned and then recycled back into the reactor. Id. ii. FCC Additive: SOx Emissions Control Additives 34. The gas oil that is introduced into the FCC unit also contains sulfur compounds. Tr. at 39. 35. When the gas oil reacts with the catalyst in the reactor, these sulfur compounds deposit on the catalyst along with the carbon. Tr. at 40-41. 36. As the catalyst is recycled through the regenerator, the oxygen added to the FCC unit promotes the conversion of the sulfur compounds into sulfur dioxidé (S02) and sulfur trioxide (S03). Id. 37. If the resulting S02 and S03 are released into the atmosphere through the flue of the regenerator, it can lead to acid rain. Id. 38. To mitigate the release of sulfur oxide (SOx) into the atmosphere, oil refineries may employ various strategies, including the use of SOx emission control additives. Id. 39. SOx additives promote the conversion of S02 to S03 in the regenerator and then capture or “pick up” the S03 using a metal oxide. Id. 40. The S03 thus becomes attached to the SOx additive itself and is recycled back into the reactor. Id. 41. In the reactor, the S03 is reduced to hydrogen sulfide (H2S), which is ultimately converted into other sulfur products, thereby preventing S02 from entering the atmosphere through the flue of the regenerator. Id. iii. FCC Additive: Combustion Promoter 42. The introduction of oxygen and the presence of heat in the regenerator leads to the creation of carbon monoxide (partial combustion) and then carbon dioxide (full combustion). Tr. at 38; Kat. Exh. 330. 43. This reaction of carbon monoxide and carbon dioxide generates significant heat and thus increases the temperature in the regenerator. Id. 44. Since the temperature in an average regenerator runs extremely hot, between 1100 and 1400 degrees, maintaining control over the temperature in the regen-erator is paramount. Tr. at 38-39, 375. 45. The bed of catalyst at the bottom portion of the regenerator, or “dense phase,” serves as a heat sink and absorbs the heat from the reaction of carbon monoxide to carbon dioxide. Tr. at 38-39; Kat Exh. 330. 46. In order to help control the temperature in the regenerator, it is advantageous to have the full combustion of carbon to carbon monoxide to carbon dioxide take place in the lower portion of the regenerator (dense phase) as opposed to the upper portion of the regenerator (dilute phase). Tr. at 37-39; Kat. Exh. 330. 47. If the combustion of carbon monoxide to carbon dioxide takes place in the dilute phase, the temperature in the regen-erator rises rapidly, often called “after-burn,” which can cause problems with the structural integrity of the FCC unit itself. Tr. at 39. 48. The hardware of the FCC unit can actually start to melt if the FCC re-generator achieves a “hot enough temperature.” Id. 49. Many oil refineries utilize an FCC additive called a combustion promoter to speed the combustion process in the FCC unit regenerator and to ensure that full combustion takes place in the dense phase of the regenerator. Tr. at 38-39. iv. FCC Additive: Octane Enhancers 50. FCC unit operators also utilize octane enhancement additives. Tr. at 41-42. 51. Octane enhancement additives react with the gas oil in the reactor of the FCC unit and cause certain reactions so that the resulting gasoline product will have a higher octane level. Tr. at 42. C. Technology Transfer Agreement i. Unambiguous Provisions and the Implementation Thereof 52. In 1995, the German government privatized state-owned businesses, including several businesses that became Kata-Leuna. Tr. at 70,106,1228-29. 53. In 1997, Triadd (specializing in FCC additives business) was an operating division of KataLeuna. Tr. at 106. 54. At this same time, KataLeuna was owned by a company called Trieat Management GmbH (“Tricat”) which was owned by Tricat Industries (“Til”). Id. 55. In connection with this privatization effort, KataLeuna made several capital investments in technology. Id. 56. In September 1995, CMP executed and delivered into escrow the written Technology Transfer Agreement (“TTA”) pending acceptance of the same by Kata-Leuna. Tr. at 82. 57. On or about October 27, 1995, KataLeuna executed the TTA. Kat. Exh. 80. 58. Under the TTA, KataLeuna (Buyer) purchased from CMP (Seller) the inventions and all intellectual 'property, composition of matter and use, and process technology (whether or not patentable) and all documentation, test reports, summaries, compilations, statistical analysis, reports, notes, memoranda, writings and all other intellectual property rights and personal property which embodies such intellectual property with respect to [the following]: (a) two sulfur oxide pollution control additives identified as SOx A and SOx B; (b) U.S. Patent Application: “Catalyst Composition and Methods for Using and Preparing Same” (“SOx A Patent Application”) filed on September 5,1995; (c) a CO-combustion promoter identified as Combustion Promoter B; (d) U.S. Patent Application: “Catalyst and Process for Preparing Same” (“Promoter B Patent Application”) filed on May 2,1995; . (e) an octane enhancement additive identified as Octane B; (f) U.S. Patent Application: “Catalyst and Application for Same” (“Octane B Patent Application”) filed on September 12,1995; and (g) the Thiele Technology. Tr. at 74-76; Kat Exh. 80, ¶¶ l(n), 2(a), 3, 6 and 18 (emphasis added). 59. Dr. Albers testified that the “SOx B” additive in the TTA “was non zinc titanate type materials,” and could be “zinc titanate, with talc, which is high [magnesium] oxide content, and HTC, hydrotal-cite[,] ... [or] a clay based upon chloride clay” or “whatever other combinations of inorganic oxides [CMP] could come up with to make a viable material.” Tr. at 1449-51. 60. SOx B, however, is not specifically defined under the TTA except as “similar to SOx A but under further development.” Kat. Exh. 80 at ¶ l(n)(5) (emphasis added). 61. SOx B’s specific chemical composition is not defined in the TTA and no evidence was presented at trial that SOx B had a specific chemical combination or was more than just the subject of a research interest. Tr. at 75-76, 232-35. . 62. No evidence was presented at trial to establish that SOx B became a commercially viable technology for purposes of the TTA. Id. 63. Under the TTA, KataLeuna was also granted a right of first refusal with respect to ... all of [CMP’s] rights now existing or hereafter created including any patents to make, use and sell any and all: (a) sulfur oxide pollution control; (b) CO-combustion promoter; and (c) octane enhancement fluid cracking catalyst additives without any additional consideration to Seller [CMP] or either Inventor [Dr. Albers and McDaniel] .... Kat. Exh. 80, ¶ Í8(b). 64. In exchange for the “Technology” encompassed in the TTA, KataLeuna: (a) paid .$1,900,000 to CMP at closing; (b) placed with an escrow agent an additional $600,000, of which CMP subsequently received $200,000; (c) transferred to CMP 5,000 shares of Tricat Industries, Inc. (TII) stock with an agreed value of $75,000; and (d) agreed to make supplemental payments to CMP based on gross margin from future sales beginning in the fourth quarter of 1997, until total payments to CMP reached a specified cap of $9,500,000. Kat. Exh. 80, ¶ 2(b) and (c); Tr. at 84-85. 65. On October 27, 1995, in connection with the transfer of the Technology under the TTA, CMP, Dr. Albers, McDaniel, and Harry Burkhead (a CMP employee) executed and delivered to KataLeuna three documents, entitled “Assignment of Patent Application,” for U.S. Patent Application Serial Nos. 08/526,976 (Octane B Patent Application), 08/523,434 (SOx A Patent Application), and 08/432,996 (Promoter B Patent Application). Kat. Exhs. 71.-76 (Applications). 66. In 1995, as part of the overall transaction associated with the TTA, McDaniel left CMP and went to work for TII. Tr. at 33. 67. At the time McDaniel left CMP to work for TII, KataLeuna was a subsidiary of TII. Tr. at 106. 68. Pursuant to his employment contract with TII, McDaniel was assigned to run KataLeuna’s Triadd FCC Additives division (“Triadd”) — which handled Kata-Leuna’s fluid catalytic cracking (FCC) business. Tr. at 33; CMP Exh. 108, ¶ 2 (McDaniel Employment Agreement). 69. From September or October 1995 until March 1997, McDaniel was the president of Triadd (KataLeuna’s FCC additives business division). Tr. at 33, 84-85. 70. From March 1997 until the second quarter of 1998, McDaniel was the president and chief executive officer of TII. Tr. at 33. 71. McDaniel has been the vice president of TII and in charge of the Trieat zeolites business since 1998. Tr. at 34. ii. TTA Representations and Warranties 72. Under the TTA, CMP made numerous representations and warranties concerning the FCC additives technology it sold to KataLeuna, including that: (a) “all statements and oaths made in the CMP Patent Applications shall be deemed to have been made to [KataLeu-na] and [KataLeuna] shall be entitled to rely upon them as if made directly to [KataLeuna],” Kat. Exh. 80, ¶ 4(b)(6); Tr. at 76-78; (b) “[t]o the best of [CMP’s] knowledge, all information contained in the CMP Patent Applications is true, complete and correct and contains no errors or omissions as filed,” Kat. Exh. 80, ¶ 4(b)(6); Tr. at 76; (c) CMP had not “disclosed any part of the Technology to third parties and the Technology remains secret in all respects, whether or not such disclosure would or could adversely affect [CMP’s] right to obtain a patent therefor, except pursuant to confidentiality agreements,” Kat. Exh. 80, ¶ 4(b)(10); Tr. at 78; and (d) “[t]o the best of its knowledge, the Technology is new, useful and unobvious,” Kat. Exh. 80, ¶ 4(b)(13); Tr. at 78. iii. The Inventive Process Leading to the SOx A Patent Application 73. Under the TTA, SOx A is defined as a zinc titanate based sulfur oxide pollution control additive, “which removes sulfur from fluid catalytic cracking unit emissions.” Tr. at 75; Kat. Exh. 80, ¶ l(n)(4); Kat. Exh. 86 at 3 (Patent Application). 74. The industry standard SOx emissions control additive is sold under the trade name DeSOx. Tr. at 44. 75. DeSOx is a magnesium alumínate spinel material that has “some very complex processing steps” and is very expensive to manufacture. Tr. at 45. 76. In addition to the cost of manufacture, the sales price of DeSOx is further increased because royalties must be paid to certain licensors. Id. 77. In 1994, CMP set out to invent a new type of SOx emissions control additive to compete with DeSOx because CMP believed that there was an opportunity to create a low cost material comprised of non-spinel zinc titanate. Tr. at 44-45. 78. CMP filed a patent application for the SOx A additive on September 5, 1995, and it was assigned Serial No. 08/523,434. Tr. at 59; see Kat. Exh. 86. 79. The SOx A patent application was assigned to KataLeuna. Kat. Exh. 75. 80. Under the TTA, KataLeuna was “entitled to rely” on all statements contained in the SOx A patent application as representations made by CMP directly to KataLeuna. See Kat. Exh. 80, ¶ 4(b)(6). 81. In the section of the SOx A patent application entitled, “Detailed Description of the Invention,” CMP represented that: “[t]he invention uses the catalyst composition in a process to reduce the emissions of sulfur compounds from industrial processing needs such as fluid cracking catalyst (FCC) process used in petroleum refineries and the coal gasification processes used by utility companies.” Kat. Exh. 86 at 3; Tr. at 60. 82. Coal gasification is a process used generally in power plants but not in connection with FCC units. Tr. at 60. 83. In the section of the SOx A patent application entitled, “Detailed Description of the Invention,” CMP also represented that “[t]his invention is also the use of a catalyst composition to reduce the emissions of sulfur compounds from industrial processes.” Kat. Exh. 86 at 7; Tr. at 61. 84. The section of the SOx A patent application entitled, “Summary of the Invention,” states that the invention “includes a process for reducing the amount of SOx emissions passing through a fluid particle bed” and “a process for preparing a catalyst for the removal of SOx.” Kat. Exh. 86 at 2-3; Tr. at 62. 85. In the section of the SOx A patent application entitled, “Detailed Description of the Invention,” CMP further represented that [t]he fluid cracking catalyst additive of this invention reduces the amount of SOx emissions from a fluid catalytic cracking unit by “capturing” the SOx in the fluid cracking catalyst regener-ator section and “releasing” the captured sulfur as H-2S in the stripper/reactor sections of the fluid- cracking catalyst unit. The additive promotes the oxidation of SOx to S03 in the fluid cracking catalyst regenerator, captures this S03 in the fluid cracking catalyst regenerator by forming an inorganic sulfate, and reduces this inorganic sulfate in the fluid cracking catalyst stripper/reactor to H2S. This H2S- is later removed downstream. In the preferred embodiment of this invention, the zinc titanate component provides the functionality of SOx capture and H2S release. Kat. Exh. 86 at 8; Tr. at 61-62. 86. This process is described in claim 26 of the SOx A patent application. Kat. Exh. 86 at 18; Tr. at 63. 87. Other claims of the SOx patent application also pertained to the use of the invention in ebullating beds for power plants (coal gasification) and other non-FCC uses. See, e.g., Kat. Exh. 86 at 18 (claim 28); Tr. at 61-63. • Testing by the Research Triangle Institute 88. Dr. Raghubir Gupta has been the research director at the Research Triangle Institute in North Carolina (“RTI”) for 13 years. Tr. at 475. 89. Dr. Gupta has a Ph.D. in chemical engineering and specializes in gas oxide reactions with material sorbents and catalysts. Id. 90. Dr. Gupta has six issued patents and three patents pending, including patents related to zinc titanate. Tr. at 476, 487-88. 91. In 1986, RTI began working on developing a “zinc titanate as a sorbent material for removing sulfur and compounds from gas.” Tr. at 477. 92. By 1992, Dr. Gupta and his colleague, Santosh Gangwal had developed a zinc titanate sorbent that was suitable for use in a fluidized-bed reactor for removing reduced sulfur species, particularly H2S, in the coal gasification process (“RTFs zinc titanate sorbent technology”). Tr. at 504-07. 93. In 1992, RTI filed a patent application disclosing their zinc titanate sorbent technology and were issued U.S. Patent 5,254,516 for this technology in 1993. Kat. Exh. 302 (Patent). 94. Subsequently in the early 1990s, RTI published a number of technical papers (including “Hot Coal Gas Desulfuri-zation in Fluidizedr-Bed Reactors Using Zinc Titanate Sorbents ”) also disclosing RTFs zinc titanate sorbent technology. Id.; CMP. Exh. 297 (Paper); Tr. 501-02, 506-07. 95. In 1994, Dr. Gupta, on behalf of RTI, was working under a contract with the United States Department of Energy (“DOE”) that involved researching and developing sorbent materials to remove power plant gases. Tr. at 476. 96. As part of the research and development of sorbent materials to remove power plant gases with the DOE, RTI subcontracted with CMP to manufacture (produce not develop) a zinc titanate catalyst. Tr. at 476, 481; Kat. Exh. 316-18 (Invoices), 319 (Confirmation Letter). 97. As part of the 1994 contract, CMP agreed to toll manufacture 3000 kg of the zinc titanate sorbent technology disclosed in U.S. Patent No. 5,254,518 for RTI. Tr. at 1439-46; Kat. Exh. 319. 98. Dr. Albers and CMP subsequently advised RTI that CMP had proprietary technology that would enable CMP to provide a fluid material for commercialization of RTFs zinc titanate sorbent technology. Tr. at 476-79, 1439-42; CMP Exh. 297. 99. CMP and RTI executed a Confidential Disclosure Agreement in connection with the DOE subcontract dated July 6, 1993, whereby both parties agreed to maintain all proprietary information of the other party in confidence. Tr. 498-99, 1444; CMP Exh. 286. 100. In October 1994, Dr. Gupta and RTI filed a patent application for the use of zinc titanate as a sulfur removal additive in the coal gasification process in power plants. Tr. at 487-88; Kat. Exh. 302. 101. During the course of the work on the DOE subcontract for Dr. Gupta and RTI, Dr. Albers and CMP expressed a belief that the zinc titanate material that they were producing for RTI also could be utilized in FCC units. Tr. at 477-78 (Gupta). 102. As a result, in 1994, CMP requested that Dr. Gupta'assess the capacity of the zinc titanate material to work as a SOx emission control additive in an FCC unit by testing it in a thermo-gravametric analysis (“TGA”) machine at RTI. Tr. at 478-79. 103. Although CMP asserts that CMP disclosed the SOx A technology (CMP-5) to RTI and Dr. Gupta for TGA testing (analyzing the zinc titanate formula for use in FCC units) pursuant to a confidentiality agreement that was separate from the agreement between the parties in connection with the DOE project, I find that no separate confidentiality agreement existed. Tr. at 299-300, 303, 482-83, 498; CMP Exh. 286. 104. The TGA tests performed by RTI and Dr. Gupta were outside the scope of the DOE subcontract, and, thus, were not covered under the confidentiality agreement between CMP and RTI signed in connection with the DOE subcontract. Tr. at 299, 303, 482-83; CMP Exh. 286. 105. The TGA tests are designed to measure the pickup of S02 by the zinc titanate under controlled conditions. Tr. at 46, 479. 106. At Dr. Albers’s request, Dr. Gupta ran a series of TGA tests (monitoring S02 “pickup”) on the CMP zinc titanate material, which was usually identified as “CMP-5” on the graphs that RTI provided. Tr. at 478-87; Kat Exhs. 81-84 (Graphs), 248. 107. CMP-5 (and later the SOx A additive sold to KataLeuna under the TTA for use in FCC units) was actually the same zinc titanate material being developed by RTI for use in power plants under the DOE project. Tr. at 476, 481 (Gupta), 303-04 (Dr. Albers). . 108. In the TGA tests, RTI compared the ability of the CMP-5 zinc titanate material to pick up and release sulfur oxide with the ability of the other zinc titanate preparations and the commercially available DeSOx to do the same. Tr. at 478-87; Kat. Exhs. 81-84- (Graph Results), 248. 109. On or about June 15, 1994, Dr. Gupta sent Dr. Albers a fax with the first results of the TGA tests RTI had run on the samples of CMP’s zinc titanate Sox A additive. Tr. at 306-07, 480; Kat. Exh. 248. 110. Subsequently, Dr. Gupta discussed this data on the telephone with Dr. Albers and told him that the “zinc titanate itself was not very suitable for DeSox application.” Tr. at 480. 111. On or about July 6,1994, Dr. Gupta sent a letter to Dr. Albers with the TGA test results of three additional zinc titanate samples. Tr. at 481; Kat. Exh. 81. 112. One of these three samples was identified as CMP-5. Tr. at 309-311; 481-82. 113. The other' two samples provided by CMP for the second set of tests were: (1) CMP-5 and one part oxidation catalyst; and (2) CMP-5 and two parts oxidation catalyst. Tr. at 482. 114. In his letter to Dr. Albers (describing the results of the second set of tests), Dr. Gupta observed “that the CMP-,5 which [RTI] tested had very little activity for removing S02 but when [RTI] added platinum to the zinc titanate it showed some activity for removing S02.” Tr. at 483. 115. Dr. Gupta told Dr. Albers that zinc titanate,- alone, was not effective for SOx removal. Id. 116. I find, as Dr. Gupta testified, that although CMP-5 showed “some activity for removing S02” when platinum was added to the sample, this activity still was not “as good activity as the industry standard De-Sox.” Id. 117. On or about August 16, and August 19, 1994, Dr. Gupta sent additional TGA test results to Dr. Albers of more zinc titanate-based samples. Kat. Exhs. 82, 88. 118. These additional TGA tests included samples of CMP-5 combined with platinum in a one-to-one ratio. Tr. at 484-85. 119. Dr. Gupta conveyed his opinion to Dr. Albers that the CMP-5 additive mixed with platinum (a sample labeled Catave 850) did not show much SOx pickup. Tr. at 484-86; Kat. Exh. 81 at 1. 120. Finally, on or about September 2, 1994, Dr. Gupta sent Dr. Albers TGA test results that compared more samples of the CMP-5 mixed with platinum against the commercial DeSOx material. Tr. at 486; Kat. Exh. 8k- 121. The data from this last test was not useful because the sample was left in the TGA unit over the weekend and picked up moisture. Tr. at 486. 122. Dr. Albers agreed that this test did not provide any meaningful data. Tr. at 315. 123. Dr. Gupta continued to believe, and I find, that zinc titanate would not work as a SOx emissions control additive. Tr. at 486-87. 124. Using equations and chemical reactions to support his opinion, Dr. Gupta explained to Dr. Albers (on a blackboard at CMP’s offices) that zinc titanate did not work as a SOx emissions control additive. Tr. at 487 (Gupta). 125. The TGA testing of the SOx A emissions control additive (CMP-5) was completed more than one year before the TTA was fully executed. Kat. Exh. 8k. 126. CMP did no further work on the SOx A additive (CMP-5) after the RTI testing. Tr. at 47-48, 303-04 (Dr. Albers). • CMP’s Knowledge (Regarding SOx A) Prior to Execution of the TTA 127. Prior to executing the TTA, CMP and Dr. Albers were aware that the zinc titanate formula for SOx additives (which was sold to KataLeuna under the TTA) did not effectively capture SOx and was not effective for removal of sulfur from an FCC unit. Tr. at 299-300 (Dr. Albers), 304, 309, 480-87; Kat. Exhs. 218, 81, 82, 83, 8k (TGA test results performed by RTI). 128. Dr. Albers admits that the TGA tests run by RTI were “less than desirable” and demonstrated that the SOx A technology was not as effective as the commercial DeSOx. Tr. at 299-300, 304, 307. 129. In 1994, approximately one year before execution of the TTA, Dr. Albers and CMP knew that RTI and Dr. Gupta had filed and were prosecuting a patent application for the same zinc titanate formula as SOx A (CMP-5) for use in power plants and FCC units. Tr. at 318-20, 343; Kat. Exh. 30k (Amendment Correcting In-ventorship on the Gupta/RTI patent application); Kat. Exh. 306 (Preliminary Amendment adding claims 11-39). 130. In October 1994, a heated dispute between Dr. Albers and RTI arose concerning whether Dr. Albers and Burkhead (a CMP employee) would sign the patent application for the zinc titanate sorbent material for use in both FCC units and power plants that had been prepared by RTI and its counsel. Tr. at 1830-33,1835-36; Kat. Exh. 325. 131. Ultimately, Dr. Albers refused to sign the RTI patent application. Tr. at 319,1831,1836. 132. As a result of Dr. Albers’s refusal to sign the RTI patent application, RTI (through patent counsel) filed an “Amendment Correcting Inventorship” with the United States Patent and Trademark Office (“USPTO”) deleting Dr. Albers and Burkhead as inventors on Patent Application Serial No. 08/325,853 for the zinc tita-nate sorbent material. Kat. Exh. 30k, 305. 133. RTI subsequently filed an “Amendment After Final Action” with the USPTO to cancel the “inventive contributions” (claims 1-16, 29-30, 34-96 in Patent Application Serial No. 08/325,853) of Dr. Albers and Burkhead. Id. 134. Nonetheless, CMP represented in its SOx A patent application that SOx A included an application for zinc titanate’s use in power plants (referred to in the Gupta/RTI patent), specifically, “wherein flue gas or hot. gas of said coal gasification unit is passed through said ebullating or fluidized bed.” Tr. at 63; Kat. Exh. 86 at 18 (emphasis added). 135. Additionally, Dr. Gupta and RTI alleged, and I find, that Dr. Albers and CMP used confidential information gained during the course of the RTI-CMP DOE subcontract (when both parties were subject to the July 1, 1993, confidentiality agreement) in their subsequent patent application (transferred to KataLeuna under the TTA) for a zinc titanate SOx removal additive. Tr. at 490-91; CMP Exh. 303. • Expert Opinion that CMP’s Zinc Tita-nate SOx Emissions Control Additive Technology (SOx A) Is Not Effective to Reduce Sulfur Emissions 136. Dr. Douglas P. Harrison is the Voorhies Professor of Chemical Engineering at Louisiana State University. Tr. at 511; Kat. Exh. 259. 137. Dr. Harrison specializes in chemical engineering, chemical reactions and high temperature gas-solid reactions, and has published 25-30 articles and papers on that subject. Tr. at 512. 138. Dr. Harrison was accepted as an expert witness for KataLeuna in chemical engineering, chemical reactions, and high temperature gas-solid reactions pursuant to Fed.R.Evid. 702 without objection from CMP. Tr. at 513. 139. In preparing his expert report, Dr. Harrison reviewed, among other things, the zinc titanate TGA test data that had been generated by RTI for CMP, the SOx A patent application, and the patent that ultimately issued on the SOx A technology. Tr. at 513-14; Kat. Exh. 259 (Harrison Report). 140. Dr, Harrison also conducted an independent thermodynamic equilibrium analysis (“TEA”), a standard scientific and mathematical evaluation process used to analyze chemical reactions, using CMP’s formulation for the zinc titanate SOx A additive. Tr. at 516-18; Kat. Exh. 259. 141. Dr. Harrison explained that, while the TEA includes approximations.and simplifications, the TEA is a “standard mechanism used in [this particular field of chemical engineering] for evaluating chemical reactions.” Tr. at 517-18. 142. Specifically, the TEA “used thermodynamic principles to estimate if zinc titanate would be an effective SOx removal agent.” Tr. at 516. 143. The TEA performed by Dr. Harrison “showed that in all probability [SOx A] would not be effective” even given the approximations and simplifications of the TEA, Tr. at 518, and I so find. 144. Dr. Harrison opined that concluding that the SOx A was not effective was confirmed by the RTI TGA test data which “showed that zinc titanate was quite inferi- or to the commercial [ (industry standard) ] DeSox,” Tr. at 518, and I so find. 145. Using the TEA and the available TGA test data (from RTI), Dr. Harrison concluded that, within a reasonable degree of scientific certainty, the CMP zinc tita-nate SOx A additive “would not be an effective SOx removal agent,” Tr. at 517— 18; Kat Exh. 259, and I so find. 146. Dr. Harrison also concluded, based on the TEA and the tests run by RTI, that the addition of platinum oxidation promoter to the zinc titanate additive does promote the conversion of S02 to S03 thereby resulting in some sulfur removal, but this removal is well below the effectiveness of commercial or industry standard SOx additives and is attributable to the presence of the platinum and not the zinc titanate, Tr. at 518, 533-34; Kat. Exh. 259, and I so find. 147. I reject CMP’s assertions that Dr. Harrison’s conclusions regarding the commercial effectiveness of the CMP zinc tita-nate SOx A additive are irrelevant because I find that comparison to the industry standard SOx additive is appropriate to determine the value of the SOx A technology to KataLeuna. Id. 148. I add that, although Dr. Harrison concluded that the SOx A additive’s effectiveness was well below commercial standards for sulfur removal, he, nonetheless, stated that it would have been appropriate and helpful in preparing his expert report if he had known that CMP “took the position, quite vocally and openly, that the so-called statistical analysis performed [by RTI] was defective.” Tr. at 529. 149. Although CMP makes reference to Dr. Bernhardt Trout’s (CMP’s witness tendered as an expert on, inter alia, TEA, basic chemical reactions, and correlations of model predictions) expert report to contradict Dr. Harrison’s trial testimony concerning the effectiveness of CMP’s SOx A additive, I excluded Dr. Trout as an expert on March 5, 2003, as unreliable under Fed. R.Evid. 702, and therefore, CMP introduced no admissible testimony to contradict Dr. Harrison’s conclusions, Tr. at 525-33, 607, 696-702, and in any event, nothing in Dr. Trout’s report would alter my findings in these regards. 150. Further, contrary to CMP’s assertions that there was no guarantee that the SOx technology transferred under the TTA would be as effective as the commercial or industry standard (in most cases DeSox, a platinum-based additive) SOx additive, I find that the industry standard provides the most useful benchmark against which to determine the effectiveness, utility, value, and efficacy of the SOx technology transferred under the TTA. • SOx Effectiveness (and alternative Hydrotalcite SOx formula) 151. The TGA data on the zinc titanate SOx A additive and Dr. Harrison’s TEA of the SOx A additive demonstrate that SOx A does not effectively (i.e., significantly below extant commercial standards) capture SOx or release H2S, and therefore, does not effectively reduce sulfur emissions from an FCC unit. Kat. Exh. 259; Tr. at 517-18. 152. Contrary to the representations CMP made in the TTA, the formulation for a zinc titanate SOx additive that CMP sold to KataLeuna under the TTA as SOx A, is not effective in reducing the emissions of sulfur compounds from an FCC unit. Tr. at 517-18; Kat. Exh. 259; CMP Exh. 220. 153. The TTA defines the SOx A technology (referred to both specifically by name and generally as part of the “Technology” in the TTA) as “a sulfur oxide pollution control catalyst which removes sulfur from fluid catalytic cracking unit emissions,” Kat. Exh. 80 at ¶ l(n)(4) (emphasis added), and states that the “Technology is complete and contains all of the information necessary for Buyer to utilize the same for the purposes of further development into a commercial product, ” Kat. Exh. 80 at ¶ 4(b)(ll) (emphasis added). 154. I find that, although the SOx A technology transferred under the TTA may have arguably been “complete,” the chemical formulation for the zinc titanate-based SOx A technology is not currently effective for SOx removal in an FCC unit and it is doubtful that “further development” by KataLeuna will increase the likelihood of commercial viability. Tr. at 486-87 (Gupta), 516-18; Kat. Exh. 80 at ¶ 4(b)(ll). 155. KataLeuna and CMP entered into a related agreement, also executed on October 27, 1995 (with the other two agreements the TTA and SAA), that concerned FCC additive technology — the “Research and Development Agreement” (RDA). Kat. Exh. 79. 156. During the course of the RDA in 1996, CMP prepared additional formulations of zinc titanate-based SOx emission control additives. Tr. at 312-13, 332-36. 157. Among other formulations, Dr. Al-bers experimented with combinations of zinc titanate and hydrotalcite. Id. 158. Dr. Albers claimed that “there was a synergy between zinc titanate and hydrotalcite and if you put the two together you would actually get a better SOx performance ....” Tr. at 123-24, 950. 159. Although contrary to the direction of McDaniel (under the RDA), CMP continued to research and test the effectiveness of hydrotalcite and zinc titanate in SOx removal and were eventually issued a patent for the formulations but refused to “offer” the patent to KataLeuna as required under the TTA. Tr. at 332-36; CMP Exh. 827, 828. ' 160. Dr. Albers testified that CMP “was interested in people who might want to pursue the [hydrotalcite] patents,” but CMP had not offered the hydrotalcite patents to other clients, and, although CMP recognized KataLeuna’s right of first refusal, had not offered them to KataLeuna. Tr. at 1814-15. 161. In 1996, CMP provided KataLeu-na with data and results from TGA tests run on the various zinc titanate additive formulations it had worked up under the RDA. Tr. at 949-50. 162. On or about October 9, 1996, John McCauley, KataLeuna’s head of research and development, prepared a memorandum for McDaniel that reviewed these tests and reached a conclusion as to the effectiveness of zinc titanate as a SOx additive. Tr. at 950; CMP Exh. 220. 163. Included in this memorandum was a statistical analysis that demonstrated that, any activity in the zinc titanate/hydro-talcite samples came from hydrotalcite and “none of it comes from the zinc titanate,” Tr. at 964-66, and I so find. 164. McCauley testified that there was a margin of error in the TGA results (that he could not exactly determine), but as far as he was concerned, “the highs and lows [ (points plotted on the graphs depicting the TGA test results for zinc titanate/hy-drótalcite samples) ] were always within the range of error measurement error for the [TGA] machine.” Tr. at 966. 165. McCauley testified at trial that, based on the TGA results that were within the margin of error, he “never saw any activity for zinc titanate, ... [and he] was looking for it [because] ... the whole purpose was to find this synergistic effect, no matter how small it was.” Tr. at 966. 166. McDaniel testified that as a result of McCauley’s statistical analysis, Kata-Leuna “came [to] a realization around October of 1996, that there wasn’t anything going on with the zinc titanate material,” Tr. at 148, and I so find. 167. CMP produced no evidence at trial to demonstrate that it ever had a basis for concluding that zinc titanate was or could be an effective material for FCC SOx emission control. Kat. Exh. 80 at ¶¶ 2(n)(4), 4(b)(ll). 168. Despite assertions to the contrary CMP produced no evidence to support its theory that a “combination of zinc titanate with hydrotalcite had a synergistic effect and was particularly effective for sulfur removal in an FCC environment.” Tr. at 148, 964-66; CMP Proposed Findings of Fact at 61. 169. Under the TTA, CMP did not transfer or assign to KataLeuna an effective SOx emissions control additive (SOx A) that was valuable in comparison to the extant industry standard. See supra findings 150,154. 170. It is clear that, regardless of further development by KataLeuna, the chemical formulation for the zinc titanate-based SOx A technology purchased under the TTA is not effective for SOx removal in an FCC unit. Tr. at 486-87 (Gupta), 516-18. 171. Further, KataLeuna received nothing of value from the SOx A patent application transferred by CMP under the TTA. See id. 172. KataLeuna pursued and was eventually issued U.S. Patent No. 5,801,115 on September 1, 1998 (based on the SOx A additive purchased under the TTA), but the patent was “dramatically limited” and “substantially narrower” than the patent application purchased under the TTA, and required both amendments and continuation-in-part applications before the patent issued. Tr. at 558-59 (Steiner); Kat. Exh. 205; see infra findings 342, 347-50. iv. The Inventive Process Leading to the Combustion Promoter B Patent Application 173. Combustion Promoter B is defined under the TTA as “[a] cobalt based version of Combustion Promoter A for which a U.S. Patent Application” has been filed. Kat. Exh. 80, ¶ l(n)(2). 174. Combustion Promoter A is defined as “a platinum based combustion promoter currently patented by Mobil Oil Company.” Kat. Exh. 80, ¶ 1(b). 175. Platinum is a noble metal. Tr. at 48. 176. The industry standard commercial combustion promoter contains platinum that catalyzes the reaction of carbon monoxide (CO) to carbon dioxide (C02) in the regenerator of an FCC unit. Tr. at 48-49. 177. Because platinum is very expensive, there are high costs involved with manufacturing a conventional platinum-based combustion promoter. Tr. at 48-49. 178. In addition, platinum-based combustion promoters are based on technology developed and patented by Mobil Oil. Id. 179. Because Mobil Oil has patented the platinum-based promoter technology, royalties must be paid in order to manufacture conventional combustion promoters. Id. 180. A non-noble metal based combustion promoter, therefore, would have significant cost advantages. Id. 181. To avoid the high cost of a noble-based promoter, CMP attempted to develop a new promoter that was not based on a noble metal such as platinum. Tr. at 48. 182. CMP filed a request for a patent application for Combustion Promoter B on May 2, 1995, and it was assigned Serial No. 08/432,996. Tr. at 63-64; Kat. Exh. 87. 183. This application was assigned to KataLeuna. Kat. Exh. 71. 184. The Combustion Promoter B patent application contained CMP’s formulation of its combustion promoter utilizing the non-noble metals cobalt, strontium and lanthanum combined with other materials. Tr. at 63-64; Kat. Exh. 87, at 3-6 (Patent Application). 185. Under the TTA, KataLeuna was “entitled to rely” on all statements contained in the Combustion Promoter B patent application as representations made by CMP directly to KataLeuna. Kat. Exh. 80, ¶ 4(b)(6). 186. CMP represented in the Combustion Promoter B patent application that the invention is an FCC additive and process for making the same for “promoting the combustion of carbon monoxide to carbon dioxide in the regeneration of a fluid cracking catalyst.” Kat. Exh. 87 at 1 (emphasis added); Tr. at 64. 187. CMP further represented that “[t]he [Combustion Promoter B] invention is a catalyst composition and process for making the catalyst composition. The catalyst composition promotes the combustion of carbon monoxide to carbon dioxide .... The process is for producing a combustion promoter catalyst of carbon monoxide to carbon dioxide.” Kat. Exh. 87 at 10 (emphasis added). 188. CMP also represented that “[t]he non-noble metal [Combustion Promoter B] additive [that CMP has] discovered for catalyzing the conversion of carbon monoxide to carbon dioxide in the regenerator of an FCC unit is less expensive to produce and results in an additive with the same efficiency as a noble metal additive in converting the carbon monoxide into carbon dioxide ... [and] is a very effective ‘combustion promoter’ additive .... ” Kat. Exh. 87 at 2 (emphasis added); Tr. at 64. • Early Commercial Trials of Combustion Promoter B 189. Prior to the execution of the TTA, CMP conducted two limited commercial trials of Combustion Promoter B. Tr. at 50; Kat. Exh. 203. 190. After purchasing the CMP technology under the TTA, KataLeuna marketed Combustion Promoter B under the brand name PROMAX 2000. See, e.g., Tr. at 358. 191. Neither commercial test was “scientific” in nature; there were no controls “in the way of an ordered, organized test” in place to see whether the Combustion Promoter B worked as against the industry standard. Tr. at 51, 53. 192. The first commercial test was conducted at Ultramar Refining in Halifax, Nova Scotia (“Ultramar”) in February 1995. Tr. at 50-51, 53 193. CMP shipped Ultramar a small amount of Combustion Promoter B to put into its FCC unit. Tr. at 50. 194. Ultramar stopped adding its conventional platinum-based promoter and added the Combustion Promoter B over the course of several days (according to McDaniel’s trial testimony, contradicting the NPRA paper, see infra fact no. 205, stating that the promoter was added over the course of approximately three weeks) and saw no change in the FCC unit’s performance. Tr. at 50; CMP Exh. k.0 at Bates No. DEF 005727. 195. Another commercial test was also conducted at Consumer’s Co-op in western Canada in February 1995. Tr. at 52. 196. This test was also of a limited duration and no change was observed in the operation of the FCC unit after the Combustion Promoter B was added. Tr. at 52-53; Kat. Exh. 203. 197. When describing the process through which Combustion Promoter B was tested, McDaniel explained that an FCC unit has a “circulating inventory of catalysts and additives.” Tr. at 100. 198. If the oil refinery is utilizing a conventional platinum-based promoter, then there is already a baseline amount of that conventional promoter in the FCC unit. Tr. at 100. 199. At the beginning of a trial, the oil refinery will stop adding the conventional platinum-based promoter and begin adding the Combustion Promoter B. Id. 200. The changeover, however, is not instantaneous. Id. 201. It takes time (a matter, of weeks) for the concentration of Combustion Promoter B to increase and reach saturation, and the concentration Of platinum to decrease. Tr. at 53, 100-01; see infra findings 228-229. 202. Complete saturation occurs when there is no longer any conventional platinum based promoter left in the system and only Combustion Promoter B remains in the FCC unit. Tr. at 101. 203. Without complete saturation, it is difficult to discern whether the Combustion Promoter B is actually promoting the combustion of carbon monoxide to carbon dioxide, or if the carbon combustion is being catalyzed by residual platinum-based promoter. Tr. at 100. 204. The concentration of Combustion Promoter B in the FCC units during the Ultramar and Consumer’s Co-op trials was never brought to complete saturation, so the results of these tests were inconclusive. Tr. at 52-53,103-04. ' 205. Nonetheless, as no changes were observed in the operation of either FCC unit, McDaniel and CMP concluded that “it looked good so far.” Tr. at 53. 206. The paper presented to the Nationa