Court Upholds Gilks’ Trade Secrets in Fly Boatworks Dispute

The court’s decision in Gilk v. Fisher not only underscores that fiduciary duties among member-owners can satisfy the “reasonable efforts” requirement for trade-secret protection, but also illustrates how swiftly equity will intervene when insiders spin off new entities to divert confidential technology and corporate prospects.

The court found that the plaintiffs took reasonable efforts to maintain the secrecy of the trade secrets by relying on the fact that the five members of the closely held company at issue owed each other fiduciary duties to preserve confidential information. The court considered two competing temporary restraining orders (TROs): one involving the alleged trade secrets at issue and one involving the plaintiffs’ access to allegedly confidential and privileged information from the company’s email account.

Case Information

Gilk v. Fisher, No. 25-2158, 2025 WL 1920496 (D. Minn. July 11, 2025)

Judge: Hon. John Tunheim

Plaintiffs: Daniel Gilk, Samuel Gilk

Defendants: Mark Fisher, Errol Galt, Mark Baker, Axocon Polymers, LLC

Factual Background

Fly Boatworks, LLC was founded in 2012 by Daniel and Samuel Gilk to design, build, and sell skiff boats. In 2019, the Gilks began collaborating with Mark Fisher to develop a new skiff model, the F2 Carbon. In 2021, Fisher, Errol Galt, and Mark Baker (the investors) invested in Fly Boatworks and became parties to the company’s operating agreement. The Gilks claimed primary responsibility for the specific design work for the F2 Carbon. By late 2022, the first prototype was completed, and Fly Boatworks began limited production and sales, delivering four F2 Carbons to customers.

In October 2024, Fly Boatworks entered negotiations with Martac Corp. to integrate the F2 Carbon’s components into Martac’s M18 unmanned vessel. The Gilks alleged they developed all new components for the M18 integration.

In December 2024, Fisher, on behalf of Fly Boatworks, sent Martac a proposal that had the potential of generating $23 million in annual profits. After the M18 design was finalized, the Gilks alleged that the investors formed Axocon Polymers, LLC and began negotiating with Martac on Axocon’s behalf, effectively cutting Fly Boatworks out of the deal.

Further, Fisher created Marine Aerospace Composites LLC, allegedly to secure the manufacturing contract with Martac. Galt allegedly used his company Oversight Resources, LLC to receive invoices related to the M18 mold construction. The Gilks claim these entities were created to divert business opportunities and trade secrets away from Fly Boatworks. The Gilks further alleged that Fisher filed a patent application on behalf of Axocon, naming himself, Galt, and Baker as inventors, and incorporating Fly Boatworks’ proprietary innovations.

Procedural Background

The Gilks believed that a prototype would be delivered to Martac and a contract signed with Axocon imminently, prompting them to file suit individually and derivatively on behalf of Fly Boatworks. They filed a lawsuit claiming, inter alia, misappropriation of trade secrets. The Gilks filed a motion for a TRO and a preliminary injunction. The investors also filed a TRO and preliminary injunction, alleging that the Gilks and their counsel had illegally accessed Fisher’s email account and obtained confidential and privileged information. They sought to prevent the information from being used in the litigation.

Holding

The court granted the Gilks a preliminary injunction. As to the likelihood of success on the merits:

• The court found that the F2 Carbon and related “Skiff Innovations” were trade secrets, and that the Martac business opportunity belonged to Fly Boatworks.
• The court found that the specifics of the F2 Carbon and its integration into the M18 were not generally known or readily ascertainable, despite some public marketing and sales. Evidence showed that even Fisher, with access to the information, continued to request engineering help from the Gilks, suggesting the information was not easily replicable.
• The court also accepted the Gilks’ argument that they took reasonable measures to maintain secrecy by relying on the fiduciary duties owed by the five members of Fly Boatworks. Moreover, there were emails to suggest that the information at issue was subject to implied confidentiality.
• It also rejected the investors’ arguments that the Gilks or Fly Boatworks relinquished the Martac opportunity. The court found that the investors’ use of various entities was evidence of them trying to divert the Martac opportunity to Axocon.

As to irreparable harm, the court found that the Gilks would be harmed by not being first to the market with the Skiff Innovations, which is a unique and non-monetary advantage. It also credited the Gilks’ argument that the Martac contract was essential to Fly Boatworks’ existence.

The court denied the investors’ motion. The evidence suggested the email account in question was used for Fly Boatworks business, and that the Gilks likely had authorized access. Even if there was unauthorized access, the harm was not ongoing (the password had been changed), and any privacy or privilege issues could be addressed through later evidentiary challenges.