Chicago Business Litigation Attorney Blog

For the purposes of determining trade secret protection, an Illinois Court has held that information about customers’ needs and requirements may have a different status under the law that depends on whether the business sells goods or if the business provides a service. Del Monte Fresh Produce, N.A., Inc. v. Chiquita Brands International Inc., 616 F.Supp.2d 805 (2009).

Courts are more likely to deem information about customers’ needs and requirements a trade secret when the business provides professional services. See id. Under these circumstances, customers maintain trust in a particular seller, and that trust is a valuable business asset created by years of management that the employee is not likely allowed to take with him. See id.

However, information about customers’ needs and requirements generally may not be considered a trade secret when dealing with the selling of ordinary goods. See id. The current price and quality, rather than a past investment in meeting customers needs, are the decisive factors in the continued success of the business, and they are not appropriated by the departing employee. See id.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

About Tamari & Blumenthal, LLC: Tamari & Blumenthal, LLC is a Chicago-based business litigation and business law firm. The law firm represents clients in a broad range of business disputes. Attorneys Walid J. Tamari and Grant Blumenthal are the law firm’s co-managing partners.

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Posted In: Business Litigation , Misappropriation of Trade Secrets , Trade Secrets

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A misappropriation of trade secret occurs when a person acquires or discovers a trade secret by improper means, or discloses or uses a trade secret in breach of a duty of confidentiality imposed on him by the nature of his relationship with the owner of the trade secret and the owner of the trade secret is damaged by this improper acquisition, disclosure or use. American Antenna Corp. v. Amperex Electronic Corp., 190 Ill.App.3d 535, 538 (2d Dist. 1989). To set forth a cause of action for a violation of the Illinois Trade Secrets Act, a plaintiff must allege facts that the information at issue was: (1) a trade secret; (2) misappropriated; and (3) used in the defendant's business. Arcor, Inc. v. Haas, 363 Ill.App.3d 396, 400 (1st Dist. 2005).

First, the Illinois Trade Secrets Act defines a “trade secret” as ‘information, including but not limited to, technical or non-technical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers, that is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use, and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality.” 765 ILCS 1065/2(d) (2002). Under case law, Illinois courts have defined a “trade secret” as a secret plan or process, tool, mechanism or compound known only to its owner and those . . . to whom it is necessary to confide it. American Antenna Corp. v. Amperex Electronic Corp., 190 Ill.App.3d 535, 538 (2d Dist. 1989). Furthermore, the First District Illinois Appellate Court has identified six common law factors that courts may consider in determining whether a trade secret exists: (1) the extent to which the information is known outside of the employer's business; (2) the extent to which it is known by employees and others involved in the business; (3) the extent of measures taken by the employer to guard the secrecy of the information; (4) the value of the information to the employer and to his competitors; (5) the amount of effort or money expended by the employer in developing the information; and (6) the ease or difficulty with which the information could be properly acquired or duplicated by others. Arcor, Inc. v. Haas, 363 Ill.App.3d 396, 400 (1st Dist. 2005).

Second, under the Illinois Trade Secrets Act, “misappropriation” is defined as an acquisition of a trade secret of a person by another person who knows or has reason to know that the trade secret was acquired by improper means. 765 ILCS 1065/2. The Act also defines “misappropriation” as disclosure or use of a trade secret of a person without express or implied consent by another person who: (A) used improper means to acquire knowledge of the trade secret; or (B) at the time of disclosure or use, knew or had reason to know that knowledge of the trade secret was: (I) derived from or through a person who utilized improper means to acquire it; (II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use; or (III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use; or (C) before a material change of position, knew or had reason to know that it was a trade secret and that knowledge of it had been acquired by accident or mistake. 765 ILCS 1065/2.

Informational Purposes Only: The content of this writing was prepared by Tamari & Blumenthal, LLC for informational purposes only. The content of this writing is not intended to constitute and does not constitute legal advice. Reading the content of this writing or communicating with our office staff or attorneys by telephone, fax or e-mail does not make you a client of Tamari & Blumenthal, LLC. To become a client, you must sign and return our governing engagement agreement. Persons reading the content of this writing should not act upon this information without contacting and speaking with an attorney. Do not issue or provide us with confidential information until an attorney-client relationship has been formally established with our firm.

Posted by Tamari & Blumenthal, LLC | Permalink | Email This Post

Posted In: Business Litigation , Misappropriation of Trade Secrets , Trade Secrets

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