RRK v. Sears: Jury Instructions

RRK Holding Co. v. Sears, Roebuck & Co., No. 04 C 3944, 2007 WL 495254 (N.D. Ill. Feb. 14, 2007) (Coar, J.).

As promised last week, the jury instructions are now available -- click here for a copy.  Additionally, although the verdict form is not available electronically, the Court's minute order (click here for a copy) gave some additional detail.  The jury found for plaintiff RRK on each of eleven counts and awarded damages as follows:

Damages Award
RRK's Actual Losses $11,664,105
Sears's Unjust Enrichment $1,688,136
Punitive Damages $8,011,344
Total Damages $21,363,585

For more on this case, click here for the Blog's archives.

Unjust Enrichment Claim is Preempted by Copyright Law

Vaughn v. Kelly, No. 06 C 6427, Slip Op. (N.D. Ill. Jul. 16, 2007) (Manning, J.).

Judge Manning denied defendant R. Kelly’s (“Kelly”) motion to dismiss plaintiff Vaughn’s case arguing that Vaughn’s state law claims were preempted by copyright law. The Court previously dismissed Vaughn’s motion to remand the case to state court, holding that his unjust enrichment claim sounded in copyright law and giving Vaughn time to amend his complaint to remove the copyright elements (you can read more about the case in the Blog’s archives). Kelly now moves to dismiss the amended complaint. As in the original complaint, Vaughn alleged that he introduced Kelly to stepping, taught him how to step, helped him write a stepping-based song entitled "Step in the Name of Love," and collaborated with Kelly to develop a video for the song.  The Court held that Vaughn’s unjust enrichment claim was preempted by copyright law, but granted Vaughn leave to refile the claim as one for copyright infringement. The Court refused to consider Vaughn’s proposed amended unjust enrichment claim because Vaughn failed to amend the unjust enrichment claim when the Court first offered Vaughn a chance to amend and because it is improper to consider amendments as part of a motion to dismiss. The Court held that Vaughn’s breach of oral contract claim was not preempted by copyright law because it could be for less than co-ownership of the copyright, which would be preempted. 

Conspiracy Claim Based Solely on Trade Secrets Preempted by ITSA

Abanco Int'l., Inc. v. Guestlogix Inc., __ F. Supp.2d __, 2007 WL 1492928 (N.D. Ill. May 21, 2007) (Bucklo, J.).

Judge Bucklo dismissed plaintiff's conspiracy claim but not its unjust enrichment and tortious interference claims, holding that the former was preempted by the Illinois Trade Secret Act ("ITSA").  Plaintiff alleged that it entered a business relationship with defendant, supported by a confidentiality agreement (the "Agreement").  The parties were working together to supply airlines with electronic "buy-on-board" systems that would allow passengers to pay for drinks and other in-flight purchases with credit cards.  Plaintiff alleged that, based upon the Agreement, it provided defendant confidential, trade secret information about its buy-on-board system (the "Abanco System") and that with defendant's support, plaintiff entered negotiations to provide the Abanco System to third party American Airlines.  But after the parties' relationship soured, American Airlines allegedly ended negotiations with plaintiff and entered an agreement with defendant for a buy-on-board system.  Plaintiff then filed suit against defendant alleging trade secret misappropriation, breach of the Agreement, unjust enrichment, tortious interference and conspiracy.  The Court held that plaintiff's unjust enrichment and tortious interference claims were not preempted by ITSA because they were based upon information protected by the Agreement in addition to plaintiff's alleged trade secrets.  Specifically, plaintiff alleged that it gave defendant information "including information that was confidential, non-public, and proprietary and which constituted Abanco trade secrets." (emphasis added by the Court).  But plaintiff's conspiracy claim was based solely upon defendant's and American Airline's use of information obtained from Abanco "constitut[ing] trade secrets belonging to Abanco."  Because Abanco did not claim the conspiracy used any information other than its trade secrets, the conspiracy claim was preempted.

Insufficient Facts to Determine Whether Computer Program was Protected by Copyright or Trade Secret

Stafford Trading, Inc. v. Lovely, No. 05 C 4868, 2007 WL 1512417 (N.D. Ill. May 21, 2007) (Coar, J.).

Judge Coar granted in part declaratory judgment plaintiffs' (collectively "Stafford") motion to dismiss and denied Stafford's summary judgment motion.  The Court dismissed defendants' fraud and unjust enrichment counterclaims after holding that they were preempted by the Illinois Trade Secret Act.  The Court also dismissed defendants' fraudulent concealment.  The material fact that Stafford allegedly failed to disclose was the opinion that Stafford owned the RIVAS electronic options trading platform outright.  But the Court held that an allegedly withheld opinion could not support a fraudulent concealment claim.

The Court's summary judgment decision turned largely upon whether RIVAS was a computer program protected by copyright or a "methodology" protected as a trade secret.  The Court held that it had insufficient evidence to make the determination.  Furthermore, neither party briefed the issue of what effect the copyright/methodology would have upon defendants' alleged oral contract between the parties which allegedly made the parties co-owners of RIVAS.  The Court denied summary judgment as to defendants' breach of contract counterclaim because the existence of an oral contracts and its terms were both disputed facts.  Finally, the Court denied summary judgment as to defendants' trade secret counterclaim because, whether RIVAS was determined to be protected by copyright or trade secret, the parties disputed whether defendants employed sufficient means to protect RIVAS's secrecy.