Junction Solutions, LLC v. MBS Dev., Inc., No. 06 C 1632, 2007 WL 4233995 (N.D. Ill. Nov. 20, 2007) (Gottschall, J.).*
Judge Gottschall denied defendant’s Fed. R. Civ. P. 12(c) motion to dismiss plaintiff’s trade secret misappropriation complaint based upon the parties’ prior settlement agreement and resulting dismissal with prejudice by the District of Colorado. While the alleged misappropriation was the same — defendant employees leaving plaintiff to start their own competing software company — the use of the trade secrets was different. In the Colorado case, defendants allegedly harmed plaintiff by starting a competitor using plaintiff’s trade secrets. In this case, the alleged harm was developing competing software, after the Colorado settlement and dismissal. Claim preclusion, therefore, did not apply. Issue preclusion did not apply because the Colorado court did not make any substantive final judgments. The settlement agreement could have barred plaintiff’s claim, but the agreement’s release expressly excluded claims arising after the agreement’s effective date.
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