Morningware, Inc. v. Hearthware Home Prods., Inc., No. 09 C 4348, Slip Op. (N.D. Ill. Sep. 4, 2012) (St. Eve, J.).

Judge St. Eve granted in part plaintiff Morningware’s motion for summary judgment as to defendant Hearthware’s Deceptive Trade Practices Act, Lanham Act and related state law counterclaims. 

As an initial matter, the parties’

LimitNone v. Google, Inc., (Cook County Ct. Jun. 24, 2008).
Last week, LimitNone, a Chicago company, sued Google for trade secret misappropriation seek $1B. LimitNone alleged that Google entered a nondisclosure agreement with LimitNone to review LimitNone’s gMove software — software that helps Microsoft Outlook users migrate data to the Google platform. Google allegedly assured LimitNone that it would not offer a competing product, but after receiving LimitNone’s trade secrets and promoting the $19 gMove software, Google began offering a free, competing software package which allegedly used LimitNone’s trade secrets. LimitNone filed a speaking complaint, for example:
With gMove priced at $19 per copy and Google’s prediction that there were potentially 50 million users, Google deprived LimitNone of a $950m opportunity by offering Google’s competitive product for free as a part of its ‘premier’ Google Apps package
This appears to be an interesting and potentially significant case. I will keep my eye on it and update you as opinions and events occur. For more on the filing, check out:
* Chicago Tribune
* Slashdot
* Tech Report
* ZDNet

Continue Reading Chicago Company LimitNone Sues Google

RRK Holding Co. v. Sears, Roebuck & Co., No. 04 C 3944, Slip Op (N.D. Ill. May 27, 2007) (Coar, J.).
Judge Coar denied defendant Sears, Roebuck & Co.’s (“Sears”) Fed. R. Civ. P. 50(b) motion for judgment as a matter of law and Fed. R. Civ. P. 59(a) motion for a new trial or a remittitur. And the Court granted plaintiff RRK Holding Co.’s (“RRK”) motion for pre-judgment and post-judgment interest. A jury previously returned a verdict finding Sears liable for breach of a nondisclosure agreement and misappropriation of RRK’s trade secret related to its spiral saw – click here for much more on this case in the Blog’s archives. The jury awarded RRK approximately $21M, including $11.6M in actual damages, $1.6M for unjust enrichment and $8M in punitive damages.
First, Sears argued that RRK offered insufficient evidence showing that Sears’ alleged misappropriation caused RRK’s damages. But the Court held that there was sufficient evidence to support the jury’s verdict. The fact that Sears’s price for its spiral saw was lower than RRK’s explained why customers purchased Sears’s saws over RRK’s, but the trade secret causation was shown by the fact that Sears sold the combination tool instead of selling the components separately.
Second, Sears argued that RRK’s damages should be limited to the traditional “head start” period (an estimate of the time it would take for defendant to develop the trade secret on its own). But the Court held that Illinois law limits injunctive relief to a head start period, but not monetary relief.
Third, the Court held that RRK’s damages expert was sufficiently credible and held that Sears had sufficient opportunity to challenge the expert’s methodologies during cross examination.
Fourth, Sears argued that the jury’s award was in error because it awarded damages based on the entire sales price of the spiral saws, instead of apportioning just that portion of the sales price related to RRK’s trade secrets. But the Court held that a rational jury could have determined that the reason the spiral saw was a success was because of the trade secret and that, therefore, apportionment was not required.
Fifth, Sears argued that RRK’s lost profits damages should have been cut-off when third party competitor Dremel entered the market with a competing spiral saw. But the Court held that it was unclear whether Dremel’s tool was similar enough to RRK’s trade secret to be a substitute for it.
The Court also held that the jury’s award was not excessive. But the Court did find that the jury erred in by using the wrong figure from RRK’s expert for actual lost profits. RRK also conceded that the jury used the wrong number. The Court, therefore, reduced the jury’s actual damages award from $11.6M (the incorrect figure) to $11.2M (the correct figure).
Finally, the Court awarded RRK both pre-judgment and post-judgment interest. Pre-judgment interest, which is awarded on equitable grounds, was appropriate because of the intentional nature of trade secret misappropriation. Additionally, the Court held that pre-judgment interest was appropriate even though RRK was also awarded punitive damages. The Court did, however, suggest that had the punitive damages award been multiples of the actual damages, pre-judgment interest might not have been appropriate. Sears did not challenge RRK’s motion for post-judgment interest.
The Court added $3.7M in pre-judgment interest to the $21M award and assessed post-judgment interest of $1,931.50 per day until the award was paid.

Continue Reading RRK v. Sears: Judge Adds Interest to Jury Award

Recycled Paper Greetings, Inc. v. Davis, No. 08 C 236, __ F. Supp.2d __, 2008 WL 282687 (N.D. Ill. Feb. 1, 2008) (Bucklo, J.).
Judge Bucklo denied plaintiff’s, Recycled Paper Greetings (“RPG”), motion for a temporary restraining order in this trade secret misappropriation action. RPG argued that it was either part of a joint venture or, at least, a confidential relationship with defendant Kathy Davis to develop a signature line of greeting cards. RPG contends that Davis took confidential information regarding the greeting card line to a competitor. Davis countered that she had terminated her contract with RPG pursuant to the contract’s termination provision before working with RPG’s competitor and there was, therefore, no breach or misappropriation. At an initial hearing, the Court suggested that live testimony might be required to fully resolve the motion for the TRO. But both parties told the Court that their respective witnesses would not be available during the necessary time frame to testify. Because no witnesses were available, the Court denied the TRO, holding that it lacked sufficient information to determine that RPG maintained its alleged trade secrets with sufficient secrecy or the nature of the relationship between RPG and Davis.
Practice tip: If you are seeking a TRO, line up commitments from your potential witnesses to be available both flexibly and quickly. Not many judges will grant TROs if plaintiff cannot present requested witnesses.

Continue Reading No Temporary Restraining Order Without Live Witnesses

RRK Holding Co. v. Sears, Roebuck & Co., No. 04 C 3944, Min. Order (N.D. Ill. Sep. 10, 2007) (Coar, J.).*
Judge Coar denied the parties’ damages motions in limine.* First, the Court held that defendant Sears, Roebuck & Co. (“Sears”) could have its damages expert Catherine Lawton testify regarding her analysis of a hypothetical September 2001 negotiation between the parties. Plaintiff RRK Holding (“RRK”) argued that the misappropriation began in March 2000, not when Sears began selling its product in September 2001. As a result, Sears contended that Lawton’s September 2001 hypothetical negotiation should not be allowed into evidence. But the Court held that the timing of the misappropriation was a question of fact for the jury and, therefore, allowed Lawton’s testimony.
Second, the Court held that Sears could introduce the 2003 sale of some of RRK’s assets for $17M as part of Sears’s damages case. The Court held that the value of the sale was relevant to RRK’s alleged injury based upon the alleged misappropriation.
Third, the Court held that RRK could introduce damages calculations including periods beyond the “head start” period (the time it would have taken for Sears to reverse engineer RRK’s combination tool). The head start period was disputed, preventing the Court from fixing a time for the period, and any alleged harm would be resolved by a jury instruction explaining how the jury should calculate damages relative to the head start period.
Finally, the Court denied RRK’s motion for sanctions pursuant to 28 U.S.C. § 1927. RRK argued that Sears’s March 2007 production, two years after fact discovery closed, of documents dated 1999 was “unreasonable and vexatious” and should be sanctioned. But the Court held that Sears’s explanation that the documents were found when it replaced its litigation counsel and new counsel ran additional searches rendered the delay “negligen[t] and reckless[],” but not in bad faith. The Court, therefore, did not impose sanctions.
* Click here for a copy of the opinion and click here for more about this case in the Blog’s archives.

Continue Reading “Negligence and Recklessness” Does Not Warrant Discovery Sanctions

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.

Continue Reading 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.).
The Chicago Sun-Times is reporting that a jury returned a $21.5M verdict, including $8M in punitive damages, Monday for plaintiff RRK Holding Co. (“RRK”) in its Illinois Trade Secret Act (“ITSA”) suit against defendant Sears, Roebuck & Co. (“Sears”). RRK alleged that, pursuant to a nondisclosure agreement, it disclosed to Sears its plans for a next generation “combination tool” which consisted of a rotary saw, also called a spiral saw, which could be converted into a plunge router. But after negotiations broke down over price, Sears allegedly took RRK’s plans and used them to make Sears’s Craftsman “All-in-One” tool. Sears has said it will appeal the verdict. The Court’s docket has not been updated yet with a verdict form or jury instructions, but I will post them when they become available, likely next week.
For more on this case, click here for the Blog’s archives.

Continue Reading Jury Returns $21.5M Trade Secret Verdict

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

Judge Coar denied defendant summary judgment on plaintiff’s trade secret and breach of contract (nondisclosure agreement) claims. The Court also granted defendant summary judgment on plaintiff’s unjust enrichment claim holding that because it was based upon the trade secret misappropriation allegations it was preempted by the Illinois Trade Secret Act (“ITSA”). Plaintiff alleged that, pursuant to a nondisclosure agreement, it disclosed to defendant its plans for its “combination tool” which consisted of a rotary saw, also called a spiral saw, which could be converted into a plunge router. But after negotiations broke down over price, defendant allegedly disclosed the idea to its Canadian subsidiary, which then allegedly disclosed the idea to another party, Choon Nang Electrical Appliance Manufacturing Ltd. (“Choon Nang”), that obtained a British design patent on the combination tool and produced it for defendant. 


Continue Reading Conflicting Testimony Creates Questions of Fact in Trade Secrets Case