Articles Posted in Trade Secret Litigation

Trade secrets can be among the most valuable assets of any business. Laws in Illinois and on the federal level have long protected trade secrets.

Before 1995, the protection of trade secrets was based on the common law as defined by the Restatement of Torts. Illinois has adopted the Illinois Trade Secrets Act, 765 ILCS 1065/1, et seq.

The Illinois Trade Secrets Act is modeled on the Uniform Trade Secrets Act. There are many instances in which the Illinois Trade Secrets Act could be utilized.

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In October 2006, Stericycle Inc. entered into a contract with RQA Inc. to buy a segment of its business for $8 million.

Stericycle acquired the unlimited right to use RQA’s software. In addition, the two companies entered into a non-competition agreement. In 2010, the two companies contracted again, this time entering into an asset purchase agreement for $18 million.

One of the assets purchased was RQA’s “Recall and Retrieval Business Services Unit,” which was called the RR assets. The agreement made note that Stericycle would be refunded a portion of the purchase price if Stericycle did not achieve certain pre-set revenues.

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Conxall Corp. was the supplier of custom cables and connectors to its customer, Mine Safety Appliances Co. (MSA), the third-party defendant in this case. 

MSA later provided drawings and 3-D (3-dimensional) models to the defendant ICON Systems to enable it to offer a quote and supply the same product.

The plaintiff Conxall contended that the drawings were trade secrets. ICON argued that the drawings and files contained no information that was actually secret or otherwise unknown in the industry. In furtherance of that argument, it maintained that the drawings and models were not needed to create ICON’s product, that ICON’s product was an improvement on Conxall’s product and that MSA had no duty to keep the materials confidential.

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