08-CV-0310 Fail-Safe, LLC, v. A.O. Smith Corp.

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Contracts
Unjust enrichment

It is not inequitable for one to benefit from the willful disclosure of information or an idea when such an idea or invention is not protected by some sort of intellectual property right. “The court’s holding is consistent with the policies underlying trade secret law, which is intended to ‘encourage innovation and development’ without ‘stifl[ing] legitimate competition by prohibiting competitors from using their own independent discoveries, public information, and reverse engineering.’ American Can Co. v. Mansukhani, 742 F.2d 314, 329 (7th Cir. 1984) (applying Wisconsin law); see also Gary Van Zeeland Talent v. Sandas, 84 Wis 2d 202, 217, 267 N.W.2d 242 (1978) (stating that Wisconsin law gives special protection to trade secrets compared to confidential, non-trade secret information ‘for the same reason that patents and copyrights are afforded special protection, because it is the public policy assumption that, by giving special protection to inventors, authors and composers, an incentive will be afforded to creativity and that the benefits will inure to the general public.’). To ensure that trade secret law does not reach so far as to stifle competition, ‘one who claims a trade secret must exercise eternal vigilance in protecting its confidentiality.’ RTE Corp. v. Coatings, Inc., 84 Wis. 2d 105, 118, 267 N.W.2d 226 (1978). In fact, if an owner of information ‘disregards caution and fails to take steps to safeguard against disclosure,’ Wisconsin courts find that the owner ‘courted his [or her] own disaster,’ meaning that the equities of the situation do not afford the plaintiff any relief under the law. Id. Here, given the court’s earlier ruling, the plaintiff’s disclosure of information unprotected by any body of intellectual property law to the defendant outside of any sort of confidential relationship means that it was not unjust for AOS to allegedly use FS’s information.”

08-CV-0310 Fail-Safe, LLC, v. A.O. Smith Corp.

E.D.Wis., Stadtmueller, J.