Intellectual Property — trade secrets

Listen to this article

United States Court of Appeals For the Seventh Circuit

Civil

Intellectual Property — trade secrets

A plaintiff cannot sustain a trade secret or unjust enrichment claim when that plaintiff fails to take any protective measures to safeguard its proprietary information.

“Even assuming some sort of informal relationship existed that hinted at confidentiality, FS still failed to take any steps to maintain its secrecy, which was unreasonable under these circumstances. No information was ever marked confidential. Nor did FS take any steps to protect its claimed proprietary information, contractually or otherwise. FS volunteered its information to AOS. And, unlike in Learning Curve, the topic of confidentiality was never even broached by FS, a sophisticated party familiar with such agreements. AOS, with its one-way confidentiality agreement, was the only party that took any protective steps. Under these circumstances, FS’s efforts (or lack thereof) to maintain secrecy of its claimed trade secrets were not reasonable.”

“We agree with the district court that this is an ‘extreme case.’ FS failed to take any precautionary measures to protect its claimed trade secrets. Therefore, FS’s actions were not reasonable under these circumstances and cannot sustain FS’s misappropriation of trade secrets claim.”

Affirmed.

11-1354 Fail-Safe, LLC, v. A.O. Smith Corp.

Appeal from the United States District Court for the Eastern District of Wisconsin, Stadtmueller, J., Cudahy, J.