Trade Secrets

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7^th Circuit Court of Appeals

Case Name: Nulogy Corporation v. Menasha Packaging Company, LLC

Case No.: 22-1583

Officials: Hamilton, Jackson-Akiwumi, and Lee, Circuit Judges.

Focus: Trade Secrets

Defendant Menasha Packaging obtained a license for Nulogy’s software, referred to as Nulogy Solution. After several years, Deloitte conducted an assessment of Menasha’s systems with the goal of enhancing the integration of Nulogy Solution into Menasha’s other software. During this process, Deloitte and Menasha jointly requested Nulogy to provide access to proprietary information. However, Nulogy claims that these entities used the provided information to reverse engineer an alternative solution to Nulogy Solution. Subsequently, in 2020, Nulogy initiated legal proceedings in Ontario’s Superior Court of Justice, alleging breach of contract by Menasha and trade secret violations by both Menasha and Deloitte Consulting. Deloitte contested the jurisdiction in Canada.

Later, Nulogy withdrew its trade secret claims against both companies and refiled those allegations in the Northern District of Illinois under the Defend Trade Secrets Act (18 U.S.C. 1836(b)). The breach of contract claims against Menasha remained under consideration in Canada. Menasha then sought the dismissal of the U.S. trade secrets litigation. Notably, the contract between Menasha and Nulogy contained a forum selection clause designating Ontario, Canada as the appropriate jurisdiction. Meanwhile, Deloitte did not participate in Menasha’s motion but filed its own request for dismissal on the grounds of inadequately stating a claim. The district court ruled to dismiss the claims against Menasha, asserting that the forum non-conveniens principle warranted the dismissal of the entire complaint, encompassing the claims against Deloitte as well.

Upon review, the Seventh Circuit upholds the dismissal of Nulogy’s claims against Menasha, yet it overturns the dismissal regarding Deloitte. This decision was based on the fact that Deloitte lacked a contractual agreement with Nulogy designating Canada as the proper jurisdiction, and Deloitte continued to maintain that Canadian courts lacked jurisdiction over the matter.

Affirmed and reversed

Decided 08/07/23

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