Articles Posted in Trade Secrets

A recent decision in the case of Huffman v. Activision, a case we previously covered here, has created a split among federal courts on the issue of who gets to decide the issue of disgorgement of profits in copyright infringement cases. The court in Huffman ruled that a jury is entitled to decide the issue. Other courts to recently consider the issue have come to the opposite conclusion finding that the court should decide the issue, not a jury. These differing answers to the same question may be teeing up the issue for the Supreme Court to settle the question once and for all.

As we have previously detailed, Huffman involves claims by retired professional Booker T that video game developer, Activision, infringed on his copyrights. Specifically, Huffman has alleged that Activision’s video game character, David “Prophet” Wilkes, in Call of Duty: Black Ops 4 infringed his own “G.I. Bro” character. Huffman requested that the issue of disgorgement of Activision’s profits be decided by a jury. Activision moved to strike Huffman’s jury demand.

In its motion, Activision argued that Section 504(b), the section of the Copyright Act dealing with disgorgement of an infringer’s profits, does not provide a statutory or constitutional right to a jury trial. Activision’s motion was filed on the heels of a decision on essentially the same issue in the case Navarro v. Procter & Gamble in which the court in that case found no right to a jury on the issue of disgorgement of an infringer’s profits under Section 504(b). Despite concerning the same issue, the district court disagreed with the reasoning and conclusion of the Navarro court and denied Activision’s motion.

The plaintiff in Navarro is Anette Navarro, a world-renowned photographer, from Cincinnati, Ohio. She filed a copyright infringement suit against Procter & Gamble (P&G) and Walmart alleging that the companies willfully infringed on her copyrights in certain photos that she provided to P&G for use pursuant to licensing arrangements between the parties. Navarro claims that P&G violated the terms of the license by using them on products and in geographic areas beyond those permitted in the license agreements and also continued to use her photographs after the licenses expired.

She sought both actual damages and disgorgement of the defendants’ profits under Section 504(b) of the Copyright Act. P&G and Walmart sought to strike her jury demand with regard to disgorgement of profits, arguing that nowhere does Section 504(b) mention juries. They also argued that there was no constitutional right to a jury under the Seventh Amendment because it only provides a right to a jury for “legal” remedies, not “equitable” remedies which the companies argued disgorgement was. Continue reading ›

Statutory fee-shifting is usually meant to incentivize plaintiffs to bring claims involving important rights but relatively low monetary damages. Some statutes provide for fee-shifting not only to successful plaintiffs but also to successful defendants. As the recent decision in the case of Multimedia Sales & Marketing, Inc. v. Marzullo illustrates, plaintiffs considering bringing trade secret misappropriation claims in Illinois courts would be wise to review their claims before filing so to ensure that their claims are not meritless.

The plaintiff in the lawsuit, Multimedia Sales & Marketing, Inc., is a radio advertiser who sued a competitor, Radio Advertising, Inc., along with three former employees who left Multimedia to work for Radio Advertising. Multimedia alleged that the former employees misappropriated Multimedia’s potential customer lead lists or renewal lead lists, which these individuals allegedly used to attempt to woo away Multimedia’s existing and potential customers. Multimedia claimed the lists were protectable trade secrets under the Illinois Trade Secrets Act (ITSA), 765 ILCS 1065/1 et seq.

The trial court disagreed and granted the defendants summary judgment finding that the lists (1) did not qualify as a trade secret under ITSA, and (2) were not “secret” because Multimedia widely shared them with numerous parties including radio stations. Following the grant of summary judgment, the defendants filed a motion for attorney’s fees as permitted by Section 5 of the ITSA. The trial court granted the defendants’ motion and awarded them $71,688 in attorney’s fees. Multimedia then appealed the ruling that the lists did not qualify as trade secrets as well as the award of attorney’s fees. Continue reading ›

Best-Chicago-Business-Dispute-Lawyer-300x189A manufacturer of electrical connectors for automobiles sued another manufacturer and several competitors alleging theft of trade secrets. The plaintiff alleged that it had a contract to supply connectors to Bosch for use in cars manufactured by General Motors. After several years of performance under the contract, the manufacturer alleged that Bosch passed its designs off to its competitors in an effort to find a company to manufacture the required connectors at a cheaper price. The manufacturer sued in Illinois, but the district court found that it lacked jurisdiction over the case because the alleged theft did not take place in Illinois, and the fact that the connectors were used in vehicles that were ultimately sold in Illinois car dealerships was too attenuated to support jurisdiction. The 7th Circuit affirmed the decision on appeal.

In 2005, General Motors retained engineering company Bosch to build a “body control module” for some of its cars. A body control module is a computer system that controls certain electronic functions inside a car, like its locks and its power windows. To build the body control module, Bosch required a “183-pin connector,” an electrical adapter that can connect 183 electrical circuits. Bosch turned to Illinois company J.S.T. Corporation for the task. J.S.T. accepted the contract and designed and built for Bosch a 183-pin connector. J.S.T.’s connectors performed well and Bosch retained J.S.T. as its sole supplier of connectors for years. Continue reading ›

When a high-level employee left Archer Daniels Midland (ADM) to start his own consultancy company, ADM filed suit against the former employee alleging that his new business violated the non-disclosure agreement he signed. A trial court sided with ADM and enjoined the former employee from engaging in consultancy activities. In a case recently added to the official reports, an Illinois appellate court reversed finding that ADM failed to establish a likelihood of success on its claim that the former employee’s activities would violate the NDA he signed.

Lane Sinele worked at ADM for 28 years. At the time he left, he was the manager of national accounts for ADM’s sweetener division. In that position, he represented ADM soliciting, procuring, and servicing buyers of sweeteners. While employed by ADM, Sinele had access to ADM’s Tableau database, a customer profitability database, which contained information about freight systems, manufacturing costs by facility, individual customers’ procurements of corn, manufacturing costs of the corn products, customers’ margins, and margins by location. ADM considered the information contained in its Tableau database to be trade secrets. To maintain their secrecy, ADM limited access to the database to salespeople, like Sinele, and then only for those customers for which that salesperson had responsibility.

In 2018, Sinele left ADM and formed his own consultancy business in which he planned to act as an agent of sweetener buyers in their negotiations with the five major sweetener manufacturers, of whom ADM is one. Shortly after leaving ADM, Sinele sent an email to his former boss requesting a meeting with ADM to negotiate on behalf of two of Sinele’s clients who happened to be ADM customers whose accounts Sinele handled while at ADM. ADM responded by filing suit against Sinele shortly thereafter. Continue reading ›

Earlier this year, a federal grand jury indicted pioneer of self-driving car technology and serial entrepreneur, Anthony Levandowski, with trade secret theft. The United States Attorney’s Office for the Northern District of California charged Levandowski with 33 counts of theft and attempted theft of trade secrets from Google under 18 U.S.C. § 1832 of the Economic Espionage Act (EEA).

According to the indictment, Levandowski allegedly downloaded more than 14,000 files containing crucial information about Google’s autonomous-vehicle research before leaving the company in 2016. The indictment also alleges that Levandowski then made an unauthorized transfer of the files to his personal laptop. Some of the files that Levandowski allegedly took from Google included private schematics for proprietary circuit boards and designs for light sensor technology, known as Lidar, which is used in self-driving cars.

Levandowski joined Uber in 2016 after leaving Google when Uber bought his new self-driving trucking start-up, “Otto.” Levandowski has repeatedly asserted that he never disclosed the download, nor made use of the information while he was at Uber. If convicted, Levandowski faces a maximum sentence of 10 years and a fine of $250,000, plus restitution, for each violation, according to the U.S. Attorney’s office.

Levandowski’s attorneys issued a statement on his behalf stating he is innocent of the charges.

“He didn’t steal anything, from anyone,” the statement reads. “This case rehashes claims already discredited in a civil case that settled more than a year and a half ago. The downloads at issue occurred while Anthony was still working at Google—when he and his team were authorized to use the information. None of these supposedly secret files ever went to Uber or to any other company.” Continue reading ›

As consumers have started to recognize the unhealthy effects of consuming corn syrup, more and more food and beverage manufacturers have removed or limited its use in their products. While beer has never been considered a health food, the battle over corn syrup appears to have made its way to the world of beer, starting with Anheuser-Busch’s Superbowl commercial showing an order of corn syrup being delivered by mistake to the castle of the fictional medieval king of Bud Light. The king then leads a quest to remedy the mistake by personally taking the corn syrup to the fictional king of MillerCoors.

MillerCoors, a brewer based out of Chicago, responded, first with its own ad campaign, then with a lawsuit alleging false advertising.

The legal battle between the two beer giants recently took another turn when Anheuser-Busch sued MillerCoors for allegedly stealing trade secrets. According to the lawsuit, an employee of an Anheuser-Busch brewery allegedly shared recipes with an employee of MillerCoors.

That employee is no longer working for Anheuser-Busch, although if the allegations are true, they might be able to get a job with MillerCoors. Continue reading ›

When two founders of a company sued the company that had come into possession of the founders’ patents and intellectual property rights, the district court dismissed their suit for lack of personal jurisdiction. The appellate court affirmed on appeal, finding that the plaintiffs’ lawyer contrived to create personal jurisdiction by ordering a single item from the defendant company be shipped into the state of Illinois, even though the defendant company did not do business in or specifically target the Illinois market. The appellate panel also noted that the conduct that allegedly created personal jurisdiction had happened after the plaintiffs filed suit and was therefore clearly contrived.

Tai Matlin and James Waring, and other business partners co-founded a company called Gray Matter Holdings, LLC in 1997. Matlin and Waring developed certain products for Gray Matter, including an inflatable beach mat known as the “Snap-2-It” and a radio-controlled hang glider called the “Aggressor.” In 1999, facing failure of the company, Matlin and Waring entered into a Withdrawal Agreement with Gray Matter wherein they sold their partnership shares and forfeited their salaries. The agreement also assigned Matlin and Waring’s intellectual property to Gray Matter but entitled them to royalty payments. In the following years, Matlin and Waring frequently brought Gray Matter to arbitration to enforce royalty payments.

In 2002, Gray Matter filed an assignment of the products’ intellectual property rights with the United States Patent and Trademark Office. Matlin and Waring allege that Gray Matter filed the assignment without their knowledge and that the company forged Waring’s signature on the paperwork. The following year, Gray Matter sold assets to Swimways, including the patent rights to Matlin and Waring’s products. A 2014 arbitration between Gray Matter and Matlin and Waring determined that Gray Matter did not assign the Withdrawal Agreement to Swimways upon the sale of the products and that the plaintiffs were owed no further royalties. In 2016, Spin Master acquired Swimways and intellectual property rights. Continue reading ›

A small producer of musical instruments sued Guitar Center, alleging that Guitar Center violated its trademark on the name for a line of woodwind instruments. The plaintiff made a mistake in its suit, however, and named several subsidiary corporations of Guitar Center as additional defendants. After a trial, a jury was asked to determine whether each of the organizations were liable for infringing conduct. The jury, however, found that only the sales that occurred at Guitar Center branded stores were infringing, which amounted to a tiny fraction of the total sales across Guitar Center and all of its subsidiary brands. A district court found that the judgment could not be amended, and the appellate court agreed. The appellate court stated that the judgment was rationally supported by the evidence at trial and the plaintiff gave it no reason to think that the verdict would have been different if it had correctly identified the other stores as subsidiaries of Guitar Center.

Guitar Center makes and sells musical instruments. In 2010, it created a new brand of woodwind and brass instruments produced by Eastman, “Ventus.” Barrington Music Products owns the trademark “Vento,” which it uses in relation to the instruments it sells. Barrington began using the mark in commerce in May of 2009 and achieved gross sales just shy of $700,000. Barrington filed for registration of its “Vento” trademark in January 2010. In March 2011, Guitar Center began selling flutes, trumpets, alto saxophones, tenor saxophones, and clarinets using the “Ventus” mark, with gross sales totaling about $5 million.

Barrington eventually sued Music & Arts Centers, Guitar Center Stores, Inc., Woodwind & Brasswind Inc., and Eastman Music Company for trademark infringement. Evidence at trial demonstrated that the bulk of sales occurred at Music & Arts Centers, totaling $4.9 million, with only $3,228 in sales coming from Guitar Center. The jury found that only the sales made by Guitar Center stores were infringing and awarded Barrington the total amount of those sales — $3,228. After the judgment was entered, Barrington filed a motion pursuant to Rule 59(e) asking the district court to amend the damages award. Barrington had discovered that the only distinct corporate entity was Guitar Centers, Inc., while Music & Arts and Woodwind were each divisions of Guitar Center. Barrington moved to amend the judgment to include the total volume of all sales. The district court denied the motion, and Barrington appealed. Continue reading ›

download-300x150download-1-300x150Super Lawyers named Chicago and Oak Brook shareholder oppression attorney Peter Lubin a Super Lawyer in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Patrick Austermuehle of the Firm was named a Rising Star again and has a great deal of experience as a Chicago Defamation Libel and Slander Lawyer.  Peter Lubin and Patrick Austermuehle have achieved this honor for many years which is only given to 5% of Illinois’ attorneys each year.

Lubin Austermuehle’s Oak Brook and Chicago business dispute lawyers have over thirty years experience in litigating defamation, breach of fiduciary duty and shareholder oppression lawsuits.  Our Chicago non-compete agreement and trade secret theft lawyers prosecute and defend many types of unfair business practices and emergency business lawsuits involving injunctions, and TROS, covenant not to compete, franchise, distributor and dealer wrongful termination and trade secret lawsuits and many different kinds of business disputes involving shareholders, partnerships, closely held businesses and employee breaches of fiduciary duty. We also assist businesses and business owners who are victims of fraud.



Lubin Austermuehle’s Wheaton, Schaumburg, and Evanston business litigation attorneys have more than two and half decades of experience helping business clients unravel the complexities of Illinois and out-of-state business laws. Our Chicago business, commercial, class-action, and consumer litigation lawyers represent individuals, family businesses and enterprises of all sizes in a variety of legal disputes, including disputes among partners and shareholders as well as lawsuits between businesses and consumer rights, auto fraud, and wage claim individual and class action cases. In every case, our goal is to resolve disputes as quickly and successfully as possible, helping business clients protect their investments and get back to business as usual. From offices in Oak Brook, near Naperville and Aurora, we serve clients throughout Illinois and the Midwest.

You might think of making popcorn as a fairly simple process: you pop the popcorn, coat it in your flavor of choice, package it and sell it. But the fact is that snack food manufacturers invest an incredible amount of time, money, and resources into crafting recipes that are perfectly addictive, then test and retest those recipes before they start putting them on shelves.

Garrett Popcorn Shops says it guards the secret to its popcorn recipes so closely that only three employees are given access to the recipes and they have to prove their identity with a fingerprint scan before they can access the recipes.

Aisha Putnam was one of the three employees with access to Garrett Popcorn Shops’ incredibly valuable recipes in the four years she worked as the company’s director of research and development. She was fired in early March of this year, but she got a heads up that she was going to be fired and so she allegedly stole more than 5,400 files using a USB drive and her personal email. The files allegedly contained everything that had ever been shared with her and/or stored on her computer: from the company’s top secret recipes and production processes to pricing information, supplier information, distribution agreements, and market research. Continue reading ›

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