397 F.Supp.3d 1115
N.D. Ill.2019Background
- Vendavo, a pricing-software company, sued former employee Kim Long and competitor Price f(x) alleging Long copied and delivered Vendavo confidential materials and trade secrets to Price f(x) after resigning. Vendavo sought emergency relief and a TRO; searches recovered documents from Long’s home and Price f(x).
- Long was a long‑time pre‑sales business consultant with access to client-specific “pain points,” pitch decks, sales pipelines, contact lists, and financial reports; she had signed a broad confidentiality/CIIAA agreement.
- Vendavo identified five categories of alleged secrets: client‑specific information (pain points and tailored solutions), potential customer opportunities, customer names/contact info, confidential marketing/pitch decks, and financial/sales pipeline data.
- After expedited discovery and a full-day hearing, the court evaluated a preliminary injunction (DTSA and ITSA claims) and Defendants’ motion to dismiss or transfer; the court limited consideration to issues relevant to Long and her role.
- The court found some misappropriation (including an email where Long disclosed a client’s pain points at Price f(x)), concluded inevitable-disclosure risk existed for clients Long worked on or accessed within three years, granted a tailored one‑year preliminary injunction, and ordered the case transferred to the Northern District of California under §1404.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Vendavo identified trade secrets with sufficient particularity | Vendavo identified specific categories and concrete pitch decks, client pain points, contact lists, pipelines, and financials | Defendants said categories were overbroad and many documents were stale or publicly accessible | Court: categories (client pain points/solutions, certain contact info, pitch decks, recent financials/pipelines) were sufficiently particular; older/stale materials less likely protected; customer list and generic opportunities not protected at this stage |
| Whether Long actually misappropriated and/or will inevitably disclose trade secrets | Long retained and communicated trade‑secret materials and already shared a client’s pain points at Price f(x); given role and competition, future disclosure is likely | Defendants point to warnings, counsel involvement, and lack of present copies; assert Long only uses general skills | Court: Found actual misappropriation in at least one instance and substantial risk of inevitable disclosure for clients Long worked on or accessed in prior 3 years; injunction appropriate to prevent further misuse |
| Choice of law for trade secret claims (California vs Illinois) | Vendavo: CIIAA choice‑of‑law clause is narrow and does not control trade secret tort claims | Defendants: CIIAA selects California law, which forbids inevitable‑disclosure injunctions | Court: Illinois law governs the misappropriation claims because the choice clause was narrow (governing interpretation/performance of the agreement only) |
| Whether case should be dismissed or transferred to Northern District of California | Vendavo opposed dismissal; sought to litigate here on claims against Long | Defendants urged dismissal for claim‑splitting or transfer for convenience and related pending California litigation | Court: Denied dismissal; granted §1404 transfer to N.D. Cal. (parties consented and related litigation pending there) |
Key Cases Cited
- Valencia v. City of Springfield, Illinois, 883 F.3d 959 (7th Cir. 2018) (articulates Seventh Circuit two‑phase preliminary injunction standard)
- PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995) (recognizes inevitable‑disclosure theory for trade secrets in employment context)
- AMP Inc. v. Fleischhacker, 823 F.2d 1199 (7th Cir. 1987) (employees may not take confidential, particularized employer plans/processes after termination)
- Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714 (7th Cir. 2003) (trade‑secret elements: secrecy, reasonable efforts to maintain secrecy)
- Composite Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263 (7th Cir. 1992) (plaintiff must identify concrete secrets rather than general categories)