Wednesday, September 20, 2006, 9/20/2006 10:31:00 AM

Judge Posner on Trade Secrets, Again

A new opinion from the Seventh Circuit in BondPro Corp. v. Siemens Power Generation, Inc., 2006 WL 2597860 (7th Cir. Sept. 12, 2006) provides Judge Posner with another chance to range widely on the subject of trade secrets. (See our earlier posting here.)

The factual background sounds familiar: after entering into a confidentiality agreement, BondPro demonstrated its secret molding process to Siemens. Siemens, rather than licensing the technology from BondPro (as BondPro hoped it would), filed a patent application for a quite similar molding process. That application was denied. The patent filing, though, disclosed any trade secrets BondPro had thus placing the technology in the public domain.

At trial, BondPro obtained a liability verdict against Siemens in the Western District of Wisconsin. Before damages could be tried, though, the trial judge granted judgment as a matter of law to Siemens. The parties then went down the road to the Court of Appeals in Chicago.

The Seventh Circuit affirmed. The principal problem with BondPro's case was the question of whether its process was really a secret with any value. As Judge Posner noted, "there is no evidence of the value of any use that others may have made of BondPro's process who may have learned of it directly or indirectly from Siemens." In addition, "neither BondPro nor Siemens . . . used the process commercially." Thus, "the inference is compelling that the process neither had when disclosed to the public, nor has, measurable commercial value."

Judge Posner went on to hold that the process disclosed was principally already in the public domain and that the information disclosed simply did not rise to the level of a trade secret.

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