Chicago Trade Secrets Case Blows Up on Plaintiff

Any case has the potential to blow up on the plaintiff. Trade secrets cases, though, may present even more possibilities in that regard.

Take the case of Portola Packaging against its rival Logoplaste (reported here behind Litigation Daily’s paywall) but also nicely summarized in the Trial Community’s Litigation News Blog.

Logoplaste, in 2007, discussed the prospect of buying Portola’s Canadian subsidiary. They exchanged some putatively confidential information but never got a signed NDA. Negotiations broke off in February 2008. Shortly thereafter, Logoplaste landed a key Portola client.

Fast forward more than a year. Portola finally demanded return of the confidential information and filed suit claiming Logoplaste used the documents to steal the customer.

An Illinois state court judge ultimately ruled that Portola failed to protect its information. So far, pretty normal.

Here’s where it gets weird. The judge also ruled that because Portola designated its general counsel as a key witness, his emails were not protected by the attorney-client privilege.

Those emails apparently showed that he had urged Portola to sue just to hurt Logoplaste’s business interests. And, he also apparently hired Logoplaste’s regular counsel in an unrelated matter in order to create a conflict.

According to the report, although Portola claimed that its confidential documents were used to lure an employee away, the emails indicated the general counsel knew the employee approached Logoplaste first.

The result: a scathing opinion and an order that Portola will pay all of Logoplaste’s attorneys’ fees for the three years of litigation.

Ouch.

Appeals, no doubt, to follow.