Seventh Circuit Court of Appeals Upholds Trade Secret Protection
Life Spine Wins in Protection of Trade Secret Information
Earlier this month, the Seventh Circuit Court of Appeals upheld a preliminary injunction in Life Spine, Inc. v. Aegis Spine, Inc. that blocked a former distributor and parent company from selling devices that incorporated trade secret information.
Life Spine Files a Preliminary Injunction to Protect Trade Secret Information
In the case at hand, Plaintiff Life Spine, Inc. had invented a special spinal device that corrects spacing issues in the spine that are present during surgery. The Defendant, Aegis Spine, was the distributor of the device and was charged with distribution of the device to medical facilities across the nation. While doing so, Defendant Aegis Spine had been charged with keeping Plaintiff Life Spine’s confidential information regarding the spinal device.
At some point, however, Life Spine realized that Aegis Spine had developed a strikingly similar device to Life Spine’s, which was poised to compete with Life Spine’s spinal correction device. In response, Life Spine sued Aegis Spine, alleging that Aegis Spine had used trade secret information it acquired as a distributor in order to produce the competing device. In its filings, Life Spine alleged misappropriation of trade secrets, breach of contract, as well as other contractual and tortious claims. Life Spine also requested a preliminary injunction to prohibit Aegis Spine from producing, marketing, distributing, selling, or obtaining intellectual property rights in the competing device.
In response, Aegis Spine responded that such an injunction would be improper because Life Spine’s trade secrets were actually public knowledge that did not warrant trade secret information protection under neither the Defend Trade Secrets Act nor Illinois state law. In support of this argument, Aegis Spine stated that Life Spine constantly showcased the device at issue at public events at large conferences.
Court Finds Trade Secret Information Was Held in Close Confidence and Protectable
On appeal, the Seventh Circuit disagreed. The court stated that, on appeal, Aegis Spine was unable to show that the district court had erred in its factual findings. In its key finding the Seventh Circuit noted that the alleged trade secret information was not readily discoverable or ascertained from the public display. The Seventh Circuit also noted that Plaintiff Life Spine had imposed sufficient confidentiality measures to protect its trade secret information. As such, there had been no public disclosure of the trade secrets.
Key Takeaways on Protection of Trade Secret Information
The Seventh Circuit Court of Appeals upheld a significant trade secrets holding by:
The Plaintiff had imposed sufficient confidentiality measures for its trade secret to qualify for protection;
There had been no public disclosure of the secrets; and
The trade secrets were not readily ascertainable from public display.
For more information on trade secrets, see our Intellectual Property Litigation and Industry Focused Legal Solutions pages.