USA – ILLINOIS Trends and Developments Contributed by: Matthew Prewitt, Michael Molzberger, Trevor Jorgensen and James Cromley, ArentFox Schiff LLP
ten confidentiality or non-disclosure agreement rather than the five-year limitations periods for trade secrets claims. Both are longer than in many US jurisdictions. Identification of Trade Secrets in Pleading and Discovery Illinois law applies a flexible approach to the level of specificity required when defining asserted trade secrets, tailored to the circumstances of each indi - vidual case. Illinois has no statutory identification rule analogous to California’s “reasonable particularity” requirement. Cal. Civ Proc. Code § 2019.210; see Advanced Modular Sputtering, Inc. v Superior Court (2005) 132 Cal.App.4th 826, 835–36. At the pleading stage, Illinois state courts and the federal courts sit - ting in Illinois accept general descriptions giving fair notice of the categories of trade secrets at issue. See AutoMed Techs., Inc. v Eller , 160 F. Supp. 2d 915, 920–21 (N.D. Ill. 2001). As cases progress to injunc - tive relief or a trial on damages, courts require greater specificity to test secrecy, value, and misappropriation and to tailor relief. Composite Marine Propellers, Inc. v Van Der Woude , 962 F.2d 1263, 1266–67 (7th Cir. 1992). The federal courts sitting in Illinois frequently condition equitable relief on precise identification of the trade secrets. See Life Spine, Inc. v Aegis Spine, Inc. , 8 F.4th 531, 538–42 (7th Cir. 2021) (affirming tai - lored preliminary injunction). Illinois state court and federal Seventh Circuit deci - sions do require that plaintiffs separate secret from non-secret matters and identify concrete trade secrets. In Composite Marine , the Seventh Circuit rejected “catchall” theories pointing to broad areas of technology hoping “something there” must be secret. 962 F.2d at 1266–67; see also U.S. Gypsum Co. v LaFarge N. Am. , Inc. , 508 F. Supp. 2d 601, 636 (N.D. Ill. 2007). Illinois state courts follow the same approach, denying relief where a plaintiff’s definition of its trade secrets would sweep in public domain fea - tures or marketing generalities. See Elmer Miller, Inc. v Landis , 253 Ill. App. 3d 129, 134 (1st Dist. 1993). The Seventh Circuit’s recent decision in NEXT Pay- ment Solutions, Inc. v CLEAResult Consulting, Inc. , 163 F.4th 1091 (7th Cir. 2026) applies this specificity requirement in the software context. The plaintiff iden - tified 34 software “modules” and several “combina -
tions” in functional terms, such as managing appoint - ment inventory and presenting real-time availability. The Seventh Circuit affirmed summary judgment for the defendant, holding that merely describing what software does is insufficient; instead, as the court explained, a plaintiff must identify how the software achieves the claimed functions so a factfinder can dis - tinguish between what is generally known or readily ascertainable and what derives value from secrecy. Id. at 1096–99. The court suggested that pointing to source code, rules, or algorithms is often the most efficient way to carry that burden, while stopping short of requiring source code disclosure in every case. Id. Proving Reasonable Measures to Protect Secrecy Reasonable confidentiality measures remain a sepa - rate, essential element that also is evaluated contextu - ally by courts applying Illinois law. Rockwell Graphic Sys., Inc. v DEV Indus., Inc. , 925 F.2d 174, 180 (7th Cir. 1991). Robust confidentiality policies, “confiden - tial” stamps or legends on documents, computer user authentication and passwords, need-to-know access restrictions, and vendor and customer non-disclosure agreements are typical evidence of reasonable efforts, but consistent compliance with such protections is important to demonstrate reasonable efforts. Tax Track Sys. Corp. v New Investor World, Inc. , 478 F.3d 783, 787–88 (7th Cir. 2007); see Abrasic 90 Inc. v Weldcote Metals, Inc. , 364 F. Supp. 3d 888, 898–903 (N.D. Ill. 2019). The Illinois courts’ approach to this element is generally in accord with most states, although the extensively developed case law across a broad cross section of business sectors has produced a range of precedents on this issue that are very case-specific and do not provide any bright-line rules. The Inevitable Disclosure Doctrine Although Illinois law continues to enforce employee restrictive covenants that are reasonable in scope and satisfy the statutory requirements (as discussed below), Illinois law in appropriate cases allows non- compete-type restrictions to be imposed by injunction even where the employee has no non-compete agree - ment, at least in exceptional cases. This legal princi - ple was first developed by courts applying Illinois law and is known as the “inevitable disclosure” doctrine because it is premised on the argument that disclo - sure of trade secrets may be inevitable if an employ -
200 CHAMBERS.COM
Powered by FlippingBook