Wednesday, September 14, 2011

Illinois Court Describes What Facts State Claim for "Inevitable Disclosure" (Mobile Mark, Inc. v. Pakosz)

Illinois is one of the many states which recognize the "inevitable disclosure" doctrine. As I have written before, the doctrine is a species of the Uniform Trade Secrets Act provision which allows "threatened" misappropriation to be enjoined. A few courts have noted the fine line between a threat of disclosure and the inevitability of such disclosure. Only lawyers would devote such time to parsing this distinction.

With the new heightened federal pleading standard, a trade secrets plaintiff must show facts that demonstrate inevitable disclosure is a plausible theory of misappropriation. In Mobile Mark, Inc. v. Pakosz, a federal district court in Chicago rejected a motion to dismiss on the grounds the plaintiff had not pled the inevitable disclosure claim with enough facts.

Here are some factors the court outlined that are critical to the inevitable disclosure theory:

(1) Evidence of copying the employer's confidential information (usually, this is alleged by way of suspicious downloading activity, e-mails to web-based accounts, unusual printing activity, or off-hours appearances on the employer's premises prior to departure);

(2) The level of competition between the new employer and the old employer;

(3) Whether the employee's position is comparable to the position s/he previously held;

(4) The employer's steps in protecting against the employee's use or disclosure of the prior employers' confidential information (as an example, courts look to warnings, covenants not to use such information in a new agreement, "firewalls" from sensitive projects or clients).

Prior inevitable disclosure cases seem to examine other factors, such as an employee's lack of candor about the new work assignment or shifting explanations about what job duties s/he will be assuming.


Court: United States District Court for the Northern District of Illinois
Opinion Date: 9/6/11
Cite: Mobile Mark, Inc. v. Pakosz, 2011 U.S. Dist. LEXIS 99865 (N.D. Ill. Sept. 6, 2011)
Favors: Employer
Law: Illinois

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