as opposed to individually. Noah contends that the certain characteristics of the Precious Moment's figurines resemble features of his figurines, such as the intertwined giraffe necks.
Plaintiff Noah's figurines received only minimal customer orders at the trade show, and Enesco advised Noah that it would not pursue a license. Noah alleges that Enesco incorporated his unique concept into their lines, made a large profit from these figurines, and effectively closed him out of the market. As such, Noah filed a four count complaint against Enesco alleging both fraud and the misappropriation of a trade secret. Both parties have filed motions for summary judgment on these counts.
Summary judgment is available only under limited circumstances. Summary judgment is appropriate if the pleadings, affidavits and other material show "that there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue exists, and summary judgment is therefore inappropriate, if "there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). A "material fact" exists only if there is a factual dispute that is outcome determinative under governing law. Howland v. Kilquist, 833 F.2d 639, 642 (7th Cir. 1987). The inquiry on summary judgment is whether the evidence presents a sufficient disagreement to require submission to a jury, or whether the evidence is so onesided that one party must prevail as a matter of law. Anderson 477 U.S. at 251-52
The party seeking summary judgment has the initial burden of showing that no such issue of material fact exists. Id. Moreover, the opposing party is entitled to the benefit of all favorable inferences that reasonably can be drawn from the underlying facts, but not every conceivable inference. DeValk Lincoln Mercury v. Ford Motor Co., 811 F.2d 326, 329 (7th Cir. 1987).
I. COUNT I: FRAUD
In its motion for summary judgment, the parties apparently agree that the crux of Plaintiff's fraud argument rests upon Noah's contention that Enesco had a duty to disclose that it would and could incorporate Noah's concept for Enesco's own use.
Defendant goes to great lengths, quite literally,
to demonstrate the absence of such a relationship. In addition, Enesco argues that Noah has presented no evidence that Enesco intended to use Noah's concept when the alleged representation was made and that Noah suffered no damages because his concept was free for use by everyone by the time Enesco first manufactured and sold its "Two by Two" figurines. In response, Noah claims that a special relationship existed between the parties giving rise to a duty to disclose.
In general, fraud includes "any act, omission or concealment calculated to deceive, including silence, if accompanied by deceptive conduct or suppression of material facts constituting an act of concealment." Rybak v. Provenzale, 181 Ill. App. 3d 884, 537 N.E.2d 1321, 1327, 130 Ill. Dec. 852 (Ill. App. 1989). Courts should never presume the existence of fraud. Carey Electric Contracting, Inc. v. First National Bank of Elgin, 74 Ill. App. 3d 233, 392 N.E.2d 759, 762, 30 Ill. Dec. 104 (Ill. App. 1979). Under Illinois law, a plaintiff must establish five elements to support its claim for fraud: 1) a false statement of material fact; 2) by one who believes it to be false; 3) made with the intent to induce action by another in reliance on the statement; 4) action by the other in reliance upon the statement; and 5) injury arising from that reliance. Soules v. General Motors Corp., 79 Ill. 2d 282, 402 N.E.2d 599, 601, 37 Ill. Dec. 597 (Ill. App. 1980).
To establish fraud by omission, however, Noah need only show: 1) concealment of a material fact; 2) with the intent to deceive; and 3) that he was unaware of the concealed fact and would have acted differently had he known it. Frain v. Andy Frain, Inc., 660 F. Supp. 97, 99 (N.D. Ill. 1987). The defendant's failure to disclose the material fact must occur under circumstances which create a duty to speak. State Sec. Ins. Co. v. Frank B. Hall & Co., 258 Ill. App. 3d 588, 630 N.E.2d 940, 943, 196 Ill. Dec. 775 (Ill. App. 1994). A fiduciary or other special relationship creates a duty to speak. Id.
As a matter of law, a fiduciary relationship exists between attorney and client, guardian and ward, and principal and agent. Carey Electric, 392 N.E.2d at 763. However, a relationship involving "confidence and trust on one side and dominance and influence on the other" may constitute such a relationship where "the existence of such a fiduciary relationship [is] shown by proof so clear and convincing, so strong, unequivocal and unmistaken that it leads to only one conclusion." Id. citing In re Estate of Nelson, 132 Ill. App. 2d 544, 270 N.E.2d 65 (Ill. App. 1971). The Court should consider such factors as the "degree of kinship. . . disparity in age, health, mental condition, education and business experience between the parties, and the extent to which the allegedly subservient party entrusts the handling of his business and financial affairs to the other and reposes faith and confidence in him" in determining whether such a relationship exists. In re Estate of Wernick, 151 Ill. App. 3d 234, 502 N.E.2d 1146, 1153, 104 Ill. Dec. 486 (Ill. App. 1986).
Noah has failed to show the existence of a relationship giving rise to Enesco's duty to disclose its intent to market the Precious Moments "Two by Two" line. The parties' relationship is governed by contracts, including the December nondisclosure agreement, which should have alerted Noah to the possibility that Enesco could develop similar concepts. While the Court readily acknowledges that Enesco, as the country's largest giftware manufacturer, held a dominant position in the relationship, Noah has failed to present sufficient evidence to convince this Court that this dominance transformed the "formal, contractual relationship into a confidential or fiduciary relationship." Carey Electric, 392 N.E.2d at 763.
Noah asserts that, as an unsophisticated craftsman, he sought and relied upon Enesco's advice in developing his concept. The Court notes, however, that Noah also sought the advice of numerous friends relatives, business persons and small business organizations concerning the development of his concept. In addition, Noah taped conversations, documented meetings, and obtained legal representation in his negotiations with Enesco. As such, the Court finds that Noah was not so unsophisticated and trusting as to transform this business relationship into a fiduciary relationship.
As a practical matter, the Court notes that finding that such a relationship did in fact exist would distort Enesco's position as a marketer of giftware. Arguably, hundreds of craftsman/artisans approach Enesco with various concepts. Despite Enesco's sophistication and experience in this area, it hardly holds itself out as being in the business of cultivating and educating craftsmen seeking to develop their concepts. In addition, while the Court finds the timing of Enesco's release of the "Two by Two" line suspicious, this "coincidence" fails to save Noah's claim for fraud. See, Fitzpatrick v. Catholic Bishop of Chicago, 916 F.2d 1254, 1256 (7th Cir. 1990).
Neither the law nor this Court sanction the usurpation of another's ideas. Noah, however, has failed to present sufficient evidence to support his fraud claim. Specifically, Noah argues that Enesco had a duty to disclose, but fails to show the existence of a fiduciary or other special relationship creating such a duty. Therefore, Defendant's motion for summary judgment is Granted, and Plaintiff's cross-motion for summary judgment is Denied.
II. COUNT II: TRADE SECRET MISAPPROPRIATION
To establish the misappropriation of a trade secret under Illinois law, the plaintiff must provide evidence showing that the alleged secret was: "1) secret (that is, not generally known in the industry; 2) misappropriated (that is, stolen from [plaintiffs] rather than developed independently or obtained from a third source); and 3) used in the defendant's business." Composite Marine Propellers v. Van Der Woude, 962 F.2d 1263, 1265-66 (7th Cir. 1992). The existence of confidential information or a secret is an essential element for such relief. AMP, Inc. v. Fleischhacker, 823 F.2d 1199 (7th Cir. 1987). The plaintiff has the burden of proving that its trade secrets are in fact "secret". Wesley-Jessen, Inc. v. Reynolds et al., 182 U.S.P.Q. (BNA) 135, No. 72 C 1677, 1974 WL 20197 (N.D. Ill. May 23, 1974).
The Illinois Supreme Court defines a trade secret as "a plan or process, tool, mechanism, compound, or informational data utilized by a person in his business operations and known only to him and such limited other persons to whom it may be necessary to confide in." ILG Industries Inc. v. Scott, 49 Ill. 2d 88, 273 N.E.2d 393, 395 (1971). The Illinois legislature codified this common law rule with the enactment of the Illinois Trade Secrets Act ("Act"). The Act defines a "trade secret" as:
information, including but not limited to, technical or nontechnical data, a formula, pattern, compilation, program, device, method, technique, drawing, process, financial data, or list of actual or potential customers or suppliers that:
(1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use;