United States District Court, N.D. Illinois, Eastern Division
NUCAP INDUSTRIES, INC. and NUCAP U.S. INC., Plaintiffs,
ROBERT BOSCH LLC and BOSCH BRAKE COMPONENTS, LLC, Defendants.
JOAN B. GOTTSCHALL, District Judge.
Defendants Robert Bosch LLC and Bosch Brake Components LLC (collectively, "Bosch") were customers of plaintiffs, Nucap Industries Inc. and Nucap US. Inc. (collectively, "Nucap") from September 2008 to approximately December 2014. Nucap sold aftermarket brake components to Bosch, which Bosch incorporated into the brake pads it manufactures. The parties' relationship came to a halt on or about December 17, 2014, when Bosch informed Nucap that Bosch would no longer be purchasing supplies from Nucap.
Nucap filed suit in this court shortly thereafter, alleging that Bosch misappropriated Nucap's library of brake component drawings, infringed Nucap's copyrights, and interfered with Nucap's exclusive supply relationship with Trelleborg Rubore Inc. ("Trelleborg Rubore"). Bosch now moves to stay this proceeding pursuant to an arbitration provision incorporated by reference into Bosch's purchase orders. For the reasons set forth herein, Bosch's motion to stay is denied.
A. Bosch's Purchase Orders
In September 2008, Bosch acquired the brake pad business of Morse Automotive ("Morse"). Morse had been a longtime customer of Nucap until it was acquired by Bosch.
Nucap and Morse did not have a master agreement governing Morse's purchase of brake components from Nucap. Instead, Morse issued purchase orders to Nucap for brake components, including backing plates, shims, and brake hardware. Nucap supplied those parts to Morse and invoiced Morse. None of the purchase orders that Morse issued to Nucap referred to any standard terms and conditions in the purchase orders themselves or in any other document.
After Bosch took over Morse, Bosch continued to issue individual purchase orders for brake components to Nucap. These purchase orders did not state that additional terms and conditions applied.
Beginning in March 2009, however, Bosch added a line to the bottom of the purchase orders it issued to Nucap. The line provides:
THE TERMS AND CONDITONS OF PURCHASE ARE AVAILABLE AT WWW.BOSCHNASUPPLIERS.COM AND INCORPORATED HEREIN BY REFERENCE [sic], SHALL BECOME A BINDING AGREEMENT UPON SELLER COMMENCING PERFORMANCE OF THIS PURCHASE ORDER, OR UPON SELLER OTHERWISE ACKNOWLEDGING ACCEPTANCE, WHICHEVER OCCURS FIRST.
( See ECF No. 35.)
Bosch's Terms and Conditions bear on its motion to stay because, since at least September 1, 2010, they have contained a compulsory arbitration clause in Section 32. This section states, in pertinent part, that "all disputes arising out of or relating to the Order shall be resolved through binding arbitration." (Bosch Mem. Ex. A, ECF No. 44.) The Terms and Conditions also identify the documents that "are incorporated into and shall be part of the Order." ( Id. ) These documents are:
(i) any executed supply agreement between Buyer and Seller; (ii) Material Releases... issued by Buyer to Seller under the Order; (iii) prints and specifications for the Supplies; (iv) Buyer's policies, as revised by Buyer from time to time; and (v) any written agreement between Buyer and Seller which provides therein that it shall be part of the Order.
( Id. )
In 2011, Bosch proposed that the parties enter into a master "Corporate Agreement" and "Purchase and Sale Agreement." ( See Declaration of Montu Khokhar ("Kohkar Decl."), Ex. 5, ECF No. 48.) Both agreements incorporated Bosch's Terms and Conditions by reference to Bosch's website, www.boschnasuppliers.com. Nucap responded to Bosch's proposal in writing on May 17, 2011. In this correspondence, Nucap stated that it "cannot have any blind acceptance of Bosch standard terms and conditions." ( Id. Ex. 5.) Nucap countered with a list of ten "terms that Nucap would require" in any master agreement. In the end, the parties could not agree to a master agreement, so they reverted back to transacting with each other on an individual purchase order by purchase order basis.
Over the past two decades, Nucap has spent millions of dollars researching and developing a library of thousands of brake component drawings. Bosch began seeking access to these drawings in October 2008, according to a declaration from Montu Khokhar, Nucap's Chief Operating Officer. At that time, Khokhar indicates that "Bosch told Nucap that it required access to drawings for internal quality control requirements." (Khokhar Decl. ¶ 28.) Khokhar further states that "Bosch confirmed that it would keep Nucap's drawings confidential, and would not disclose them to any third parties or misappropriate the drawings." (Id.) Based on Bosch's representations, Nucap "agreed to provide certain Nucap drawings to Bosch and to grant specified Bosch engineers access to Nucap's Engineering Database." (Id.)
Although Bosch does not directly challenge Khokhar's explanation of how Bosch began accessing Nucap's drawings, Christopher Thornton, a Bosch Purchasing Manager, describes a different course of dealing. ( See Bosch Reply, Ex. A, Declaration of Christopher Thornton ("Thornton Decl."), ECF No. 57.) Thornton avers that each transaction between the parties commenced when Nucap (a) "informed Bosch of available components, identified with unique FMSI' numbers, " and (b) "sent drawings and specifications for those components to Bosch." ( Id. at 17.) Bosch then "identified the component parts it was interested in purchasing, and Nucap shipped samples of those components parts for Bosch to inspect." ( Id. ) Next, "Bosch issued purchase orders to Nucap identifying the quantity required at the prices quoted by Nucap of desired components." ( Id. )
Thornton's recollection, however, is not necessarily at odds with Khokhar's explanation. Khokhar describes a separate line of communications that started in or around October 2008 regarding Bosch's desire to have its engineers access Nucap's online database of engineering drawings. Thornton's declaration does not shed any light on this dialogue. Nor does Bosch submit any other evidence that speaks to its request to gain access to Nucap's Engineering Database circa 2008.
Yi responded on October ...