United States District Court, N.D. Illinois, Eastern Division
MEMORANDUM OPINION AND ORDER
E. Chang Judge
Nucap Industries, Inc. and Nucap U.S. Inc. (Nucap) brought
this suit against Robert Bosch LLC; Bosch Brake Components
LLC; and Robert Bosch GmbH (Bosch) after the dissolution of
their five-year commercial relationship. Nucap brought
both federal and state law claims, all of which relate to
Bosch's use of Nucap's allegedly proprietary drawings
of after-market brake pad components, which Nucap had
originally allowed Bosch to access as part of their
relationship. In turn, Bosch levelled counter-claims against
Nucap, challenging Bosch's ownership of the drawings, as
well as Nucap's decision to stop acting as a supplier for
Bosch. The parties now cross-move for summary judgment. For
the reasons discussed below, both motions are granted in part
and denied in part.
deciding cross-motions for summary judgment, the Court views
the facts in the light most favorable to the respective
non-moving party. See Matsushita Elec. Indus. Co. v.
Zenith Radio Corp., 475 U.S. 574, 587 (1986). So, when
the Court evaluates Bosch's summary judgment motion,
Nucap gets the benefit of reasonable inferences; conversely,
when evaluating Nucap's cross-motion, the Court gives
Bosch the benefit of the doubt.
Aftermarket Brake Pads
parties in this suit operate in the industry of aftermarket
brake pads. R. 1140.16, Khokhar Dec. ¶¶ 9, 10; R.
1116.8, Wilkes Dec. ¶¶ 8-10. Bosch buys component
parts from suppliers to construct a final aftermarket brake
system, which it then sells to auto-parts retailers like
Autozone and O'Reilly's. Wilkes Dec. ¶ 8; R.
1159.2, Pls.' Resp. DSOF ¶¶ 1, 13. Nucap
manufactures and sells aftermarket brake components.
Pls.' Resp. DSOF ¶ 10. Bosch buys various
parts-backing plates, shims, and brake hardware-from
suppliers, such as Nucap, and then constructs the final
product using its own proprietary friction material.
Id. ¶ 912. It is undisputed that in order to
design and create aftermarket brake components, suppliers
need to reverse engineer original equipment (known as
“OE” in the industry) brake pads. Pls.' Resp.
DSOF ¶ 7. Nucap outlined its reverse-engineering process
in an email to a Bosch employee, in which Nucap explained
that it measures OE brake parts and then creates component
drawings based on those measurements. Wilkes Dec.
¶¶ 18, 19; id. at Ex. 1, 11/5/12 Khokhar
Email. Nucap uses the drawings to create the component parts
its sells to customers, like Bosch. Wilkes Dec. ¶ 18.
Bosch sources a particular brake component from a supplier,
Bosch typically requests either a drawing of the component
part or a physical sample. Wilkes Dec. ¶ 10. Bosch then
performs an initial evaluation to determine if the potential
supplier's parts conform and fit with Bosch's
existing tooling. Id. ¶ 11. “If the new
component is an alternative or replacement, Bosch may compare
the new suppliers' part drawings to the part already
being provided [by the original supplier] to assure that they
are close in shape and dimensions.” Id. To be
clear, Bosch does not request drawings from its suppliers,
including Nucap, in order to develop its own competing parts.
Instead, Bosch uses the drawings to determine if the
components would work with its existing brake components, or
so that it could develop its own mold tool to work with the
new components. Id. at ¶ 13.
parties dispute when exactly Bosch began purchasing
aftermarket brake components from Nucap, but it was no later
than 2009. Pls.' Resp. DSOF ¶ 14. Bosch ordered its
parts by submitting purchase orders to Nucap; the purchase
orders initially went to Nucap customer-service
representatives. R. 1140.10, Barruch Emails. Although
Nucap's internal process of fulfilling the purchase
orders is somewhat opaque, it is undisputed that Bosch's
purchase orders were also sent to Nucap's senior-level
executives at least 11 times after July 2011. Pls.' Resp.
DSOF ¶ 27. Once Nucap received and processed the
purchase orders, Nucap would ship the goods to Bosch, along
with invoices, packing lists, and bills of lading that
referenced specific Bosch purchase-order numbers.
Id. ¶¶ 15, 18. The invoices included some
written text that addressed the calculation of interest
charges, while the packing lists specified the time in which
Bosch could report quantity discrepancies. Id.
Prologue in countless commercial cases, the parties never
executed a formal supply agreement outside of the purchase
orders. R. 1166, Defs.' Resp. PSOF ¶ 15. In April
2010, however, the parties traded drafts of a Purchase and
Supply Agreement. R. 1142.35, 4/9/10 Butera Email. At one
point, Vince Butera, Nucap's Chief Executive Officer,
sent Chris Thornton, Bosch's Purchasing Manager, a draft
agreement in which Butera deleted a paragraph that Bosch had
proposed. Id. at 5. There is no evidence that the
parties ever executed this agreement. Nonetheless, between
September 1, 2010 and November 10, 2014, Nucap filled
thousands of Bosch purchase orders and, in exchange, received
more than $170, 000, 000 from Bosch. Pls.' Resp. DSOF
¶¶ 20, 43. Throughout this time, Nucap also gave
Bosch access to its drawings of the component parts that
Bosch was purchasing. Id. ¶ 25.
the parties dispute the exact date, no later than September
2010, Bosch began including the following language in its
purchase orders, referring to an online set of terms and
conditions (the eye-numbing capitalization is in the
THE TERMS AND CONDITIONS OF PURCHASE ARE AVAILABLE AT
WWW.BOSCHNASUPPLIERS.COM AND INCORPORATED HEREIN BY
REFERENCE, SHALL BECOME A BINDING AGREEMENT UPON SELLER
COMMENCING PERFORMANCE OF THIS PURCHASE ORDER, OR UPON SELLER
OTHERWISE ACKNOWLEDGING ACCEPTANCE, WHICHEVER OCCURS FIRST.
Pls.' Resp. DSOF ¶ 17. Also, backing up a few
months, in February 2010, Bosch sent Nucap a letter stating
that it expects their “suppliers to understand and
comply with the requirements in the Bosch Supplier Manual.
The contents of the Supplier Manual are accessible via
www.boschnasuppliers.com.” Id. ¶ 19.
terms and conditions of purchase (which the parties call
“POTCs”) purported to set out the terms that
governed the parties' relationship, including warranties,
customs, and remedies for incomplete or delayed deliveries.
R. 1121, Bosch POTCs. The POTCs also included provisions that
would preclude Nucap from suing Bosch for any alleged misuse
of its component part drawings or other intellectual
property. See, e.g. Id. §§ 23.1, 23.4
(prohibiting Seller from asserting claims against Buyer
“with respect to any technical information that Seller
has disclosed … except to the extent expressly covered
by a separate written confidentiality and/or license
agreement”); id. §§ 22.4, 23.3
(establishing all intellectual property provided to Buyer and
relating to the manufacture of the parts as the “sole
and exclusive property of” the Buyer and assigning all
“copyrights and moral rights” in the IP to the
Buyer). According to Thornton (Bosch's Purchasing
Manager), Bosch “would never eliminate the Bosch terms
and conditions of purchase from the agreements that we have
with suppliers. We just wouldn't do business with a
company that would not agree to our terms and conditions of
purchase.” R. 1118.12, Thornton 30(b)(6) Dep. at
March 2, 2011, Bosch sent Nucap a draft “Purchase and
Sale Agreement” and a “Corporate Agreement,
” both of which incorporated the POTCs. Pls.' Resp.
DSOF ¶¶ 28, 29. Bill Murray, Nucap's Vice
President of Global Sales, discussed both agreements with
other Nucap executives and Nucap's in-house legal
counsel, but did not sign it. Id. ¶ 30. A few
months later, on May 17, 2011, Murray sent Thornton an email
listing ten “Talking Points for Contract, ” and
specifically stated that Nucap “cannot have any blind
acceptance of Bosch standard terms and conditions.”
Id. ¶ 33. The parties later met in person that
same day to discuss a variety of matters, including
Bosch's proposed contracts. Id. ¶ 34.
Following the meeting, Nucap's Greg Andes prepared a
summary email in which he stated, “[h]ave agreed on all
of our issues on the contract, but [Bosch] wants us to tell
them what issues we have with their standard terms and
conditions on their PO's. They will then address with
their legal department.” Id. ¶ 35.
parties dispute what happened next. Bosch contends that it
did not hear any objections to the POTCs from Nucap following
the May 17, 2011 meeting. R. 1116, DSOF ¶ 37; Thornton
30(b)(6) Dep. at 248:22-249:4, 253:6-8, 270:24-271:8. Nucap
asserts that Butera told Thornton that Nucap
“rejected” the POTCs and that it “would not
go through the provisions one-by-one in multiple
conversations between March and June 2011.” Pls.'
Resp. DSOF ¶ 37; R. 1143.8, Butera Dep. at 97:18-25,
180:23-181:15, 244:25-246:12. The parties met again on May
31, 2011, but no one raised the POTCs. Pls.' Resp. DSOF
¶ 39. Nucap also continued to fulfill Bosch's
purchase orders without objection. Id. ¶ 40.
appears to have been no meaningful correspondence between the
parties about additional agreements for a couple of years.
Then, in 2013, discussions on confidentiality and disclosure
ramped up. First, in March 2013, Don Garrett, Bosch's
Purchasing Director, and Robert Wilkes, Bosch's Director
of Product Development, alerted other Bosch employees that
their practice of using supplier drawings needed to be
adjusted to avoid misusing the suppliers' intellectual
property. R. 1141.4, 4/3/13 Wilkes Email. Wilkes shared this
discussion with Murray (Nucap's Vice President of Global
Sales). R. 1141.9, 3/22/13 Wilkes Email. Wilkes then sent a
follow up email to Murray and Metu Khokhar, Nucap's Chief
Operating Officer, explaining “what [Bosch was] doing
to preserve the supplier drawings, ” which included
embedding the supplier drawings within Bosch drawings,
“thus preserving supplier information while fulfilling
[Bosch's] needs for additional information outside of the
original.” R. 1141.12, 3/26/13 Wilkes Email. Bosch
alleges that Wilkes's email clarified that “Bosch
would maintain Nucap drawings together with other
suppliers' drawings for the same parts.” DSOF
¶ 65. The “Guideline” that Wilkes attached
to the email implies that Bosch would maintain separate
“sheets” for each vendor, but that multiple
sheets were used to make up one drawing:
1122.9, 3/26/13 Wilkes Email at 7. Nucap's Murray
testified that he allowed Bosch continued access to
Nucap's drawings based on Wilkes's promises in those
emails. R. 1146.4, Murray Dep. at 575:7-17 (“Q. Why did
Nucap allow these Bosch engineers to access its drawings if
it hadn't signed-if they hadn't signed the terms of
use agreement? A. Because we had repeated assurances by Bob
Wilkes how they were going to handle our drawings, our IP,
our proprietary information. Q. Did you rely on that in
allowing Bosch the access to the drawing? A. It is what we
in June 2013, Murray and Garrett discussed a draft
“Mutual NonDisclosure Agreement, ” although it
was never finalized nor executed. Pls.' Resp. DSOF ¶
60. Garrett testified that Bosch sent the draft agreement to
Murray in “an attempt to solve the issue of gaining
access to [Nucap's] design information.” R. 1144.4,
Garrett Dep. at 128:15-25. That same month, Khokhar emailed
several other Nucap employees and Wilkes to explain (1)
“Bosch would not be able to sign the confidentiality
contract, ” but (2) “Wilkes has sent us numerous
emails showing us how Bosch intends to control print
distribution internally.” R. 1141.7, Khokhar Emails at
4. Khokhar also stated that Nucap should provide Nucap's
drawings to Bosch moving forward. Id. In his
response, Wilkes copied additional Bosch employees and called
the development “a major breakthrough in cooperation
between Nucap and Bosch.” Id. at 3. Wilkes
also specified the Bosch engineers who were authorized to
request Nucap drawings. Id. Bosch employee Christian
Wecker later forwarded the email chain to additional Bosch
employees and explained the steps they should take to
“respect [Nucap's] intellectual property (IP)
rights.” Id. at 2. He told the other Bosch
employees not to forward Nucap's documents to anyone
outside of Bosch and explained that if a drawing “is
based on Nucap's input it is still the IP of
Nucap.” Id. Over a year later, in August 2014,
Murray prepared another draft supply
agreement-“Bosch-Nucap Supply Agreement
Contract”-which incorporated Bosch's POTCs.
Pls.' Resp. DSOF ¶ 48. The draft agreement also laid
out the parties' mutual confidentiality obligations,
specifically, each party was to use the other's
intellectual property “only for the purpose of [Nucap]
supplying Materials to [Bosch], ” and that neither
would disclose that IP to third parties. Id. It also
specified that each party “remains the owner of any
drawings, models, patterns, tools, dies, jigs, specifications
of delivery or other documents” that the particular
party provides. Id.; R. 1120.13, 8/5/14 Murray
Email. But this document too was never executed.
Dissolution of Bosch-Nucap Relationship
October 2014, the parties' relationship was fraying, as
Bosch began to search for alternative cheaper suppliers. Pls.
Resp. DSOF ¶ 55; Defs.' Resp. PSOF ¶ 61. The
next month, in November 2014, Thornton sent another draft
“Purchase and Supply Agreement” to several Nucap
employees, including Murray and Khokhar. Pls.' Resp. DSOF
¶ 49. Khokhar responded a few days later, explaining
that “the current situation [had] resulted in a
devastating impact on Nucap's business.” R.
1120.17, 11/10/14 Khokhar Email. He also told Thornton that
Nucap was placing Bosch on “a complete business
pause.” Id. At the time, Bosch sourced 90
percent of its components from Nucap. R. 1143.5, PI Hearing
Tr., Chavda Testimony at 477:7-9. Nucap's refusal to fill
orders put Bosch at serious risk of losing customers and
shutting down its plant. Id. at 477:10-17.
avoid this, Bosch reached out to alternate suppliers for the
components it originally sourced by Nucap. R. 1122.10, Chavda
30(b)(6) Dep. at 100:21-101:4. As part of that outreach,
Bosch asked for preexisting product samples from all of its
suppliers in an attempt to quickly find replacement
components that worked with its product. Chavda 30(b)(6) Dep.
at 101:5-15 (“[B]ecause we were in survival mode, we
requested samples from all our suppliers.”). Bosch
determined whether the components were compatible by
performing physical fit tests on them. Pls.' Resp. DOSF
¶¶ 66, 67. At the same time, Bosch also requested
drawings of the potential replacement components, which were
quicker to obtain than the sample parts. Chavda 30(b)(6) Dep.
at 311:3-8; PI Hearing Tr., Chavda Testimony at 478:1-8
(“We had to evaluate the critical features, okay, and
we did drawing overlays to do that to expedite… We did
not have component samples of every vendor.”). Bosch
engineers “overlayed” these drawings with
drawings of the Nucap components in order to compare the two
and determine if the replacement components were likely to
pass a fit test and be compatible with the Bosch products. R.
1116.8, Wilkes Dec. ¶ 33; Chavda 30(b)(6) Dep. at
98:6-9, 101:16-102:2; 121:3-10, 123:5-8; 129:17-22; R.
1116.9, Bouwma Rpt. ¶ 88 (“While waiting for each
supplier's physical samples to arrive at Bosch's
facilities for completion of physical fit testing, I
understand that Bosch conducted overlays of potential
replacement supplier parts with Nucap parts.”); R.
1143.4, PI Hearing Tr., Wilkes Testimony at 412:21-414:17.
overlay process was conducted on a computer and was done to
compare the product “profile” of the Nucap
component to the product “profile” of the
component from the alternate vendor. PI Hearing Tr., Chavda
Testimony at 479:14-25. Beyond that, the parties describe the
overlay process in different terms. For its part, Bosch
asserts that the only supplier information used during the
overlay process is the manufacturing perimeter-or perimeter
outline of the component part-taken from Computer Aided
Design (CAD) drawings, and that it simply laid the alternate
supplier's manufacturing perimeter on top of Nucap's
manufacturing perimeter to compare the two. DSOF ¶ 70;
Wilkes Dec. ¶ 23; Chavda 30(b)(6) Dep. at 120:3-121:15.
In contrast, Nucap asserts that Bosch “copied
Nucap's full and complete drawings of backing plates and
shims from Nucap's CAD files and then overlaid
Nucap's manufacturing perimeter drawing and competitor
manufacturing perimeter drawing.” Pls.' Resp. DSOF
¶ 70. Nucap's cited evidence does not directly
support that proposition, but it tends to show that each
manufacturing perimeter was more than just a mechanically
traced outline of a component's measurements. PI Hearing
Tr., Wilkes Testimony at 367:15-22; R. 1143.2, PI Hearing
Tr., Khokhar Testimony at 60:8-61:11; R. 1148.3, Bouwma Dep.
at 178:3-180:15; R. 1148.4, Lange Dep. at 103:8-104:24,
162:23-163:7, 313:17-314:7. According to Nucap, the drawings
were based on “Nucap's engineers' experience,
knowledge, and creative and expressive design choices.”
Pls.' Resp. DSOF ¶ 70; PI Hearing Tr., Khokhar
Testimony at 125:15-126:24; R. 1142.31, Stoloff Rpt.
¶¶ 81-91, 116-125.
way, because Bosch was “in survival mode, ” it
decided to place “production quantity” orders of
replacement supplier components- rather than first ordering
samples of the components-as soon as the drawing of the
component passed the overlay process. PI Hearing Tr., Chavda
Testimony at 483:6-9. Bosch's witnesses testified,
though, that each component was required to pass a fit test,
in addition to the overlay process, before it would be placed
into production. Id. at 483:8-19 (“So what
I'm trying to clarify is that if it passed an overlay, we
ordered production quantities. That did not mean that those
parts went right into production. The parts still had to get
fit tested.”); PI Hearing Tr., Wilkes Testimony at
parties also dispute whether Bosch limited its distribution
of the overlay comparisons-which incorporated Nucap's
manufacturing perimeters-for internal use only. Pls.'
Resp. DOSF ¶ 72; Defs.' Resp. PSOF ¶ 67.
According to Wilkes, Bosch never sent original supplier's
component drawings to replacement suppliers, Wilkes Dec.
¶¶ 36, 37, and Chavda testified that Bosch never
intended to share the comparisons with anyone outside of
Bosch, Chavda 30(b)(6) Dep. at 327:24-328:7. Nucap, on the
other hand, asserts that Bosch disclosed the overlay
comparisons to third-party competitors in order to
communicate proposed drawing changes. Pls.' Resp. DSOF
¶ 72. Although Bosch disputes that it sent its overlays
to third parties so that the parties could “conform
[their drawings] to Nucap's drawings, ” Defs.'
Resp. PSOF ¶ 67, Bosch does concede that it disclosed
Nucap information to third parties on nine occasions,
filed suit against Bosch in March 2015. R. 1, Compl. In
January 2016, it moved for a preliminary injunction, which
the previously assigned judge granted in part in August 2016.
R. 609, PI Order. Amid the briefing on that motion, Nucap
amended its complaint and now brings claims for trade secret
misappropriation, copyright infringement, violations of the
Digital Millennium Copyright Act (DMCA), tortious
interference with contract, tortious interference with
prospective economic advantage, unfair competition, and
unjust enrichment. R. 239, First Am. Compl., ¶¶
100-158. In response to Nucap's amended complaint, Bosch
filed counterclaims for federal and state antitrust
violations, breach of contract, violations of the Illinois
Consumer Fraud and Deceptive Business Practices Act (ICFA),
unjust enrichment, tortious interference with business
expectancy, and breach of implied-in-fact contract and
covenant of good faith and fair dealing. R. 329, Answer and
Counterclaims to First Am. Compl., ¶¶ 92-167. In
March 2017, the previously assigned judge granted Nucap's
motion to dismiss Bosch's antitrust counterclaims but
denied the parties' first round of cross-motions for
summary judgment on the remaining claims. R. 713, SJ Order.
After more discovery, the parties again cross-move for
summary judgment on the remaining claims.