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Following Trade Secrets Litigation

Sears Gets “Roto Zipped” for $21M

For anyone following the Sears trade secrets case in Chicago where Roto Zip Tool Corp. alleged that Sears had breached a non-disclosure agreement and misappropriated a trade secret regarding a rotary cutting tool combined with a plunge base router, IP Law360 is reporting that a jury has found that Sears stole the trade secrets of Roto Zip and awarded Roto Zip (now known as RRK Holding Co.) damages of $21M ($8M of which was for punitive damages).

A family-owned company has won a $21 million verdict against national retailer Sears, Roebuck and Co. after a jury found the appliance store chain guilty of stealing the invention for a popular power tool.

The federal jury in Illinois ruled Sears had misappropriated the trade secrets of Wisconsin carpenter Bob Kopras and the company he started 30 years ago in his basement, Roto Zip Tool Corp.

Instructive in this case was the court’s denial of summary judgment relative to Sears’ argument that the tool was generally known within the relevant industry because it was comprised of two well-known tools and could thus not be considered a trade secret. However, the court found that “although a spiral saw and a plunge base router were marketed and known as separate products, the combination of the two into a single convertible product was not on the market, and was referred to as “new” and “innovative” by the Defendant itself. . . . The new combination of tools offered a lucrative and competitive product.” The court also stressed that the combination tool “had never been on the market before.”

Thus, this case may stand for the precedent that a trade secret does not have to be totally comprised of confidential information, but rather can be a “new” and “inventive” way of combining products already known to the industry and not protected by trade secret law because they have been previously disclosed to the public.

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December 3, 2007 Posted by | Intellectual Property, misappropriation, non-disclosure agreement, Trade Secrets | , , , , | 1 Comment