ZILA SWAB TECHNOLOGIES, INC., Plaintiff v. DARRELL W. VAN DYKE, et al., Defendants.

No. 01 C 8729United States District Court, N.D. Illinois, Eastern Division
August 5, 2002

MEMORANDUM OPINION AND ORDER[1]

[1] At the outset an apology to the litigants and their counsel is extended for this Court’s failure to address, before now, defendants’ request for review of Magistrate Judge Sidney Schenkier’s April 25, 2002 order (“Order”), entered pursuant to the referral to him of a discovery dispute. Although this is not a justification, this Court’s practice in dealing with the large number of contested motions that are submitted for its consideration is to maintain a comprehensive list, complete with the due dates for briefing — a list that is regularly doublechecked against the updates that this Court frequently obtains of a computer-generated “Pending Motions” listing. Unfortunately the mindless computer does not classify objections to a magistrate judge’s order as a “Pending Motion” — hence what is discussed here slipped off the radar screen. But as soon as the subject was referred to by counsel at the last status hearing, this Court hastened to correct the oversight.

MILTON I. SHADUR, United States District Judge.

Extraordinarily able Magistrate Judge Sidney Schenkier has addressed a major discovery dispute between Zila Swab Technologies, Inc. (“Zila”) on the one hand and Darrell Van Dyke (“Van Dyke”) and GMP Products, LLC on the other. At the end of the day he entered the Order that granted, pretty much in its entirety, the disclosures sought by Zila. Defendants have since filed timely objections to the Order, and the parties have now briefed the matter fully, making it ripe for decision. employee from the use of information derived in the course of employment.

But useful or even valuable business information does not necessarily equate to a trade secret. As the term “secret” denotes, the party seeking protection of such assertedily proprietary information must not only particularize its identity (Nilssen, 963 F. Supp. at 672 quoted one of this Court’s earlier rulings in which it found legally insufficient a “blunderbuss statement that `Everything you got from us was a trade secret'”) but must also specify its efforts to maintain secrecy. Thus the Illinois Trade Secrets Act definition of “trade secret” (765 ILCS 1065/2
(d) specifies the twofold requirement that the assertedly protected information):

(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; and
(2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality.

IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581, 583-84 (7th Cir. 2002), relying on such earlier cases as Composite Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 1266 (7th Cir. 1992) (per curiarn), has spoken to the first requirement of specificity. And it sounds as though Zila’s supplemental responses to defendants’ repeated demands for such specificity go well down the road of showing the “concrete secrets” to which this Court to sustain defendants’ objections to the Order in their entirety.[4]

In short, this Court has been left with the definite and firm conviction that a mistake has been made by the extremely able Magistrate Judge (Weeks v. Samsurig Heavy Indus. Co, , 126 F.3d 926, 943 (7th Cir. 1997)) — not so much in terms of what the Order has provided as in what the Order has omitted as a precondition to granting relief to Zila. Accordingly this Court orders:

1. that the portions of the Order to which defendants’ timely objected be vacated;
2. that defendants are excused from further disclosure and production until such time as Zila provides the particularized information called for by the quoted provisions of the Illinois Trade Secrets Act; and
3. that Zila comply with defendants’ outstanding request for written discovery on or before August 15, 2002.

Finally, it is understood that the parties have reached agreement that witnesses John Rowe and William Casey will be produced by Zila for depositions in Chicago at early dates to be agreed upon by the parties.

[4] It may be that after Zila sustains its burden it may become entitled to part or all of the disclosures ordered by Magistrate Judge Schenkier. This Court expresses rio views (let alone criticism of Judge Schenkier’s analysis) on that score. But any substantive ruling in that respect must await the future.