Pope v. Alberto-Culver Co.

FIRST DIVISION
APRIL 27, 1998

No. 1-97-0202

H. MAIE POPE,

Plaintiff-Appellant,

v.

ALBERTO-CULVER COMPANY,

Defendant-Appellee.)
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)
)
)
)
)
)
)Appeal from the
Circuit Court of
Cook County

No. 95 L 07012

Honorable
Paddy McNamara,
Judge Presiding.


JUSTICE O'MARA FROSSARD delivered the opinion of the court:
On May 27, 1995, plaintiff H. Maie Pope filed a complaint
against defendant Alberto-Culver Company for trade secret
misappropriation in violation of the Illinois Trade Secrets Act
(765 ILCS 1065/1 et seq. (West 1994)), breach of contract and
unjust enrichment. Plaintiff alleges defendant misappropriated a
proposal she submitted to the company which involved the
dispensing of lye-based hair relaxer in a squeezable tube, using
the tube to apply the product. She contends defendant
misappropriated her proposal by introducing a similar product
line after the company rejected her proposal. The trial court
bifurcated the liability and damage issues for separate trials,
and after discovery on the liability issues, defendant moved for
summary judgment. The trial court granted defendant's motion for
summary judgment on December 11, 1996. It is from this order that
plaintiff appeals.

I. FACTS
Plaintiff approached defendant in May of 1990 with a
proposal in which a plastic tube is used to contain and apply
lye-based hair relaxer. Defendant has developed and marketed
product lines that include both lye-based and non-lye-based hair
relaxers since the 1980s. Within the industry at large, non-lye-
based hair relaxers are sold in tubes almost identical to those
in plaintiff's proposal, while lye-based hair relaxers are sold
primarily in plastic jars or tubs, though at least one company
has sold a lye-based hair relaxer in a plastic, squeezable
bottle.
After conducting research in the public library, plaintiff
constructed crude models and made drawings of her proposal. Her
proposal included prototypes of the dispenser and instructions
for its use. She and defendant executed a confidential and
nondisclosure agreement in which defendant agreed not to disclose
or misappropriate any trade secrets or confidential information
contained in the proposal.
Defendant rejected plaintiff's proposal in February 1991.
In April of 1993, defendant introduced a line of hair care
products under the name "Motions," which included a lye-based
hair relaxer in a tube. In her complaint, plaintiff contends the
idea for the "Motions" tube was taken directly from her proposal.
Defendant denies that plaintiff's proposal led to the creation of
the "Motions" tube and asserts the idea was independently
originated by an employee who had experience with lye-based
relaxers in tubes as early as the 1970s.

II. ANALYSIS
1. Standard of Review
The appellate review of a grant of summary judgment is de
novo. USG Corp. v. Sterling Plumbing Group, Inc., 247 Ill. App.
3d 316, 318, 617 N.E.2d 69 (1993). Summary judgment is proper
only when there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law. 735
ILCS 5/2-1005(c) (West 1994). The function of the appellate
court in reviewing the grant of summary judgment is not to decide
disputed issues of fact but rather to determine whether a factual
dispute exists. Kerr v. Illinois Central R.R. Co., 283 Ill. App.
3d 574, 583, 670 N.E.2d 759 (1996). The court must construe the
evidence strictly against the movant and liberally in favor of
the opponent. Quality Lighting, Inc. v. Benjamin, 227 Ill. App.
3d 880, 884, 592 N.E.2d 377 (1992).

2. The Illinois Trade Secrets Act
Plaintiff first asserts that defendant misappropriated her
trade secret under the Illinois Trade Secrets Act (Act) (765 ILCS
1065/1 et seq. (West 1994)). Before addressing the issue of
misappropriation under the Act, however, we must determine
whether plaintiff's proposal is entitled to trade secret
protection as a matter of law.
Under the Act, a trade secret is defined as follows:
"[I]nformation, including but not limited to, technical
or non-technical 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; and
(2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy or
confidentiality." 765 ILCS 1065/2 (West 1994).
Under the Act, whether the information sought to be
protected qualifies as a trade secret focuses fundamentally on
the secrecy of such information. Thermodyne Food Service
Products, Inc. v. McDonald's Corp., 940 F. Supp. 1300 (N.D. Ill.
1996). Under the first statutory requirement, the information at
issue must be substantially secret to impart economic value to
both its owner and its competitors because of its relative
secrecy. Mangren Research & Development Corp. v. National
Chemical Co., 87 F.3d 937, 942 (7th Cir. 1996), quoting George S.
May International Co. v. International Profit Ass'n, 256 Ill.
App. 3d 779, 628 N.E.2d 647 (1993). This requirement precludes
trade secret protection for information generally known or
understood within an industry even if not to the public at large.
Mangren, 87 F.3d at 941; see also M. Jaeger, Trade Secrets Law
3.04, at 3-34 (1988).
It is well established that a product or service that is
within the realm of general skills and knowledge in the industry
cannot be a trade secret. Web Communications Group, Inc. v.
Gateway 2000, Inc., 889 F. Supp. 316, 319 (N.D. Ill. 1995),
citing Service Centers of Chicago, Inc. v. Minogue, 180 Ill. App.
3d 447, 535 N.E.2d 1132 (1989).
The Web case involved a multipage, stepped advertising
insert that plaintiff Web designed to be incorporated into a
bound magazine. Though such inserts had been used in the
printing industry before, Web's was the first to be utilized in a
bound magazine. Though Web discussed using the advertisements
with defendant Gateway 2000, the final arrangements for the work
were never made. Instead, Gateway hired another company to
create similar advertising inserts which appeared in bound
magazines. Web filed an action against Gateway for, among other
things, misappropriation of a trade secret under the Illinois
Trade Secrets Act.
The court granted Gateway's motion for summary judgment on
the basis that the stepped insert at issue was not a protectable
trade secret under Illinois law. The court found that Web failed
to demonstrate that the leap from the previously used stepped
inserts to the stepped insert he developed could be characterized
as "not generally known or easily duplicated by the industry."
Web, 889 F. Supp. at 319. The court noted that stepped inserts
were well known and used in the printing industry, and that
developing a stepped insert that could be run in magazines
required little time, money or effort. See also Hamer Holding
Group, Inc. v. Elmore, 202 Ill. App. 3d 994, 560 N.E.2d 907
(1990) (the key to secrecy under the Act is the ease with which
information can be developed through proper means; if the
information can be readily duplicated without involving
considerable time, effort or expense, then it is not secret);
Computer Care v. Service Systems Enterprises, Inc., 982 F.2d 1063
(7th Cir. 1992) (no protectable trade secret found where
plaintiff failed to demonstrate alleged trade secrets were not
within the general skills and knowledge of the industry or
readily ascertainable without involving considerable time, effort
or expense).
In Service Centers v. Minogue, the court provided further
guidance as to what information qualifies as a protectable trade
secret, stating:
"Simply being the first or only one to use certain
information does not in and of itself transform otherwise
general knowledge into a trade secret. If it did, the first
person to use the information, no matter how ordinary or
well known, would be able to appropriate it to his own use
under the guise of a trade secret. We do not believe such a
result was intended by the Act." Service Centers, 180 Ill.
App. 3d at 455.
We believe the above language is particularly
applicable in the present case. There is no dispute that a tube
dispenser for non-lye-based hair relaxer, with a nozzle, was
already in existence at the time plaintiff submitted her proposal
to defendant. There is no dispute that a squeezable bottle-
shaped dispenser, with a nozzle, was already in existence for
lye-based relaxer. In fact, the only "new" aspect of plaintiff's
proposal was the use of the base of the tube to spread the
relaxer, and it is clear this method could have been easily and
cheaply discovered utilizing existing technology. The fact that
defendant marketed the "Motions" tube as "A New Technology" does
not make it so for purposes of a legal analysis.
The Service Centers court noted that the focus of both the
common law and the Act is on the secrecy of information sought to
be protected. Service Centers, 180 Ill. App. 3d at 453. Prior
to enactment of the Act, the supreme court outlined several
factors to be addressed in determining whether a trade secret
exists. ILG Industries, Inc. v. Scott, 49 Ill. 2d 88, 273 N.E.2d 393 (1971). These factors parallel the standards under the Act
and can be helpful in our analysis of whether plaintiff's
proposal was a protectable trade secret. Jackson v. Hammer, 274
Ill. App. 3d 59, 653 N.E.2d 809 (1995).
In ILG Industries, the supreme court identified the
following six factors as significant in determining the existence
of a trade secret:
"(1) [T]he extent to which the information is known outside
of [plaintiff's] business; (2) the extent to which it is
known by employees and others involved in [plaintiff's]
business; (3) the extent of measures taken by him to guard
the secrecy of the information; (4) the value of the
information to him and to his competitors; (5) the amount of
effort or money expended by him in developing the
information; [and] (6) the ease or difficulty with which the
information could be properly acquired or duplicated by
others." ILG Industries, Inc., 49 Ill. 2d at 93.
The information on which plaintiff's proposal was based
clearly existed before she sent the idea for the product to
defendant. This information was well known in the hair care
business and could be easily duplicated. The fact that it had
not been utilized is simply not determinative.
Plaintiff asserts that she conducted experiments and did
library research which resulted in the product at issue. In a
declaration to the court, she makes several general assertions as
to the time, effort and expense of developing her proposal.
However, these assertions must be viewed in the context of the
alleged trade secret, which is really a combination of two
existing products - lye-based hair relaxer and a stock caulk
tube.
Certainly the placement of lye relaxer in an already
existing tube was easily within the realm of general skills and
knowledge in the industry. See Web, 889 F. Supp. at 320.
Likewise, turning the existing tube to use its base to smooth
relaxer on the hair was also within the realm of the industry's
skills and knowledge. A design or process that can easily be
ascertained from an examination of the product itself cannot be a
trade secret. Televation Telecommunication Systems, Inc. v.
Saindon, 169 Ill. App. 3d 8, 522 N.E.2d 1359 (1988). Such is the
case here.
Plaintiff also contends that her identification of a "niche
market" for this product and market timing information constitute
trade secrets. However, again we believe these aspects of
plaintiff's proposal were generally ascertainable to those within
the industry, including defendant. Rohn Hamel, the Alberto-
Culver employee charged with developing the "Motions" product
line, has been in the hair care industry since the mid-1970s and
was involved in the creation of several African-American hair
care lines. Defendant company clearly had the knowledge,
personnel and resources to identify the "niche market" referred
to by plaintiff. The availability of a wide variety of relaxer
products targeted to African-American consumers indicates that
this market had already been identified and was considered by
many companies to be quite worthwhile in terms of product
development.
Finally, while we recognize that plaintiff did take steps to
protect the confidentiality of her idea, this alone does not
overcome the fact that the general knowledge needed to develop
this particular relaxer dispenser and accompanying delivery
instructions was well within the province of the industry.
Even if plaintiff were the first to introduce the idea of a
lye-based hair relaxer in a tube to this particular defendant,
that in and of itself does not transform otherwise general
knowledge into a trade secret. See Minogue, 180 Ill. App. 3d at
455. We recognize that the key to secrecy under the Act is the
ease with which information can be developed. See Hamer, 202
Ill. App. 3d at 1011.
Based on the totality of the circumstances, we find that the
product at issue in this case can be readily duplicated without
considerable time, effort or expense. We further find plaintiff
has failed to demonstrate the alleged trade secrets were not
within the general skills and knowledge of the industry or were
not readily ascertainable without involving considerable time,
effort or expense. See Computer Care v. Service Systems
Enterprises, Inc., 982 F.2d 1063 (7th Cir. 1992).
Because we have determined that plaintiff's proposal was not
a trade secret as contemplated in the Act, we need not address
whether the proposal was misappropriated under the Act.
Accordingly the trial court's grant of summary judgment on this
count is affirmed.

3. Breach of contract
Plaintiff next claims defendant violated the confidential
and nondisclosure Agreement, in which defendant agreed not to
disclose any trade secrets contained therein and agreed not to
misappropriate the proposal. We agree with the trial court that
because plaintiff's proposal does not constitute a trade secret
under Illinois law, this count must also fail.
The agreement reads, in pertinent part:
"[T]he obligations set forth in Section 1 shall not extend
to any portion of such proprietary information: a. which is
generally available to the public or becomes so available
through no fault of [Alberto-Culver]***."
Based on our determination that plaintiff's proposal was
generally available to the public, we conclude there can be no
contractual liability on the part of defendant. Therefore, we
affirm the trial court's grant of summary judgment on this count.

4. Unjust enrichment claim
As noted by the trial court, this claim must also fail, as
unjust enrichment is preempted by the Illinois Trade Secrets Act.
The Act provides:
"(a) Except as provided in subsection (b), this Act is
intended to displace conflicting tort, restitutionary,
unfair competition, and other laws of this State providing
civil remedies for misappropriation of a trade secret.
(b) This Act does not affect:
(1) contractual remedies, whether or not based upon
misappropriation of a trade secret***." 765 ILCS 1065/8
(West 1994).
Unjust enrichment is essentially a claim for restitution.
Web, 889 F. Supp. at 320. Thus, under the Act, plaintiff's claim
must fail.

III. CONCLUSION
As noted by the trial court, if we were to find plaintiff's
proposal a trade secret, then placing any well-known,
commercially available product into a well-known, commercially
available container would be a secret entitled to legal
protection. The fact that the proposal contained instructions
regarding the use of this well-known, commercially available
container for application of the product does not change this
analysis. Furthermore, defendant had already targeted African-
American consumers for the sale of relaxer products.
We find that plaintiff's product could be easily duplicated
and her proposal was based on information generally available
within the hair care industry and to the general public,
therefore, her proposal does not constitute a protectable trade
secret under Illinois law.
Based on the foregoing analysis, we affirm the summary
judgment of the trial court.
Affirmed.
BUCKLEY, P.J., and O'BRIEN, J., concur.