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Confold Pac., Inc. v. Polaris Indus. - 433 F.3d 952 (7th Cir. 2006)

Rule:

Wisconsin law denies recovery for unjust enrichment if all the defendant has done is use (to his profit) an idea of the plaintiff that is not a trade secret.

Facts:

Defendant Polaris Industries is a manufacturer of snowmobiles and other vehicles. Polaris used to ship its vehicles in disposable containers, but in 1993 it began considering the possibility of using returnable containers instead. ConFold Pacific Inc. was a new company that wanted to produce such containers, and in the following two years, assisted by a management consulting and software development firm, it conducted a "reverse logistics analysis" of Polaris's shipping needs.  After ConFold conducted an analysis of Polaris' shipping needs pursuant to a non-disclosure agreement, Polaris sent out a request for proposals to supply reusable containers.  Of the nine proposals submitted, including one from ConFold, none were chosen. Rather, Polaris subsequently began using its "own" designed container. Alleging that Polaris' container was based on its design, ConFold sued Polaris for breach of contract and unjust enrichment. The district court granted summary judgment for Polaris, and ConFold sought appellate review.

Issue:

Was defendant manufacturer unjustly enriched from using a reusuable container allegedly based on plaintiff's design?

Answer:

No

Conclusion:

The court of appeals found that summary judgment was proper on the contract claim because, based on the undisputed extrinsic evidence considered by the district court, the non-disclosure agreement did not apply to the container design. Unjust enrichment theories did not apply, and Polaris did not misappropriate any trade secret. Although a tort existed for misappropriation or unfair competition arising from "free riding" on information, ConFold made no effort to establish the elements of that tort. Instead, ConFold sought to claim infringement of a design that it did not patent, and such a claim was preempted by patent law.

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