Thermodyne Food Service Products, Inc. v. McDonald's Corp.

940 F. Supp. 1300, 40 U.S.P.Q. 2d (BNA) 1801, 1996 U.S. Dist. LEXIS 14566, 1996 WL 563406
CourtDistrict Court, N.D. Illinois
DecidedOctober 1, 1996
Docket95 C 6747
StatusPublished
Cited by26 cases

This text of 940 F. Supp. 1300 (Thermodyne Food Service Products, Inc. v. McDonald's Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Thermodyne Food Service Products, Inc. v. McDonald's Corp., 940 F. Supp. 1300, 40 U.S.P.Q. 2d (BNA) 1801, 1996 U.S. Dist. LEXIS 14566, 1996 WL 563406 (N.D. Ill. 1996).

Opinion

MEMORANDUM OPINION AND ORDER

ALE SI A, District Judge.

This matter is before the Court on Defendants’ motion for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, Defendants’ motion is granted as to count VI, but denied as to all other counts of the second amended complaint.

I. BACKGROUND

Plaintiff Thermodyne Food Service Products Inc. is engaged in the manufacture and sale of food service products and systems. Thermodyne’s claim to fame is its development of ovens which utilize “Thermodyne technology” for transferring heat to food items. Generally speaking, the Thermodyne technology uses precise computer controls and the interrelationship of numerous component parts to cook and hold 1 food items at lower temperatures through conduction processes, rather than by means of convection heat. The benefit is that the conduction method of cooking and holding food items reduces water loss and the risk of harmful bacteriological development.

Plaintiff AFTEC Inc. is engaged in the research and development of food service products and systems, focusing primarily on developing and improving the Thermodyne technology.

Thermodyne and AFTEC (collectively referred to as “Plaintiffs”) are jointly owned and managed. They enjoy somewhat of a symbiotic relationship — Thermodyne is the manufacturing and sales arm and AFTEC is the research and development arm. Vince Tippman is the President and majority shareholder of both corporations.

In May of 1987, Defendant McDonald’s Corporation contacted AFTEC to inquire about Plaintiffs’ cooking and holding technology. The next month, AFTEC began working steadily on the testing and design of its technology to meet McDonald’s specific needs and products. For approximately the next three years, AFTEC conducted numerous demonstrations for McDonald’s personnel.

In June of 1989, Plaintiffs’ agents visited McDonald’s offices. They were taken to Defendant Specialty Equipment Companies Inc.’s Bloomfield division for the purpose of discussing a joint venture for the production of ovens. McDonald’s indicated an interest in purchasing thousands of ovens.

Unknown to Plaintiffs, on November 13, 1989, Eugene Tippman, brother of Plaintiffs’ President Vincent Tippman, was hired by Specialty Equipment — a competitor of Plaintiffs — to work in its Bloomfield division as a research engineer. Upon learning of Eugene Tippman’s employment, Plaintiffs in *1303 formed Specialty Equipment of his covenant not to compete and requested information concerning his job duties. Shortly thereafter, Specialty Equipment terminated Eugene Tippman.

In the spring of 1990, Sheldon Lavin, President of Defendant OSI Industries Inc. — a supplier of McDonald’s — and chairman of both Defendant Gands Corporation and Defendant Prodell Corporation met secretly with Defendant Benno Liebermann — an officer, director, shareholder, and employee of Thermodyne and AFTEC — at one of AFTEC’s facilities. The meeting was allegedly conducted for the purpose of “stealing” Plaintiffs’ Thermodyne technology. The next month, Liebermann authorized the shipment of a Thermodyne oven to McDonald’s, but allegedly altered the destination on the shipping order and instead sent it to OSI. A few days later, in a similar manner, Liebermann sent a replacement oven originally destined for McDonald’s, to OSI.

In June of 1990, McDonald’s contacted Plaintiffs to inform them that McDonald’s formally approved the Thermodyne technology for its use. A couple of days later, McDonald’s insisted that Plaintiffs sell McDonald’s a particular Thermodyne oven. Plaintiffs originally resisted, but later acquiesced when McDonald’s President and Senior Vice President assured Plaintiffs that McDonald’s approved their technology for McDonald’s use.

Two days later, Liebermann, unbeknownst to Plaintiffs, entered into a confidentiality agreement with McDonald’s pertaining to the development of, among other things, cooking ovens. Within days of executing the confidentiality agreement, McDonald’s informed Plaintiffs that all of Plaintiffs’ equipment would be returned immediately.

On July 18, 1990, Liebermann resigned from his position at Thermodyne and AFTEC and joined Lavin at OSI. On July 24, 1990, Prodell entered into a partnership agreement with Defendant Liebco Inc. — Liebermann is Liebeo’s principal — to develop, manufacture, and distribute food processing equipment. The partnership corporation was named Beltec International. 2

At a multi-unit food service operators convention in May of 1993, several of McDonald’s suppliers informed Plaintiffs that McDonald’s was testing a “Thermodynetype” oven in Puerto Rico. After the convention, an article appeared in the Nation’s Restaurant News discussing McDonald’s test marketing in North Carolina of the “McStuffin Sandwich.” The article described the special holding cabinet in which McDonald’s claimed that it could “hold” sandwiches for up to two hours before serving.

Plaintiffs were suspicious of the holding cabinet and sent employees to investigate. McDonald’s product was known as the “Tern-perfect oven” and it was manufactured by a division of Specialty Equipment. Plaintiffs suspected that McDonald’s somehow “stole” their technology.

In July of 1995, Plaintiffs filed an eight-count complaint (the complaint was amended twice) against eight defendants. The complaint alleged violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, the Illinois Trade Secrets Act, unfair competition, breach of confidence, interference with contractual relations, breach of fiduciary duty, breach of contract, and conspiracy to interfere with contractual relations.

In May of 1996, the Court dismissed the Illinois Consumer Fraud and Deceptive Business Practices Act claim (count I), the unfair competition claim (count III), and the breach of confidence claim (count IV). This matter is now before the Court on Defendants’ motion for summary judgment on the remaining counts of the second amended complaint.

II. SUMMARY JUDGMENT-STANDARD OF REVIEW

Under Fed.R.Civ.P. 56(c), summary judgment shall be granted if the record shows that “there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Black v. Henry Pratt Co., 778 F.2d 1278, 1281 (7th Cir.1985). The moving party has the burden of providing proper documentary *1304 evidence to show the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

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Bluebook (online)
940 F. Supp. 1300, 40 U.S.P.Q. 2d (BNA) 1801, 1996 U.S. Dist. LEXIS 14566, 1996 WL 563406, Counsel Stack Legal Research, https://law.counselstack.com/opinion/thermodyne-food-service-products-inc-v-mcdonalds-corp-ilnd-1996.