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205 Corp. v. Brandow

517 N.W.2d 548 (1994)

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205 Corp. v. Brandow

Iowa Supreme Court

517 N.W.2d 548 (1994)

Facts

205 Corporation (plaintiff) owned and operated The Tavern, a restaurant. 205 Corporation hired Ron Brandow (defendant) to manage The Tavern and shared recipes for its pizza sauce, pizza crust, and grinder sandwiches with Brandow. The sauce and grinder recipes were previously only known by two people, the former owner of The Tavern and the president of 205 Corporation. The pizza-crust recipes were also known by the employees who prepared the crust each day. The Tavern had won several highly prized local food awards. Later, 205 Corporation fired Brandow, who then obtained employment with a competitor restaurant, Mustards Restaurant (defendant). 205 Corporation sued Brandow and Mustards Restaurant, alleging that the sauce, crust, and grinder recipes were trade secrets that were improperly shared by Brandow. The lawsuit also alleged that Mustards Restaurant induced Brandow to share the trade secrets. During the trial, 205 Corporation showed that the recipes were the most valuable assets when it purchased The Tavern. 205 Corporation also showed that the ingredients could only be determined through the use of an expensive chemical-analysis machine, but even that machine could not show the precise quantities of ingredients or methods of cooking. Finally, 205 Corporation showed that the sauce and grinder recipes were kept secret, but the crust recipes were known by the employees who prepared the crust each day. The trial court found in favor of 205 Corporation and entered an injunction prohibiting Brandow and Mustards Restaurant from using or disclosing any of The Tavern’s recipes or any substantially similar recipes. Brandow and Mustards Restaurant appealed.

Rule of Law

Issue

Holding and Reasoning (Harris, J.)

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