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ConFold Pacific, Inc. v. Polaris Industries, Inc.

United States Court of Appeals, Seventh Circuit
433 F.3d 952 (2006)


Facts

ConFold Pacific, Inc. (ConFold) (plaintiff) was a consultancy and design firm. Polaris Industries, Inc. (Polaris) (defendant) manufactured snowmobiles and other vehicles. Polaris originally shipped its products in disposable containers. Polaris hired ConFold to conduct a reverse-logistics study analyzing the benefits of switching to returnable containers. Polaris and ConFold signed a mutual nondisclosure agreement called the Mutual Non-Disclosure Agreement-Logistics Consulting Version. The agreement's preamble stated that ConFold had information relating to its proprietary software systems, documentation, and related consultancy services necessary to perform the reverse-logistics analysis. The contract also contained a statement that it represented the entire agreement between the two parties regarding the exchange of proprietary information “relating to the program.” ConFold completed the reverse-logistics analysis pursuant to the agreement. Two months after the agreement was signed, Polaris requested proposals for designs for returnable containers. Polaris received nine proposals, including one design proposal from ConFold. Polaris ultimately rejected all nine proposals. A few years later, Polaris came out with a returnable container produced by a third party. The design was very similar to the design submitted originally by ConFold. ConFold brought suit against Polaris in federal district court, alleging that Polaris breached the nondisclosure agreement by sharing ConFold's returnable-container design with the third party. The district court found that the agreement was ambiguous on its face and considered external evidence about the meaning of the contractual language, but the court ultimately held that Polaris did not breach any confidentiality obligation because the nondisclosure agreement applied only to ConFold's reverse-logistics analysis and not to its design plans. The court granted summary judgment in favor of Polaris, and ConFold appealed.

Rule of Law

Issue

Holding and Reasoning (Posner, J.)

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