QSRSoft v. Restaurant Technology

84 U.S.P.Q.2d 1297 (2006)

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QSRSoft v. Restaurant Technology

United States District Court for the Northern District of Illinois
84 U.S.P.Q.2d 1297 (2006)

Rich Walter headshot
  • Written by Rich Walter, JD

Facts

QSRSoft, Inc. (plaintiff) and Restaurant Technology, Inc. (RTI) (defendant) were rival software developers. As back-office vendors for McDonald’s Corporation, both companies had access to the real-time data that McDonald’s collected from each of its franchised fast-food stores. QSRSoft devised a software tool that could quickly analyze a store’s data and report results to the store’s franchisee. QSRSoft showed brief samples of this password-protected, analytical tool to prospective customers and competitors at trade shows, but the company’s policy was not to provide full access to the tool until a prospective customer or competitor signed a licensing agreement. At RTI’s behind-the-scenes instigation, a franchisee known as FAF told QSRSoft it wanted to analyze the tool’s software and requested a trial subscription. QSRSoft agreed and sent FAF a licensing agreement. Without waiting to receive FAF’s signed agreement, QSRSoft mailed FAF a password that unlocked the tool. FAF shared this password with RTI, which used it to access the tool’s software. RTI subsequently released a similar product. Suspecting that RTI had misappropriated the tool’s software, QSRSoft sued RTI in federal court for violating Illinois’s version of the Uniform Trade Secrets Act (UTSA). QSRSoft moved for a preliminary injunction, which RTI countered by arguing that QSRSoft took inadequate measures to protect its tool as a trade secret.

Rule of Law

Issue

Holding and Reasoning (Der-Yeghiayan, J.)

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Casebooks

Intellectual Property

Key Terms

  • Preliminary InjunctionA temporary order commanding a party to act or refrain from acting that is issued prior to or during trial in order to prevent irreparable injury from occurring before the case is decided.
  • MisappropriationThe act of dishonestly taking something that belongs to someone else and using it for oneself. Misappropriation is also a type of unfair competition claim in which the defendant appropriates the plaintiff’s intellectual property if the intellectual property at issue is not otherwise protected by copyright, patent, trademark, or as a trade secret.
  • Trade SecretA formula, method, program, device, or other business material that is kept confidential and whose competitive value is enhanced by the maintenance of such confidentiality.
  • Uniform Trade Secrets ActA template first published by the Uniform Law Commission in 1979 for state laws intended to protect information that derives its economic value from its not being generally known or ascertainable by unauthorized persons.

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