Schulenberg v. Signatrol, Inc.

In 1932 Edward Schulenburg, Sr. (plaintiff) took a job with a company that made flashers, devices used in the sign industry to make lights flash in a specific pattern or design. Schulenburg eventually moved the company to Illinois under the name Time-O-Matic Co. J.W. Sutphin (defendant) worked with Schulenburg at Time-O-Matic but resigned after the two disagreed about company operations. Sutphin created a new flashers company called Signatrol, Inc. (defendant). Several other employees of Time-O-Matic joined Sutphin at Signatrol. Schulenburg sued Sutphin and Signatrol for misappropriation of Time-O-Matic’s trade secrets, alleging that they were using the manufacturing knowledge gleaned from Time-O-Matic to create Signatrol’s flashers, unfairly capitalizing on Time-O-Matic’s secret blueprints, plans, and information. This allowed Signatrol to make copies of Time-O-Matic’s flashers without having to undergo any of the lengthy or expensive work, investigation, or testing that would normally be required to create such a product. At trial, Time-O-Matic argued that its flashers could not be recreated simply by examining the finished product; rather, doing so required an intensive development and testing process. Sutphin and Signatrol argued that the manufacturing information they used did not qualify as a trade secret. The trial court found for Schulenburg, and Signatrol appealed all the way to the Illinois Supreme Court.