Hormel Foods Corporation (“Hormel”) has been sued by Unitherm Food Systems, Inc. (“Unitherm”) for misappropriating trade secrets relating to the method of pre-cooking sliced bacon. The suit has been filed in a Minnesota Federal Court in front of the presiding U.S. District Judge Paul Magnuson. Unitherm is a manufacturer of machines used for producing food products, while Hormel is a producer of lunch meats.
Unitherm and Hormel had a joint development agreement that encompassed the manufacture of an oven that would use very high levels of steam to cook sliced bacon. Under the contract terms of the agreement, all inventions therein were to be owned by Hormel.
Soon thereafter, relation between the two began to dwindle, when Unitherm accused Hormel of disclosing important trade secrets to another food processing machinery competitor, FMC Technologies, Inc. As such, a trade secret defined under the Uniform Trade Secret Act (“UTSA”) comprises:
- information, including a formula, pattern, compilation, program, device, method, technique, or process,
- that derives independent economic value, actual or potential, from not being generally known to or readily ascertainable through appropriate means by other persons who might obtain economic value from its disclosure or use; and
- is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
The UTSA has been enacted, in one form or another, by 40 states and the District of Columbia. Prior the development of the UTSA, improper use or disclosure of a trade secret was traditionally a common law tort.
Given all this, Unitherm had filed for a patent application related to the method of cooking sliced bacon. However, after the joint development agreement was withdrawn by Hormel, it subsequently filed its own patent application related to method of cooking bacon. Soon thereafter, Unitherm filed suit, alleging that the patent application filed by Hormel was based on the process of making bacon it was developing with Hormel.
In its initial ruling, Judge Magnuson has said that while the process may have been a trade secret, it is “axiomatic that a thing patented cannot also remain a secret.” As such misappropriation claims alleged by Unitherm have been dismissed, while breach of contract and unjust enrichment claims still remain to be decided at trial.