Fujitsu Ltd. v. Tellabs Operations

Illinois choice of law for trade secret cases selects the law of the place of misappropriation.

(Opinion: Holderman) Fujitsu Ltd. ("Fujitsu") and Tellabs, Inc. ("Tellabs") are competitors in the field of optical telecommunications. In 2005, both Fujitsu and Tellabs attempted to win a business contract from Verizon Wireless, Inc. ("Verizon"). During the proposal process, Tellabs provided Verizon with an information packet describing their optical telecommunications system. Each page of the packet contained non-disclosure warnings. Despite the warnings, some Verizon employees made unauthorized copies of the Tellabs packet and provided those copies to Fujitsu. Fujitsu also purchased Tellabs equipment and systems on ebay.com, for the purpose of reverse engineering Tellabs’ design advances. When Fujitsu made its ebay.com purchases, it took steps to hide its identity. Tellabs filed suit, alleging trade secret infringement. Fujitsu filed a motion to dismiss. In addressing the claims of the parties, the court first conducted a choice of laws analysis. Fujitsu argued that Texas law applied to the case because the majority of the alleged misappropriations occurred in Texas. Tellabs argued that Illinois law applied because Illinois is the site of Tellabs’ headquarters and is, therefore, the site of Tellabs’ damages. The court applied Texas law to this case because “choice of law in tort cases usually select the law of the place where the victim of the tort was injured . . . the Illinois choice of law rule applicable to misappropriation cases . . . selects the place where the misappropriation took place or the defendant obtained the benefit of the misappropriation.”Applying Texas common law to the facts pled, the court held that Tellabs had stated a plausible claim for relief against Fujitsu and DENIED their motion to dismiss.