Conxall Corp. v. ICONN Systems, LLC, et al.

1-14-0158
September 2, 2016
State Court
Illinois
Illinois Appellate Court

In Conxall Corp v. ICONN Systems, LLC, at al. the Illinois Appellate Court determined what constitutes “bad faith” under §5 of the Illinois Trade Secret Act for purposes of awarding attorneys’ fees. In a divided decision, the court proposed two standards for defining “bad faith” under the statute.

Section 5 of the Illinois Trade Secret Act states that if “a claim of trade secret misappropriation is made in bad faith . . . the court may award reasonable attorneys’ fees to the prevailing party.” The majority held that Illinois courts should determine the meaning of “bad faith” by examining if the pleadings were frivolous or in some way abuse the judicial process. The concurring judge followed California’s approach, which held that a claim is made in “bad faith” under California’s Trade Secret Act if it consists of “(1) objective speciousness and (2) subjective bad faith." The majority noted that the California approach has been adopted in a number of federal courts.

Despite taking different approaches to defining “bad faith,” the judges all agreed to remand the issue to the lower court for consideration.

A copy of the opinion can be found here: http://www.tradesecretsnoncompetelaw.com/files/2016/09/Conxall-Corp-v-ICONN-Systems-LLC_-Illinois-App-Court-1st-Dist_opinion-from-court-site.pdf

Conxall Corp.
ICONN Systems, LLC et al.
Other state statute