“Seventh Circuit Denies Request To Compel Arbitration In Trade Secret Misappropriation Dispute”

Peter Lubin and Patrick Austermuehle have this article, published in Mondaq, discussing the Seventh Circuit’s recent decision in CCC Intelligent Solutions Inc. v. Tractable Inc., in which the court refused to permit a company known as Tractable to invoke the arbitration provision contained in a software license agreement between Tractable’s employee using a fictitious name and a competitor. The employee turned over to Tractable the licensed software, which Tractable allegedly proceeded to disassemble and appropriate in violation of the software agreement. The victimized competitor brought suit, and Tractable moved to compel arbitration based upon the terms of the license agreement between its employee and the competitor.

The Seventh Circuit rejected the attempt to arbitrate, holding that Tractable could not step into the shoes of its employee. For the court, the actions of the employee using a fictitious name was a game stopper, as there was no way that the competitor would “know that Tractable would claim to be its trading partner.” As the court noted, “some legal disputes are simple. This is one…Tractable is not a party to this contract, so it cannot demand arbitration.”

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