Abrasic 90 v. Weldcote Metals: Trade Secrets

A former president took CGW's pricing and customer files, yet the court denied an injunction because the company took almost no measures to guard the data.

Trade-secret plaintiffs like to lead with the theft. A trusted insider walked out with the files, joined a competitor, and started selling against the very customers whose data he took. That story feels like it should win. Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F. Supp. 3d 888 (N.D. Ill. 2019), is the decision that explains why it often does not. Judge John J. Tharp, Jr. denied a preliminary injunction even while assuming the defendants took the plaintiff’s files, because the company had done almost nothing to treat that information as secret in the first place.

The opinion, issued March 4, 2019 in the Northern District of Illinois, has become a standard citation for a hard lesson: the reasonable-measures element of trade-secret law is not a formality that sympathetic facts can override. If the owner did not guard the information, the information is not a trade secret, and there is nothing for a court to protect no matter how badly the former employee behaved.

At a glance

Case: Abrasic 90 Inc. v. Weldcote Metals, Inc., 364 F. Supp. 3d 888 (N.D. Ill. 2019), No. 1:18-cv-05376.
Decided: March 4, 2019, by Judge John J. Tharp, Jr.; motion for preliminary injunction denied.
Holding: Compiled pricing, cost, and customer information does not qualify as a trade secret under the DTSA or the Illinois Trade Secrets Act where the owner took almost no measures to maintain its secrecy, so the plaintiff cannot show likelihood of success even assuming the defendants took the files.
Status: District court order denying preliminary injunction; the case continued but the injunction ruling stands as the widely cited authority on secrecy measures.

The two-element structure of a trade secret

Both the federal Defend Trade Secrets Act, 18 U.S.C. § 1836, and the Illinois Trade Secrets Act, 765 ILCS 1065, define a trade secret through a pair of requirements the court distilled cleanly. First, the information must be sufficiently secret to derive economic value from not being generally known. Second, the owner must have taken reasonable measures, or reasonable efforts, to keep it secret. The statutes phrase these slightly differently, but the analysis merges them, and a plaintiff who fails either one loses.

The second element is where many otherwise strong cases collapse. Courts treat the owner’s own conduct as evidence about whether the information is truly valuable and truly secret. The logic is practical. If a company genuinely believed its pricing model was a crown jewel, it would have guarded it. When the company guarded nothing, a court reasonably doubts that the information was the kind of protectable asset the plaintiff now claims. The reasonable-measures inquiry is thus both a legal element and a credibility test.

Abrasic 90 also confirms that this inquiry can be decisive at the preliminary-injunction stage, not just at trial. A plaintiff seeking a preliminary injunction must show a likelihood of success on the merits. If the record already shows the owner took almost no precautions, the court can find that likelihood absent and deny relief without waiting for a jury.

The facts: an insider, a flash drive, and a competitor

The plaintiff, Abrasic 90, Inc., did business as Camel Grinding Wheels, USA, or CGW, a manufacturer and distributor of grinding and cutting abrasives. Joseph O’Mera served as its president for roughly eighteen years. He left to build a competing abrasives line for Weldcote Metals, Inc., and on his way out he retained CGW files, including a flash drive with transactional information: sales figures, pricing, costs, and the identities of suppliers and distributors. A second employee, Colleen Cervencik, also left CGW for Weldcote.

CGW sued and moved for a sweeping preliminary injunction. It asked the court not only to bar the defendants from using its claimed trade secrets but to keep them out of the abrasives industry altogether. That breadth mattered. A request to shut a competitor out of an entire field puts real pressure on the plaintiff to prove that what was taken was genuinely protectable, because the remedy sought is so severe.

The court was willing to assume, for the motion, that the defendants had taken CGW’s files and that at least some categories of the information, particularly the compiled pricing and customer data, were the sort of thing that can carry independent economic value from not being publicly known. That assumption is what makes the decision instructive. The plaintiff cleared the sympathy hurdle and still lost, because the second element was missing.

Almost no measures at all

Judge Tharp catalogued what CGW did not do, and the list reads like a checklist of trade-secret hygiene turned inside out. According to the court and the analyses of the opinion, CGW failed on essentially every routine front:

It did not require confidentiality or non-disclosure agreements from all employees with access to the information. Some employees signed such agreements; others with identical access signed nothing, which the court treated as evidence that CGW itself did not consistently regard the data as confidential. It had no written policy that identified which information was confidential; the generalized statements that existed were too vague to tell an employee what was actually off limits. It provided no training on confidentiality obligations, and no data-security training or protocols. It did not restrict access on a need-to-know basis or use individual credentials to differentiate who could reach sensitive material. And it had no exit procedure requiring departing employees to return or delete company information, which is precisely how O’Mera walked out with a flash drive in the first place.

The court’s summary was blunt: CGW “took almost no measures to safeguard the information that it now maintains was invaluable to its competitors.” The gap between the claimed value of the data and the effort spent protecting it was the whole problem. The court underscored the “almost total failure to adopt even fundamental and routine” protections, which is the phrase that has made the opinion a favorite of practitioners advising on secrecy programs.

Why the theft could not save the claim

The natural objection is that the defendants clearly took the files, so why should the plaintiff’s paperwork failures matter. Abrasic 90 answers that objection directly. Misappropriation requires a trade secret to misappropriate. The wrongfulness of the taking is a separate question from whether the information qualifies for protection, and the qualification question comes first.

Because CGW failed the reasonable-measures element, its pricing, cost, and customer compilations were not trade secrets under either statute. With no trade secret in existence, there was nothing for the defendants to have misappropriated, and no likelihood that CGW would succeed on the merits. The court therefore denied the injunction without needing to resolve whether the defendants’ conduct was otherwise improper. The decision does not reward the defendants’ behavior; it simply holds that trade-secret law is not the vehicle to remedy it where the plaintiff never created a protectable secret.

This sequencing is the doctrinal heart of the case. Reasonable measures are not a defense that a defendant raises after the plaintiff proves everything else. They are part of the plaintiff’s affirmative case for the existence of a trade secret, and their absence is fatal at the threshold.

Open questions

The opinion leaves several edges unresolved. It does not draw a bright line for how much protection is enough; the standard remains reasonableness under the circumstances, and a smaller company with fewer resources may satisfy it with a lighter program than a large enterprise would need. The decision also does not decide whether any single measure, such as a consistently applied NDA, would by itself have carried the day, since CGW failed on nearly all fronts at once.

The order likewise addressed only the preliminary-injunction posture. A plaintiff who loses on likelihood of success at that stage is not necessarily barred from developing a fuller record later, though a record this thin on secrecy measures is difficult to rehabilitate. Finally, the interplay between inconsistent NDA coverage and the secrecy analysis is worth watching: the court treated selective agreements as evidence against secrecy, but a company could argue that partial coverage plus other controls still amounts to reasonable measures in a closer case.

Implications for inventors and businesses

Protect it before you claim it. The time to build a secrecy program is before an employee leaves, not after. Abrasic 90 shows that even a clear taking will not produce an injunction if the information was never guarded, so the value of a trade-secret asset depends on the routine controls in place around it.
Be consistent, not selective. Requiring NDAs from some employees but not others with the same access can affirmatively undercut a claim. Inconsistency reads to a court as proof the owner did not really treat the information as secret.
Adopt the ordinary baseline. The court asked for fundamental and routine steps, not perfection: a written policy that identifies what is confidential, training, need-to-know access with individual credentials, and exit procedures that recover or delete company data. Meeting the baseline is inexpensive relative to what it protects.
Match the remedy to the proof. CGW sought to exclude competitors from an entire industry on a record that could not sustain even a narrow order. Overbroad requests invite scrutiny that exposes weak secrecy measures, so calibrate the relief to what the evidence actually supports.

Frequently asked questions

Did the court find that Abrasic’s information was actually secret? In part. Judge Tharp accepted that some of the compiled pricing, cost, and customer data could have economic value from not being generally known. The case failed on the second element: the company took almost no measures to keep the information secret, so it never qualified as a trade secret at all.

Why did taking the files not decide the case? Trade-secret law protects information the owner actually treats as secret. The court assumed the defendants took CGW files, but wrongful taking is irrelevant if the information was never a trade secret. Because CGW failed the reasonable-measures element, there was no protectable secret to misappropriate, so the misconduct could not carry the injunction.

What secrecy measures would have changed the outcome? The court listed routine steps CGW skipped: consistent confidentiality agreements for everyone with access, a written policy identifying what is confidential, employee training, need-to-know access limits with individual credentials, and exit procedures requiring return or deletion of company data. Adopting the ordinary baseline, not perfection, is what the element demands.