A Minnesota federal court has granted in part and denied in part a motion to dismiss in a lawsuit alleging that Hormel Food Corp. stole trade secrets and breached contractual agreements in its joint venture to develop new methods of cooking bacon. Unitherm Food Sys. Inc. v. Hormel Food Corp., No. 14-4034 (U.S. Dist. Ct., D. Minn., order entered January 27, 2015).
Unitherm alleged that it created the first viable method for pre-cooking sliced bacon—a process using spiral ovens and super-heated steam—and agreed to develop a commercially viable product with Hormel in June 2007. Unitherm asserted that Hormel disclosed its process, which Unitherm had not yet patented, to a rival company in violation of confidentiality agreements, which constituted an appropriation of trade secrets. The court disagreed, finding that Unitherm’s July 2009 patent application precluded its claim of trade secrets because patented processes cannot, by necessity, be trade secrets due to the disclosure of the process on the application. The court also found that the claim of trade secrets appropriation before July 2009 was barred by the three-year statute of limitations and accordingly granted Hormel’s motion to dismiss on that count. Claims of unjust enrichment and breach of contract were allowed to proceed after the court determined that Unitherm had provided enough information to properly support the claims.