Loggerhead Tools, LLC v. Sears Holdings Corp., No. 12-CV-9033, Slip Op. (N.D. Ill. Sep. 20, 2016) (Darrah, J.).
Judge Darrah granted defendant Sears’ summary judgment motion regarding Loggerhead’s fraud claims in this patent, Lanham Act and trade secret case involving the Bionic Wrench.
Of particular note, the Court held as follows:
- Loggerhead could not maintain a fraud claim based upon concealing a material fact because it could not prove the required special fiduciary relationship between Loggerhead and Sears. They were sophisticated parties operating an arms-length business relationship.
- Loggerhead could not prove intent to defraud. The evidence showed that over months of negotiations between Loggerhead and Sears, Sears planned for contingencies in case the negotiations fell through. Contingency planning did not evidence an intent to deceive.
- Loggerhead could not show the necessary reliance. While Loggerhead forewent soliciting Sears’ competitors, in fact Loggerhead solicited several competitors. And the parties’ agreement made clear that sales forecasts were only forecasts, not purchasing commitments.
- In order to prove promissory fraud in Illinois, Loggerhead had to prove that the act was part of a scheme to defraud. That requires showing that Sears did not intend to fulfill its promise at the time Sears made the promise. Because Loggerhead’s claims were based upon Sears’ forecasts being promises to purchase, the claims cannot succeed. According to the parties’ agreements the forecasts were only forecasts, not commitments to purchase.
- Loggerhead’s promissory fraud claims also failed because Loggerhead could not prove its reasonable reliance upon the forecasts. In addition to the fact that the parties’ agreement stated that the forecasts were not commitments to purchase product, Loggerhead’s emails stated that prior forecasts were not commitments: “[b]allpark estimates are great, but they are not commitments . . . .”