## Facts

- IDX Systems Corporation and Epic Systems Corporation developed software used by medical practices for billing and related financial management.
- The University of Wisconsin Medical Foundation used IDX software until December 2000, when it switched to Epic’s software.
- IDX alleged that two former Epic employees, Mitchell Quade and Michael Rosencrance, later employed in data processing roles at the Foundation, caused the switch and transmitted IDX’s confidential information to Epic.
- IDX sued the Foundation, Quade, and Rosencrance for misappropriation of trade secrets and breach of confidentiality obligations, and sued Epic for inducing the alleged misconduct.
- To support its trade secret claim, IDX produced a 43-page description of its software and related materials that included substantial generic or publicly known information and did not clearly separate alleged secrets from non-secret content.

## Issues

1. Whether a trade secret claim can survive summary judgment when the plaintiff identifies alleged secrets by an undifferentiated, broad description of a software system and related documentation.
2. Whether Wisconsin’s Uniform Trade Secrets Act (Wis. Stat. § 134.90(6)(a)) displaces tort claims based on the same alleged misappropriation of confidential business information.
3. Whether confidentiality agreements lacking temporal and geographic limits are unenforceable under Wisconsin law.

## Decision

- The Seventh Circuit affirmed summary judgment for defendants on the trade secret claim because IDX did not identify its alleged trade secrets with sufficient specificity.
- The court affirmed dismissal of tort claims against Epic on the ground that Wisconsin’s trade secret statute displaced overlapping tort theories grounded in the same alleged misappropriation.
- The court affirmed the district court’s disposition of the contract-based theories as pleaded, including the ruling that the confidentiality agreements were invalid under Wisconsin law due to lack of temporal and geographic limitations.
- The district court’s judgment was affirmed in full.

## Legal Principles

- Under Wisconsin’s UTSA, “trade secret” protection applies only to information that (1) derives independent economic value from not being generally known or readily ascertainable and (2) is subject to reasonable secrecy efforts.
- A trade secret plaintiff must identify the alleged secrets with particularity; it is insufficient to present broad, high-level descriptions or an unsorted mass of materials and ask the court or defendants to determine what is secret.
- A compilation may qualify as a trade secret, but the claimant must explain what specific combination is proprietary and why the combination is not readily ascertainable; inclusion of generic or public elements defeats attempts to label an entire “package” as secret without delineation.
- Wisconsin’s UTSA displacement provision channels civil remedies for trade secret misappropriation into the statute and bars overlapping tort claims based on the same nucleus of alleged misuse of confidential information.
- Contract cannot expand trade secret protection beyond statutory requirements, and confidentiality restraints resembling perpetual or non-compete-like restrictions may be unenforceable under Wisconsin law when lacking temporal and geographic limitations.

## Conclusion

The Seventh Circuit held that IDX’s inability to specify discrete trade secrets within a broad description of its software was fatal at summary judgment and that Wisconsin’s UTSA displaced parallel tort theories based on the same alleged misappropriation, while affirming the district court’s rejection of the contract-based claims as pleaded.


IDX Sys. Corp. v. Epic Sys. Corp., 285 F.3d 581 (7th Cir. 2002)