## Facts

- Incase, a Massachusetts packaging manufacturer, developed injection-molded plastic watch packaging concepts for Timex during negotiations for manufacturing work.
- Incase created two designs, “S-4” and “S-5,” each using integrated plastic components to display watches; S-5 featured a movable/removable “price flag,” which Timex considered important for flexible retail pricing/display.
- Timex issued a purchase order for six million S-4 units; later it reduced the order to two million.
- Incase continued developing the S-5 design in coordination with Timex, expecting to obtain the manufacturing contract and recoup design costs through production.
- Incase did not obtain a confidentiality agreement, did not mark design materials as confidential, and did not restrict Timex’s use or disclosure of the design information.
- Timex contracted with a third-party manufacturer to produce S-5-style packaging without notifying Incase.
- Incase later observed Timex products in retail packaging it viewed as virtually identical to its S-5 design and sued for trade-secret misappropriation, breach of contract (six million S-4 units), implied contract/unjust enrichment, and unfair and deceptive acts under Massachusetts General Laws ch. 93A.
- A jury found for Incase on trade secrets, breach of contract, and implied contract; the district court later entered JMOL for Timex on trade secrets and implied contract, and after a bench trial found a ch. 93A violation but denied multiple damages.

## Issues

1. Whether evidence permitted a finding that Incase’s S-5 design information was a protectable trade secret, including whether Incase took reasonable steps to maintain secrecy.
2. Whether the evidence supported an implied-contract recovery for Incase’s design services and related damages.
3. Whether sufficient evidence supported an express contract for six million S-4 units, and whether an unresolved tooling-cost term prevented contract formation.
4. Whether Timex’s conduct constituted unfair or deceptive acts under ch. 93A, and whether it was willful or knowing so as to justify multiple damages.
5. Whether the district court abused its discretion in denying Timex a new trial based on alleged unfair surprise in Incase’s damages proof.

## Decision

- The First Circuit affirmed all rulings.
- The court affirmed JMOL for Timex on the trade-secret claim because Incase failed, as a matter of law, to show reasonable secrecy measures.
- The court affirmed JMOL for Timex on the implied-contract claim because the evidence did not support the jury’s damages award.
- The court affirmed denial of Timex’s JMOL on breach of contract, holding the evidence supported a contract for six million S-4 units and that tooling cost was not an essential missing term.
- The court affirmed the ch. 93A finding of unfair/deceptive conduct but upheld denial of multiple damages because the conduct was not shown to be willful or knowing under the statute’s enhanced-damages standard.
- The court affirmed denial of a new trial because the district court did not abuse its discretion and Timex failed to show unfair surprise or prejudice warranting retrial.

## Legal Principles

- Trade-secret protection under Massachusetts law requires proof of reasonable steps to preserve secrecy; sharing information with a business counterparty without confidentiality measures can defeat trade-secret status as a matter of law.
- A party seeking compensation for design/development work beyond an express purchase relationship must prove an implied agreement and damages with sufficient evidentiary support; general business expectations are not enough.
- Contract formation may be found where the parties’ communications and purchase documentation support agreement on essential terms; unresolved nonessential terms do not necessarily render an agreement too indefinite to enforce.
- Conduct can be “unfair or deceptive” under Massachusetts ch. 93A based on opportunistic commercial behavior, but multiple damages require a further showing that the violation was willful or knowing.
- A new trial is discretionary; alleged changes in damages presentation warrant retrial only upon a showing of unfair surprise and resulting prejudice.

## Conclusion

The First Circuit left intact a mixed outcome: Incase recovered on an express contract for six million S-4 units and proved a ch. 93A violation, but it could not maintain trade-secret or implied-contract relief because it failed to protect secrecy and failed to support implied-contract damages, and it could not obtain multiple damages absent willful or knowing misconduct.


Incase Inc. v. Timex Corp., 488 F.3d 46 (1st Cir. 2007)