## Facts

- QSRSoft, Inc. and Restaurant Technology, Inc. (RTI) were competing software developers serving McDonald’s franchisees as approved “back-office” vendors with access to restaurant data stored on McDonald’s in-store processors (ISPs).
- QSRSoft developed the “DotComm System,” an internet-based, password-protected tool that analyzed ISP data and generated reports and related detailed information for franchisees.
- QSRSoft treated DotComm as proprietary and generally limited full access to customers or evaluators who signed a licensing or evaluation agreement restricting use and access (including limits to certain authorized personnel).
- QSRSoft also used technical controls, including unique access codes and passwords, and required users to change the initial password upon first access.
- At RTI’s alleged urging, a McDonald’s franchisee entity known as FAF requested a trial subscription so it could evaluate DotComm.
- QSRSoft sent FAF an evaluation licensing agreement, but—before receiving the executed agreement—QSRSoft provided FAF an access code and password in anticipation of receiving the signed document.
- FAF accessed DotComm, changed the initial password, and then provided RTI with the access code and the updated password.
- QSRSoft alleged RTI used FAF’s credentials over a period of time to access DotComm and to view and copy DotComm webpages and content, then released a similar competing product.
- QSRSoft sued in the Northern District of Illinois, asserting misappropriation under the Illinois Trade Secrets Act (ITSA), and moved for a preliminary injunction to stop RTI from using or benefiting from the information taken from DotComm.

## Issues

1. Whether QSRSoft showed a likelihood of success that information in and about the DotComm System qualified as a trade secret under the Illinois Trade Secrets Act, including that QSRSoft used reasonable measures to keep it secret.
2. Whether QSRSoft showed a likelihood of success that RTI misappropriated QSRSoft’s trade secrets by obtaining and using DotComm access credentials through FAF and accessing the system without authorization.
3. Whether QSRSoft satisfied the requirements for preliminary injunctive relief, including irreparable harm and lack of an adequate remedy at law, and whether the balance of harms and the public interest supported an injunction.

## Decision

- The court granted QSRSoft’s motion for a preliminary injunction.
- The court found QSRSoft made a sufficient preliminary showing that DotComm contained protectable trade-secret information and that QSRSoft took reasonable steps—contractual and technical—to maintain secrecy, despite having provided FAF access before receiving a signed agreement.
- The court found QSRSoft made a sufficient preliminary showing of misappropriation, based on evidence that FAF shared DotComm credentials with RTI and RTI used those credentials to access and copy information from the system.
- The court concluded QSRSoft showed irreparable harm and no adequate remedy at law, given the competitive threat posed by a rival’s continued use of misappropriated confidential information.
- The court determined the balance of harms and public interest favored relief because RTI would be restrained only from exploiting improperly obtained confidential material, while QSRSoft faced ongoing competitive harm from continued use.

## Legal Principles

- A preliminary injunction requires a showing of (1) likelihood of success on the merits, (2) irreparable harm and no adequate remedy at law absent relief, and then a balancing of harms and consideration of the public interest.
- Under the Illinois Trade Secrets Act, a trade secret is information that derives economic value from not being generally known and is subject to reasonable efforts to maintain secrecy.
- “Reasonable efforts” may include contractual restrictions (such as licensing or evaluation agreements limiting access and use) and technical measures (such as password protection and controlled credentials).
- Misappropriation may be shown where a defendant obtains or uses another’s trade secrets through improper means or through unauthorized access, including use of credentials supplied by a third party who was not authorized to share them.
- In trade-secret disputes between direct competitors, continued use or disclosure can constitute irreparable harm because loss of secrecy and loss of competitive advantage may be difficult to measure and to fully remedy with money damages alone.
- In weighing equities, a court may view harm to a defendant from being barred from using wrongfully obtained information as limited, compared to the harm to a plaintiff from ongoing exploitation of confidential material.

## Conclusion

The court granted preliminary injunctive relief because QSRSoft made a sufficient initial showing that DotComm contained trade-secret information protected by reasonable secrecy measures and that RTI likely misappropriated that information by using franchisee-supplied credentials to access and copy the password-protected system; the court also found the threatened competitive injury was not readily cured by damages and that the equities and public interest favored restricting use of the allegedly misappropriated material pending further proceedings.


QSRSoft v. Restaurant Technology, 84 U.S.P.Q.2d 1297 (2006)