to establish the truth that the heaters in question contained
Prime’s name and number - Prime itself concedes and stipulates to
that. Rather, Tempco admits that it desires to use this statement
as evidence of Dean’s possibly long-held state of mind in the
‘actual confusion” prong of the “likelihood of confusion” test -
devoid of Dean actually experiencing any actual event or condition
around the time of the statement. Ergo, the Court properly
excluded Dean’s statement.
2. William Smith’s Statement

In deposition testimony, David Farmery (“Farmery”), a Tempco
distributor, testified that Prime-customer Smith expressed
confusion to him regarding whether or not Prime manufactured the
heaters it sold him. Specifically, within the context of Farmery
and Smith reviewing stock reports, Farmery claims that Smith told
him that “at some point we thought Prime was a manufacturer for
these items.” Farmery also claimed that Smith told him about how
“when he got products in, got paperwork in, it would say Prime
Industries. . .. I figured they were the manufacturer.”

In its October 27, 2003 order, the Court found that these
statements could not qualify as “present sense impressions” —-
although they described an event or condition - because they
described past events or conditions not remotely contemporaneous

with Smith’s purported statements. Accordingly, the Court excluded



remove all copies of SA/2 from its computers as it claimed it did.
Additionally, Tempco argues that Shoemaker’s testimony proves that
Prime had installed SA/2 on laptop computers not present in its
central facility. These computers, Tempco notes, were never
inspected by PC AfterDark during its analysis of the computers
found at Prime’s offices - and, as such, could possibly remain on
Prime’s computers to this day.

In its original opinion, the Court found that Tempco could
survive summary judgment if its circumstantial evidence would allow
a “reasonable jury” to “possibly allow them to prevail.” Id. at
*26. Looking at Tempco’s claims in a fresh light, the Court does
concede it erred in granting summary judgment on Count IV. In the
Court’s original ruling it noted the web of circumstantial facts
laid out by Tempco to attempt to surmount summary judgment on
Count IV. Id. at *27-28. Combined with the Court’s fresh look at
the relevance of Shoemaker’s testimony, the Court now believes that
this web suffices under the Court’s summary judgment standard to
permit a reasonable jury to find that Prime committed trade secrets
misappropriation. For this reason, the Court agrees that Tempco
should at least have the opportunity to present its case at trial.

II. CONCLUSION

For the reasons stated herein, Tempco’s request for the Court

to reconsider its evidentiary rulings regarding Dean’s and Smith’s

hearsay statements is denied, However, Tempco’s Motion for


admitting present sense impressions. Tempco contends that the
Court only examined whether Dean’s statement described an “event.”
In actuality, Tempco contends, the Court should have examined
whether the statement described an “event or condition,” Fed. R.
Evid. 803(1). In so doing, Tempco effectively concedes that Dean
was not describing an “event.” However, Tempco contends that “Dean
was describing the condition of certain heaters sitting in front of
him.” Pl. Br. p. 7 (emphasis in original). Consequently, these
statements should have been admitted under the “condition” portion
of the present sense impression.

The Court disagrees. Contrary to Tempco’s claims, the Court
properly found in its original opinion that Dean’s statement
“appears to lack an essential component of admissible testimony
under the 803(1) exception: it fails to describe an “event or
condition.” Tempco, 2004 U.S. Dist. LEXIS 10124 at *11.
Therefore, the Court found that Dean was describing neither an
“event” nor a “condition.” Indeed, in contrast to Tempco’s
characterization, Dean was not describing the “condition” of
heaters sitting in front of him (indeed, from the deposition
testimony, it is unclear whether heaters even were sitting in front
of him, or if Dean inquired of Hudson impromptu). Rather, as the
Court originally held, Dean was merely expressing his “perhaps
long-held uncertainty as to whether or not Prime functioned as a

manufacturer.” Id. Tempco does not wish to admit Dean’s statement

-3-


the statements as “nothing more than a memory of a past sense
impression.” Id. at *12.

Tempco asks the Court to reconsider its ruling, reiterating
its argument that the statements qualify as present sense
impressions because they occurred during a stock review on a
computer system. The Court rejects this argument, again, as it did
the first time. The statements do not describe the stock review.
Rather, the statements simply recount what Smith believed during
previous events or conditions, such as receiving products into his
plant. Indeed, the statements themselves record Smith as saying
that “at some point we thought Prime was a manufacturer” implying
that he was no longer confused regarding whether Prime was a
manufacturer, and had not been for some time. Consequently, he was
not expressing any “present sense impressions” of conducting the
stock review.

B. Count IV

In its May 27, 2004 order, the Court granted summary judgment
to Prime on Tempco’s Count IV, which alleged that Prime
misappropriated Tempco’s trades secrets. The order was twofold -—
barring Tempco from proceeding with trade secret claims arising
both before and after Tempco terminated its License Software
Agreement with Prime. The Court ruled as such based on its belief
that Tempco had failed to establish the requisite issue of material

fact necessary to withstand summary judgment.


Reconsideration of its grant of summary judgment with respect to

Count IV is granted. The Court vacates and rses its order of

summary judgment on Count IV, and now ary judgment on
that count.

IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court

Dated: (00


Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Name of Assigned Judge
or Magistrate Judge

Sitting Judge if Other

D. Leinenweber
Harry D, Leinenweber than Assigned Judge

CASE NUMBER 02 C 3572 DATE 6/29/2004
CASE Tempco Electric Heater Corporation vs. Temperature Engineering Company
TITLE
[ln the following box (a) indicate the patty filing the motion, e-g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
MOTION: of the motion being presented.]
DOCKET ENTRY:
(1) Q Filed motion of [ use listing in “Motion” box above.]
(2) Qa Brief in support of motion due
(3) Qo Answer brief to motion due. . Reply to answer brief due
(4) ia) Ruling/Hearing on set for at
(5) a Status hearing{held/continued to) [set for/re-set for] on set for at
(6) i) Pretrial conference[held/continued to) [set for/re-set for]}on__——s set for saat .
(7) a Trial(set for/re-set for] on at
8) OG {Bench/Jury trial] [Hearing] held/continued to at
(9) CG This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
OOFRCP4(m) OLocal Rule 45.1 CFRCP41(a)(1) OFRCP41(a)(2).
qo) =f {Other docket entry] ENTER MEMORANDUM OPINION AND ORDER: Tempco’s request for
the Court to reconsider its evidentiary rulings regarding Dean’s and Smith’s hearsay statements is denied.
However, Tempco’s Motion for Reconsideration of its grant of summary judgment with respect to Count
IV is granted. The Court vacates and reverses its order of summary judgment on Count IV, and now
denies summary judgment on that count.
ab (For further detail see order attached to the original minute order.]

No notices required,

Mail AO 450 form.

No notices required, advised in open court.

Notices mailed by judge’s staff,
Notified counsel by telephone.

Docketing to mail notices.

Copy to judge/magistrate judge. YU
courtroom Be tH Wd 62 NAT 4002 date maied notin
waP deputy's
initials + 3

number of notices

JUN 3 0 2004

dave docketod

Grud

docketing deputy initials

1yn0o LoMIsia “s'n

Bhan! Tatneain

central Clerk's Office

matting deputy initials



Tempco’s motion to reconsider concerns only the portion of the
Court’s opinion granting summary judgment on claims arising after
the ending of the License Software Agreement. It does not contest
the Court’s ruling with respect to those claims stemming from
Prime’s conduct prior to the extinguishing of this agreement.

Tempco bases its motion for reconsideration on its contention
that the Court misunderstood the testimony of Steven Shoemaker. In
its original ruling, the Court acknowledged that Shoemaker’s
testimony established that Prime did retain at least one copy of
Tempco’s trade-secret computer program SA/2 - the copy existing on
Shoemaker’s own laptop computer. However, the Court found this
fact non-material because Shoemaker himself denied having possessed
a hardware access key, and denied using SA/2 after termination of
the License Software Agreement. Accordingly, the Court reasoned,
for Tempco to use Shoemaker’s testimony to meet its burden of
creating a material dispute regarding Prime’s use of SA/2, it would
have to convince a jury that Shoemaker volunteered the truth during
one part of his testimony, and lied during another - despite having
no personal interest to do so.

In its motion for reconsideration, Tempco contends that the
Court misunderstood the importance of Shoemaker’s testimony.
Tempco claims that it never intended to infer that Shoemaker
himself used SA/2. Rather, Tempco insists that Shoemaker’s

testimony has relevance because it establishes that Prime did not


| FILED
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS JUN 2 9 2994

EASTERN DIVISION

JUDGE riniey
US. DISTRICT COURT JUDGE

TEMPCO ELECTRIC HEATER

CORPORATION,

Plaintiff, Case No. 02 ¢ 3572
v. Hon. Harry D. Leinenweber
TEMPERATURE ENGINEERING
COMPANY, d/b/a PRIME
INDUSTRIES,
Defendant. | a]

JUN 3 0 2004

MEMORANDUM OPINION AND ORDER

Plaintiff Tempco Electric Heater Corporation (hereinafter,
‘“Tempco”) brought suit against one of its former distributors,
Temperature Engineering Company, d/b/a Prime Industries
(hereinafter, “Prime”), alleging trademark infringement, various
breaches of contract, and misappropriation of trade secrets. On
May 27, 2004, this Court granted in part and denied in part Prime’s
Motion for Summary Judgment. See Tempco Elec. Heater Corp. v.
Temperature Eng'g Co., 2004 U.S. Dist. LEXIS 10124 (N.D, Ill.
2004). Tempco now moves for the Court to reconsider two of its
rulings in that summary judgment motion. Specifically, Tempco asks
that the Court reverse its evidentiary ruling that excluded as
inadmissable hearsay the statements of Daniel Dean (“Dean”) and
William Smith (“Smith”), and also asks the Court to reverse its

grant of summary judgment on Count IV.

D. LEINENWEBER

q


I. DISCUSSION

A. Hearsay Statements of Daniel Dean and William Smith

In its May 27, 2003 order, the Court denied Prime’s Motion for
Summary Judgment on Count I and Count II, which allege that Prime
committed trademark infringement in violation of § 43(a) of the
Lanham Act, 15 U.S.C. § 1125(a) and also breached its Trademark
License Agreement with Tempco. However, in so doing, the Court
refused Tempco’s request that it consider hearsay statements of
Daniel Dean and William Smith as “present sense impressions”
excepted from the usual hearsay rules. In so doing, the Court also
ruled that Tempco could not admit these statements at trial to
bolster its effort to prove Counts I and II to a jury. Tempco now
asks that the Court reconsider this ruling.

1. Daniel Dean’s Statement

In the deposition testimony of Richard Hudson (“Hudson”),
Hudson claimed that Dean, a Prime customer, once expressed
confusion regarding whether or not Prime manufactured the heaters
it sold to him. According to Hudson’s deposition testimony, the
context of Dean’s statement occurred “in Nashville it was - Daniel
Dean made a comment when I was in the storeroom one time about, you
know, what - what- am I getting, you know what - what is this,
because it had the Prime name and number on it.”

Tempco argues that the Court erred in excluding this

statement, because it misapplied the proper legal standard for