### *The HONORABLE CATHERINE D. PERRY, United States Distric t

Judge for the Eastern District of Missouri, sitting b y designation.
The Honorab le Michael J. Davis, United States District Judge 1 

### for the District of Minnesota. ___________ No. 95-2640

___________ Sip-Top, Inc., a Minnesota * corporation, * * Appellant, * * Appeal from the United States v. * District Court for the * District of Minnesota. Ekco Group, Inc., a Delaware * corporation; Ekco Housewares, * Inc., a Delaware corporation, * * Appellees. *

___________ Submitted: December 14, 1995 Filed: June 21, 1996

___________ Before McMILLIAN, and BEAM, Circuit Judges, and PERRY, District Judge. *

___________ BEAM, Circuit Judge.
Sip-Top, Inc. (Sip-Top) a ppeals the district court's order entering 1 judgment as a matter of law for Ekco Group, Inc. and Ekco Housewares, Inc. (collectively Ekco). Because Sip-Top relies on unreasonable inferences an d speculat ion in attempting to prove each of its various theories o f recovery, we affirm.

### -2-

I. BACKGROUND

In 1989, Sip-Top began producing and marketing a consumer product , under the trademark name SIP-TOP, designed to hold a straw and fit over th e top of a beverage can . This product consisted of four components, namely
a plastic lid, a straw, a plastic cap for the end of the straw, and a pape r card used for packaging. According to Sip-Top, it sold in excess of 3.5 million units of this product between 1989 and the time of trial in 1995. Sip-Top's customers i ncluded large retail stores, such as Target, K-Mart, and Osco Drug. K-Mart purchased 1.8 million of the total units sold , making it Sip-Top's largest single customer.

In 19 92, Ekco was negotiating with K-Mart over a kitchen tool an d gadg et planogram (a pegboard display of a variety of products) to b e located in the housewares department of K-Mart stores. Ekco intended to inclu de a beverage top as one of the products in the planogram. In th e spring of the same year, Sip-Top contacted Ekco in an effort to obtai n marketing assistance with its SIP-TOP product. Shortly thereafter, Sip-To p and Ekco began discussing the possibility of Ekco acquiring Sip-Top. To protect any confident ial marketing and manufacturing information provided to Ekco during the course of the negotiations, Sip-Top required Ekco t o sign a confidentialit y agreement. Ekco drafted an agreement, executed it and sent a copy to Sip-Top.

The Confi dential Information Agreement (Confidentiality Agreement), entered into on May 2 9, 1992, provided that Ekco would not use or divulge any confidential information provided to it by S ip-Top, except to evaluate the desirability of acquiring Sip-Top. The Confidentiality Agreement' s prohibition against using or divulging confidential information did no t apply to public information, information already known to Ekco, informatio n obtained from a third party, or independently developed information.

### -3- In 1992, Ekco's Vice President of Operations, Ron Fox, visited SipTop representatives in Minnesota and toured the facilities of the companie s that produced the SIP-TOP components. In addition to touring th e manufacturing facilities, Sip-Top provided Fox with design, production, an d marketing information. Fox also visited the site where the four component s were combined and packaged. After this trip, no further negotiations took pla ce until the fall of 1992. In the meantime, Ekco explored th e possib ility of other manufacturers providing the beverage top for it s planogram. One of these companies, Maverick Ventures, Inc. (Maverick), ha d been manufacturing a can top called the "Soda Si pper." Maverick sent Ekco a letter, dated August 31, 1992, in which Maveri ck included its price list and attached a Sip-Top price list.

In the fall of 1992, Jeff Weinstein of Ekco called Jeff Dress o f SipTop and offered to buy the entire Sip-Top company for $75,000. On the sam e day, K-Mart indicated to Sip-Top that it intende d to purchase 425,000 SIPTOP unit s. Later in the year, K-Mart indicated that it would order a n additi onal 425,000 units, making its projected 1993 total over 800,00 0 units. Sip-Top rejected Ekco's offer, anticipating that it would make mor e than $75,000 in annual sales. No further discussions took place between Sip-Top and Ekco.
In late 1992, Ekco made an agreement with K-Mart to place a pla nogram in K-Mart stores throughout the country. In ear ly 1993, Sip-Top contacted K-Mart to inquire about its product needs for 1993. The K-Mart buyer in charge of Sip-Top's account, Bill Tubbs, told Sip-Top that Ekco' s housewares planogram included a product, the "Soda Sipper," similar to SIP

TOP. Ekco did not ma nufacture the "Soda Sipper." Rather, Ekco purchased the p roduct from Maverick. K-Mart never actually placed the order fo r 425,000 units of SIP-TOP discussed in the fall of 1992, or any other order

. Sip-Top ceased its business activities after losing the K-Mart account.

### -4- Sip-Top filed this lawsuit in federal court based on diversit y jurisd iction, asserting six claims for relief: breach of th e ConfidentialityAgreement; interference with prospective busines s adv antage; tortious interference with contract; unfair competition ; misapp ropriation of trade secrets; and conversion. At trial, Sip-To p presented testimony, before a jury, for over three days. At the close of Sip-Top's case, Ekco moved for judgment as a matter of law pursuant to Rul e 50(a) of the Federal Rules of Civil Procedure. The district court granted the mo tion and dismissed Sip-Top's complaint with prejudice. Sip-To p appeals, asserting that it presented enough evidence to get some of it s claims to the jury. Sip-Top has not, however, appealed the dismissal of its trade secret and conversion claims.

II. DISCUSSION

This case requires us to determine whether the district court erred in granting judgment as a matter of law to Ekco over Sip-Top's contention tha t it presented enough evidence for a jury to infer that Ekco acte d improperl y toward Sip-Top. We review a district court's grant of a judgm ent as a matter of law de novo and apply the same standards as th e distr ict court. Keenan v. Computer Assocs. Int'l, Inc. , 13 F.3d 1266 , 1268-69 (8th Cir. 199 4). Judgment as a matter of law may be granted when "a party has been fully heard on an issue and there is no legall y sufficient evidentiary basis for a reasonable jury to find for that party. " Fed. R. Civ. P. 50(a)(1). Affirming a judgment as a matter of law "i s approp riate where the evidence is such that, without weighing th e credibility of the witnesses, there can be but one reasonable conclusion
as to the verdict." Caudill v. Farmland Indus., Inc. , 919 F.2d 83, 86 (8t h Cir. 1990) . We view the evidence in the light most favorable to th e nonmoving party. See , e.g. , Larson v. Miller , 76 F.3d 1446, 1452 (8th Cir

. 1996). In applying this standard we must:

### -5- "(1 ) resolve direct factual conflicts in favor of th e nonmovant, (2) assume as true all facts supporting th e non movant which the evidence tended to prove, (3) give th e nonmovant the benefit of all reasonable inferences, and (4 ) den y the motion if the evidence so viewed would allo w reasonable jurors to differ as to the conclusions t hat could be drawn."

Pumps & Power Co. v. Southern States Indus., Inc. , 787 F.2d 1252, 1258 (8t h Cir. 1986) (quoting J ones v. Edwards , 770 F.2d 739, 740 (8th Cir. 1985)). Ultimately, "[a] motion for judgment as a matter of law presents a legal question to the district court and this court on review: `whether there is suffic ient evidence to support a jury verdict.'" Keenan , 13 F.3d a t 1268 (quoting White v. Pence , 961 F.2d 776, 779 (8th Cir. 1992)).
Sip-Top contends it presented sufficient evidence under this st andard to permit each of its claims to be considered by the jury. Sip-Top assert s that the district court improperly resolved factual issues, weighe d eviden ce, and construed all inferences against Sip-Top. We disagree

. Although we must give Sip-Top the benefit of all reasonable inferences, we may not accord a party "the benefit of unreasonable inferences or those `a t
war wit h the undisputed facts.'" Marcoux v. Van Wyk , 572 F.2d 651, 65 3 (8th Cir. 1978) (quoting Schneider v. Chrysler M otors Corp. , 401 F.2d 549, 555 (8th Cir. 1968), cert. dismissed by 439 U.S. 801 (1978)). A reasonabl e inference is one "which may be drawn from the evidence without resort to speculation." Hauser v. Equifax, Inc. , 602 F.2d 811, 814 (8th Cir. 1979)) ;
see also Caudill , 919 F.2d at 86. When the record contains no proof beyon d spe culation to support the verdict, judgment as a matter of law i s appropriate. Pumps & Power Co. , 787 F.2d at 1258. After analyzing each of Si p-Top's four causes of action, we conclude that Sip-Top failed t o esta blish sufficient evidence to support a jury verdict and thus th e district court did not err in granting Ekco judgment as a matter of law.

### -6-

A. Breach of Contract (Confidentiality Agreement)

Turning first to Sip-Top's breach of contract claim, Sip-Top mus t prove the existence of a valid contract and that Ekco failed, without lega l justification, to perform as obligated under the contract. See , e.g. , Associated Cinemas of Am., Inc. v. World Amusement Co. , 276 N.W. 7, 1 0 (Minn. 1937). We assume the validity of the Con fidentiality Agreement and foc us on whether Sip-Top presented evidence of a breach. Th e Confi dentiality Agreement prohibits Ekco from divulging or usin g confidential information provided by Sip-Top. The Confidentialit y Agreement does not ap ply to public information, information already known to Ekc o, information obtained from a third party, or informatio n indepe ndently developed. Therefore, to prove that Ekco breached th e contra ct, Sip-Top must demonstrate that Ekco either used or divulge d confidential information and that it was the type of information covered by the Confidentiality Agreement.
Sip-Top contends that Ekco used conf idential information to evaluate Maverick, another man ufacturer of a similar beverage cap. Sip-Top showed that Ekco received various information from Sip- Top regarding its product. Sip-Top also demonstrated that Ekco eventually purchased Maverick' s product. Assuming that the information provided to Ekco by Sip-Top wa s confide ntial, we nevertheless conclude that Sip-Top failed to provid e sufficient evidence to support a jury verdict th at Ekco used, or divulged, any co nfidential information when it negotiated with Maverick. Sip-To p
even concedes that it did not offer any direct evidence on how Ekco used
or div ulged confidential information. Rather, Sip-Top asserts that th e jury should have been able to infer that in negotiating with Maverick, Ekc o used or divulged conf idential information provided by Sip-Top. This type of inf erence, however, is unreasonable and nothing more than mer e spe culation. And as such, it is insufficient to survive a motion fo r judgment as a matter of law.

### -7- In a case factually similar to the one before us, the Fifth Circuit reached the same resu lt. See Omnitech Int'l, Inc. v. Clorox Co. , 11 F.3d 1316, 1324 (5th Cir.) (concluding that the plaintiff company "simply faile d to dem onstrate that [the defendant company] misused the information i t tran sferred pursuant to the non-disclosure agreement" and granting th e plaintiff company judgment as a matter of law), cert. denied , 115 S. Ct. 71 (1994). In both the Omnitech case and the present case, the contract did not prohibit the parties from negotiating, or entering into agreements , with other companies. Thus, evidence of Ekco's interaction with Maverick does not tend to prove that Ekco breached the Confidentiality Agreement, unless the evidence shows that Ekco used or divulged confidentia l information provided by Sip-Top. Moreover, the Confidentiality Agreement exp ressly authorized Ekco to use the information provided by Sip-Top t o evaluate the desirability of acquiring Sip-Top. Therefore, even if w e
assume Sip-Top's assertions are true, no inference arises that Ekco used
or div ulged confidential information. The fact that the informatio n prov ided by Sip-Top might have made Ekco more informed in evaluatin g whether to acquire Sip-Top or purchase Maverick' s product does not support an inference that Ekco violated the Confidential ity Agreement. See id. at 1327 (ref erring back to the court's conclusion that such use o f conf idential information also did not constitute misappropriation of a trade secret).

To accept Sip-Top's argument we would need to make the unreasonable inference that every time a company receives confidential information it uses that information if it negotiates with anot her entity. As recognized in Omnitech , Sip-Top's position would lead to one of two equall y unacceptable results:
(i) every time a company entered into preliminary negotiations for a possible purchase of another company's assets in whic h the acquiring company wa s given limited access to the target's trad e secrets, the acquiring party would effectively b e precluded from evaluating other

### -8- pot ential targets; or (ii) the acquiring company would, as a practical matter, be forced to make a purchase deci sion without the b enefit of examination of the target company's mos t important assets--its trade secrets.

Id. at 132 5. Thus, the district court properly disposed of Sip-Top' s breach of contract claim by entering judgment as a matter of law for Ekco.

B. Interference with Prospective Business Relationship

Si p-Top next contends that Ekco interfered with Sip-Top's busines s relationship with K-M art. To prevail on an interference with prospective business relationship claim under Minnesota law, Sip-Top must prove that Ekco intentionally committed a wrongful act that improperly interfered wit h Sip-Top's prospective business relationship with K-Mart. See , e.g. , Hunt
v. University of Minnesota , 465 N.W.2d 88, 95 (Minn. Ct. App. 1991) (citin g United Wild Rice, Inc. v. Nelson , 313 N.W.2d 628, 633 (Minn. 1982)).
Sip-To p did not submit any evidence by a K-Mart employee as to wh y K-Mart decided to cea se its business relationship with Sip-Top. Although this failure would not alone be fatal to its cla im, Sip-Top also failed to present evidence that Ekco acted wrongfully. Rather, Sip-Top admittedly relies, once again, s olely on inference. Sip-Top presented evidence that it h ad a prior business relationship with K-Mart. Sip-Top employee s testified that in the fall of 1992, K-Mart expressed its intention o f purchasing additional SIP-TOP units. And it is undisputed that K-Mart in fact did not purchase any additional SIP-TOP units. Rather, K-Mart entere d into an ag reement with Ekco and Ekco purchased its beverage tops fro m another company, Maverick. Even assuming the veracity of all thi s evidence, and other evidence, Sip-Top failed to provide anything more than specul ation as to how Ekco wrongfully interfered with Sip-Top's futur e busine ss relationship with K-Mart. The evidence reflects that variou s companies were competing to sell

### We doubt that Sip-Top could establish the existence of a n 2 

### oral c ontract for over 400,000 units of SIP-TOP. As a matter o f law, Sip-Top and K-Mart could not have a valid oral contract for a sale of goods worth over $500 dollars. Minn. Stat. § 336.2-201.
-9- their own products bu t does not support an inference that Ekco wrongfully interfered with Sip-Top's business relationship with K-Mart. Nor does suc h evidence support an inference that Ekco's conduct caused Sip-Top to lose its K-Mart account. Therefore, this claim also fails as a matter of law.

C. Tortious Interference with Contract
We next turn to Sip-Top's tortious i nterference with contract claim. Under Minnesota law, Sip-Top must prove the following five elements t o prevail: (1) a contract existed between Sip-Top and K-Mart; (2) Ekco knew about the contract; (3) Ekco intentionally interfered with the contract; (4) Ekco's actions were not justified; and (5) S ip-Top suffered damages as
a resu lt. See , e.g. , Furlev Sales & Assocs., Inc. v. North America n Automotive Warehouse, Inc. , 325 N.W.2d 20, 25 (M inn. 1982). Assuming that the testimony provided by Sip-Top's employees es tablished that K-Mart made
an oral commitment in the fall of 1992 to order a significant number o f SIP-TOP units, Sip-Top failed to provide any evidence that Ekc o 2 intent ionally interfered with that contract. Sip-Top cannot rely o n unreasonable inferences and speculation to establish the necessar y eviden tiary basis required to support a finding that Ekco intentionall y interfered with Sip-T op's contract. See City Nat'l Bank of Fort Smith v. Unique Structures, Inc. , 929 F.2d 1308, 1315-16 (8th Cir. 1991) (upholding jud gment as a matter of law when the plaintiff relied on inference t o support the required proof of intent under Arkansas law). Moreover, the evidence does not sup port an inference that Ekco's actions caused Sip-Top to lose a contract with K-Mart. Thus, this claim also fails as a matter of law.

### -10- D. Unfair Competition

Finally, we analyze Sip-Top's unfair competition claim, which is not an independent tort, but rather encompasses several causes of action that have been recognized in order to protect commercial interests

. Rehabilitation Specialists, Inc. v. Koering , 404 N.W.2d 301, 305 (Minn. Ct

. App. 1987). Under Minnesota law, an unfair comp etition claim may be based
on either: (1) tortious interference with contract; or (2) improper use of a trade secret. I d. at 305-06 (citing United Wild Rice , 313 N.W.2d at 632). As discussed above, Sip-Top failed to pro vide the minimum amount of evidence required to send a tortious interference with contract claim to the jury and thus Sip-Top cannot base its unfair competition claim on that premise. Moreover, improper use of a trade secr et obviously would require Sip-To p to prove that Ekco used secret information without Sip-Top' s consent. See Minn. Stat. § 325C.01, subd. 3 (de fining misappropriation of a trade secret as eit her: (1) improper acquisition of a trade secret; or (2) disclosure or use of a trade secret without consent); Electro-Craf t Corp. v. Controlled M otion, Inc. , 332 N.W.2d 890, 897 (Minn. 1983). Just
as in its breach of contract claim, Sip-Top cannot rely on unreasonabl e inferences and speculation to establish a suffic ient evidentiary basis for a reasonable jury to find that Ekco used a trade secret provided to it by Sip-Top. See , e.g. , Omnitech , 11 F.3d at 1325-26. Therefore, Sip-Top's fourth and final claim fails as a matter of law.

III. CONCLUSION
Sip-Top f ailed to provide evidence essential to its claims, relying instead on unreasonab le inferences and mere speculation. Accordingly, we affirmthe district court's order granting Ekco's motion for judgment as a matter of law and dismissing Sip-Top's complaint with prejudice.

### -11- A true copy.

Attest:

CLERK, U. S. COURT OF APPEALS, EIGHTH CIRCUIT.