UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

PEOPLEFLO MANUFACTURING, INC.,

Plaintiff,

v.

SUNDYNE, LLC, et al.,

Defendants.

No. 20 CV 3642

Judge Manish S. Shah

MEMORANDUM OPINION AND ORDER

When PeopleFlo Manufacturing, Inc., developed a novel sealless pump design,

it sought a large industry partner to help bring the technology to market. It pitched

the technology to manufacturer Sundyne, LLC, and its affiliate Accudyne, LLC

(under cover of non-disclosure agreements), but they ultimately passed on a deal.

PeopleFlo then picked up negotiations with distributor DXP Enterprises Inc., and its 

manufacturer subsidiary, PumpWorks, LLC. DXP and Sundyne had a pre-existing 

supply and distribution relationship, but DXP assured PeopleFlo that Sundyne had 

no objection to DXP or PumpWorks pursuing their own deal with PeopleFlo. 

PumpWorks and PeopleFlo later contracted to bring the sealless pumps to market. 

PeopleFlo says PumpWorks did not uphold its end of the bargain, DXP and 

Sundyne sabotaged the deal, and Accudyne and Sundyne misappropriated trade 

secrets to develop and market a competing product. PeopleFlo sues all four 

companies, bringing several claims under Illinois law. Relevant here are its fraud

claims against DXP and PumpWorks, and its breach of contract and trade-secret 

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misappropriation claims against Sundyne and Accudyne. Defendants move to dismiss 

under Rule 12(b)(6). For the reasons below, the DXP/PumpWorks motion is granted, 

but Sundyne’s and Accudyne’s motions are denied. 

I. Legal Standards

A complaint must contain a short and plain statement that plausibly suggests 

a right to relief. Fed. R. Civ. P. 8(a)(2); Ashcroft v. Iqbal, 556 U.S. 662, 677–78 (2009). 

To survive a Rule 12(b)(6) motion, plaintiff must allege facts that “raise a right to 

relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 

(2007). I accept all factual allegations as true and draw all reasonable inferences in 

plaintiff’s favor, but I disregard legal conclusions or “threadbare recitals” supported 

by only “conclusory statements.” Iqbal, 556 U.S. at 678. Allegations of fraud require 

more. A party must “state with particularity the circumstances constituting fraud or 

mistake.” Fed. R. Civ. P. 9(b). In other words, plaintiff must describe the “who, what, 

when, where, and how” of the fraud. See Muskegan Hotels, LLC v. Patel, 986 F.3d 

692, 698 (7th Cir. 2021).

II. Facts

A. Negotiations for PeopleFlo’s Sealless Pump Technology

PeopleFlo designed and engineered pump technology for pump-equipment 

manufacturers and other end users. [77] ¶ 7.1 This case is about its efforts to bring 

its patented, magnetically coupled sealless pump technology to market. Id. ¶ 1.

1 Bracketed numbers refer to entries on the district court docket. Referenced page numbers 

are taken from the CM/ECF header placed at the top of filings. Facts are taken from the first 

amended complaint, [77].

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In 2012, pump-manufacturer Sundyne (and shortly thereafter, its affiliate 

Accudyne) began negotiations regarding PeopleFlo’s sealless pump technology. Id. 

¶¶ 8–10, 18. PeopleFlo disclosed to Sundyne and Accudyne—after executing separate 

non-disclosure agreements—details regarding its commercial plans and market 

concept, intellectual property, confidential information, and trade-secret information.

Id. ¶¶ 21–22. Sundyne executed an NDA with PeopleFlo in February 2012, and 

Accudyne executed an NDA with PeopleFlo in April 2014. Id. ¶¶ 20–24; [77-2] at 2.2

Under the NDAs, Sundyne and Accudyne agreed not to disclose any 

confidential information provided by PeopleFlo without prior written consent; they 

also agreed not to use any of PeopleFlo’s confidential information other than to 

evaluate their potential business relationship with PeopleFlo. [77] ¶¶ 25–26. The 

agreements defined “confidential information” to include:

any and all financial, technical, commercial or other information concerning 

the business and affairs of [PeopleFlo], including business plans, financial 

information, lists of customers, vendors or employees, marketing techniques, 

strategies and developments, computer software, methods of operation, and all 

notes, analyses, compilations, studies or other materials derivative of any of 

the foregoing (including, without limitation, all retrievable information in any 

computer storage format), or any information which a reasonable person would 

consider confidential, which has been or may hereafter be provided or shown 

to Receiving Party or any of its Representatives, irrespective of the form of the 

communication, by [PeopleFlo] or by its Representatives, and also includes all 

notes, analyses, compilations, studies or other material prepared by Receiving 

Party or its Representatives containing or based on, in whole or in part, any 

information provided or shown by [PeopleFlo] or by its Representatives.

2 PeopleFlo alleges in the complaint that Sundyne executed the NDA “on or about February 

11, 2013.” [77] ¶ 23. PeopleFlo attached the actual agreement to its complaint, however, 

which indicates that the agreement was “entered into as of 10 Feb 12.” [77-2] at 2.

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Id. ¶ 27. Sundyne and Accudyne further agreed that PeopleFlo would remain the 

owner of all intellectual property rights in the confidential information, including any 

inventions, modifications, or improvements Sundyne or Accudyne made based on

such information. Id. ¶ 28. The NDAs covered all communications between the 

parties, but each party could opt out of future confidential discussions by providing

notice to the other party. Id. ¶ 29. Confidential information disclosed under the 

agreements would remain protected for five years after the last disclosure of 

confidential information (except trade secrets, which would remain confidential until 

no longer legally a trade secret). Id. After executing the NDAs, PeopleFlo shared 

highly confidential and commercially sensitive information with Sundyne and 

Accudyne between 2014 and 2018. Id. ¶¶ 30, 132. 

By March 2017, as PeopleFlo and Sundyne neared a deal, Sundyne confirmed 

that PeopleFlo’s technology represented a new product design for a new market 

segment that would not be competitive with any of Sundyne’s existing sealless pump 

product lines. Id. ¶¶ 31–32. A few months later, Accudyne Vice President Peter 

Johansson met with PeopleFlo CEO Bill Blankemeier to discuss and review a deal for 

PeopleFlo’s pump technology. Id. ¶¶ 33–34. Johansson and Sundyne representatives 

agreed with the deal’s valuation, and Johansson provided Blankemeier guidance on 

how to structure the transaction to obtain approval from Sundyne. Id. ¶¶ 35–36.

During roughly the same period, PeopleFlo also engaged in separate

negotiations with distributor DXP and manufacturer PumpWorks. Id. ¶¶ 37–40. In 

late 2014, top executives from DXP and PumpWorks (DXP’s subsidiary) visited 

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PeopleFlo’s facilities to learn more about its sealless pump technology. Id. ¶¶ 11–13, 

38. DXP and PumpWorks remained interested in the technology for years, especially 

after PeopleFlo designed its sealless pumps to be integrated into an existing 

PumpWorks product. Id. ¶ 40. Although DXP had a pre-existing relationship with

Sundyne (which supplied several product lines that DXP distributed), both companies 

acknowledged that Sundyne’s pump products were not competitive with PeopleFlo’s 

new product line. Id. ¶¶ 41–42. Still, PumpWorks and DXP sought to ensure that 

Sundyne would not object if they negotiated or made a deal with PeopleFlo. Id. ¶ 43. 

In September 2017, DXP and PumpWorks representatives met with Sundyne 

to discuss PumpWorks’s potential use of PeopleFlo’s technology. Id. ¶¶ 45–48. During 

the meeting, Sundyne revealed to DXP and PumpWorks that it too was involved in 

ongoing negotiations with PeopleFlo regarding the same pump technology. Id. ¶ 49. 

DXP, PumpWorks, and Sundyne decided that Sundyne would have the right of first 

refusal with respect to any deal for PeopleFlo’s sealless pump technology. Id. ¶ 50.

The next month, Accudyne and Sundyne representatives met with PeopleFlo 

at its Franklin Park, Illinois facility. Id. ¶ 51. PeopleFlo shared and demonstrated its 

advanced manufacturing intellectual property, tailored to pump manufacture. Id. 

¶ 53. By the end of the meeting, the representatives told PeopleFlo that they would 

be presenting the pump-technology deal to their boards in mid-November for final 

approval. Id. ¶¶ 51, 54. Sundyne’s board passed on the deal in November 2017. Id. 

¶¶ 57–58. PeopleFlo nevertheless continued its discussions with Sundyne and 

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Accudyne representatives into 2018 and continued disclosing trade secrets and 

confidential information regarding its pump technology. Id. ¶ 132.

B. The Deal Between PeopleFlo and PumpWorks

DXP and PumpWorks learned of Sundyne’s decision to pass on the deal the 

same day and immediately resumed negotiations with PeopleFlo. Id. ¶¶ 60, 66–67. 

In a late-November 2017 phone call, PumpWorks Vice President Trey Maxwell told 

Blankemeier that Sundyne had provided its “blessing” and “had no objection to” DXP 

and PumpWorks entering their own deal to bring PeopleFlo’s technology to market. 

Id. ¶¶ 61, 212. DXP and PumpWorks representatives Skip Giessing and Mark Smith 

“further communicated about and confirmed this blessing after November 2017.” Id. 

¶¶ 62, 213. Sundyne has said (in this litigation) that it did not provide its blessing, 

and PeopleFlo alleges that Maxwell’s statement was knowingly false. Id. ¶¶ 210, 212. 

PeopleFlo relied on these representations in moving forward with the PumpWorks 

and DXP negotiations and, ultimately, entering an agreement and investing

significant time and money in development and engineering costs. Id. ¶¶ 64, 215.

In late March 2018, after months of negotiations, PeopleFlo and PumpWorks 

entered a multi-year agreement to bring PeopleFlo’s pump technology to market. Id. 

¶ 68. PeopleFlo agreed to design, manufacture, and supply custom magnetic coupling 

units for integration into PumpWorks’s existing pump products using the sealless 

pump technology. Id. ¶¶ 70–71. This enabled PumpWorks to launch a new product

line. Id. ¶ 80. PumpWorks agreed to use its best efforts to promote the sale and use 

of the coupling units in connection with the new product line. Id. ¶¶ 76–77.

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C. PeopleFlo’s Allegations of Wrongdoing

PeopleFlo met its obligations under the agreement, but PumpWorks delayed 

the launch of the new product line without reasonable explanation. Id. ¶ 81. Just over 

a year after signing the deal, a DXP representative told PeopleFlo that Sundyne was 

to blame for the ongoing delay; according to the representative, Sundyne had used

PeopleFlo’s pump design and target-market concept to design a competing product. 

Id. ¶¶ 82–84. The complaint alleges that Sundyne and Accudyne violated their NDAs 

and misappropriated PeopleFlo’s trade secrets to redesign, enhance, and market 

Sundyne’s new pump products. Id. ¶¶ 132, 137–38, 186. The alleged misappropriated 

trade secrets included: (1) technical and financial information, design specifications, 

marketing strategy and other features relating to the bushings incorporated into 

PeopleFlo’s pump technology; (2) those same categories, along with pricing 

information and cost-reduction strategies and methods, relating to PeopleFlo’s PEEK 

carbon fiber shell technology and secondary containment technology; (3) pricing and 

cost structures and models, processes, and marketing strategies associated with 

achieving cost reductions in the design and production of magnetically coupled 

sealless pumps; (4) the identities of non-publicly available suppliers and vendors that 

PeopleFlo engaged to achieve cost reductions in the components and design features 

associated with its sealless pump technology; and (5) marketing plans and strategies 

that enable sealless pumps to compete with single-sealed pumps in mainstream 

markets. Id. ¶¶ 142, 184.

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PeopleFlo later learned that DXP Vice President Jim Hook knew about 

Sundyne’s plan to develop a product that would potentially compete with PeopleFlo’s 

sealless pumps. Id. ¶ 87. In June 2019, Hook assured PeopleFlo’s Blankemeier that 

“Sundyne was not working on a competing product or any products using PeopleFlo’s 

concept or [pump technology].” Id. ¶¶ 88, 216. PeopleFlo relied on Hook’s assurances 

in continuing to work with PumpWorks and DXP regarding the development of the 

pump technology. Id. ¶¶ 89, 219. Hook knew that the statements were false—he had 

recently visited Sundyne’s United Kingdom facility and observed its new product line 

that used PeopleFlo’s concept, confidential information, and trade secrets. Id. ¶¶ 91, 

218. DXP also required PumpWorks to delay the launch of its new product line to 

help boost the launch of Sundyne’s competing sealless product line. Id. ¶ 90. 

PumpWorks launched its new product line in late August 2019, but within a 

week, it abandoned most marketing, sales, and distribution efforts. Id. ¶¶ 95–97.

PeopleFlo alleges that PumpWorks conspired with DXP and Sundyne to breach its 

agreement with PeopleFlo by substantially abandoning all marketing, distribution, 

and sales of the new product line in areas where DXP distributed Sundyne’s sealless 

pumps. See id. ¶¶ 98–131.

PeopleFlo brings: breach of contract claims against PumpWorks (Count I) and 

Sundyne and Accudyne (Count IV); tortious interference claims against Sundyne 

(Counts II & III) and DXP (Counts VI & VII); trade-secret misappropriation claims

against Sundyne and Accudyne (Count V); civil conspiracy claims against 

PumpWorks, DXP, and Sundyne (Count VIII); and fraud claims against PumpWorks 

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and DXP (Count IX).3 DXP and PumpWorks move to dismiss the fraud claims 

(Count IX), see [79], and Sundyne and Accudyne move to dismiss the breach of 

contract and trade-secret claims (Counts IV & V), see [82], [94].

III. Analysis

A. Fraud (DXP and PumpWorks)

A plaintiff alleging fraudulent inducement must show: (1) a false statement of 

material fact; (2) knowledge or belief by defendant that the statement was false; 

(3) an intention to induce plaintiff to act; (4) reasonable reliance upon the truth of the 

statement by plaintiff; and (5) damages. See Smart Oil, LLC v. DW Mazel, LLC, 970 

F.3d 856, 866 (7th Cir. 2020).4 Reliance upon a false statement must be justified. See 

Cozzi Iron & Metal, Inc. v. U.S. Off. Equip., Inc., 250 F.3d 570, 574 (7th Cir. 2001) 

(citing Charles Hester Enters., Inc. v. Illinois Founders Ins. Co., 114 Ill.2d 278 (1986)).

In assessing the reasonableness (i.e., justifiability) of reliance, “all facts known to the 

plaintiff and those facts plaintiff could have learned through the exercise of ordinary 

prudence must be taken into account.” Ringgold Cap. IV, LLC v. Finley, 2013 IL App 

(1st) 121702, ¶ 37. Justifiable reliance is ordinarily a question of fact but can be 

determined as a matter of law when only one conclusion can be drawn from the facts. 

See Siegel Dev., LLC v. Peak Const. LLC, 2013 IL App (1st) 111973, ¶ 114; see also 

Cozzi Iron & Metal, 250 F.3d at 574.

3 The court has subject-matter jurisdiction under 28 U.S.C. § 1332. The amount in 

controversy exceeds $75,000, PeopleFlo is a citizen of Illinois, Sundyne is a citizen of the 

United Kingdom, DXP is a citizen of Texas, PumpWorks is a citizen of Delaware and Texas, 

and Accudyne is a citizen of Delaware and North Carolina. [1] ¶¶ 7–10, 13–20; [112]. 

4 PeopleFlo has clarified that it does not attempt to allege promissory fraud. [97] at 11–12.

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A party “is justified in relying upon the representations of another, without 

independent investigation, where the person to whom the representations are made 

does not have the same ability to discover the truth as the person making the 

representations.” Gerill Corp. v. Jack L. Hargrove Builders, Inc., 128 Ill.2d 179, 195 

(1989). Reliance is not justified, on the other hand, when a plaintiff “has ample 

opportunity to ascertain the truth of the representations before he acts.” Davis v. G.N. 

Mortg. Corp., 396 F.3d 869, 882 (7th Cir. 2005) (quoting Elipas Enterprises, Inc. v. 

Silverstein, 243 Ill.App.3d 230, 237 (1st Dist. 1993)).

PeopleFlo premises its fraud claims on two statements.5 First, Maxwell’s 2017 

statement to Blankemeier that Sundyne provided its “blessing” and “would not object

to” or “had no objection to” PumpWorks and DXP pursuing a deal to bring PeopleFlo’s

pump technology to market.6 PeopleFlo asserts that Maxwell knew that Sundyne had 

not provided such assurances, that he misrepresented this material fact to induce 

PeopleFlo to enter the PumpWorks agreement, and that PeopleFlo detrimentally 

relied when it continued to negotiate and later entered the agreement. See [97] at 5.

5 Giessing’s and Smith’s alleged communications cannot sustain a fraud claim under 

Rule 9(b). The complaint alleges that Smith and Giessing “further communicated about and 

confirmed this blessing after November 2017.” [77] ¶¶ 62, 213. Even assuming this 

sufficiently pleads what Smith and Giessing said, the complaint fails to allege with the 

requisite particularity who they communicated with, and how, when, or where the 

communications occurred. 

6 The complaint characterizes Maxwell’s November 2017 statement in different ways. 

Compare [77] ¶ 61 (Sundyne “would not object to DXP and/or PumpWorks entering into their 

own deal”), with id. ¶ 212 (“Sundyne had no objection to DXP and PumpWorks engaging in a 

deal with PeopleFlo.”). PeopleFlo’s fraud claim, however, is against DXP and PumpWorks 

and based on Maxwell’s knowingly false confirmation of Sundyne’s blessing. The tense in 

which Sundyne phrased the blessing is not material because PeopleFlo’s fraud allegations 

are a step further down the chain. The question here is whether Maxwell knew that Sundyne 

had provided no blessing at all when he spoke to Blankemeier.

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Second, PeopleFlo points to Jim Hook’s 2019 statement assuring Blankemeier that 

“Sundyne was not working on a competing product or any products using PeopleFlo’s 

concept or sealless pump technology.” Id. PeopleFlo argues that it reasonably and 

detrimentally relied on Hook’s false statement by continuing to work with 

PumpWorks and DXP on the development of the sealless pump technology. Id. at 6. 

Neither statement is actionable for fraud here. As a preliminary matter, the 

complaint’s allegation that Maxwell’s statement was knowingly false is directly

contradicted by other facts in the complaint. Maxwell told Blankemeier of Sundyne’s 

blessing in a late-November 2017 call, not more than two weeks after Sundyne and 

Accudyne informed PeopleFlo that they would not be moving forward with a deal of 

their own. [77] ¶¶ 57, 61. PeopleFlo’s allegation that Maxwell’s representation was 

knowingly false conflicts with the complaint’s allegation that defendants agreed in 

September 2017 that Sundyne would have “the right of first refusal with respect to 

engaging a deal” for the pump technology. Id. ¶ 50. The alleged agreement between 

defendants suggests that once Sundyne stepped back from negotiations with 

PeopleFlo, other defendants had the green light to proceed. 

Setting these contradictions to the side and assuming the falsity of Maxwell’s 

statements, the fraud claim still fails because PeopleFlo has not alleged justifiable 

reliance on Maxwell’s statement. According to the complaint’s allegations, PeopleFlo 

had both time and opportunity to investigate the veracity of Maxwell’s claims. After 

Maxwell made his statement, PeopleFlo and PumpWorks engaged in “months of 

negotiations” before entering a multi-year contract in March 2018. Id. ¶ 68. If 

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Sundyne’s blessing was so critical to PeopleFlo’s decision to move forward and sign 

the PumpWorks deal, it easily could have sought verification from Sundyne. Recall 

that PeopleFlo continued to engage in discussions with Sundyne representatives into 

2018. See id. ¶¶ 30, 132. PeopleFlo thus had both ample time (four months) and 

opportunity (continued access to Sundyne) to ascertain the truth of Maxwell’s

representations before entering the contract. Because it failed to do so, PeopleFlo’s 

reliance on Maxwell’s statements was unjustified. See Metro. Cap. Bank & Tr. v. 

Feiner, 2020 IL App (1st) 190895, ¶ 47 (“Where parties ‘have equal knowledge or 

means of obtaining knowledge of the misrepresented facts,’ a plaintiff’s reliance on a 

defendant’s material misrepresentation is only justifiable where the defendant ‘has 

created a false sense of security or blocked further inquiry,’ and where ‘the facts were 

not such as to put a reasonable person on inquiry.’” (quoting Hassan v. Yusuf, 408 

Ill.App.3d 327, 350 (1st Dist. 2011))).

PeopleFlo has also failed to plead any detrimental reliance or damage 

stemming from Hook’s false statement. Hook told PeopleFlo that Sundyne was not 

working on a competing product or any products using PeopleFlo’s concept or 

technology. PeopleFlo says it relied on these assurances in continuing to work with 

PumpWorks and DXP regarding the development of the sealless pump technology. 

[77] ¶ 219. Yet Hook made this statement over a year after PumpWorks and 

PeopleFlo entered their agreement, which bound PeopleFlo to work with PumpWorks 

to develop and bring to market the sealless pump technology. No matter what Hook 

told PeopleFlo about Sundyne’s activities, PeopleFlo would have remained bound by 

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its contract with PumpWorks. Put another way, if Hook had told PeopleFlo that 

Sundyne had been using its concept or technology or working on a competitive 

product, PeopleFlo would have still been obligated, under its contract, to continue 

working with PumpWorks. PeopleFlo has not alleged detrimental reliance or harm 

caused by Hook’s statements.

Count IX is dismissed. 

B. Trade Secret Misappropriation (Sundyne and Accudyne)

Sundyne and Accudyne move to dismiss the trade-secret misappropriation

claims (Count V). To prove misappropriation under the Illinois Trade Secrets Act, 765 

ILCS 1065/1 et seq., PeopleFlo must show: “(1) a trade secret existed; (2) the secret 

was misappropriated through improper acquisition, disclosure, or use; and (3) the 

owner of the trade secret was damaged by the misappropriation.” Nat’l Tractor Parts 

Inc. v. Caterpillar Logistics Inc., 2020 IL App (2d) 181056, ¶ 40 (quoting Liebert Corp. 

v. Mazur, 357 Ill.App.3d 265, 281 (1st. Dist. 2005)). The Act defines a “trade secret”

as information that: “(1) is sufficiently secret to derive economic value, actual or 

potential, from not being generally known to other persons who can obtain economic 

value from its disclosure or use; and (2) is the subject of efforts that are reasonable 

under the circumstances to maintain its secrecy or confidentiality.” 765 

ILCS 1065/2(d). Whether a trade secret exists “ordinarily is a question of fact” that is 

“best ‘resolved by a fact finder after full presentation of evidence from each side.’” 

Learning Curve Toys, Inc. v. PlayWood Toys, Inc., 342 F.3d 714, 723 (7th Cir. 2003)

(quoting Lear Siegler, Inc. v. Ark–Ell Springs, Inc., 569 F.2d 286, 289 (5th Cir. 1978)).

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Defendants argue that PeopleFlo has failed to identify its trade secrets with enough 

specificity, that its alleged secrets are not trade secrets due to disclosure in a patent, 

and that it has failed to allege misappropriation.

PeopleFlo has alleged sufficiently specific trade secrets. At the pleading stage, 

the complaint “can describe trade secret information in general terms.” Gen. Elec. Co. 

v. Uptake Techs., Inc., 394 F.Supp.3d 815, 831 (N.D. Ill. 2019); see also Covenant 

Aviation Sec. v. Berry, 15 F.Supp.3d 813, 818 (N.D. Ill. 2014) (collecting cases).

Defendants focus on the generic categories of information PeopleFlo identifies 

(technical and financial information, design specifications, marketing strategy, 

pricing and cost strategies, and lists of vendors) and argue that PeopleFlo is simply 

reciting the types of information listed in the statute. See 765 ILCS 1065(d).

But PeopleFlo does more than just list these broad categories. It instead ties 

them to specific aspects of its technology or marketing strategy, including the 

bushings, PEEK carbon fiber shell technology, and secondary containment 

technology that it incorporated into its sealless pumps. PeopleFlo alleges secrets 

regarding cost-reduction strategies, marketing, and non-public vendors and 

suppliers, but only as they relate to the sealless pumps. PeopleFlo also alleges steps 

that it took to protect its trade secrets, including disclosing such information for 

business purposes only after executing NDAs, storing the information in a locked 

facility, and keeping electronic forms of secret information on a secure server with 

password protection. [77] ¶ 133. To ultimately prevail in its trade-secret claims, 

PeopleFlo will need evidence showing how Sundyne and Accudyne misappropriated 

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concrete secrets that derive economic value from not being public. See 765 

ILCS 1065(d); Composite Marine Propellers, Inc. v. Van Der Woude, 962 F.2d 1263, 

1266 (7th Cir. 1992). PeopleFlo’s description of its trade secrets at this stage, 

however, is sufficiently specific to put defendants on notice and to survive dismissal.7

Defendants next argue that because PeopleFlo patented its sealless pump 

design in 2019, PeopleFlo’s alleged trade secrets were public information. Cf. 

BondPro Corp. v. Siemens Power Generation, Inc., 463 F.3d 702, 706 (7th Cir. 2006)

(“A trade secret that becomes public knowledge is no longer a trade secret ... [and] 

[p]ublication in a patent destroys the trade secret.”); see also Rototron Corp. v. Lake 

Shore Burial Vault Co., 712 F.2d 1214, 1215 (7th Cir. 1983) (patented process cannot 

be regarded as a trade secret, “because the grant of a patent automatically constitutes 

full disclosure of the patented process”). The patent, Sundyne further argues, also 

claimed the specific subparts of the design central to PeopleFlo’s trade-secret 

allegations—the bushings, PEEK carbon fibers, and secondary containment shell.

But PeopleFlo does not allege secrecy in the patented design or its subparts. 

The patent says nothing about the financial information, marketing, pricing, cost 

strategies, and lists of vendors related to some parts of the design. That information, 

according to the complaint, remained secret and could not be gleaned from a search 

of public records. See 3M v. Pribyl, 259 F.3d 587, 595–96 (7th Cir. 2001) (“A trade 

7 Sundyne argues that I should “require more of PeopleFlo” because the parties have been 

litigating for nearly a year, engaged in some discovery, and PeopleFlo has not refined its 

trade-secret allegations. [104] at 2–4. But under Rule 12(b)(6), the allegations in the amended 

complaint control, and I do not consider external litigation facts. 

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secret can exist in a combination of characteristics and components, each of which, 

by itself, is in the public domain, but the unified process, design and operation of 

which, in unique combination, affords a competitive advantage and is a protectable 

secret.”); Syntex Ophthalmics, Inc. v. Tsuetaki, 701 F.2d 677, 684 (7th Cir. 1983) (“[A] 

trade secret can be comprised of both public and novel information.”). The patent does 

not preclude PeopleFlo from holding the trade secrets it alleges. 

Finally, PeopleFlo adequately alleges misappropriation. Misappropriation 

means “the unauthorized acquisition, disclosure, or use of a trade secret by a person 

who knows or has reason to know that the secret was improperly acquired.” J.S.T. 

Corp. v. Foxconn Interconnect Tech. Ltd., 965 F.3d 571, 576–77 (7th Cir. 2020) (citing 

765 ILCS 1065/2(b)). PeopleFlo adequately alleges unauthorized use. The complaint 

asserts that both Sundyne and Accudyne obtained access to its trade secrets under 

the cover of NDAs, agreed that they would not use PeopleFlo’s confidential 

information and trade secrets other than to evaluate the business relationship, and 

then used PeopleFlo’s trade secrets to develop and market Sundyne’s competing 

pump products. See [77] ¶¶ 21, 26, 90, 137–38, 142–43, 186. In discovery, PeopleFlo 

may need to be more specific about how Sundyne and Accudyne misappropriated its 

secrets through incorporation into Sundyne’s products and marketing before 

subjecting defendants to overbroad search parameters. But its allegations, taken as 

true, raise a plausible inference of misappropriation. Accudyne and Sundyne have 

sufficient notice of what PeopleFlo intends to prove—that both knew or had reason 

to know that their use of PeopleFlo’s trade secrets was not authorized. 

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C. Breach of Contract (Sundyne and Accudyne)

Sundyne and Accudyne also move to dismiss PeopleFlo’s breach of contract 

claims, arguing that the NDAs are unenforceable. In Illinois, confidentiality 

agreements are restrictive covenants, and their enforceability is a question of law. 

See Coady v. Harpo, Inc., 308 Ill.App.3d 153, 159 (1st Dist. 1999) (quoting Woodfield 

Group, Inc. v. DeLisle, 295 Ill.App.3d 935, 938 (1st Dist. 1998)). The test is 

reasonableness, though business-to-business contracts are analyzed less stringently 

than employment contracts because businesses negotiating at arm’s length hold more 

bargaining power than typical employees. See Arcor, Inc. v. Haas, 363 Ill.App.3d 396, 

404 (1st Dist. 2005); see also ExactLogix, Inc. v. JobProgress, LLC, 508 F.Supp.3d 254, 

276 (N.D. Ill. 2020). In general, a restrictive covenant is reasonable if it does not 

injure the public, cause undue hardship to the promisor, and the restraint imposed is 

no greater than necessary to protect the promisee’s legitimate business interests. See 

Reliable Fire Equip. Co. v. Arredondo, 2011 IL 111871, ¶ 17; Coady, 308 Ill.App.3d at 

161. While Illinois law disfavors restrictive covenants that inhibit trade, courts must 

remain mindful that “[a]n equally important public policy in Illinois is the freedom to 

contract.” See Prairie Eye Ctr., Ltd. v. Butler, 305 Ill.App.3d 442, 448 (4th Dist. 1999).

Defendants argue that the NDAs they signed are unreasonable because the

agreements lack time or geographic limitation, and because they are overbroad. 

Confidentiality agreements are not unenforceable in Illinois “for lack of 

durational or geographic limitations where trade secrets and confidential information 

are involved.” Coady, 308 Ill.App.3d at 161 (citing PepsiCo, Inc. v. Redmond, 54 F.3d 

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1262, 1272 n.10 (7th Cir. 1995)). While the NDAs at issue do not identify a specific 

end date, they do include some time limits. Defendants may disclose confidential 

information five years after PeopleFlo’s final disclosure of such information. More 

importantly, the contracts provide an escape hatch: either party can end confidential 

negotiations by providing notice to the other. 

And although the agreements contain no geographic limits, that is perfectly 

sensible in this context. While imposing geographic limits make sense in the context 

of employment agreements (to prevent tying up human capital), applying such limits 

to contracts restricting “the use of particular information between businesses that 

have vertical (supplier-to-customer) rather than horizontal (competitor-tocompetitor) relations” makes little sense. See IDX Sys. Corp. v. Epic Sys. Corp., 285 

F.3d 581, 585–86 (7th Cir. 2002).8 As such, defendants’ reliance on Illinois decisions 

involving employment-based restrictive covenants is inapt. They have not cited, and 

I am not aware of, any Illinois decision requiring durational or geographic limits as a 

condition to enforce a non-disclosure agreement between businesses regarding 

intellectual property.

That leaves defendants’ argument that the NDAs are unenforceable because 

their scope is unlimited. The agreements are certainly broad, applying “without 

limitation” to disclosure of “any and all financial, technical, commercial or other 

8 Sundyne points out that IDX is a case applying Wisconsin law. While IDX does not control 

on questions of Illinois law, its reasoning on the geographic-limits issue is equally persuasive 

when applied to the NDAs here. It is also consistent with Illinois law. See Coady, 308 

Ill.App.3d at 162 (rejecting a plaintiff’s argument that “confidentiality agreement is too broad 

because it remains effective for all time and with no geographical boundaries”).

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information concerning” PeopleFlo’s “business and affairs.” [77] ¶ 27. But the 

agreements cover only “certain information” that “is non-public and/or proprietary in 

nature.” [77-2] ¶ 1; [77-3] ¶ 1. And the NDAs expressly exclude information that 

Accudyne or Sundyne learned before PeopleFlo’s disclosures, or information that “was 

or becomes generally available to the public” (unless Sundyne’s or Accudyne’s 

disclosure caused the publicity). See id. As such, Accudyne is incorrect when it implies 

that PeopleFlo’s business address, website, and phone number might be confidential 

information under the terms of the agreement. [95] at 13. The breadth of the nondisclosure agreement is reasonable given the context of the parties’ discussions and 

PeopleFlo’s need to protect its intellectual property. The three-page NDAs signed by 

Sundyne and Accudyne—sophisticated business entities—are not unenforceable for 

overbreadth. Cf. McClure Eng’g Assocs., Inc. v. Reuben H. Donnelley Corp., 95 Ill.2d 

68, 72 (1983) (Illinois embraces “a widespread policy of permitting competent parties 

to contractually allocate business risks as they see fit”).

IV. Conclusion

DXP and PumpWorks’s motion to dismiss Count IX, [79], is granted. The

dismissal is without prejudice. Sundyne’s and Accudyne’s motions to dismiss

Counts IV and V, [82] and [94], are denied. 

ENTER: 

___________________________ 

Manish S. Shah

United States District Judge

Date: July 23, 2021

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