Environment Solutions Associates Group, LLC v. Conopco, Inc

Background

Environment Solutions Associates Group, LLC (ESG) brought a breach-of-contract action against Conopco, Inc., doing business as Unilever. ESG alleged that Unilever violated confidentiality and intellectual-property provisions in a February 12, 2019 Services Agreement by using ESG’s information in connection with refill stations in the United Kingdom.

ESG developed the Ecopod kiosk, which dispenses products into reusable containers. ESG alleged that the kiosk included a proprietary peristaltic pump system for dispensing viscous products, a system that remotely identifies when a product needs refilling, and related processes and know-how. Under the agreement, Unilever leased the Ecopod system, received training and technical support, and was allowed to use ESG’s preexisting intellectual property—called “Background IP”—only to perform or receive the agreement’s services unless the parties made a separate written agreement. The agreement also restricted the use of confidential information received from the other party.

ESG alleged that it shared confidential information and technical details with Unilever and later learned that Unilever planned to roll out refill stations in the United Kingdom that were nearly identical to the Ecopod kiosks. ESG alleged, on information and belief, that Unilever used ESG’s confidential information and intellectual property for that project.

Motion to Dismiss

Unilever moved to dismiss ESG’s Second Amended Complaint under Rule 12(b)(6), which tests whether a complaint alleges enough facts to state a legally plausible claim. Unilever argued that ESG had not adequately described the intellectual property allegedly misappropriated. It also argued that the information was either disclosed in a patent or constituted “Arising IP”—intellectual property created during the agreement that, under the agreement, belonged to Unilever.

Court’s Analysis

The court held that ESG’s allegations satisfied the pleading requirements. ESG identified the allegedly misappropriated information as the peristaltic pump system, the refill-sensor system, and the processes and know-how used to operate those systems. ESG also alleged that it had configured the kiosk to dispense Unilever’s products under Unilever’s hygiene and safety requirements and had shared those details with Unilever.

The court concluded that these allegations were sufficiently clear to give Unilever fair notice of the claim. At the motion-to-dismiss stage, the court accepted the complaint’s factual allegations as true and drew reasonable inferences in ESG’s favor.

The court also rejected dismissal based on Unilever’s argument that the information was disclosed in U.S. Patent No. 9,440,842. The court explained that information can receive trade-secret protection when it includes elements beyond what the patent discloses. The court found that ESG had alleged confidential know-how concerning the specific configuration and technical specifications of the Ecopod for Unilever’s products, which was enough to state a claim at this stage.

The court further recognized a potential conflict between the agreement’s intellectual-property and confidentiality provisions. Although the agreement stated that Arising IP belonged to Unilever, it separately stated that confidential information received from the other party could be used only to fulfill the agreement. Because the agreement could reasonably be interpreted to restrict Unilever’s use of confidential information developed during the relationship, the court resolved that ambiguity in ESG’s favor for purposes of the motion.

Disposition

Judge Mary Kay Vyskocil denied Unilever’s Motion to Dismiss, docket entry 37, and directed the Clerk of Court to terminate that docket entry. The opinion did not determine whether Unilever actually misappropriated ESG’s information or ultimately breached the agreement; it held only that ESG’s claim could proceed beyond the pleading stage.