The Seventh Circuit Court of Appeals affirmed summary judgment against NEXT Payment Solutions, Inc. in a closely watched trade secret case involving appointment scheduling software development. The decision, issued Jan. 13, 2026, upholds a district court ruling that NEXT failed to adequately define its claimed trade secrets in its lawsuit against CLEAResult Consulting, Inc.
The dispute arose from a business partnership that soured after CLEAResult decided to transition away from NEXT's scheduling software. According to court documents, CLEAResult initially hired NEXT to develop appointment scheduling software and used the application successfully for several years. However, problems emerged when CLEAResult decided to shift to different scheduling software.
Before making the transition, CLEAResult allegedly modified and refined its new program based on the functionality and features of NEXT's application without informing NEXT of these activities. CLEAResult then terminated its relationship with NEXT and stopped using the scheduling tool entirely.
NEXT responded by filing suit in the U.S. District Court for the Northern District of Illinois, bringing claims for misappropriation of trade secrets under federal law and unjust enrichment under Illinois common law. The company alleged that CLEAResult improperly used proprietary features from NEXT's software to improve competing technology.
NEXT designs and develops customer service software for businesses through its primary platform called the "NEXT System." The company offers customizable versions of this system to meet specific customer business needs. CLEAResult, meanwhile, provides North American utilities with energy efficiency programs and services for utility customers.
The case proceeded through years of contentious litigation before reaching resolution at the district court level. Judge Steven C. Seeger of the Northern District of Illinois granted summary judgment against NEXT on the trade secrets claim, finding that the company failed to define its alleged trade secrets with sufficient specificity to proceed under federal law.
This specificity requirement is crucial in trade secret litigation, as courts require plaintiffs to clearly identify what information they claim as proprietary before analyzing whether that information qualifies for protection. Without adequate definition, courts cannot properly evaluate whether the alleged secrets meet legal standards for trade secret protection.
After losing on the trade secrets claim, the case moved to pretrial proceedings on NEXT's unjust enrichment claim under Illinois common law. However, the district court granted CLEAResult's motion in limine limiting the scope of this claim. Faced with these constraints, NEXT voluntarily dismissed the unjust enrichment claim, allowing the district court to enter final judgment in favor of CLEAResult.
NEXT appealed the decision to the Seventh Circuit, which heard oral arguments Nov. 6, 2024. The three-judge panel consisted of Chief Judge Diane P. Brennan and Circuit Judges David Kolar and Nancy L. Maldonado, with Judge Maldonado writing the opinion.
In affirming the district court's decision, the Seventh Circuit validated the lower court's analysis of NEXT's trade secret claims. The appeals court's decision reinforces the importance of specificity requirements in trade secret litigation and demonstrates the challenges plaintiffs face when attempting to protect software-related intellectual property.
The case highlights common tensions in the software development industry, where companies often work closely with clients to develop customized solutions. These relationships can create disputes when partnerships end and questions arise about who owns various technological innovations or improvements.
Trade secret law provides protection for confidential business information that derives economic value from not being generally known. However, courts require plaintiffs to clearly identify their claimed secrets and demonstrate that reasonable efforts were made to maintain secrecy. The specificity requirement prevents overly broad claims that could stifle legitimate competition.
For software companies, the decision underscores the importance of clearly documenting proprietary technologies and implementing robust confidentiality protections when working with business partners. Companies should consider detailed nondisclosure agreements and specific identification of trade secrets before entering collaborative relationships.
The ruling also demonstrates how procedural requirements can significantly impact litigation outcomes. NEXT's inability to adequately define its trade secrets proved fatal to its federal law claims, regardless of the underlying merits of its allegations against CLEAResult.
The case number is No. 24-1377, and the original district court case was No. 1:17-cv-08829. The decision continues the Seventh Circuit's pattern of requiring precise pleading standards in intellectual property disputes involving complex technology relationships.