IP Law Daily, TRADE SECRETS—7th Cir.: CLEAResult defeats NEXT Payment’s software misappropriation, unjust enrichment claims, (Jan 14, 2026)

By Saurabh Kashyap, B.A., M.A., LL.B., LL.M.

NEXT failed to identify “concrete secrets,” and unjust enrichment theory was raised too late in litigation.

The U.S. Court of Appeals for the Seventh Circuit affirmed a district court’s final judgment in favor of CLEAResult Consulting, Inc., concluding that NEXT Payment Solutions, Inc. failed to adequately identify trade secrets under the Defend Trade Secrets Act (DTSA) and improperly introduced a new theory of unjust enrichment on the eve of trial. The panel found that NEXT’s software feature descriptions were too vague and generic to qualify as legally protectable trade secrets, and it upheld the district court’s decision to exclude NEXT’s unjust enrichment claim based on alleged “other proprietary information” as untimely (NEXT Payment Solutions, Inc. v. CLEAResult Consulting, Inc., No. 24-1377 (7th Cir. Jan. 13, 2026)).

Background. The plaintiff/appellant, NEXT Payment Solutions, Inc., develops customized customer service and appointment scheduling software for business clients. Its flagship offering, the “NEXT System,” can be tailored for various operational needs. The defendant/appellee, CLEAResult Consulting, Inc., offers energy efficiency programs to utilities and their customers across North America. In 2014, CLEAResult retained NEXT to develop a cloud-based appointment management software called the “FAST Tool,” which was used to schedule in-home services such as energy assessments.

The FAST Tool had two functional components: a public interface that allowed customers to book appointments, and a private internal interface that enabled CLEAResult staff to manage scheduling and customer data. NEXT alleged that the FAST Tool incorporated 34 distinct software “modules” and five module combinations containing proprietary features such as real-time availability displays, customer eligibility filters, and automated communications. NEXT contended that these modules embodied trade secrets not found in CLEAResult’s successor platform.

In 2017, CLEAResult acquired a separate technology firm and decided to replace the FAST Tool with a newly integrated software system known as DSMTracker. As part of an internal evaluation effort, Project Renaissance, CLEAResult staff compared the FAST Tool’s internal-facing features to guide improvements in DSMTracker. NEXT claimed that CLEAResult misused the FAST Tool’s proprietary functionalities in building DSMTracker, even though CLEAResult never had access to its source code or software engine.

NEXT sued CLEAResult in the Northern District of Illinois, asserting claims for trade secret misappropriation under the DTSA, 18 U.S.C. §§ 1836 et seq., and unjust enrichment under Illinois common law. Following discovery, the district court granted summary judgment to CLEAResult on the DTSA claim, holding that NEXT failed to define its alleged trade secrets with sufficient specificity. During pretrial proceedings, the court also granted a motion in limine precluding NEXT from asserting an unjust enrichment theory based on “other proprietary information,” finding that NEXT had never previously articulated that theory independently of its trade secrets claim. NEXT appealed both rulings.

Specificity. Affirming summary judgment, the Seventh Circuit found that NEXT did not meet the DTSA’s threshold requirement to identify its trade secrets with “a high level of specificity.” Citing REXA, Inc. v. Chester, 42 F.4th 652, 662–63 (7th Cir. 2022), the panel emphasized that a plaintiff must do more than point to broad functionalities; it must identify specific, concrete secrets that are not readily ascertainable and derive economic value from being confidential.

NEXT’s description of the software modules, such as “Online Self Scheduling” and “Dashboard Client,” focused on what the software did rather than how it did it. For example, NEXT described one module’s “secret” as managing appointment inventory and displaying real-time availability based on technician schedules and customer locations. However, the court held that this language merely described the software's visible outputs—obvious to any user—and failed to disclose the underlying algorithms, architecture, or methods that might qualify as trade secrets.

The court relied on Silvaco Data Sys. v. Intel Corp., 184 Cal. App. 4th 210, 221–22 (Cal. Ct. App. 2010), disapproved on other grounds by Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310 (Cal. 2011), which held that visible features of a compiled software program are not protectable unless accompanied by non-obvious underlying processes. The Seventh Circuit further noted that NEXT conceded CLEAResult had no access to the source code or processing engine, and thus could not have misappropriated any hidden proprietary content.

The court reaffirmed that the burden rests on the plaintiff to distinguish general industry knowledge from proprietary techniques. Merely pointing to the utility or novelty of a feature does not suffice, nor does reliance on nondisclosure agreements transform otherwise observable functionality into protected secrets. The ruling also cited BondPro Corp. v. Siemens Power Generation, Inc., 463 F.3d 702, 710 (7th Cir. 2006), in which a general description of a process failed to establish trade secret status due to its wide availability.

Late-stage unjust enrichment theory. The appellate court next affirmed the district court’s decision to exclude NEXT’s additional unjust enrichment theory. During pretrial proceedings, NEXT attempted to assert that CLEAResult was unjustly enriched not only through alleged trade secret misappropriation but also by misusing other unspecified “proprietary information.”

However, the Seventh Circuit agreed that this was a new theory, introduced too late in the litigation. The court relied on Crest Hill Land Dev., LLC v. City of Joliet, 396 F.3d 801, 804 (7th Cir. 2005), to hold that introducing new liability theories after summary judgment risks prejudicing the opposing party and delaying proceedings—grounds for exclusion.

Reviewing the complaint as a whole under Scott v. City of Chicago, 195 F.3d 950, 952 (7th Cir. 1999), the court found that “proprietary information” was never pleaded or treated as distinct from trade secrets. All references to such information were embedded within the same framework as the DTSA claim. The court further emphasized that NEXT did not disclose or identify what constituted this “other” information, nor did it distinguish it in discovery or motion practice.

The panel concluded that NEXT was attempting to reframe its claims in response to the court’s rejection of its trade secrets theory, which is precisely the type of procedural maneuver discouraged by Seventh Circuit precedent. The district court thus did not abuse its discretion in barring the theory under the standards set out in Soltys v. Costello, 520 F.3d 737, 743 (7th Cir. 2008).

The Case is No. 24-1377.

Judge: Maldonado, N.

Attorneys: Devan V. Padmanabhan (Padmanabhan & Dawson, PLLC) for NEXT Payment Solutions Inc. Kristin Asai (Holland & Knight LLP) for CLEAResult Consulting, Inc.

Companies: NEXT Payment Solutions Inc.; CLEAResult Consulting, Inc.

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