Cadco, Ltd. v. Doctor's Associates, Inc.

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CADCO, LTD. v. DOCTOR’S ASSOCIATES,
INC., ET AL.
(AC 40306)
Sheldon, Elgo and Flynn, Js.

Syllabus

The plaintiff sought to recover damages from the defendants for, inter
alia, unfair and deceptive acts and practices in their business dealings
concerning the design and development of a certain new product in
violation of the Connecticut Unfair Trade Practices Act (CUTPA) (§ 42-
110a et seq.). Beginning in February, 2012, and over the course of approx-
imately one and one-half years, the plaintiff engaged in a business rela-
tionship with the defendants to design and produce a metal heating
plate for the defendants’ production of a certain new food product in
certain of its restaurants. In August or September, 2013, following the
dissemination of information about the heating plate to the defendants
and orders of the heating plate for testing by the defendants, the plaintiff
filed an application for a design patent for the heating plate, which was
granted following the initiation of this action. In October, 2013, the
plaintiff was informed that the defendants had decided to go with another
provider for the heating plate, and, subsequently, the plaintiff discovered
that another company, with personal ties to the defendants, had supplied
a nearly identical heating plate to the defendants. The trial court granted
the defendants’ motions for summary judgment on all counts and ren-
dered judgment thereon, from which the plaintiff appealed to this
court. Held:
1. The trial court properly concluded that there was no genuine issue of
material fact that the defendants’ conduct did not amount to an unfair
act or practice in violation of CUTPA; the plaintiff’s claims failed to
meet any prong of the cigarette rule, which is used to determine whether
a practice violates CUTPA, as the defendants’ prolonged negotiations
with the plaintiff and the defendant’s conduct in giving the plaintiff’s
design to a competitor in the absence of a patent or confidentiality
agreement, and granting a contract to a manufacturer with ties to the
defendants, which the defendants were free to do, did not offend public
policy in such a way as to violate an established concept of unfairness,
the defendants’ behavior in not hiring the plaintiff to produce the new
heating plates it had designed or in taking the plaintiff’s design to a
competitor with ties to the defendant companies was not immoral,
unethical, oppressive, or unscrupulous in any way, and any injury that
the plaintiff suffered could reasonably have been avoided by obtaining
a confidentiality agreement or other stopgap measure to protect its
product design until the patent it had applied for was issued.
2. The trial court properly concluded that there was no genuine issue of
material fact as to whether the defendants’ conduct constituted a decep-
tive act or practice under CUTPA; there was no evidence of any misrepre-
sentation, omission, or practice by the defendants likely to mislead the
plaintiff to believe that it would receive a contract from the defendants,
and to the extent the plaintiff claimed that the defendants should have
informed it explicitly that they were soliciting bids from others and that
one potential bidder had been given the plaintiff’s design upon which
to formulate its own bid, such omissions did not amount to a CUTPA
violation because the defendants were under no duty to so inform
the plaintiff.
3. The trial court did not err in concluding that there was no genuine issue
of material fact as to whether the defendants were unjustly enriched
to the plaintiff’s detriment by the defendants’ alleged conduct; although
the defendants benefited from the time and effort it took the plaintiff
to design the heating plate, there was no evidence that they did not
compensate the plaintiff fully for that benefit, as there was evidence
that the defendants paid the plaintiff each time they purchased one or
more heating plates for product and market testing.
Argued November 14, 2018—officially released March 5, 2019
Procedural History

Action to recover damages for, inter alia, unfair trade
practices, and for other relief, brought to the Superior
Court in the judicial district of Litchfield, where the
court, Pickard, J., granted the plaintiff’s motion to cite
in additional parties; thereafter, the matter was trans-
ferred to the judicial district of Hartford, Complex Liti-
gation Docket; subsequently, the court, Moukawsher,
J., granted the defendants’ motions for summary judg-
ment and rendered judgment thereon, from which the
plaintiff appealed to this court. Affirmed.
Patrick E. Power, for the appellant (plaintiff).
Jeffrey R. Babbin, with whom were David R. Roth
and, on the brief, John M. Doroghazi, for the appellees
(named defendant et al.).
Matthew W. Buttrick, pro hac vice, with whom was
David T. Martin, for the appellee (defendant Indepen-
dent Purchasing Cooperative, Inc.).
Opinion

SHELDON, J. The plaintiff, Cadco, Ltd., commenced
this action alleging that the defendants, Doctor’s Associ-
ates, Inc. (Doctor’s Associates), Franchise World Head-
quarters, LLC (Franchise), and Independent Purchasing
Cooperative, Inc. (Independent), engaged in unfair acts
or practices and unfair methods of competition and
deceptive acts or practices in their business dealings
with the plaintiff concerning the design and develop-
ment of a new product in violation of the Connecticut
Unfair Trade Practices Act (CUTPA), General Statutes
§ 42-110a et seq., and that in so doing they unjustly
enriched themselves to the plaintiff’s detriment. The
plaintiff appeals from the summary judgment rendered
in favor of the defendants on its complaint. We conclude
that the trial court properly determined that the defen-
dants were entitled to summary judgment on each of the
plaintiff’s claims against them because they established
that there was no genuine issue of material fact that
the plaintiff had no right to prevail on any of those
claims. Accordingly, we affirm the judgment of the
trial court.
The following facts are undisputed. In February, 2012,
representatives from Doctor’s Associates, the franchi-
sor of the Subway restaurant chain in the United States,
and Franchise, a corporation that provides administra-
tive services to Doctor’s Associates, approached the
plaintiff about purchasing a standard flat metal heating
plate that the plaintiff manufactured. The plate was to
be considered for use in Subway restaurants to cook
a new flatbread pizza product called the ‘‘Flatizza.’’ As
a result of this meeting, the plaintiff provided one of
its standard heating plates to Doctor’s Associates for
testing at Subway headquarters. Doctor’s Associates
also requested that the plaintiff sign a nondisclosure
agreement to protect various details about its business
practices, which the plaintiff signed on February 27,
2012.
During the course of testing, representatives from
Franchise notified the plaintiff that problems had arisen
with using the plaintiff’s standard plate to cook the
Flatizzas. Thereafter, between April, 2012, and Septem-
ber, 2012, the plaintiff made numerous changes to its
standard heating plate to address those problems, creat-
ing six different versions of the plate for the defendants
to test. In its correspondence with defendants Doctor’s
Associates and Franchise concerning the changes that
had been made to the plates, the plaintiff shared
detailed technical information about its design. By the
end of the testing period, Doctor’s Associates had pur-
chased a total of 133 heating plates from the plaintiff.
Subway’s primary oven manufacturer, TurboChef, ulti-
mately approved the fifth version of the modified heat-
ing plate for use in its ovens in Subway restaurants.
Subway then began to test market the Flatizza in several
cities across the country to determine if it should offer
the new product nationally. To facilitate such market
testing, Doctor’s Associates purchased 1,728 of the
modified heating plates from the plaintiff, in eight sepa-
rate orders from May, 2012 through February, 2013.
On June 4, 2012, a meeting was held between several
the plaintiff representatives and representatives from
Doctor’s Associates and Franchise. At that meeting, the
plaintiff was informed that if Subway’s management
decided to offer the Flatizza throughout the country, it
would aim to distribute the modified heating plates to
its franchisees in March, 2013, and thus the plaintiff
would be expected to begin production of the new
plates in October, 2012, after the plaintiff and Indepen-
dent, Subway’s purchasing arm, determined the pricing
for the ‘‘full production rollout.’’ The plaintiff e-mailed
representatives of Doctor’s Associates and Franchise
on June 7, 2012, to memorialize the June 4 meeting, but
received no response. The defendants later decided to
delay the March, 2013 rollout of the Flatizza.
From March, 2013 through September, 2013, the
defendants continued to update the plaintiff regarding
the Flatizza project and to gather information from the
plaintiff regarding its production capabilities for the
new plates, the process by which it would seek national
public health and safety approval for them, and its
updates to its proposal for pricing the plates’ produc-
tion. On March 25, 2013, Ed Degnan, an equipment
specialist for Franchise, requested a detailed produc-
tion timeline and cost information from the plaintiff for
an order of 16,000 plates, but he cautioned in an e-mail
the following day: ‘‘To be clear, this is exploratory only
[and] not an order. DO NOT ORDER ANY MATERIALS.’’
In April, 2013, Franchise informed the plaintiff, in
another e-mail, that it was working with four different
vendors on the project. On May 31, 2013, Tricia Hether-
ington, the director of new product development for
Franchise, e-mailed the plaintiff, stating that she would
‘‘like to explore how we could be ready for a potential
February, 2014 launch of Flatizza.’’
On July 10, 2013, the plaintiff e-mailed a representa-
tive from Independent to confirm the details of a recent
phone call between itself and Independent concerning
the need for a production timeline and pricing for 22,000
of the new plates, Subway’s intent to roll out the Flatizza
in its restaurants in February, 2014, and, to that end,
its need to have all of the new plates delivered to a
warehouse in Massachusetts for that purpose by
December 20, 2013, and for the plaintiff to commit to
filling the order no later than September 1, 2013. In
response to that e-mail, the Independent representative
stated that, although the plaintiff’s summary of the
phone call was accurate, ‘‘[m]uch on our end is not
firm, so please await further information . . . .’’
At the same time, there was uncertainty as to whether
Merrychef, the manufacturer of a different oven used
in certain Subway restaurants as an alternative to the
TurboChef oven, would make its own heating plates
for use in its ovens to cook Flatizzas rather than using
plates manufactured by the plaintiff. Thereafter, on July
10, 2013, Independent asked the plaintiff to inform it
of ‘‘the impact of an additional 7000 Merrychef style
plates should we add these to the order.’’ On July 18,
2013, Franchise sent an e-mail to the plaintiff with the
subject line ‘‘Pizza Plate Bid Information.’’ That e-mail
read: ‘‘Do you guys have any questions on this bid? I
have notified my Merrychef rep that if you guys are
approved to manufacture both plates then Merrychef
will need to approve your plate in their oven. I would
then send one of the [two] Merrychef plates you sent
me to Merrychef for approvals.’’ This was the first and
only documented mention to the plaintiff by any defen-
dant that the choice of manufacturer for the new heating
plates, if they were ordered, would be made through a
bidding process. Later that evening, Franchise e-mailed
the plaintiff that it ‘‘looks like you are ready to [go] if
we give you the go ahead.’’
On August 1, 2013, Independent e-mailed the plaintiff
to verify the production timeline information for a pre-
sentation by Franchise and Independent to ‘‘the leader-
ship,’’ so that the leadership could ‘‘understand the
timing of the decision required.’’ On August 16, 2013,
the plaintiff e-mailed Independent to confirm a quote
for the heating plates of $67.27 per unit. On September
13, 2013, Degnan informed the plaintiff that there were
no new updates on the Flatizza project and that he
would not expect any decisions that year. The final
e-mail exchange between Franchise and the plaintiff
occurred on September 23, 2013, when the plaintiff
asked Franchise to ‘‘go over a few things’’ over the
telephone and Franchise responded that it was not sure
what the plaintiff wanted to discuss, but it still needed
the information about production capabilities and other
matters it had requested from the plaintiff earlier
that day.
On October 10, 2013, Sam Grano de Oro, the director
of operations for the plaintiff, received a telephone call
from Degnan. Degnan first asked whether the plaintiff
had purchased the materials needed to fulfill an order
from the defendants for the full production rollout.
Grano de Oro responded that the plaintiff had not pur-
chased any materials, but that all of the necessary prep-
arations to do so had been made with its materials
suppliers. Degnan then informed Grano de Oro that the
defendants had ‘‘decided to go with another provider,’’
without offering any explanation for its decision. Grano
de Oro responded by requesting an opportunity to
address any concerns that the defendants might have
had with their bid, but that request was not honored.
All he could do at that time was to inform Degnan that
the new heating plate and its design belonged to the
plaintiff. Sometime in late August or early September,
2013, the plaintiff filed an application for a design patent
for the modified heating plate. That application was
ultimately granted approximately two years later, on
September 15, 2015.
Early in 2014, the plaintiff became aware that Subway
had proceeded with the nationwide rollout of the Flati-
zza. In April, 2014, representatives from the plaintiff
began to investigate how that had been done and discov-
ered that a metal heating plate similar to the one the
plaintiff had designed for the defendants was being
used in Subway restaurants in Florida and Connecticut.
The plaintiff then hired a mechanical engineer and a
material science engineer to compare the new heating
plate it had designed to the plate being used in Subway
restaurants. The engineers opined that the two plates
were nearly identical and that the defendants’ plate
appeared to be a refinement of the plaintiff’s plate.
Through its continued investigation, the plaintiff discov-
ered that an executive at VTM Concepts, the supplier of
the nearly identical heating plate being used in Subway
restaurants, is married to the president of Doctor’s
Associates and Franchise, who had been copied on
several of the e-mails between the plaintiff and Fran-
chise regarding the progress of the heating plate project.
The plaintiff subsequently filed this action. In its five-
count amended complaint, the plaintiff alleged that the
defendants were jointly and severally liable on the fol-
lowing theories of liability: (1) in the first count, for
unfair acts or practices and unfair methods of competi-
tion in violation of CUTPA; (2) in the second count, for
punitive damages under CUTPA, based upon the unfair
acts or practices and unfair methods of competition
alleged in the first count; (3) in the third count, for
deceptive acts or practices in violation of CUTPA; (4)
in the fourth count, for punitive damages under CUTPA
based upon the deceptive acts or practices alleged in the
third count; and (5) in the fifth count, unjust enrichment
based upon the conduct alleged in the first four counts.
The complaint alleged, more specifically, that over the
course of one and one half years, the defendants had
expressly or impliedly represented to the plaintiff, and
thereby caused it to believe, that it would receive an
order for over 25,000 new heating plates if Subway
decided to launch the Flatizza nationwide. In reliance
on these representations, the plaintiff had designed a
custom heating plate for the defendants, supplied sam-
ples of the new plate to Subway for test marketing
purposes, and turned over to the defendants the design
and technical information needed to manufacture the
plates. Each of the defendants answered the complaint
by denying all allegations of wrongdoing against it and
pleading several special defenses.
On January 13, 2017, the defendants filed parallel
motions for summary judgment. In its memorandum of
decision granting the motions for summary judgment
as to all defendants on all counts, the trial court con-
cluded that the undisputed facts showed that there was
nothing unfair or deceptive about the defendants’ deal-
ings with the plaintiff with respect to the new heating
plates, noting that ‘‘not every missed business opportu-
nity violates CUTPA,’’ and that the plaintiff could have
avoided any injury to itself resulting from others’ use of
its product design by taking reasonable steps to protect
itself. The court further concluded that the defendants
had not been unjustly enriched by the plaintiff’s efforts
to design the new heating plate because the plaintiff
had not been deceived or misled to provide its design
to the defendants without paying for it or without pro-
tecting itself by negotiating a confidentiality agreement.
On appeal, the plaintiff claims that (1) the trial court
improperly concluded that no genuine issue of material
fact exists as to whether the defendants’ conduct consti-
tuted an unfair act or practice in violation of CUTPA,
(2) the court improperly concluded that there was no
genuine issue of material fact as to whether the defen-
dants’ conduct constituted a deceptive act or practice
in violation of CUTPA, and (3) the court erred in con-
cluding that no genuine issue of material fact exists as
to whether the defendants were unjustly enriched to
the plaintiff’s detriment.
‘‘Our review of the trial court’s decision to grant a
motion for summary judgment is plenary.’’ (Internal
quotation marks omitted.) Brusby v. Metropolitan Dis-
trict, 160 Conn. App. 638, 646, 127 A.3d 257 (2015).
Practice Book § 17-49 provides in relevant part: ‘‘[Sum-
mary] judgment . . . shall be rendered forthwith if the
pleadings, affidavits and any other proof submitted
show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment
as a matter of law.’’ ‘‘In deciding a motion for summary
judgment, the trial court must view the evidence in
the light most favorable to the nonmoving party. . . .
Although the party seeking summary judgment has the
burden of showing the nonexistence of any material
fact . . . a party opposing summary judgment must
substantiate its adverse claim by showing that there is
a genuine issue of material fact together with the evi-
dence disclosing the existence of such an issue. . . .
It is not enough . . . for the opposing party merely to
assert the existence of such a disputed issue. . . . Mere
assertions of fact, whether contained in a complaint or
in a brief, are insufficient to establish the existence of
a material fact and, therefore, cannot refute evidence
properly presented to the court [in support of a motion
for summary judgment].’’ (Emphasis omitted; internal
quotation marks omitted.) Marsala v. Yale-New Haven
Hospital, Inc., 166 Conn. App. 432, 458–59, 142 A.3d
316 (2016). ‘‘A material fact is a fact that will make a
difference in the result of a case.’’ (Internal quotation
marks omitted.) Silberstein v. 54 Hillcrest Park Associ-
ates, LLC, 135 Conn. App. 262, 266, 41 A.3d 1147 (2012).
I
The plaintiff first claims that the trial court improp-
erly concluded that no genuine issue of material fact
exists as to whether the defendants’ conduct consti-
tuted an unfair act or practice under CUTPA. Specifi-
cally, the plaintiff argues that the defendants induced
the plaintiff to believe that it would receive a large
order for new plates of the type it had designed and
developed for the defendants if the Flatizza was intro-
duced in Subway restaurants nationwide, but instead
gave their design to a manufacturer run by the spouse
of a high ranking executive of Doctor’s Associates and
Franchise, from which they purchased the new plates
at a slightly lower price than that quoted to them by
the plaintiff. Although the conduct complained of by the
plaintiff might very well constitute a CUTPA violation
if the circumstances were as alleged, that claim is factu-
ally unsupported in this case. Cf. Milford Paintball,
LLC v. Wampus Milford Associates, LLC, 156 Conn.
App. 750, 765–66, 115 A.3d 1107, cert. denied, 317 Conn.
912, 116 A.3d 812 (2015) (persistent negligent misrepre-
sentations intended to induce execution of subject lease
by plaintiff supported finding of unfairness under
CUTPA); Utzler v. Braca, 115 Conn. App. 261, 281, 972
A.2d 743 (2009) (builder’s material intentional misrepre-
sentation that induced plaintiff to invest in project was
an unfair or deceptive practice that violated CUTPA).
There is no factual basis for the plaintiff’s claim that it
was unfairly induced to act to its own detriment in any
way. To the contrary, the evidentiary materials submit-
ted to the trial court show that the plaintiff freely sold
the defendants a product and the design specifications
therefor that were unprotected, and thus fully available
to the defendants to use, refine or copy as they saw fit.
Therefore, we agree with the court’s determination that
there is no genuine issue of material fact that the defen-
dants’ conduct did not amount to an unfair act or prac-
tice in violation of CUTPA, and thus that the defendants
were entitled to judgment on the plaintiff’s first two
claims as a matter of law.
General Statutes § 42-110b (a) provides: ‘‘No person
shall engage in unfair methods of competition and
unfair or deceptive acts or practices in the conduct
of any trade or commerce.’’ ‘‘It is well settled that in
determining whether a practice violates CUTPA [our
Supreme Court has] adopted the criteria set out in the
cigarette rule by the [F]ederal [T]rade [C]ommission
for determining when a practice is unfair: (1) [W]hether
the practice, without necessarily having been pre-
viously considered unlawful, offends public policy as
it has been established by statutes, the common law,
or otherwise—in other words, it is within at least the
penumbra of some common law, statutory, or other
established concept of unfairness; (2) whether it is
immoral, unethical, oppressive, or unscrupulous; (3)
whether it causes substantial injury to consumers,
[competitors or other businesspersons]. . . . All three
criteria do not need to be satisfied to support a finding
of unfairness. A practice may be unfair because of the
degree to which it meets one of the criteria or because
to a lesser extent it meets all three.’’ (Internal quotation
marks omitted.) Ulbrich v. Groth, 310 Conn. 375, 409,
78 A.3d 76 (2013).
A
The first prong of the cigarette rule requires us to
consider whether the alleged unfair practice offends
public policy to the extent that it constitutes a breach
of an established concept of unfairness. The plaintiff
argues that such a breach can be found in (1) the defen-
dants’ inducement of the plaintiff to believe that it
would receive a contract for a large order of the new
plates, which allowed the defendants to obtain techni-
cal information for the plate’s product design, (2) giving
the plaintiff’s design for the new plate to a competitor
that had personal ties to the defendants, and (3) then
awarding the manufacturing contract for the new plates
to that competitor instead of to the plaintiff. The plain-
tiff does not explicitly state which public policies sup-
port its claims, arguing general unfairness instead. It
appears that the public policy basis for the plaintiff’s
first argument is equitable estoppel.
‘‘Strong public policies have long formed the basis
of the doctrine of equitable estoppel. The office of an
equitable estoppel is to show what equity and good
conscience require, under the particular circumstances
of the case, irrespective of what might otherwise be
the legal rights of the parties. . . . No one is ever
estopped from asserting what would otherwise be his
right, unless to allow its assertion would enable him to
do a wrong. . . . There are two essential elements to
an estoppel: the party [against whom it is asserted] must
do or say something which is intended or calculated to
induce another to believe in the existence of certain
facts and to act upon that belief; and the other party,
influenced thereby, must actually change his position
or do something to his injury which he otherwise would
not have done. Estoppel rests on the misleading con-
duct of one party to the prejudice of the other. In the
absence of prejudice, estoppel does not exist.’’ (Internal
quotation marks omitted.) Fischer v. Zollino, 303 Conn.
661, 668, 35 A.3d 270 (2012).
We agree with the trial court that the defendants’
prolonged negotiations with the plaintiff do not offend
public policy in such a way as to violate an established
concept of unfairness within the meaning of the first
prong of the cigarette rule. In rejecting the plaintiff’s
CUTPA claim, the trial court concluded that there was
no genuine issue of material fact that the defendants’
communications with the plaintiff about the design or
development of the new plate was misleading or
intended to induce the plaintiff to believe that it would
receive the contract. Although the defendants spent one
and one half years discussing the plaintiff’s potential
receipt of a contract for a large order of the new plates,
the plaintiff concedes that there never was such a con-
tract and that throughout its dealings with the defen-
dants it fully understood that Subway might decide to
forego a national rollout of the Flatizza, in which case
no order for the new plates it designed and developed
would ever be placed with anyone. Even if the defen-
dants had explicitly stated that they intended to pur-
chase plates from the plaintiff in the event of a
nationwide rollout of the Flatizza, it is undisputed that
any order was conditioned on the rollout’s occurrence.
Moreover, the defendants cautioned the plaintiff on
more than one occasion that it should not take any
actions in reliance on their exploratory conversations.
As noted by the trial court, the plaintiff hoped that it
would be chosen to manufacture a large order of plates
for the defendants and, from the e-mails discussing
production timelines, shipping details, and pricing, it
seemed for some time that that would happen; however,
the defendants never made any statements that would
lead the plaintiff reasonably to believe that a future
contract was guaranteed. Without any misleading state-
ments or conduct on the part of the defendants, the
public policy underlying equitable estoppel was not vio-
lated by their conduct in violation of the first prong of
the cigarette rule.
The plaintiff further contends that the defendants
violated CUTPA by giving the plaintiff’s design to a
competitor. Here again, the plaintiff does not point this
court to any particular public policy which it claims to
have been violated by such conduct, thus establishing
its unfairness under the first prong of the cigarette rule.
In support of its argument, however, the plaintiff states
that during its dealings with the defendants it was seek-
ing a patent for the modified heating plate and had
informed the defendants of these efforts. Therefore, we
consider whether the defendants’ actions violated any
established public policy related to the plaintiff’s efforts
to patent the new heating plate.
As an initial matter, it is undisputed that there was
no patent or confidentiality agreement in effect for the
plaintiff’s design at the time of its dealings with the
defendants. The most protection the product had was
the pending patent application that was not submitted
until August or September, 2013. It is disputed between
the parties as to whether the plaintiff ever informed
the defendants that it had filed a patent application for
the heating plate. The defendants deny being told by
the plaintiff that it had filed such an application. The
plaintiff claims that in September, 2012, representatives
from the plaintiff had met with representatives from
Doctor’s Associates and Franchise at Subway headquar-
ters to give them a status report on the heating plate
project and during that meeting it had noted that it was
in the process of applying for a design patent for the
new plate. The plaintiff also etched the words ‘‘Patent
Pending’’ on at least forty of the heating plates that
it sold to the defendants during the testing process.
However, these disputed facts are not material because,
even if we assume that the plaintiff informed the defen-
dants of its pending patent application in September,
2012, and that the defendants, knowing this informa-
tion, took the plaintiff’s plate design to a competitor,
these acts would not have violated any established pub-
lic policy.
‘‘To willfully infringe a patent, the patent must exist
and one must have knowledge of it. . . . Filing an
application is no guarantee any patent will issue and a
very substantial percentage of applications never result
in patents.’’ (Emphasis omitted; internal quotation
marks omitted.) State Industries, Inc. v. A.O. Smith
Corp., 751 F.2d 1226, 1236 (Fed. Cir. 1985). There is a
‘‘strong federal policy favoring the full and free use of
ideas in the public domain.’’ Lear, Inc. v. Adkins, 395
U.S. 653, 674, 89 S. Ct. 1902, 23 L. Ed. 2d. 610 (1969).
‘‘[P]atent laws have embodied a careful balance
between the need to promote innovation and the recog-
nition that imitation and refinement through imitation
are both necessary to invention itself and the very life-
blood of a competitive economy.’’ Bonito Boats, Inc.
v. Thunder Craft Boats, Inc., 489 U.S. 141, 146, 109 S.
Ct. 971, 103 L. Ed. 2d 118 (1989).
By informing the defendants that they were in the
process of applying for a patent and marking their prod-
uct ‘‘Patent Pending,’’ the plaintiff merely gave notice
that the plate might be subject to future protection. The
plaintiff argues that the trial court erred in its analysis
of the defendants’ conduct under the first and second
prongs of the cigarette rule by requiring the plaintiff to
have taken reasonable measures to avoid the injury,
which is only required under prong three of the rule.
We disagree with the plaintiff’s interpretation of the
trial court’s decision and conclude that the steps taken
to protect the heating plates, as referenced by the trial
court, are relevant to determine whether the defen-
dants’ actions were unfair under the circumstances.
Here, Doctor’s Associates made several arm’s length
purchases of these unprotected products from the plain-
tiff over the course of a year and a half. The defendants
were free to do as they wished with the plaintiff’s prod-
ucts that they purchased in that time frame, including
showing those products, which they then owned with-
out restriction, to other companies and asking those
companies to refine the products’ design. The public
policy underlying our patent law supports such imita-
tion and refinement. Thus, it cannot be said that the
defendants’ conduct in so doing violated any estab-
lished concept of unfairness.
Finally, the plaintiff argues that the defendants’ com-
mitted an unfair act or practice by causing it to engage
in a ‘‘sham ‘bidding’ process,’’ in the course of which
it was forced to bid against only one competitor with
personal ties to the defendant companies that had been
given the plaintiff’s design with which to prepare and
submit its competing bid. Nothing about the fact that
the defendants gave the contract to a manufacturer run
by the spouse of the president of Doctor’s Associates
and Franchise offends public policy. It is well estab-
lished that a trader or manufacturer carrying on an
entirely private business is free to determine with whom
it will deal. See United States v. Freight Assn., 166 U.S.
290, 320–21, 17 S. Ct. 540, 41 L. 3d. 1007 (1897). Further,
there is nothing about the fact that there were only two
companies bidding for the contract that is inherently
unfair.
In reaching our conclusion, we are mindful that in
Landmark Investment Group, LLC v. CALCO Con-
struction & Development Co., 318 Conn. 847, 882, 124
A.3d 847 (2015), our Supreme Court concluded that the
‘‘trial court acted improperly when, rather than consid-
ering what inferences could have been drawn by the
jury from the totality of the defendants’ conduct, it
parsed [the plaintiff’s] allegations and concluded that
each of the defendants’ acts did not meet the standard
necessary to prove a violation of CUTPA.’’ An individual
examination of each of the defendants’ discrete acts is
necessary to analyze the public policy implications of
the totality of the conduct. When considering the total-
ity of the defendants’ conduct—of negotiating with the
plaintiff over a substantial period of time without mak-
ing any misrepresentations, giving another manufac-
turer the plaintiff’s unprotected design to reverse
engineer and refine, and granting a contract to a manu-
facturer with ties to the defendant companies, which
it was free to do—such conduct does not amount to a
violation under CUTPA. Therefore, we conclude that
the defendants’ actions do not violate the first prong
of the cigarette rule.
B
Under the second prong of the cigarette rule, we
must consider whether the defendants’ actions were
‘‘immoral, unethical, oppressive or unscrupulous.’’
(Internal quotation marks omitted.) Johnson Electric
Co. v. Salce Contracting Associates, Inc., 72 Conn. App.
342, 357, 805 A.2d 735, cert. denied, 262 Conn. 922, 812
A.2d 864 (2002). Whether conduct so qualifies is not
controlled by ‘‘a global standard but rather must reflect
the particular circumstances of the case.’’ Id. ‘‘A trade
practice that is undertaken to maximize the defendant’s
profit at the expense of the plaintiff’s rights comes
under the second prong of the cigarette rule.’’ Votto v.
American Car Rental Inc., 273 Conn. 478, 485, 871 A.2d
981 (2005).
In Johnson Electric Co., the defendant general con-
tractor submitted a bid for a contract on a construction
project in which it named the plaintiff as the subcontrac-
tor it would use to complete the project if the bid were
awarded, but hired a different subcontractor after the
bid was awarded when the plaintiff refused its request
to reduce its quoted price. Johnson Electric Co. v. Salce
Contracting Associates, Inc., supra, 72 Conn. App. 346.
An attorney trial referee found that it was industry
practice that a subcontractor named in a successful bid
would receive a subcontract for the work it had quoted
when the contract was awarded on the basis of that
quote. Id. The trial court, rejecting the report of the
attorney trial referee, found that the plaintiff had not
proven its CUTPA claim. Id., 344. In reversing the trial
court, this court found that the defendant’s conduct
met the second prong of the cigarette rule because
it deliberately refused to conform its conduct to the
established industry practice for the admitted purpose
of maximizing its profit, and thereby caused substantial
injury to the plaintiff. Id., 357.
In Glazer v. Dress Barn, Inc., 274 Conn. 33, 873 A.
2d 929 (2005), by contrast, the plaintiffs argued that the
defendant had violated the second prong of the cigarette
rule by inducing them to believe that the defendant
would either provide financing for a deferred billing
program or close on the proposed acquisition of the
plaintiff’s company. See id., 48. It was undisputed that
there was no enforceable agreement between the par-
ties for either the financing or the acquisition. See id.,
85. The plaintiff’s theory at trial was that the defendant
initially intended to provide financing to the plaintiff
but then changed its mind when the cost estimates
changed for the program. Id., 81. In concluding that
there was no CUTPA violation, our Supreme Court
stated that the defendant ‘‘expressly retained the right
not to proceed with the acquisition. Thus, [a]lthough the
plaintiffs hoped and even expected that [the defendant]
would [complete the acquisition], [the defendant] was
under no statutory or contractual obligation to do so.
Under those circumstances, [the defendant] did not vio-
late CUTPA by declining to do that which it simply was
not required to do. The analysis does not differ because
the plaintiffs, effectively, gambled on an expectation
that [the defendant] would choose to proceed differ-
ently than it did and, subsequently, lost that gamble.’’
(Internal quotation marks omitted.) Id., 83–84.
In the present case, the defendants’ behavior in not
hiring the plaintiff to produce the new heating plates
it had designed to implement the nationwide rollout of
the Flatizza, unlike that of the defendants in Johnson
Electric Co. in declining to hire the plaintiff as a subcon-
tractor on the project for which it had bid successfully
on the basis of the plaintiff’s quote, did not violate any
established trade or industry practice or public policy,
as discussed in the part I A of this opinion, or thus
qualify, on that basis, as ‘‘immoral, unethical, oppressive
or unscrupulous’’; (internal quotation marks omitted)
Johnson Electric Co. v. Salce Contracting Associates,
Inc., supra, 72 Conn. App. 357; under the second prong
of the cigarette rule. Rather, like the defendant in Glazer
that declined to provide financing for or to buy out the
plaintiff’s company, the defendants here, by not hiring
the plaintiff to manufacture the new heating plates for
the rollout of the Flatizza, merely declined to do some-
thing that they were not legally required to do despite
the disappointed plaintiff’s hope or expectation to
the contrary.
As for taking the plaintiff’s design to a competitor
with ties to the defendant companies, for the same
reasons articulated in part I A of this opinion, there
was nothing ‘‘immoral, unethical, oppressive or unscru-
pulous’’; (internal quotation marks omitted) Johnson
Electric Co. v. Salce Contracting Associates, Inc.,
supra, 72 Conn. App. 357; about the defendants’ behav-
ior, for it did not infringe on the plaintiff’s rights in
any way and involved no more than taking a legally
unprotected product, which the defendants had duly
purchased and therefore owned without restriction, to
another manufacturer to improve upon its design and,
so improved, to manufacture and sell it. We conclude
that such fully lawful conduct was not immoral, unethi-
cal, oppressive or unscrupulous in any way, and thus
did not violate the second prong of the cigarette rule.
C
The third prong of the cigarette rule requires us to
consider whether the defendants’ actions caused sub-
stantial injury to the plaintiff. Under this prong, ‘‘[t]o
justify a finding of unfairness the injury must satisfy
three tests. It must be substantial; it must not be out-
weighed by any countervailing benefits to consumers
or competition that the practice produces; and it must
be an injury that consumers themselves could not rea-
sonably have avoided.’’ (Internal quotation marks omit-
ted.) McLaughlin Ford, Inc. v. Ford Motor Co., 192
Conn. 558, 569–70, 473 A.2d 1185 (1984).
The plaintiff alleges that the injury it suffered as a
result of the defendants’ conduct was the loss of an
expected order of approximately 25,000 plates. We
agree with the trial court that this loss was substantial
for the plaintiff, at a price of $67.27 per plate. There
are no facts to suggest that the cost savings for the
defendants in purchasing from VTM Concepts in any
way passed through to the consumer so as to establish
a countervailing benefit that outweighs the injury. We
agree with the trial court, however, that this injury was
one that the plaintiff reasonably could have avoided
by the simple expedient of obtaining a confidentiality
agreement or some other stopgap measure to protect
its product design until the patent it had applied for was
issued. This is especially true considering that Doctor’s
Associates had the plaintiff sign a nondisclosure
agreement at the outset of their business relationship,
at which point the plaintiff could have requested such
an agreement to protect their design in return. Instead,
by proceeding without such protection for its work
product, the plaintiff freely allowed the defendants to
take its design to a competitor that might in turn refine
it or simply manufacture it, with or without refinements,
more cheaply. Because this result reasonably could
have been avoided, the plaintiff fails to meet the third
requirement of the third prong of the cigarette rule.
In conclusion, because the plaintiff’s claims fail to
meet any prong of the cigarette rule, we agree with the
trial court’s conclusion that there is no genuine issue
of material fact that the defendants committed no unfair
acts or practices in violation of CUTPA.
II
The plaintiff next claims that the court improperly
concluded that there was no genuine issue of material
fact as to whether the defendants’ conduct constituted
a deceptive act or practice under CUTPA. We disagree.
An act or practice is deceptive if three requirements
are met. ‘‘First, there must be a representation, omis-
sion, or other practice likely to mislead consumers.
Second, the consumers must interpret the message rea-
sonably under the circumstances. Third, the misleading
representation, omission, or practice must be mate-
rial—that is, likely to affect consumer decisions or con-
duct.’’ (Internal quotation marks omitted.) Caldor, Inc.
v. Heslin, 215 Conn. 590, 597, 577 A.2d 1009 (1990),
cert. denied, 498 U.S. 1088, 111 S. Ct. 966, 112 L. Ed.
2d 1053 (1991). ‘‘[A] party need not prove an intent to
deceive to prevail under CUTPA.’’ Cheshire Mortgage
Service, Inc. v. Montes, 223 Conn. 80, 106, 612 A.2d
1130 (1992).
Here, the plaintiff alleges that the defendants misrep-
resented to the plaintiff that it would receive a contract
for a large order of heating plates. As discussed in part
I of this opinion, however, there is no evidence of any
misrepresentation, omission, or practice likely to mis-
lead the plaintiff to believe that it would receive such
a contract. The parties negotiated the details of a poten-
tial order for a prolonged period of time, but there is
no evidence that the defendants made any misrepresen-
tations during that period. To the extent that the plain-
tiff is arguing that the defendants should have informed
it explicitly that they were soliciting bids from others
and that one potential bidder had been given its design
upon which to formulate its own bid, such omissions
do not amount to a CUTPA violation because the defen-
dants were under no duty to so inform it.
‘‘[Our Supreme Court has] held that [a] failure to
disclose can be deceptive only if, in light of all the
circumstances, there is a duty to disclose.’’ (Internal
quotation marks omitted.) Glazer v. Dress Barn, Inc.,
supra, 274 Conn. 84. ‘‘Regarding the duty to disclose,
the general rule is that . . . silence . . . cannot give
rise to an action . . . to set aside the transaction as
fraudulent. Certainly this is true as to all facts which are
open to discovery upon reasonable inquiry.’’ (Internal
quotation marks omitted.) Id. ‘‘A duty to disclose may
be imposed by statute or regulation . . . or such a duty
may arise under common law.’’ (Citation omitted.) Id.,
85. As correctly noted by the defendants Doctor’s Asso-
ciates and Franchise, the plaintiff has not identified any
basis for imposing a duty upon them to disclose the
details of the bidding process, and we have found no
authority establishing such a duty under these circum-
stances. Therefore, the defendants did not commit a
deceptive act or practice by that omission. For these
reasons, we conclude that the defendants were also
entitled to summary judgment on the plaintiff’s claims
that they committed deceptive acts or practices in viola-
tion of CUTPA.
III
The plaintiff’s final claim is that the court erred in
concluding that there was no genuine issue of material
fact as to whether the defendants were unjustly
enriched to the plaintiff’s detriment by the defendants’
alleged conduct. Specifically, it argues that the defen-
dants were unjustly enriched by retaining the benefit
of the research and development efforts that the plain-
tiff put into the design of the new heating plate.
‘‘A right of recovery under the doctrine of unjust
enrichment is essentially equitable, its basis being that
in a given situation it is contrary to equity and good
conscience for one to retain a benefit which has come
to him at the expense of another. . . . With no other
test than what, under a given set of circumstances, is
just or unjust, equitable or inequitable, conscionable or
unconscionable, it becomes necessary in any case
where the benefit of the doctrine is claimed, to examine
the circumstances and the conduct of the parties and
apply this standard. . . . Unjust enrichment is, consis-
tent with the principles of equity, a broad and flexible
remedy. . . . Plaintiffs seeking recovery for unjust
enrichment must prove (1) that the defendants were
benefited, (2) that the defendants unjustly did not pay
the plaintiffs for the benefits, and (3) that the failure
of payment was to the plaintiffs’ detriment.’’ (Internal
quotation marks omitted.) New Hartford v. Connecticut
Resources Recovery Authority, 291 Conn. 433, 451–52,
970 A.2d 592 (2009).
Although the defendants benefited from the time and
effort it took the plaintiff to design the custom heating
plate prototype, there is no evidence that they did not
compensate the plaintiff fully for that benefit. To the
contrary, there is evidence that the defendants paid the
plaintiff several times, each time they purchased one
or more plates for product and market testing. The
plaintiff could have charged the defendants higher
prices when it sold the defendants those plates for the
labor and time it had spent developing the designs for
them. The fact that it elected not to do so and that the
design of the new plate was not protected does not
convert the time it spent perfecting that design into an
unpaid for benefit for which compensation is due to
it in equity from the defendants. Because there is no
evidence that the defendants failed to pay the plaintiff
for any benefit they received, we conclude that the
court did not err in rendering summary judgment for the
defendants on the plaintiff’s unjust enrichment claim.
The judgment is affirmed.
In this opinion the other judges concurred.