David Lilenfeld Blog The intellectual property blog of David Lilenfeld

17Jan/160

B&B Hardware Trademark Case Gives TTAB a Boost

B&B Hardware Inc. v. Hargis Industries Inc. come from the District Court for the Eastern District of Arkansas and then the Eight Circuit Court of Appeals. Justice Alito wrote the opinion for the Supreme Court of the United States.

B&B Hardware (“B&B”) sells a fastener for the aerospace industry, called SEALTIGHT, which was federally registered in 1993. The opposing party, Hargis Industries (“Hargis”) sells self-drilling screws under the mark SEALTITE in the construction industry. B&B took action.

 

The Trademark Trial and Appeal Board (“TTAB”) found a likelihood of confusion between the trademarks. On appeal, the district court chose not to give deference to the TTAB ruling because TTAB is not an Article III court, which helped Hargis prevail at in the district court.

The U.S. Court of Appeals for the Eighth Circuit agreed that the district court was not required to give deference to TTAB’s decision.

The question presented to the Supreme Court was whether a finding of a likelihood of confusion by the Trademark Trial and Appeal Board preclude re-litigation in federal court?

In a 7-2 decision, the Supreme Court held that re-litigation is frequently precluded and, on appeal, deference should ordinarily be given to TTAB’s ruling. The Court reasoned that when parties have had adequate opportunity to litigate an issue and an administrative agency properly resolves the issue, re-litigation is precluded unless Congress has indicated otherwise. The Court next determined that nothing in federal trademark law prohibited issue preclusion. The Court also held that TTAB’s ruling satisfied the ordinary elements for claim preclusion: (1) likelihood-of-confusion standards for registration and infringement are the same; (2) no reason to doubt the quality, extensiveness, or fairness of the agency’s procedures, and (3) parties are likely to treat both contested registration and infringement seriously.

So, convincing TTAB you are right, could be a great first step. “Filing an opposition or cancelation proceeding with TTAB is typically quicker and less expensive than filing a district court lawsuit,” said David Lilenfeld of Lilenfeld PC, an intellectual property attorney in Atlanta, Georgia. “Now that preclusive effect is confirmed, trademark owners have another compelling reason to file with TTAB.”

16Jan/160

David Lilenfeld — “Legal Elite” Honor

David Lilenfeld, founding partner of Lilenfeld PC, was named Georgia Trend’s 2012 Legal Elite in Intellectual Property law.  "Legal Elite" are  based on votes cast by thousands of Georgia attorneys.

16Jan/160

Presumption of Irreparable Harm Disappears – discussion led by David Lilenfeld

In its 2006 decision eBay Inc. v. MercExchange, L.L.C. (547 U.S. 388), the United States rejected a long-standing general rule in patent infringement cases.  That general rule had trial courts favoring granting permanent injunctions (i.e., orders requiring a party to refrain from certain activities) against alleged patent infringers.  This favor developed because irreparable harm -- a requirement in most other types of cases in which a permanent injunction is sought -- was presumed to exist in if the court (or jury) found patent infringement.  The new rule, according to this case, has trial courts applying the traditional, four-factor permanent injunction used in most case to patent infringement cases. In other words, irreparable harm is no longer presumed; rather, it has to be proven.

David Lilenfeld, founder of Lilenfeld PC, moderated a panel discussion in which the participants discussed how the MercExchange case has changed the way permanent injunctions are sought and the frequency with which they are granted.  The panel also features Ronald T. Coleman Jr., of Parker Hudson Rainer & Dobbs; Ann G. Fort, of Sutherland; and Frank G. Smith III, of Alston & Bird.

16Jan/160

Interview About Trademark and Copyright Rights, David M. Lilenfeld

Here Diane Bogino of Georgia Business Network Directory interviews Atlanta-based intellectual property lawyer David Lilenfeld, founder of Lilenfeld PC.

25Apr/120

Why Big Companies are Hiring Small Law Firms – David M. Lilenfeld, Lilenfeld PC

More and more, legal departments are moving their work from large, big-name law firms to small, boutique firms like Lilenfeld PC.  While the recession prompted much of this movement, I am now observing that this is a lasting practice for efficiency-minded in-house counsel.

Boutique law firms such as ours are flourishing because clients are turning to different law firms for different tasks.  This practice allows legal departments to match specific tasks to the right lawyers. For example, a new client came to us recently specifically because most of the litigation we handle involves trademark infringement claims.

Legal departments are recognizing the benefits of splitting work between firms with different focuses and using small, boutique firms that offer the right fit for each individual matter.  In-house attorneys also acknowledge that the work produced by small firms is as good as (or better than) what they receive from large, big-name law firms.  Small firms like ours also have far fewer conflicts, can make decisions regarding representation in hours instead of days and are equipped to provide personalized service.

Technology has also made small firms more competitive with large ones.  Software, for example, speeds up document production and review, while, cloud computing makes sharing documents, invoices and case developments fast and efficient.

Lilenfeld PC focuses entirely on intellectual property, and its highest hourly billing rate is $325, a rate 40 to 50 percent lower than that of large-firm counterparts.  Our clients receive the same level of expertise as clients of large firms but at a lower price.  Since we have less overhead, we have lower rates, which helps our clients manage budgets and increases the volume of business we receive.

Consider talking with us about your intellectual property needs.

15Aug/110

If meaning is clear despite typo, patent claim still enforceable

Fed Cir.’s reverses  N.D.Ga. grant of summary judgment to defendant in patent infringement case, ruling the trial court had authority to correct an obvious drafting error in a claim.  Here is the opinion.

21Feb/110

Some of the Finer Points of Federal Civil Procedure from Judge Batten

Judge Timothy C. Batten’s (N.D.Ga.) 23-page “Instructions to Parties and Counsel" is an excellent manual on finer points of federal civil procedure. Good read for all fed court litigators.

 

 

Some of these principles are in play in the below trademark infringement lawsuit," said David Lilenfeld, founder of Lilenfeld PC, an Atlanta-based intellectual property law firm.

 

Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 1 of 11  Page ID #:9378

 

 

 

 

 

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8                                     UNITED STATES DISTRICT COURT

 

9                                   CENTRAL DISTRICT OF CALIFORNIA
 

JS-6

 

 

10     Atlantic Inertial Systems Inc,

 

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Plaintiff,

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vs.

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14     Condor Pacific Industries of

California, Inc. et al,

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Defendants.

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)   Case No. 2:08-cv-02947-JHN-PJW

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)   ORDER RE PLAINTIFF’S MOTION

)   FOR FINAL ADJUDICATION OF

)   COUNTS III AND VI AND AWARD

)   OF ROYALTY AND PERMANENT

)   INJUNCTION [306]

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)   Judge: Honorable Jacqueline H. Nguyen

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Before the Court is Plaintiff Atlantic Inertial Systems, Inc.’s (“Plaintiff”)

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Motion for Final Adjudication of Counts III and VI and Award of Reasonable

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Royalty and Permanent Injunction. (Docket No. 306.) The Court has considered

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the Motion, Opposition, and Reply briefs, and oral arguments at the hearing on

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May 2, 2011. For the reasons discussed below, the motion is DENIED.

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I. FACTUAL BACKGROUND1

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This action stems from purported trademark infringement and

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misappropriation of trade secrets. Defendant Sidney I. Meltzner (“Meltzner”)

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27             1   For context, the Court only summarizes the relevant facts culled from the

28   record, including the Court’s June 30, 2010 Order (hereinafter, “June 30, 2010

Order”). (Docket No. 162.) A full discussion of the facts leading to the issuance of

the order on terminating sanctions can be found in that order.

 

Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 2 of 11  Page ID #:9379

 

 

 

 

1     owned a gyroscope manufacturing company, Condor Pacific Industries, Inc.

 

2     (“Condor I”), which he founded in the 1960s. In 2002, Meltzner sold Condor I to

 

3     BAE Systems Inertial Products (“BAE”) for $57 million. This sale included all

 

4     of Condor I’s intellectual property, including Condor I’s name, designs, and

 

5     drawings. The terms of the sale also included a limited non-competition clause,

 

6     whereby Meltzner agreed not to compete with Condor I for four years. In

 

7     2007, Plaintiff acquired BAE.

 

8               Upon expiration of the non-competition clause, Meltzner formed Defendant

 

9     Condor Pacific Industries of California, Inc. (“Condor II”) and hired Condor I’s

 

10     former employees. Condor II engaged in the same business of gyroscopic

 

11     manufacturing as Meltzner’s former company, Condor I, and even operated out of

 

12     Condor I’s former facilities in Westlake Village, California.

 

13               On May 6, 2008, Plaintiff filed the instant lawsuit against Defendants

 

14     Meltzner and Condor II (collectively, “Defendants”). Plaintiff’s First Amended

 

15     Complaint (“FAC”) alleges the following causes of action: false designation of

 

16     origin (Count 1); infringement of a common law mark (Count II); common law

 

17     unfair competition (Count III); misappropriation of trade secrets relating to

 

18     pricing information (Count IV); misappropriation of trade secrets related to

 

19     drawing packages (Count V); unfair competition under state law (Count VI); and

 

20     interference with prospective economic advantage (Count VII). The gravamen of

 

21     the complaint is that Meltzner, after selling all of Condor I’s intellectual property

 

22     to BAE, created a company identical to Condor I—using the “Condor” name,

 

23     working out of the old Condor I facilities, hiring Condor I’s former employees,

 

24     and most egregiously, using the exact same gyroscopic drawings it sold to Condor

 

25     I in order to create and sell nearly identical gyroscopes in the marketplace–

 

26     thereby misappropriating Plaintiff’s trade secrets.

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 3 of 11  Page ID #:9380

 

 

 

 

1                                          II. PROCEDURAL HISTORY

 

2               On May 18, 2010, Plaintiff filed a motion for terminating sanctions on

 

3     Counts III and V. (Docket No. 144.) Plaintiff also sought monetary sanctions.

 

4     The Court found that Defendants’ discovery abuses were egregious and granted

 

5     terminating sanctions on Counts III (common law unfair competition) and V

 

6     (misappropriation of trade secrets related to drawing packages). (June 30, 2010

 

7     Order at 11-12.) The Court also awarded Plaintiff reasonable expenses incurred

 

8     as a result of the discovery abuses.

 

9               Thereafter, Plaintiff moved for entry of permanent injunction. (Docket No.

 

10     194.) The motion, based the June 30, 2010 Order, sought to permanently enjoin

 

11     Defendants from activities involving the use and misappropriation of Plaintiff’s

 

12     trade secret drawings. On December 14, 2010, the Court denied the motion

 

13     without prejudice, finding the motion premature as factual issues remain with

 

14     regard to the propriety of injunctive relief and its scope. (Docket No. 238.)

 

15               On January 10, 2010, the Court issued the Final Pretrial Conference Order

 

16     (“FPTCO”). (Docket No. 259.) Among other things, the FPTCO provided for a

 

17     jury trial on all claims, with the exception of the following: (1) Plaintiff’s

 

18     demands for injunctive relief; (2) Plaintiff’s Count VI (unfair competition under

 

19     Cal. Bus. & Prof. Code § 17200 et seq.); (3) Plaintiff’s request for exemplary

 

20     damages; and (4) the parties’ respective requests for attorneys’ fees. (FPTCO at

 

21     2:18-28.)

 

22               Between February 22, 2011 and March 3, 2011, Counts I and II (trademark

 

23     claims) and the monetary damages portion of Counts III2 and V were tried to a

 

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26             2  The parties dispute whether Count III was presented to the jury. As the Court

27   explains in IV. A, the damages portion of Count III was tried to the jury, which resulted in a finding that Plaintiff was not harmed by the misappropriation of trade

28   secrets and unfair competition.

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 4 of 11  Page ID #:9381

 

 

 

 

1     jury.3   (Leader Decl., Ex. A at 75:21-76:5; 1216:20-1217:3 (instruction to the jury

 

2     that they must determine the amount of damages, if any, Plaintiff suffered as a

 

3     result of the misappropriation and unfair competition).) The jury found that

 

4     Plaintiff had not been harmed by Defendants’ misappropriation and unfair

 

5     competition. (Docket No. 300 [Special Verdict at 12].)

 

6                                          III. THE INSTANT MOTION

 

7               Plaintiff now seeks to resuscitate the issue of its entitlement to permanent

 

8     injunction as a result of the imposition of terminating sanctions. Plaintiff also

 

9     seeks money damages. Specifically, Plaintiff asks the Court to issue an order

 

10     entering final adjudication in Plaintiff’s favor with respect to Count III and Count

 

11     VI. In the alternative, to the extent that the Court does not award damages under

 

12     Count III or restitution under Count VI, Plaintiff seeks an award of a reasonable

 

13     royalty for Defendants’ misuse of Plaintiff’s trade secret drawings pursuant to

 

14     Count V. In addition, Plaintiff seeks permanent injunction under Counts III, V,

 

15     and/or VI to restrain Defendants and their agents from engaging in any

 

16     manufacturing or marketing activity involving or derived from the intellectual

 

17     property that Meltzner sold to BAE in 2002. Alternatively, Plaintiff seeks to

 

18     permanently enjoin the manufacture, use, or marketing of any of the parts,

 

19     including use of designs, drawings, and trade secrets relating the parts at issue in

 

20     this lawsuit (i.e., identified in Attachment A to the FAC).

 

21                                                    IV. DISCUSSION

 

22     A.      Plaintiff Is Not Entitled to Damages and Prejudgment Interest

 

23               Count III has been adjudicated with respect to liability pursuant to the

 

24     Court’s June 30, 2010 Order. (FPTCO at 7.) Plaintiff now asserts that any

 

25     damages it is entitled to recover, if any, should be determined by the Court as the

 

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27             3     Plaintiff elected to discontinue, without prejudice, Counts IV and VII.

28   (FPTCO at 7:23-8:1.)

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 5 of 11  Page ID #:9382

 

 

 

 

1     issue has not been submitted to the jury. (Mot. 7.) In support of this contention,

 

2     Plaintiff cites to its Revised Memorandum of Contentions of Fact and Law

 

3     (“RMCFL”), where Plaintiff asserted that damages in the common law unfair

 

4     competition cause of action must be tried to the Court. (Docket No. 240 at 18:27-

 

5     28 [RMCFL].) On the other hand, Defendants argue that the issue of whether

 

6     Plaintiff is entitled to damages for Count III has been tried to the jury, and

 

7     Plaintiff lost as a result of the jury’s finding that Plaintiff was not harmed.

 

8     (Opp’n 6; see also, Special Verdict at 12.)

 

9               The Court agrees with Defendants and finds that the issue of damages on

 

10     Count III has already been tried to the jury. As the parties stipulated in the

 

11     FPTCO, which was submitted subsequent to Plaintiff’s RMCFL, certain claims

 

12     and/or reliefs were not intended to be submitted to the jury. (FPTCO at 2, n.2.)

 

13     Count III was not in the enumerated exceptions. (Id.) If Plaintiff believed that

 

14     the damages aspect of Count III is a matter that should be tried to the Court,

 

15     Plaintiff should asked the Court to include this claim in the enumerated

 

16     exceptions. Plaintiff cannot now make an about-face and assert that the damages

 

17     under Count III should be adjudicated by the Court.

 

18               Furthermore, in the FPTCO, the parties specifically agreed that “at the trial,

 

19     Plaintiff [would] . . . offer evidence with respect it its claimed damages” under

 

20     Counts III and V. (FPTCO at 7:17-22.) Indeed, consistent with the FPTCO, on

 

21     the first day of trial, the Court instructed the jury as follows: “The court has

 

22     already determined that defendants misappropriated certain of AIS’ trade secret

 

23     drawings and used those drawings to unfairly compete. The court, however, has

 

24     not made any determination regarding the amount of damages, if any, to be

 

25     awarded to the plaintiff as a result. During this trial, it will be up to you to

 

26     determine the amount of damages, if any, plaintiff suffered as a result of

 

27     defendants’ misappropriation of plaintiff’s trade secrets and unfair

 

28     competition.” (Leader Decl., Ex. A at 75:21-76:5 (emphasis added).) On the last

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 6 of 11  Page ID #:9383

 

 

 

 

1     day of trial, the Court repeated this instruction. (Id. at 1216:20-1217:3.) Plaintiff

 

2     never raised any objection to these instructions.

 

3               Thus, the Court finds that the issue of damages in Count III has been

 

4     submitted to the jury, and the Court will not disturb the jury’s finding that

 

5     Plaintiff has not been harmed. The jury verdict was supported by sufficient

 

6     evidence. In view of the jury’s finding, the Court finds that Plaintiff is not

 

7     entitled to damages and prejudgment interest. Coupons, Inc. v. Stottlemire, 588 F.

 

8     Supp. 2d 1069, 1075 (N.D. Cal. 2008) (“Common law unfair competition has

 

9     four elements: (1) a substantial investment of ‘time, skill or money in developing

 

10     its property’; (2) appropriation and use of the property by another company at

 

11     little or no cost; (3) the appropriation and use of the ‘property was without the

 

12     authorization or consent’; and (4) injury by the appropriation and use by the other

 

13     company.” (Emphasis added)).

 

14     B.      Plaintiff Is Not Entitled to Restitution

 

15               In the FPTCO, the parties stipulated that Count VI, the statutory unfair

 

16     competition claim, was to be tried by the Court. (FPTCO at 2:18-28.) Plaintiff

 

17     now asks the Court to order Defendants to surrender all profits they earned as a

 

18     result of its unfair business practice. Kraus v. Trinity Management Services, Inc.,

 

19     23 Cal. 4th 116, 127 (2000).

 

20               “Unfair competition” means “unlawful, unfair or fraudulent business act or

 

21     practice.” Cal. Bus. & Prof. Code § 17200. Here, Plaintiff claims that it is

 

22     entitled to restitution because Defendants’ misappropriation of trade secrets was

 

23     “unfair”. (Mot. 9:5-8.) Previously, Plaintiff’s § 17200 claim was based on

 

24     Counts I and II (trademark claims) and Counts III and V. However, Plaintiff now

 

25     concedes that Counts I and II “are no longer at issue.” (Mot. 10, n.10.) Thus, the

 

26     only remaining predicate claims for the § 17200 cause of action are Counts III

 

27     and V. (Id.)

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 7 of 11  Page ID #:9384

 

 

 

 

1               As previously explained, while the Court has found Defendants liable in

 

2     Counts III and V, the jury determined that Plaintiff is not entitled to any damages

 

3     because it was not harmed by the misappropriation of trade secrets. (Special

 

4     Verdict at 12.) Because Count VI stands or falls depending on the fate of the

 

5     predicate claims, Plaintiff does not have a viable § 17200 claim that would

 

6     warrant restitution. Krantz v. Bt Visual Images, 89 Cal. App. 4th 164, 178 (Cal.

 

7     App. 1st Dist. 2001).

 

8               As a separate and independent basis for denying restitution, the Court finds

 

9     that Plaintiff has no standing to bring a § 17200 claim. A non-representative §

 

10     17200 claim may be brought only “by a person who has suffered injury in fact

 

11     and has lost money or property as a result of the unfair competition.” Cal. Bus. &

 

12     Prof. Code § 17204. Because the jury has found that Plaintiff has suffered no

 

13     harm in connection with Defendants’ misappropriation of trade secrets, Plaintiff

 

14     cannot claim that it has suffered “injury in fact” for purposes of § 17204.

 

15               For these reasons, the Court concludes that Plaintiff is not entitled to

 

16     restitution.

 

17     C.      Plaintiff Is Not Entitled to Reasonable Royalty

 

18               Plaintiff seeks a royalty of $1.5 million based on Defendants’ sales of the

 

19     intellectual property at issue. (Mot. 12-13.) Plaintiff claims that to the extent that

 

20     Plaintiff is not entitled to reasonable royalty under Counts III or VI, Plaintiff may

 

21     still recover royalty via Count V based on the misappropriation of trade secrets

 

22     related to drawing packages. The California Uniform Trade Secrets Act

 

23     (“CUTSA”) provides that: “If neither damages nor unjust enrichment caused by

 

24     misappropriation are provable, the court may order payment of a reasonable

 

25     royalty for no longer than the period of time the use could have been prohibited.”

 

26     Cal. Civ. Code § 3426.3.

 

27               To prevail in a CUTSA claim, a plaintiff must establish harm. See

 

28     CytoDyn of New Mexico, Inc. v. Amerimmune Pharmaceuticals, Inc., 160 Cal.

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 8 of 11  Page ID #:9385

 

 

 

 

1     App. 4th 288, 297 (Cal. App. 2d Dist. 2008) (“Under the UTSA, a prima facie

 

2     claim for misappropriation of trade secrets requires the plaintiff to demonstrate:

 

3     (1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or

 

4     used the plaintiff’s trade secret through improper means, and (3) the defendant’s

 

5     actions damaged the plaintiff.”) (internal quotations omitted) (emphasis added);

 

6     see also, Sargent Fletcher, Inc. v. Able Corp., 110 Cal. App. 4th 1658, 1665 (Cal.

 

7     App. 2d Dist. 2003) (same). Here, while the terminating sanctions established the

 

8     first two elements, the jury found that Defendants’ actions have not harmed

 

9     Plaintiff. Therefore, the third element is not met and as a result AIS is not entitled

 

10     to any form of relief under CUTSA.4

 

11     D.      Plaintiff Is Not Entitled to Permanent Injunction

 

12               Plaintiff asks the Court to permanently enjoin Defendants’ misuse of

 

13     Plaintiff’s intellectual property for the following reasons. First, the Court found

 

14     misappropriation and Defendants continue to infringe the intellectual property at

 

15     issue. (See generally, June 30, 2010 Order; Mot. 13-14.) Second, both common

 

16     law and statutory unfair competition claims, Counts III and V, respectively,

 

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4  AIS argues that harm to plaintiff is not an element of a CUTSA claim. (Mot.

19   14.) In support of this argument, Plaintiff cites to Dealertrack, Inc. v. Huber, 460 F.

20   Supp. 2d 1177, 1183 (C.D. Cal. 2006), which states that “[t]o state a claim for misappropriation of trade secrets under [CUTSA], Plaintiff must plead two primary

21   elements: (1) the existence of a trade secret, and (2) misappropriation of the trade

22   secret.” Dealertrack, which is non-binding on this Court, did not cite any California case for this proposition. Plaintiff also cites to Diodes, Inc. v. Franzen, 260 Cal. App.

23   2d 244, 250 (Cal. App. 2d Dist. 1968) in support of its argument that a showing of

24   harm is not a required element of a CUTSA claim. However, Diodes is inapposite as it was decided before the enactment of CUTSA in 1984. Lastly, Plaintiff also cites to

25   Oculus Innovative Sciences, Inc. v. Nofil Corp., 2007 WL 4044867, *6 (N.D. Cal.

26   Nov. 15, 2007). The Court declines to follow Oculus as it merely relies on Diodes and

27   Dealertrack.  Moreover, the question of whether harm was required to establish a claim under CUTSA was not squarely before the court in either Dealertrack or

28   Oculus.

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 9 of 11  Page ID #:9386

 

 

 

 

1     constitute separate and independent grounds upon which Plaintiff can obtain an

 

2     injunction. Third, Plaintiff satisfies the equitable four-factor test for granting a

 

3     permanent injunction— “ (1) that it has suffered an irreparable injury; (2) that

 

4     remedies available at law, such as monetary damages, are inadequate to

 

5     compensate for that injury; (3) that, considering the balance of hardships between

 

6     the plaintiff and defendant, a remedy in equity is warranted; and (4) that the

 

7     public interest would not be disserved by a permanent injunction.” eBay, Inc. v.

 

8     MercExchange, LLC 547 U.S. 388, 391 (2006).

 

9               1.       Irreparable Injury

 

10               The following question was presented to the jury: “Was plaintiff harmed by

 

11     defendant’s misappropriation of plaintiff’s drawings and associated technical

 

12     performance data, and was defendants’ misappropriation a substantial factor in

 

13     causing harm, if any, to plaintiff?” (Special Verdict at 12.) The jury answered,

 

14     “No.” (Id.) In retrospect, the question posed to the jury could have been clearer.

 

15     By answering “no,” the jury could have found that Plaintiff was not harmed at all

 

16     as Defendant argues. Alternatively, the jury could have determined that Plaintiff

 

17     was harmed to some degree, but Defendants’ misappropriation was not a

 

18     substantial factor in causing that harm. For example, Plaintiff lost a contract but

 

19     the jury could have determined that the loss was due primarily to factors other

 

20     than Defendants’ misappropriation. In any event, since the jury made a factual

 

21     determination that Plaintiff was not harmed, or alternatively, that any harm

 

22     suffered was not substantially due to Defendants’ conduct, Plaintiff cannot meet

 

23     its burden of establishing that it has suffered an “irreparable injury” for which

 

24     Defendants are responsible.

 

25               2.       Inadequate Remedies at Law

 

26               As stated above, based on the jury’s findings, Plaintiff is not entitled to any

 

27     remedies, legal or equitable.

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 10 of 11  Page ID

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1               3.       Balance of Hardships

 

2               Plaintiff submits that it has suffered and will continue to suffer hardship

 

3     until Defendants’ misappropriation ceases. Plaintiff further argues that a

 

4     permanent injunction will not prejudice Defendants as they will merely be

 

5     precluded from misappropriating Plaintiff’s trade secrets. (Mot. 18-19.)

 

6               The Court finds that the balance of hardship tips in Defendants’ favor. The

 

7     jury has found that Plaintiff has not been harmed. On the other hand, Defendants

 

8     operate a business that will be decimated if a permanent injunction is granted.

 

9     Moreover, the breadth of Plaintiff’s requested injunctive relief, which would in

 

10     effect prevent Meltzner and his individual employees from using any prior know-

 

11     how concerning the manufacture of the gyroscopes at issue, is unjustified. The

 

12     duration of the non-compete clause was four years. (See Trial Ex. 86.) Plaintiff

 

13     would have the requested injunction do what the noncompetition agreement itself

 

14     could not do– permanently prevent Meltzner from competing. For these reasons,

 

15     the Court finds that the balance of hardships tips in favor of denying the requested

 

16     injunctive relief.

 

17               4.       Interest of the Public

 

18               An injunction precluding Condor II, the only company willing and able to

 

19     supply the military with the gyros and parts at issue (with perhaps only a few

 

20     limited exceptions) would be harmful to the public interest. In his deposition,

 

21     Lieutenant Jacob English testified that Plaintiff has stopped producing the subject

 

22     12000 series gyro and refused to bid on them in response to numerous

 

23     government requests. (See Leader Decl., Ex. B at 38:4-25, 81-83.) Thus, the

 

24     U.S. Military has no other source for those parts aside from Condor II. As such,

 

25     an injunction precluding the only supplier of the gyros and parts at issue would be

 

26     harmful to the public interest. (Leader Decl., Ex. 81:21-24, 82:10-12, 83:12-15.)

 

27     This factor, therefore, weighs against granting a permanent injunction. See

 

28     Geo-Seis Helicopters, Inc. v. United States, 77 Fed. Cl. 633, 650 (Fed. Cl. 2007)

 

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Case 2:08-cv-02947-CAS-PJW  Document 345  Filed 08/25/11  Page 11 of 11  Page ID

#:9388

 

 

 

1     (observing that courts give due regard to the interests of national defense and

 

2     national security in analyzing whether a permanent injunction is warranted).

 

3               Having weighed all the factors, the Court concludes that permanent

 

4     injunction is not warranted.

 

5                                                   V. CONCLUSION

 

6               Having duly considered the matter, Plaintiff’s motion is DENIED in its

 

7     entirety. Defendants shall lodge a proposed judgment within 10 days from the

 

8     date of this Order.

 

9               IT IS SO ORDERED.

 

10

 

11     Dated: August 25, 2011

 

12                                                               Honorable Jacqueline H. Nguyen

UNITED STATES DISTRICT COURT

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14Jan/110

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