On May 16th, 2017, Patterson + Sheridan litigation attorneys Jayme Partridge (Houston) and Keith Taboada (Shrewsbury) succeeded in getting a federal judge to grant a preliminary injunction in an intellectual property lawsuit. Historically, federal courts have rarely granted preliminary injunctions and such a ruling is very difficult to obtain.

The Case: Systems Spray-Cooled v. FCH Tech, William Chris Henry and Michael J. Campbell

At issue was low-pressure, spray-cooling equipment supplied to the steel industry by Systems Spray-Cooled. Two of Systems’ employees left Systems, set up FCH Tech and began competing with Systems by providing bids to Systems’ customers for low-pressure, spray-cooling equipment, using information and knowledge obtained while they were working for Systems.

Systems sued Defendants Henry and Campbell for breach of employment agreements and for taking and possessing Systems’ trade secrets and confidential information in violation of the Defense of Trade Secrets Act, the Arkansas Trade Secrets Act, and the Computer Fraud and Abuse Act. In addition, Systems sued Defendants for tortious interference with business expectancy, breach of fiduciary duty, and unjust enrichment.

Systems filed a Motion for Preliminary Injunction against Defendants based on breach of contract and violation of the Arkansas trade secret act. The Court held a full evidentiary hearing on the PI issues. Systems asked the Court to enjoin Defendants, as well as anyone acting in concert with Defendants, from further misappropriation, disclosure and use of Systems’ trade secrets and confidential information until a final determination on the merits of the pending litigation has been made. In addition, Systems requested that the Court enjoin Defendants from directly or indirectly designing or supplying low pressure spray-cooling equipment for the steel industry.

The Court found that Defendants misappropriated Systems’ trade secrets and breached their employment agreements. As a result, the Court granted the PI, enjoining Defendants from using or disclosing those items found to be trade secrets in the Court’s Memorandum Opinion and from designing and supplying low pressure, spray-cooling equipment for the steel industry using those items found to be trade secrets.