EDWARD J. DAVILA, District Judge.
Before the court is a motion filed by Plaintiff, SolarBridge Technologies. Plaintiff moves the Court for entry of default judgment and permanent injunction against Defendant, Isaac Ozkaynak. Defendant has not submitted opposition to the motion, and the time for such opposition has expired.
Having reviewed Plaintiff's Complaint, Brief and the supporting declarations, the Court finds this matter appropriate for decision without oral argument.
Plaintiff filed this suit on August 24, 2010, originally naming John Doe d/b/a "Mark Tatley." On August 27, 2010, the Court granted Plaintiff's motion to conduct third-party discovery in order to determine the true identity of the Doe defendant. On December 17, 2010, Plaintiff filed an Amended Complaint (`Complaint') naming Isaac Ozkaynak as the defendant in these proceedings.
Pursuant to the Hague Convention on Service Abroad, an agent of the Ministry of Justice of Turkey effected service resulting in Defendant being personally served at his place of residence, in Turkey, on April 25, 2011. Defendant did not file an answer or otherwise respond to the Complaint. On November 14, 2011 the Clerk of the Court entered default against Defendant. Motion for Default Judgment was filed by Plaintiff and a hearing was scheduled for April 20, 2012.
Ten days before the hearing for default judgment, the Ninth Circuit in
The Court now turns to the factual allegations upon which the Motion for Default Judgment and Permanent Injunction is based.
Plaintiff develops solutions that reduce the levelized costs in solar panel installations.
As part of its regular course of business, Plaintiff hires employees as well as consultants and other third parties. During the course of the relationship with Plaintiff, its employees and consultants may be privy to Plaintiff's confidential and trade secret information that is not available to the public.
Plaintiff limits access to confidential information and trade secrets through use of passwords on its computers, secured access to its facilities and other security measures that limit and control access to Plaintiff's confidential information and trade secrets.
Plaintiff does not freely share its confidential material or trade secrets with any entity or person outside of the company. Plaintiff requires all of its employees and consultants to sign agreements that include confidentiality and non-disclosure provisions that acknowledge its employees and consultants will receive confidential information during their employment. Confidentiality provisions define Plaintiff's proprietary and confidential material broadly, and prohibit its employees and consultants from disclosing such material to anyone outside of the company without Plaintiff's consent or otherwise misappropriating the company's information. These agreements, signed by Plaintiff's employees, establish a contractual duty to the company not to disclose, use or retain confidential information without Plaintiff's authorization.
Defendant was an employee of Plaintiff, in the position of a senior engineer, until employment was terminated on February 5, 2010.
During his employment, Defendant had access to Plaintiff's trade secrets and confidential information.
Defendant accessed Plaintiff's protected computers that stored confidential material and trade secrets of SolarBridge.
Defendant owns the email address tattel_49@yahoo.com associated with the alias "Mark Tatley."
Plaintiff's brief asserts that Defendant's conduct has caused it to incur losses, including attorney's fees and costs necessary to prosecute this action and to investigate and mitigate the injury caused by Defendant's conduct.
Default judgment is a two-step process under the Federal Rules of Civil Procedure. First, and pursuant Rule 55(a), when a "party against whom a judgment for relief is sought has failed to defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Second, once the clerk has entered the party's default, the party seeking default judgment must apply under Fed. R. Civ. P. 55(b)(2) to the court for default judgment.
Here, and given that Clerk of the Court has entered default against Defendant on November 14, 2011 Plaintiff now seeks entry of a default judgment and permanent injunction.
Courts have an affirmative duty to examine their own jurisdiction — both subject matter and personal.
Plaintiff relies on the federal CFFA claim for the purposes of jurisdiction. While the CFAA claim is not pursued in the Motion for Default Judgment, the claim still provides jurisdiction as the allegation remains pled in Plaintiff's Complaint. The action also arises from Defendant's breaching of California laws, which this Court has supplemental jurisdiction pursuant to 28 U.S.C. § 1367.
Personal jurisdiction arises when a substantial part of the events or omissions, giving rise to the claims pled, occurred in the jurisdiction.
Additionally, the court must also assess whether Defendant was properly served with notice of this action.
The grant of default judgment is determined at the court's discretion.
When assessing these factors, all factual allegations in the complaint are taken as true, except those with regard to damages.
The first factor cuts in favor of Plaintiff because without remedy it will be left without any means to prevent Defendant from continued trade secret violations. Defendant would be permitted to continue the alleged conduct with impunity and cause injury to Plaintiff.
The Plaintiff's motion is predicated on several claims; all of which provide basis for the grant of default judgment.
To establish a prima facie case for trade secret misappropriation, a plaintiff must demonstrate: (1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or used the plaintiff's trade secret through improper means, and (3) the defendant's actions damaged the plaintiff's business.
With respect to the first element, a trade secret is defined as "a formula, pattern, compilation, program, device, method, technique, or process, that: (1) derives independent economic value . . . from not being generally known to the public; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."
Here, Plaintiff claims that Defendant obtained topology diagrams for Plaintiff's converter products that included, amongst other things, equations, diagrams and schematics associated with Plaintiff's prototypes.
As established in Van Dell's declaration and the Complaint, measures were taken to prevent public access to these documents and, as such, they held economic value as trade secrets for the purposes of the UTSA.
With respect the second element, Plaintiff must show that Defendant acquired, disclosed, or used its trade secrets through improper means.
Plaintiff asserts — and the alleged facts support — that Defendant disclosed the abovementioned trade secrets in contravention of non-disclosure provisions of Plaintiff's employment agreements.
Finally, and with respect to the third element, Defendant's misappropriation of Plaintiff's trade secrets has caused damage to its reputation and diluted the value of its trade secrets. Defendant's misappropriation of Plaintiff's trade secrets was willful and malicious, entitling Plaintiff to an award of reasonable attorney's fees and costs.
Plaintiff also asserts that Defendant has violated California's Bus. & Prof Code § 17200. This claim covers a wide range of conduct and embraces "anything that can properly be called a business practice and that, at the same time, is forbidden by law."
Section 17200 defines unfair competition as "(1) any unlawful, unfair or fraudulent business act or practice; (2) unfair, deceptive, or misleading advertising or (3) any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code." Importantly, misappropriation of trade secrets in violation of UTSA constitutes unfair competition.
Here, similarly, Defendant has engaged in unfair competition as prescribed by Section 17200. Defendant did so when he obtained confidential information from Plaintiff and disclosed trade secrets to competitors. Through Defendant's actions, he has undermined Plaintiff and caused damage to its business.
Defendant's actions thus constitute unfair competition under California's Business and Professions Code §17200.
Under the common law, a former employer has a right to enjoin acts of unfair competition by an ex-employee in divulging or using trade secrets.
For reasons that substantially follow from the claims above, Defendant also falls afoul of the common law action for unfair competition. Specifically, Plaintiff has developed trade secret material and expended time and money developing same.
Turning to the next factor, nothing in the Complaint suggests that Plaintiff has not pled factual allegations consistent with the appropriate standard held in
Under this factor, the Court looks to the sum of money at stake between the parties. A large sum of money tends to cut against the grant of default judgment.
In this case, the sum of the money at stake is relatively small. Plaintiff seeks $56,989.98 in attorney fees and costs of $9,573.35. These amounts are far less than the amount sought in
In light of the recent
Nonetheless, with respect to the claims that remain for default judgment, the factual context is straightforward: Defendant was an employee of the Plaintiff with access to the same materials that were sent to SolarBridge's competitor from the email address "tattel_49@yahoo.com." It was revealed from account records, provided by Yahoo during the discovery, that this Yahoo account was Defendant's personal email account. Tellingly, and in telephone exchanges with Defendant, these facts were not denied.
Defendant has failed to appear before this Court in any way during the course of these proceedings. Even when communicated to via telephone with Plaintiff's counsel, there has been nothing to suggest that there has been technical error or excusable neglect on Defendant's behalf.
Although federal policy generally disfavors the entry of a default judgment, all of the other
In sum, because the
Plaintiff seeks a permanent injunction against Defendant from further violations of California Civil Code §§ 3426 et seq and Business & Profession Code § 17200. As addressed earlier, section 17203 allows a plaintiff to obtain injunctive relief or other equitable relief for any person who engages in unfair competition. Here, Plaintiff has sufficiently pled facts with respect to the underlying claims. Those pleadings establish that irreparable harm will result from further unauthorized disclosures by Defendant. Accordingly, Plaintiff's request for permanent injunction is granted.
Plaintiff seeks to recover $56,989.98 in attorney fees and litigation costs of $9,573.35. As asserted in Plaintiff's brief, both attorney fees and costs are authorized under California Civil Code § 3426.4.
Based on the foregoing reasons, Plaintiff's motion for default judgment, request for attorney's fees/costs, and permanent injunction is granted based on the fact that Defendant has engaged in, and is likely to engage in, acts or practices that violate (1) California's Uniform Trade Secrets Act (Cal. Civ. Code § 3426); (2) the law of unfair competition (Cal. Bus. & Prof. Code § 17200); and (3) the common law of trade secret misappropriation and unfair competition.
Since this order represents a final resolution of all the issues in this case, judgment will be entered in favor of the Plaintiff and the Clerk will close this file, accordingly.
1. Plaintiff, SolarBridge's Motion for Default Judgment is granted.
2. Defendant, Isaac Ozkaynak is in default.
3. Plaintiff is awarded judgment against Defendant. It is hereby ordered and adjudged that Plaintiff has and shall recover from Defendant the sum of $56,989.98 in attorney's fees, together with costs in the sum of $9,573.35, for a total judgment of $66,563.33.
4. Pursuant to Federal Rule of Civil Procedure 65(d), Defendant, his agents, assignees, and successors-in-interest, and those in active concert or participation with him are permanently enjoined from:
a. directly or indirectly using, for any purpose, any physical or electronic items or documents belonging to Plaintiff, including all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property, or copies or reproductions of any aforementioned items or documents, and any information contained, reflected, found or derived from the foregoing (the foregoing is referred to as "Plaintiff Materials and Information");
b. directly or indirectly disclosing, for any purpose, any Plaintiff Materials and Information to any third party, including but not limited to any current, future, actual or potential competitor to Plaintiff;
c. directly or indirectly accessing, for any purpose, any SolarBridge Materials and Information, including not limited through any physical or electronic means;
d. directly or indirectly selling, offering for sale, conveying, transferring, developing, designing, manufacturing or otherwise commercializing or profiting from any SolarBridge Materials and Information;
e. directly or indirectly using, disclosing or accessing any information, including any SolarBridge Materials and Information, in any manner inconsistent with or in breach of the September 9, 2009 Confidential Information and Invention Assignment Agreement between Ozkaynak and SolarBridge;
f. directly or indirectly using, disclosing or accessing any information, including any SolarBridge Materials and Information, in any manner inconsistent with or in breach of the February 5, 2010 Termination Certification between Ozkaynak and SolarBridge;
g. directly or indirectly using, disclosing or accessing any information in any manner that violates any intellectual property rights of Plaintiff, violates any state or federal law governing use, disclosure or access of any SolarBridge Materials or Information, or otherwise violates any right or privilege of Plaintiff.
5. Defendant shall return and transfer to SolarBridge all SolarBridge Materials and Information.
6. Defendant take all steps to ensure that no SolarBridge Materials and Information remain in his possession, custody or control and Defendant shall take all steps to confirm the return to Plaintiff of all SolarBridge Materials and Information. Ozkaynak shall certify in writing to Plaintiff that all such steps have been taken and that all SolarBridge Materials and Information have been returned and transferred to Plaintiff.
7. This Court shall retain jurisdiction over any and all issues arising from or related to the enforcement of this Permanent Injunction, the implementation of this Order or the interpretation of this Order.
8. Defendant shall provide a copy of this Permanent Injunction to each employee, agent, contractor or affiliate acting on Defendant's behalf and any third party, who has or may have actually or potentially had access to, used or disclosed SolarBridge Materials and Information.