Filed: Apr. 24, 2014
Latest Update: Apr. 24, 2014
Summary: REPORT AND RECOMMENDATION REGARDING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION (Docket #18) DAVID H. HENNESSY, Magistrate Judge. Plaintiff's Motion for Preliminary Injunction (Docket #18) has been referred to this Court for a report and recommendation. See 28 U.S.C. 636(b)(1)(B) and Referral Order (Docket #30). For the reasons indicated below, I recommend that the motion for preliminary injunction be DENIED without prejudice. I. BACKGROUND Plaintiff Comark Communications, LLC ("C
Summary: REPORT AND RECOMMENDATION REGARDING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION (Docket #18) DAVID H. HENNESSY, Magistrate Judge. Plaintiff's Motion for Preliminary Injunction (Docket #18) has been referred to this Court for a report and recommendation. See 28 U.S.C. 636(b)(1)(B) and Referral Order (Docket #30). For the reasons indicated below, I recommend that the motion for preliminary injunction be DENIED without prejudice. I. BACKGROUND Plaintiff Comark Communications, LLC ("Co..
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REPORT AND RECOMMENDATION REGARDING PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION (Docket #18)
DAVID H. HENNESSY, Magistrate Judge.
Plaintiff's Motion for Preliminary Injunction (Docket #18) has been referred to this Court for a report and recommendation. See 28 U.S.C. § 636(b)(1)(B) and Referral Order (Docket #30). For the reasons indicated below, I recommend that the motion for preliminary injunction be DENIED without prejudice.
I. BACKGROUND
Plaintiff Comark Communications, LLC ("Comark") has sued its former at-will employees, Perry Priestly ("Priestly") and Edward Karam ("Karam") and their current employer, Anywave, LLC and Anywave Communication Technologies, Inc. ("Anywave"), alleging misappropriation of trade secrets, tortious interference with advantageous relations, breach of the duty of loyalty, breach of the covenant of good faith and fair dealing, breach of contract, violations of Mass. Gen. Laws Ch. 93A, §§ 2, 11, and negligent misrepresentation. Comark sought to enjoin Defendants from using or disclosing Comark's trade secrets and confidential information, soliciting or attempting to solicit Comark's current, former and potential customers, and providing any competitive services to any of Comark's customers, as well as to prohibit Defendants from transferring or conveying any of Defendants' assets. (Dockets #18, 21). Defendants opposed the motion, filing their own affidavits and exhibits in support. (Dockets #23-#26). This Court scheduled a hearing on the preliminary injunction, and in recognition of a lack of specificity in Comark's injunction papers, it ordered Comark to provide details regarding the confidential information and/or trade secrets that were the basis for the proposed injunction. (Docket #32). Comark responded with a filing that narrowed its request for injunctive relief to cover only one area of confidential/trade secret information: Comark's ACT! database.1 (Docket #34). According to Comark, "ACT! is a customer relationship management software application which is used to keep track of client and prospect details in a single database." (Id.). As proof that its database has been misappropriated, Comark merely asserted in its memorandum that it "is certain" that Priestly retained a copy of the ACT! database. (Id.). At the preliminary injunction hearing on April 14, 2014, the Court focused its inquiry on the database, and at the end of the hearing, ordered each of the Defendants to (1) search their property (electronic and hard copy) to confirm they did not retain any property of Comark, including the ACT! database; and (2) file an affidavit with the Court affirming under oath they do not have any such property in their possession, custody or control.2 (Dockets # 35, 36). On April 23, 2013, the Defendants filed their affidavits, and each of them affirmed under oath that they do not possess any property of Comark, including the ACT! database. (Dockets #38-1, 38-2, 38-3). Based on this record, the Court must determine whether urgent circumstances exist such that an injunction would be appropriate.
II. DISCUSSION
The burden of establishing a factual basis to justify a preliminary injunction lies with Comark, the party seeking the injunction. Nieves-Marquez v. Puerto Rico, 353 F.3d 108, 120 (1st Cir. 2003). Under Fed. R. Civ. P. 65, Comark must demonstrate "(1) a substantial likelihood of success on the merits, (2) a significant risk of irreparable harm if the injunction is withheld, (3) a favorable balance of hardships, and (4) a fit (or lack of friction) between the injunction and the public interest." Id. (citation omitted). The Court is free to accept as true "well-pleaded allegations [in the] complaint and uncontroverted affidavits." Rohm & Haas Elec. Materials, LLC v. Elec. Circuits Supplies, Inc., 759 F.Supp.2d 110, 114, n.2 (D. Mass. 2010) (quoting Elrod v. Burns, 427 U.S. 347, 350, n.1 (1976)). A full evidentiary hearing in open court is not required to resolve a request for an injunction. Aoude v. Mobil Oil Corp., 862 F.2d 890, 893 (1st Cir. 1988).
Comark fails at the first prong: likelihood of success on its misappropriation of trade secrets claim. To succeed under this claim, a plaintiff must show (1) the existence of a trade secret; (2) that the plaintiff took reasonable steps to protect the secret; and (3) that the defendant acquired and used, by improper means or through breach of a confidential relationship, the trade secret. Blake v. Prof'l Coin Grading Serv., 898 F.Supp.2d 365, 393 (D. Mass. 2012). At this stage, Comark has not shown that Defendants acquired and used any of Comark's trade secrets. Defendants have filed affidavits under oath that they do not possess Comark's property, including its confidential ACT! software. If Comark uncovers new facts to suggest otherwise, then Comark may request injunctive relief on that basis. Based on the current record, Comark has failed to demonstrate a likelihood that it will be injured if a preliminary injunction does not issue. See EchoMail, Inc. v. American Exp. Co., 378 F.Supp.2d 1, 4 (D. Mass. 2005).
IV. CONCLUSION
For the reasons stated above, I RECOMMEND that the Motion for Preliminary Injunction (Document #18) be DENIED without prejudice.3