The Second Circuit this week overturned a preliminary injunction that barred a maker of subway train braking equipment, Wabtec, from selling its product. The court agreed with the district court that Wabtec misused the trade secrets of the plaintiff, Faiveley Transport, and would likely continue. But the district court hadn't found that the Wabtec's improper use of the trade secrets would cause Faiveley Transport "irreparable harm".
The evidence on the contrary showed that Wabtec had every incentive to keep the trade secrets hush-hush, rendering damage from permanent loss of secrecy improbable. Nor would possible loss of sales by Faiveley Transport to misappropriator Wabtec count as irreparable injury, the court concluded. "Where a misappropriator seeks only to use those secrets — without further dissemination or irreparable impairment of value — in pursuit of profit, no such presumption [of irreparable harm] is warranted because an award of damages will often provide a complete remedy for such an injury." Faiveley Transport Malmo AB v. Wabtec Corp., No. 08-5126-cv (2d Cir. Mar. 9, 2009).
Blawgletter notes that the availability of a damages award won't always — or even most of the time — preclude a finding of irreparable harm in trade secrets cases. Faiveley Transport involved sales to just one customer — the New York City Transit Authority, which of course operates the Big Apple's subway system. Wabtec's profits and Faiveley Transport's losses from the misappropriation presented a reasonably knowable proposition. In other cases, with sales to many customers, the job becomes much harder; and the difficulty of determining damages in itself may warrant a finding of irreparable injury.
