Bowe Bell & Howell Co. v. Harris , 145 F. App'x 401 ( 2005 )

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-2539
BOWE BELL & HOWELL COMPANY,
Plaintiff - Appellee,
versus
ALBERT M. HARRIS; MICHAEL BROOKS; NIELS
ANDERSEN; JEFFREY LEUTNER; RICHARD A. NESTOR;
DAVID MEEHLING; DOCUMENT SERVICES,
INCORPORATED, d/b/a Trans-Print Software
Service, d/b/a Trans-Print Services,
Defendants - Appellants.
Appeal from the United States District Court for the District of
Maryland, at Baltimore. Richard D. Bennett, District Judge. (CA-
04-3418-RDB)
Argued: May 25, 2005 Decided: July 15, 2005
Before WILKINS, Chief Judge, and TRAXLER and KING, Circuit Judges.
Affirmed by unpublished per curiam opinion.
ARGUED: Timothy Guy Smith, Silver Spring, Maryland, for Appellants.
Douglas Glenn Edelschick, MCDERMOTT, WILL & EMERY, L.L.P.,
Washington, D.C., for Appellee. ON BRIEF: Melise Blakeslee, Sarah
E. Hancur, MCDERMOTT, WILL & EMERY, L.L.P., Washington, D.C.; Scott
H. Phillips, SEMMES, BOWEN & SEMMES, Baltimore, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
2
PER CURIAM:
Plaintiff Bowe Bell + Howell Company (BBH) brought an action
against Defendants, Document Services, Inc. d/b/a Trans-Print
Services (TPS) and several individuals associated therewith,
alleging federal copyright and trademark infringement and related
state law claims. BBH moved for a preliminary injunction to enjoin
Defendants from conducting any business related to a software
package called TransFormer. The district court granted BBH’s
motion and Defendants appeal from this order. We affirm.
I.
In 1997, BBH purchased the assets of The Harris Group for
$5,000,000. The Harris Group’s primary asset included TransFormer
and its intellectual property rights--such as the software’s
copyrights, trademarks, and exclusive right to license--and its
related trade secrets and software “know-how,” which included the
provision of software maintenance to TransFormer users. The
individual Defendants were all employees or shareholders of The
Harris Group. In fact, Defendants Albert Harris and Michael Brooks
originally developed TransFormer.
After BBH’s purchase, the individual Defendants continued to
work in some capacity for BBH. To protect TransFormer’s
intellectual property rights and trade secrets, BBH required its
employees and customers to agree to keep confidential all
3
proprietary information related to TransFormer. Employees signed
either a nondisclosure or a noncompetition agreement, or both.
Customers purchasing the product agreed to certain licensing terms,
which prohibited sharing the product with others without BBH’s
prior written consent.
Over time, the individual Defendants voluntarily resigned or
were terminated from their employment at BBH. Before Defendant
Brooks left BBH, however, he sent Defendant Harris, who had already
left the company, BBH’s 267-page customer list containing hundreds
of customer names, contact information, and service histories.
This list was saved on a password protected BBH server which was
securely stored in BBH’s Baltimore office and accessible only by
BBH employees.
After leaving BBH, Defendant Brooks incorporated TPS, and the
other individual Defendants associated themselves with TPS in some
capacity. TPS advertised itself in a press announcement as having
been formed by “the original developer and owner of The Harris
Group’s . . . software” and as “an alternative vendor for users of
the TransFormer . . . perform[ing] software maintenance and
provid[ing] programmer coding services.” J.A. 41. In all, the
announcement made eleven references to the registered trademark,
“TransFormer,” and also mentioned The Harris Group and BBH several
times.
4
After a two-day hearing, the district court issued a written
order granting BBH’s motion for a preliminary injunction and
enjoining Defendants from conducting any business relating to
TransFormer. In reaching its decision, the district court applied
the four-factor test relevant to determining whether injunctive
relief is appropriate in a given case. The district court examined
(1) the likelihood of irreparable harm to the plaintiff if
injunctive relief were denied; (2) the likelihood of harm to the
defendant if relief were granted; (3) the likelihood of success on
the merits; and (4) the public interest. See Blackwelder Furniture
Co. v. Seilig Mfg. Co., 550 F.2d 189, 195-97 (4th Cir. 1977).
In considering these factors, the district court found the
irreparable harm to BBH in denying the injunction substantially
greater than the harm to Defendants in granting the injunction.
The district court concluded that the balance of hardships plainly
favored BBH in large part because the evidence demonstrated a
likelihood of success on the merits as to several of BBH’s claims
for misappropriation of trade secrets, trademark and copyright
infringement, and breach of noncompetition and nondisclosure
agreements. Many of these violations, the district court noted,
could not be compensated by money damages alone. In contrast, the
district court determined that the harm to Defendants was
relatively small because TPS’s business was still evolving and
involved working with other software products aside from
5
TransFormer. The district court further pointed out that the
individual Defendants, who are well-educated, can work with other
types of computer software too.
Particularly with respect to BBH’s likelihood of success on
the merits, the district court determined that in “cop[ying] the
TransFormer source code from the licensee” onto the TPS computer
and using TransFormer to service customers, J.A. 1452, TPS likely
violated the TransFormer License Agreement. Further, in using the
registered trademark, “TransFormer,” eleven times in its press
announcement, TPS’s advertising was likely to cause, and continue
to cause, confusion in the marketplace. While employed by BBH,
moreover, Defendant Brooks’ transmission of BBH’s customer list to
Defendant Harris, who was no longer employed with BBH, likely
misappropriated a BBH trade secret. Finally, the district court
found that many of the individual Defendants’ association with TPS
likely violated either their noncompetition or nondisclosure
agreements with BBH.
The district court also determined that the public interest
favored granting the injunction. The district court reasoned that
the public has an interest in enforcing restrictive covenants that
protect business interests, and that the public has an interest in
preventing the misleading and deceptive use of trademarks or the
infringement of copyrights.
6
After having thoroughly analyzed the evidence presented by the
parties with respect to each factor, the district court concluded
that all the relevant factors weighed in favor of granting BBH’s
motion for preliminary injunction and, accordingly, issued an order
to that effect.
II.
“We review the grant or denial of a preliminary injunction for
abuse of discretion, recognizing that ‘preliminary injunctions are
extraordinary remedies involving the exercise of very far-reaching
power to be granted only sparingly and in limited circumstances.’”
MicroStrategy, Inc. v. Motorola, Inc., 245 F.3d 335, 339 (4th Cir.
2001) (quoting Direx Israel, Ltd. v. Breakthrough Med. Corp., 952
F.2d 802, 816 (4th Cir. 1991)). “We review factual determinations
under a clearly erroneous standard and legal conclusions de novo.”
Safety-Kleen, Inc. (Pinewood) v. Wyche, 274 F.3d 846, 859 (4th Cir.
2001).
After careful consideration of the parties’ positions, both as
presented in their briefs and at oral argument, we find nothing in
the record to suggest that the district court abused its discretion
in granting BBH’s motion for preliminary injunction. Defendants
have failed to demonstrate that any fact found by the district
court is clearly erroneous or that any conclusion of law drawn from
7
those facts is in error. Accordingly, we affirm based on the well-
reasoned opinion of the district court.
AFFIRMED
8