MAPEI CORPORATION and SOUTHEASTERN PRINTING COMPANY, INC. v. J.M. FIELD MARKETING, INC. ( 2020 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
MAPEI CORPORATION, a foreign corporation, and SOUTHEASTERN
PRINTING COMPANY, INC., a Florida corporation,
Appellants,
v.
J.M. FIELD MARKETING, INC, a Florida corporation,
Appellee.
No. 4D19-2380
[May 13, 2020]
Appeal and cross-appeal of nonfinal order from the Circuit Court for
the Seventeenth Judicial Circuit, Broward County; Martin J. Bidwill,
Judge; L.T. Case No. CACE17-013715.
James H. Wyman of Hinshaw & Culbertson LLP, Coral Gables, and
David H. Levitt of Hinshaw & Culbertson, LLP, Chicago Illinois, for
appellants.
Gary S. Phillips and Jeffrey B. Shalek of Phillips, Cantor & Shalek, P.A.,
Hollywood, for appellee.
MAY, J.
Mapei Corporation (“Mapei”) and Southeastern Printing Company, Inc.
(“SPCI”), appeal a temporary injunction in favor of J.M. Field Marketing,
Inc. (“JM”). JM cross-appeals and argues the circuit court erred in failing
to extend the injunction to Mapei’s and SPCI’s continued use of its trade
secret. We affirm the temporary injunction on direct appeal. We agree
with JM on the cross-appeal and remand the case for the court to enjoin
Mapei’s and SPCI’s continuing use of JM’s trade secret.
Mapei is a global chemical construction product company. Its
marketing department uses a fulfillment program to support its sales force
in its different business units. JM is a full-service fulfillment and
marketing firm. It developed a proprietary web-based inventory
management software program called All In View (“AIV”), which it used in
its service for Mapei.
Only JM’s employees and clients with passwords can access AIV. It
controls each user’s specific and limited permissions and areas of access.
Before it will demonstrate the full system, a potential client must sign a
confidentiality agreement. When potential clients become actual clients,
they must sign another confidentiality agreement.
AIV provides budget management, real time inventory tracking,
reporting, and full-service customer care options. To track usage and
protect the confidential nature of its program, JM maintains logs of each
user’s entry into the system, tracking the pages on the website the user
visits, the activities performed, and the time spent on a page.
JM created a personalized website for Mapei, using its AIV software,
which Mapei used from 2009 to 2017. In October 2012, JM and Mapei
executed a Services Agreement that contained the following confidentiality
provision:
(b) Integrated Collateral Management System. Customer
agrees to maintain in confidence all information related to the
JM [] WBIM1 system. Customer agrees to pursue the same
security measures as it uses to protect its own confidential
technical information, provided that such measures shall be
at least commercially reasonable for such purpose. Customer
further agrees not to disclose such information to anyone
other than those of its employees, and such contractors as JM
[] may approve, under non-disclosure obligations, who have a
need to know such information.
In the summer of 2016, Mapei became dissatisfied with JM’s services
and decided to use SPCI instead for its fulfillment services. SPCI licensed
its software from a company named Propago, whose software program
called “Argosy” was available for purchase on the open market. Mapei
provided SPCI information to permit Argosy to be customized to meet
Mapei’s business needs. Mapei provided notice of termination of the JM
contract on May 2, 2017.
According to JM, Mapei scraped and gathered information from the AIV
software system and provided it to SPCI to mimic AIV and obtain the same
services at a lower price. JM alleged that Mapei made unusual email
requests for information beyond its entitlement during this time and
logged into its password-protected website to demonstrate the appearance
of the site to SPCI for its modifications. It contends SPCI knew it was using
confidential proprietary information, and that Mapei and SPCI intended to
or were using the misappropriated information for their own benefit and
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to benefit JM’s competitors.
JM sued Mapei and SPCI alleging counts for: (1) account stated for
services rendered; (2) breach of contract; (3) breach of the confidentiality
provision; (4) violation of section 688.004, Florida Statutes (2017); and (5)
temporary and permanent injunctive relief for violation of section 688.003,
Florida Statutes (2017).
JM also filed an emergency motion for temporary injunction seeking to
enjoin Mapei and SPCI from using confidential trade secret information to
their benefit in any manner that would damage JM, including the use of
trade secrets to benefit Mapei or any other SPCI clients. The circuit court
held a four-day evidentiary hearing on the emergency motion.
The essence of JM’s case was that Mapei demonstrated AIV to SPCI and
provided confidential and protected links and login information along with
detailed reports in violation of its confidentiality agreement and trade
secret law. The circuit court granted JM’s motion for temporary injunction
in part and denied it in part. The court ruled that AIV constitutes a trade
secret by statutory definition under sections 688.002(4)(a) and (b), Florida
Statutes (2017). It also found that Mapei and SPCI misappropriated JM’s
trade secret.
More specifically, the court found:
[A]n employee of Mapei provided links, passwords, login
information and reports to SPCI. Further, the employee
provided this information without ever informing JM [] or
seeking permission from JM []. Mapei had contractually
agreed not to disclose this information, or provide access to
this information, without first obtaining the permission of JM
[]. Specifically, the agreement provided: “Customer agrees to
maintain in confidence all information related to the JM []
WBIM system.” Contrary to this agreement, Mapei
unilaterally, secretly, and systematically shared information
related to [AIV] with SPIC.
SPCI knew or should have known that the information was
protected from disclosure because they needed the employee’s
user name and password to access the system. Additionally,
SPCI likewise requires confidentiality agreements before its
own clients may access its computer systems.
Mapei and SPCI improperly shared protected information.
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Mapei breached its duty to maintain the confidentiality of the
entire [AIV] computer system. SPCI knew or should have
known that it was using a password to gain access to a
competitor’s program. SPCI knew that it was observing the
functionality of a password protected website and knew or
reasonably should have known that the information provided
by Mapei, including the information on Mapei’s personalized
website, was confidential proprietary information. Further,
SPCI shared this confidential information with Propago.
Based on these findings, the circuit court found that JM met its burden
of proof for entry of a temporary injunction against Mapei and SPCI
pertaining to any further disclosure of the proprietary or confidential
information of JM. It demonstrated a substantial likelihood of success on
the merits and irreparable harm. The court also found that it was in the
public’s interest to protect JM’s trade secrets. However, the court declined
to grant the “broad” injunctive relief JM sought, including enjoining SPCI
from performing further acts relating to the shipping and fulfillment of
materials for Mapei. It explained,
First, the [c]ourt finds that, unlike the evidence clearly
demonstrating disclosure, [JM’s] proof as to the improper use
of the [its] proprietary information does not rise to the high
level needed to allow temporary injunctive relief. Further, the
[c]ourt is not convinced that [JM] lacks an adequate remedy
at law or that the continuation of the Mapei/SPCI relationship
as it currently exists will result in irreparable harm to the
plaintiff. . . . Moreover, if this [c]ourt were to order the
requested relief, such an order rather plainly would run afoul
of the binding Fourth District precedent that forbids
temporary injunctive relief that goes beyond merely preserving
the status quo. The status quo includes a business
relationship between Mapei and SPCI. Enjoining SPCI from
performing any further acts relating to the shipping and
fulfillment of marketing materials for Mapei would
disassemble the status quo, not preserve it. The [c]ourt
declines to enter such a broad injunction.
The circuit court enjoined Mapei and SPCI from “disclosing or causing
to disclose any proprietary or confidential information of [JM] and/or
aiding, abetting, encouraging or inducing any other parties to disclose any
proprietary or confidential information of JM [].” The court did not address
JM’s request to temporarily enjoin the continuing use of its trade secrets
by Mapei and SPCI. It denied the request to enjoin SPCI from further acts
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relating to the shipping and fulfillment of marketing materials for Mapei.
Mapei and SPCI now appeal.
An order granting or denying temporary injunctive relief is reviewed for
abuse of discretion as to its factual findings. Telemundo Media, LLC v.
Mintz, 194 So. 3d 434, 435 (Fla. 3d DCA 2016). Review is de novo for the
court’s legal conclusions. Picture it Sold Photography, LLC v. Bunkelman,
287 So. 3d 699, 702 (Fla. 4th DCA 2020).
To be entitled to a temporary injunction, the movant must show the
following elements: (1) irreparable harm; (2) lack of an adequate remedy
at law; (3) a substantial likelihood of success on the merits; and (4) that
temporary injunctive relief will serve the public interest. Donoho v. Allen-
Rosner, 254 So. 3d 472, 474 (Fla. 4th DCA 2018).
JM sought a temporary injunction based on misappropriation of trade
secrets under the Florida Uniform Trade Secrets Act (“FUTSA”). A plaintiff
alleging misappropriation must prove: (1) that it possessed a trade secret
and took reasonable steps to protect its secrecy; and (2) the trade secret
was misappropriated, either by one who knew or had reason to know the
trade secret was improperly obtained or who used improper means to
obtain it. § 688.002(2), Fla. Stat. Del Monte Fresh Produce Co. v. Dole Food
Co., 136 F. Supp. 2d 1271, 1291 (S.D. Fla. 2001).
Mapei and SPCI first argue that JM did not establish that AIV
constituted a trade secret. The FUTSA defines the term:
4) “Trade secret” means information, including a formula,
pattern, compilation, program, device, method, technique, or
process that:
(a) Derives independent economic value, actual or potential,
from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy.
§ 688.002(4), Florida Statutes.
Mapei and SPCI argue that JM was too vague and inclusive in asserting
a trade secret status to its entire AIV without identifying precisely which
trade secrets existed in its website, apart from the ordinary information
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found on product-ordering websites such as login screens, product
description screens, carts and other items. They cited several federal
cases, primarily relying on IDX Systems Corp. v. Epic Systems Corp., 285
F.3d 581, 583 (7th Cir. 2002).
There, a provider of medical business management software sued a
competitor and former customer, claiming misappropriation of its trade
secrets and tortious interference with contract. The federal district court
entered summary judgment for the defendants. On appeal, the Seventh
Circuit concluded that the plaintiff failed to prove trade secret
misappropriation because it effectively claimed that “all information in or
about its software is a trade secret.” Id. That claim was overbroad and
did not satisfy the statutory definition of trade secrets.
JM responds that IDX is easily distinguished. Here, JM introduced into
evidence a 51-page screen capture of a significant reproduction of its
system, which demonstrated and explained AIV’s proprietary functions
and layout, unique abilities capable of being performed on the back end of
the system, user permissions to view pages and products, order materials,
etc. Each order and piece of paper can be traced back to a single inventory,
and pending orders can be modified to reduce product prior to arrival.
These features are unique and not well-known or available in the market.
Altogether, this makes AIV a protected trade secret. See RESTATEMENT
(THIRD) OF UNFAIR COMPETITION § 39, cmt. f (AM. LAW. INST. 2019) (“The fact
that some or all of the components of the trade secret are well-known does
not preclude protection for a secret combination, compilation, or
integration of the individual elements.”).
JM relies on Penalty Kick Mgmt. v. Coca Cola Co., 318 F.3d 1284 (11th
Cir. 2003). There, the court stated that “even if all of the information is
publicly available, a unique combination of that information, which adds
value to the information, also may qualify as a trade secret.” Id. at 1291
(citing Capital Asset Research Corp. v. Finnegan, 160 F.3d 683, 686 (11th
Cir. 1998)). JM’s principal testified that AIV “allows for detailed processes
to be completed in a simplified fashion. . . . I think one of the biggest
part[s] of it is the design behind. It’s not essentially as simple as the code,
but how the pieces are put together.”
Competent substantial evidence supported the circuit court’s finding
that AIV constituted a system protected by trade secret laws.
Mapei and SPCI next argue the court relied on disclosed information
that did not constitute a trade secret because it did not consist of
“information that derives economic value from not being readily
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ascertainable by others.” Liberty Am. Ins. Grp., Inc. v. Westpoint
Underwriters, L.L.C., 199 F. Supp. 2d 1271, 1287 (M.D. Fla. 2001) (citing
§ 688.002(4), Fla. Stat.). The five Excel spreadsheets presented by JM
contained Mapei’s data. They also point to testimony that it was “silly” to
conclude that the layout of the spreadsheets as printouts or in AIV
constituted confidential information or trade secrets.
JM responds that more than mere spreadsheets and Mapei data
supported its trade secrets claim. The five detailed spreadsheets contained
back end reports inaccessible to all users. They were made available only
to specified users. While Mapei may have owned the data input into AIV,
how that data was compiled and manipulated constituted JM’s trade
secret.
JM compares its case to QSRSoft, Inc. v. Restaurant Tech., Inc., No. 06-
C-2736, 2006 WL 2990432 (N.D. Ill. Oct. 19, 2006). There, the federal
district court found that QSRSoft was likely to succeed in establishing
trade secrets protecting its DotComm System not known to competitors in
the industry. Id. at *6. Although McDonald’s franchisees owned the data
stored on QSRSoft’s computers, “how QSRSoft compiles and manipulates
the data” was not known in the industry. Id. And, it took reasonable
measures to protect its trade secrets from the general public and
competitors by password protecting its website, using licensing
agreements, and employing other practices. Id. Here, JM instituted
password protections and included a confidentiality provision in its
agreement with Mapei.
Mapei and SPCI argue that JM did not prove misappropriation and the
circuit court’s finding was based on an improper stacking of inferences.
They concede however that direct evidence of misappropriation is difficult
to prove in trade secret cases and can be based on circumstantial evidence.
Stratienko v. Cordis Corp., 429 F.3d 592, 600–01 (6th Cir. 2005). JM
responds that Mapei sent detailed reports that could only have been
generated by JM or from its back end of AIV to Argosy, which then sent an
entry link, username, and password to the SPCI account manager. That
link was widely shared throughout SPCI without JM’s permission.
The circuit court found that Mapei had contractually agreed not to
disclose information or provide access to AIV without first obtaining JM’s
permission. Despite this obligation, Mapei and SPCI shared protected
information. It found that SPCI knew or should have known that it was
using a password to gain access to AIV and that it was confidential
proprietary information. SPCI then shared that information with Propago.
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The circuit court properly inferred through circumstantial evidence that
the entry link was not provided solely to capture images, and that SPCI
went beyond data accessible through the front end of AIV. The evidence
supports the court’s inference that SPCI, with the knowledge and consent
of Mapei, placed that information and functionality into the hands of
Propago. There was no improper stacking of inferences.
Mapei and SPCI’s final argument is that the circuit court erred in
finding that their misappropriation of JM’s trade secrets would cause
irreparable harm. They recognize that “[t]he presumption of irreparable
injury, and thus the enjoinability of the [defendant’s] conduct, attaches
only after the [plaintiff] has proved the use of specific trade secrets.” Lovell
Farms, Inc. v. Levy, 641 So. 2d 103, 105 (Fla. 3d DCA 1994). They argue
the presumption was improper because there was no evidence that they
sought to do more than simply use the trade secrets, rather than
disseminate them further.
JM responds that the element of irreparable harm was properly
presumed on the evidence of trade secrets and misappropriation by Mapei
and SPCI. The AIV was not available to the general public and was shown
to contain sensitive information protected by trade secrets. If shared with
competitors, it could give them a competitive advantage. And, the evidence
showed that Mapei disseminated the trade secrets to SPCI, and SPCI sent
the trade secret information to the Propago web designer, a direct
competitor of JM.
JM cites our decision in Hatfield v. AutoNation, Inc., 939 So. 2d 155
(Fla. 4th DCA 2006), where AutoNation sought an injunction to protect its
internal procedures and operating figures contained within the materials
stolen by its general manager Hatfield. Id. at 158. “The fact that
AutoNation could only speculate on the magnitude of the ramifications of
disclosure of its secrets lends support to the irreparable nature of harm.”
Id. at 157. As in Hatfield, the circuit court here did not err in presuming
irreparable harm.
Cross-Appeal
JM argues on cross-appeal that the circuit court erred in failing to
extend its temporary injunction to prevent Mapei and SPCI from using its
trade secrets for their own benefit. The court enjoined them only from
“disclosing or causing to disclose, any proprietary or confidential
information of JM [], or from aiding and abetting, encouraging, or inducing
any party to disclose proprietary or confidential information of JM [].”
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The circuit court decided that a broader injunction would prevent
Mapei and SPCI from continuing their existing relationship and would go
beyond the status quo intended for temporary injunctive relief. See
Bautista REO U.S., LLC v. ARR Invs., Inc., 229 So. 3d 362, 365 (Fla. 4th
DCA 2017). The court found the broader injunction was unwarranted
because JM failed to demonstrate the high level of proof needed to enjoin
business activities between SPCI and Mapei or that their continued
relationship resulted in irreparable harm to JM. This was error. To allow
Mapei and SPCI to continue their use of unauthorized property would
defeat the purpose of the temporary injunction and cause JM to suffer
irreparable harm.
Annex Industrial Park, LLC v. Corner Land, LLC, 206 So. 3d 739 (Fla. 3d
DCA 2016) supports JM’s position. There, the Third District affirmed a
temporary injunction that prohibited a heavy-equipment storage business
from using a portion of a neighboring property owner’s property for
vehicular access. The court held the temporary injunction properly
protected the property owner’s rights by enjoining an ongoing trespass,
even if the injunction has the effect of disrupting the status quo. Id. at
741.
Here, JM demonstrated entitlement to a temporary injunction against
ongoing and continued use of its trade secrets by Mapei and SPCI. This
would not necessarily disturb their business relationship or exceed the
limits of temporary injunction law. The court erred in refusing to
temporarily enjoin the continued use of JM’s trade secrets by these two
entities.
Affirm temporary injunction; Reverse and remand on cross-appeal for
entry of an amended order that temporarily enjoins Mapei and SPCI from
continuing use of the trade secrets in AIV.
LEVINE, C.J., and FORST, J., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
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