Innosys v. Mercer

This opinion is subject to revision before final
publication in the Pacific Reporter.
2015 UT 80
IN THE
SUPREME COURT OF THE STATE OF UTAH
———————
INNOSYS, INC.,
Appellant,
v.
AMANDA MERCER,
Appellee.
———————
No. 20110261
Filed August 28, 2015
———————
Third District, West Jordan Dep‘t
The Honorable Robert Adkins
No. 090421501
———————
Attorneys:
Daniel L. Day, Sandy, Erik A. Olson, Salt Lake City, for appellant
Kathleen M. McConkie, Michelle R. O‘Neil, Bountiful,
Sara Pfrommer, Park City, for appellee
———————
ASSOCIATE CHIEF JUSTICE LEE authored the opinion of the Court, in
which CHIEF JUSTICE DURRANT, and JUSTICE HIMONAS joined.
JUSTICE DURHAM filed a dissenting opinion, in which
JUSTICE PARRISH joined.
———————
ASSOCIATE CHIEF JUSTICE LEE, opinion of the Court:
¶1 This is an appeal from a decision granting summary judg-
ment to Amanda Mercer in a suit filed against her by InnoSys, Inc.
Mercer worked for InnoSys, a technology company focusing on
the defense industry, as an engineer. In its suit against her,
InnoSys alleged that Mercer had violated a non-disclosure agree-
ment and misappropriated company trade secrets. Mercer‘s dis-
closures and misappropriations were undisputed. During and af-
ter her employment with InnoSys, Mercer forwarded confidential
INNOSYS v. MERCER
Opinion of the Court
emails to her private Gmail account, copied a confidential busi-
ness plan to a thumb drive, and placed protected information on
the record in an administrative (unemployment) proceeding.
¶2 Despite these admitted disclosures, the district court grant-
ed summary judgment for Mercer. It did so on the basis of its de-
termination that InnoSys had failed to make an adequate showing
of harm. And in granting summary judgment, the district court
entered rule 11 sanctions against InnoSys and awarded attorney
fees to Mercer under Utah Code section 78B-5-825.
¶3 We reverse. Mercer‘s disclosures at least arguably sustain a
presumption of harm to InnoSys—a presumption that stands un-
rebutted on the summary judgment record before us on appeal.
Genuine issues of material fact regarding the risk of future disclo-
sures also preclude summary judgment on InnoSys‘s claims. We
accordingly reverse the decisions before us on appeal, including
the decision entering rule 11 sanctions and awarding attorney fees
to Mercer.
I
¶4 In January of 2008, immediately following Amanda Mer-
cer‘s graduation from the University of Utah, InnoSys hired her as
an engineer. Per its standard practice, InnoSys had Mercer sign a
non-disclosure agreement (NDA). By signing, Mercer promised
not to ―copy, transmit, reproduce, summarize, quote or make any
commercial or other use of any Protected Information, except for
the benefit of [InnoSys].‖ She also agreed, upon termination, to
―return to [InnoSys] all items and material in [Mercer‘s] posses-
sion or control which contain any Protected Information.‖ And
she acknowledged that ―it may be impossible to measure in mon-
ey the damage to [InnoSys] resulting from [a] breach [of the
NDA],‖ and thus agreed that ―in the event of any such violation
or threatened violation, [InnoSys] shall be entitled to an injunc-
tion . . . to minimize or prevent damage to [InnoSys].‖1
1 The facts as stated here are in the light most favorable to
InnoSys, the non-moving party. See, e.g., USA Power, LLC v. Pacifi-
Corp, 2010 UT 31, ¶ 65, 235 P.3d 749.
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Opinion of the Court
¶5 In time InnoSys became dissatisfied with Mercer‘s job per-
formance. It accordingly fired her. Mercer later filed a claim for
unemployment benefits with the Department of Workforce Ser-
vices. That claim was initially denied by DWS. When Mercer ap-
pealed, she submitted a number of protected documents—
protected emails and a confidential business plan—into the ad-
ministrative record.
¶6 InnoSys was displeased. At a subsequent hearing, it assert-
ed that Mercer‘s possession and disclosure of the emails and busi-
ness plan constituted a breach of the non-disclosure agreement
and threatened an ―injur[y] [to] the company.‖ In light of this con-
cern, InnoSys‘s counsel pressed Mercer for details as to when and
how she gained access to the protected material. In response,
Mercer insisted that she ―[had] permission from the IT depart-
ment‖ to forward confidential InnoSys emails to a personal Gmail
account. And, when asked why she didn‘t ―leave‖ the confidential
business plan with InnoSys at the time of her termination, Mercer
asserted that she ―didn‘t have it with [her]‖ at the time, indicating
that she left it ―[a]t home‖ because she ―was asked to review it‖
previously and had been working on it at home over the weekend
before she was fired.
¶7 The day after the hearing, Mercer—on the advice and in the
presence of her sister and then-attorney—deleted all ―emails‖ and
―files‖ containing information about InnoSys. She then sent
InnoSys a fax informing it of her actions. According to an affidavit
from InnoSys, InnoSys‘s counsel made the decision to sue Mercer
that same day and began drafting the complaint just three days
later. A little less than two weeks after receiving Mercer‘s fax,
InnoSys sent Mercer a demand letter informing her that, in
InnoSys‘s view, she had spoliated evidence and should recover
and return all protected information in her possession.
¶8 InnoSys then filed this suit. Its complaint asserted claims
for breach of contract, misappropriation of trade secrets under the
Uniform Trade Secrets Act (UTSA), and breach of fiduciary duty.
Mercer subsequently filed a motion to dismiss (later converted to
a motion for summary judgment), asserting that InnoSys‘s claims
failed in light of its failure to establish any actual or threatened
harm.
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¶9 The district court granted Mercer‘s summary judgment
motion in full. It also entered rule 11 sanctions against Innosys
and awarded Mercer attorney fees. But the path to those decisions
was a bit convoluted—involving a ―conditional‖ ruling from the
district court, a first round of limited discovery by the parties, a
first motion to reconsider, a rule 11 hearing, two more motions to
reconsider, three reassignments of the case (from the original
judge to a second judge, back to the original judge, and then to a
third judge), a second round of limited discovery, and a motion
for attorney fees. We recount the relevant details of that proce-
dural history below.
¶10 During the first round of discovery, Mercer changed her
story regarding the use of her Gmail account and the timing of her
acquisition of the confidential business plan. InnoSys‘s IT chief,
Christopher Strong, submitted a declaration in which he stated he
―did not instruct Ms. Mercer to use Gmail‖ and never ―help[ed]
her set up Gmail in any way.‖ He reiterated this point in his dep-
osition, stating that he could not recall ever having instructed
Mercer on how she could forward her emails to her Gmail ac-
count. In response to a request for admission, Mercer then admit-
ted ―Chris Strong did not give permission to transfer InnoSys e-
mail to her g-mail account,‖ and that no particular person ―gave
her ‗permission‘‖ to forward her emails. She maintained however,
that Strong ―failed to tell her not to transfer emails when she told
him her intention and he even went so far as to provide direction
as to how she could establish the connection.‖
¶11 As to the business plan, Mercer testified in her deposition
that she had received an email asking her to review the plan the
day before her termination. But she said she was unable to access
it via InnoSys‘s secure remote network. Thus, Mercer also
changed her story regarding the business plan. She admitted that
she did not have the business plan in her possession at home the
day before she was fired, but instead copied it on the day of her
termination. And when pressed on why her story had changed,
Mercer responded that she felt InnoSys was ―pressuring [her]‖ at
the earlier DWS hearing.
¶12 This discovery was followed by additional briefing and a
hearing in the district court. At the hearing, the court ―condition-
ally‖ dismissed InnoSys‘s UTSA, breach of contract, and breach of
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fiduciary duty claims. The dismissal was with prejudice, but
―condition[ed]‖ on the outcome of further forensic discovery.2 The
court also expressed its concerns that InnoSys had yet to produce
a copy of the NDA signed by Mercer.
¶13 InnoSys then proceeded with a preliminary forensic analy-
sis of Mercer‘s email accounts and her thumb drive. Its expert
concluded that Mercer‘s deletion of the ―sent‖ and ―trash‖ folders
in her Gmail account prevented anyone from determining ―what
particular emails she copied from her InnoSys account to her
Gmail accounts and when,‖ ―what InnoSys related documents or
emails were sent from this Gmail account to other email accounts
or to third parties and when,‖ and which ―sent or received items
were deleted‖ and when they were deleted. The expert also con-
cluded that at some point prior to April 21, 2010, Mercer per-
formed a data wipe on the thumb drive. According to the expert,
this deleted all data and made it ―impossible to determine from
the drive itself when the data wipe occurred.‖ Finally, the expert
concluded that someone had reformatted the thumb drive, that
this was a ―destructive act,‖ and that it had occurred either on or
prior to April 21, 2010.
¶14 The parties then returned to the district court on two mo-
tions by InnoSys—one to reconsider, and another seeking spolia-
tion sanctions against Mercer. The district court rejected the spoli-
ation claim and confirmed the dismissal of InnoSys‘s claims. First,
the district court concluded that InnoSys‘s claims all hinged on
the existence of an actual NDA signed by Mercer, which InnoSys
had not yet located and thus had not produced. And, in response
to InnoSys‘s proposal to submit a copy of a sample agreement evi-
dencing the NDA Mercer would have signed, the court suggested
that such a document would be barred by the best evidence rule,
while also noting a concern that the sample agreement may have
been ―altered.‖
2 We are aware of no basis in our civil rules for a conditional dis-
missal of this nature. But the district court styled its order in this
way, and no party raised any objection (in the district court or on
appeal). So we do not resolve the matter.
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¶15 Second, the district court also reinforced its conditional rul-
ing on the merits of InnoSys‘s claims. It held that InnoSys had
failed to produce evidence of actual or threatened harm and thus
that there was ―no genuine issue as to any material fact‖ and Mer-
cer was ―entitled to judgment as a matter of law.‖ Finally, the dis-
trict court ruled that Mercer ―neither knew nor should have
known that there was anticipated litigation at the time she deleted
the electronic information‖ at issue, and that her actions were a
―good-faith attempt to appease InnoSys.‖ On that basis, the dis-
trict court rejected InnoSys‘s claim of spoliation.
¶16 At about this same time Mercer also filed a rule 11 motion.
The district court granted the motion. It based its decision on sev-
eral factors: (1) the missing NDA, (2) InnoSys‘s alleged repeated
assurances that it actually had the NDA, (3) the alleged ―doc-
tored‖ nature of the replacement NDA, (4) InnoSys‘s alleged retal-
iatory motives for filing suit, and (5) the fact that InnoSys could
not prove actual or threatened harm.
¶17 InnoSys then filed a petition for interlocutory review. That
petition was denied. At that point the case was reassigned to a
new judge. InnoSys then filed a second motion to reconsider—a
motion it withdrew in part when the case was later returned to
the original judge. Then the case was again reassigned to yet an-
other new judge. That judge allowed forty-five days of additional
discovery. InnoSys chose not to pursue any further discovery. But
at about this time it did finally locate Mercer‘s signed NDA. And
it then filed its third motion to reconsider. Mercer then filed a mo-
tion for an award of attorney fees.
¶18 The district court again ruled against InnoSys and in favor
of Mercer. It concluded that the discovery of the NDA changed
nothing, since ―there was no objectively reasonable basis to be-
lieve that Mercer had harmed InnoSys or was threatening to do
so.‖ And it upheld the rule 11 sanctions on the ground that
InnoSys had repeatedly implied that it possessed a signed copy of
Mercer‘s NDA. As to spoliation, the district court reiterated its
earlier conclusion that Mercer had no duty to preserve documents
because she had no way of knowing of threatened litigation at the
relevant time.
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¶19 The district court also granted Mercer‘s motion for fees un-
der Utah Code section 78B-5-825 (authorizing an award of fees to
a ―prevailing party‖ if the court finds the losing claims were
―without merit‖ and not brought ―in good faith‖), awarding a
sum of $229,481.58. In so doing it cited InnoSys‘s ―hast[y]‖ deci-
sion to sue prior to locating her NDA as evidence of the ―retaliato-
ry nature of the lawsuit‖ and hence InnoSys‘s ―demonstrable‖
lack of ―good faith.‖ The court then interpreted the NDA in a
manner sustaining an award of all of Mercer‘s fees (rather than an
amount apportioned to the claims deemed frivolous under Utah
Code section 78B-5-825).
¶20 InnoSys filed this appeal. We initially heard oral argument
in May of 2013. Then, when we were unable to reach a decision
prior to the retirement of Justice Ronald E. Nehring (who sat on
the panel that heard the initial appeal), we reheard the case on
March 4, 2015. Our review of a decision on summary judgment is
de novo. Bahr v. Imus, 2011 UT 19, ¶¶ 12–18, 250 P.3d 56.
II
¶21 Some of the key facts in this case are undisputed. As a
threshold matter, it is undisputed that InnoSys eventually found
and produced the NDA signed by Mercer—a development elimi-
nating one of the grounds for the district court‘s entry of sum-
mary judgment and for sanctioning and awarding fees against
InnoSys.3 There is likewise no dispute, at least with respect to
Mercer‘s summary judgment motion, that Mercer misappropriat-
ed material belonging to InnoSys that is protected under the Uni-
3 That ground was already questionable under our evidentiary
rule allowing secondary evidence to replace best evidence when
―all the originals are lost or destroyed, and not by the proponent
acting in bad faith.‖ UTAH R. EVID. 1004. From all that appears,
there were at least genuine issues of fact as to whether InnoSys‘s
inability to find the lost NDA was a result of any sort of ―bad
faith.‖ That seems unlikely, as it was in its interest to locate and
produce the document. But we need not address that issue in de-
tail here, as InnoSys‘s discovery of the original NDA mooted the
district court‘s concerns regarding ―best evidence.‖
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form Trade Secrets Act and under the NDA. The core remaining
question on the merits of InnoSys‘s claims concerns the question
of its evidence of harm. InnoSys‘s purported failure to present
such proof formed the basis of the district court‘s decision below.
¶22 According to the district court, Mercer‘s ―use of the
InnoSys emails at the unemployment hearing . . . did no damage
to InnoSys and did not create any threatened harm.‖ The district
court raised the same concern regarding Mercer‘s use of the con-
fidential business plan and her use of a private Gmail account.
Mercer echoes these same points on this appeal. She contends that
InnoSys failed to produce ―evidence of any damages suffered as a
result of the alleged wrongdoings by Mercer.‖4
¶23 We reverse. We find sufficient evidence of threatened
harm—or at least genuine issues of material fact concerning such
harm—to defeat Mercer‘s motion. First, we conclude that InnoSys
4 The dissent seeks to distinguish InnoSys‘s ―damages claims‖
from its ―claims for injunctive relief,‖ see infra ¶ 65 and concludes
that evidence of actual economic harm was required to sustain the
former, while the latter fails absent proof of a threat of future
harm, infra ¶¶ 66–70 (economic harm), 71–73 (future harm). But
the case was neither pleaded nor argued in the manner formulat-
ed by the dissent. InnoSys never asserted separate ―claims‖ for
damages or injunctive relief. It simply pleaded claims for misap-
propriation of trade secrets and for breach of the NDA. The fact
that its prayer for relief sought both damages and an injunction
did not create two separate sets of claims, only two requested
remedies. So the lack of proof of economic harm is beside the
point on this motion before us on appeal. If InnoSys has a viable
basis for injunctive relief on its claims for misappropriation and
for breach of contract—as we conclude it does for reasons ex-
plained below—then the fact that the record as it now stands may
not sustain a damages award is beside the point.
Thus, the dissent errs in arguing for ―summary judgment as to
InnoSys‘s damages claims,‖ infra ¶ 69, as the case as pleaded and
argued does not concern ―damages claims.‖ Mercer never sought
―partial summary judgment‖ on such claims, infra ¶ 70, and we
are accordingly in no position to award it.
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has asserted a prima facie case of misappropriation of trade se-
crets under the UTSA, and hold that such a showing at least argu-
ably sustains a presumption of irreparable harm. Second, we
deem that presumption—along with affirmative evidence of
threatened harm—to also sustain a prima facie case of breach of
the NDA. Third, for these and other reasons, we reverse summary
judgment on Innosys‘s breach of fiduciary duty claim. And final-
ly, we reverse the entry of rule 11 sanctions and attorney fees
against InnoSys.
A. Misappropriation Under the UTSA
¶24 Under our Uniform Trade Secret Act, a prima facie case of
misappropriation is established on the basis of two essential ele-
ments: existence of a protectable ―trade secret‖ of a plaintiff and
demonstration of ―misappropriation‖ by a defendant. UTAH CODE
§ 13-24-2. These elements are at least arguably established under
the undisputed facts of this case.5
¶25 First, InnoSys appears to have established the existence of
protectable trade secrets in its business plan and other confiden-
tial information. It is undisputed that such materials (a) ―derive[]
independent economic value . . . from not being generally known
to, and not being readily ascertainable by proper means by, other
persons who can obtain economic value from [their] disclosure or
use,‖ and (b) are ―the subject of efforts that are reasonable under
the circumstances to maintain [their] secrecy.‖ Id. § 13-24-2(4).
5 In so concluding, we do not rule that InnoSys is entitled to
summary judgment, as it made no such motion and that question
is accordingly not before us on this appeal. But the question of
Mercer‘s right to summary judgment encompasses more than just
the issue whether there are genuine issues of material fact. In as-
sessing Mercer‘s motion, we must also decide whether she is enti-
tled to judgment as a matter of law. UTAH R. CIV. P. 56(c). We re-
solve that question, at least in part, on the basis of our determina-
tion that InnoSys has arguably made a prima facie showing of in-
fringement under the UTSA and breach of the NDA, which show-
ing sustains a presumption of irreparable harm.
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¶26 Second, misappropriation was also evident on the sum-
mary judgment record. Under the Utah statute, misappropriation
may be established upon proof of either unlawful disclosure or
unlawful acquisition. Id. § 13-24-2(2)(a), (b). The record includes
undisputed evidence of both.
¶27 It was undisputed that Mercer disclosed the InnoSys trade
secrets by forwarding them from the secure company computer
system to her unsecure Gmail account and by filing them with the
DWS. This at least arguably amounts to misappropriation by un-
lawful disclosure under Utah Code section 13-24-2(2)(b). The def-
inition of ―misappropriation‖ under this provision encompasses
―disclosure . . . of a trade secret of another without express or im-
plied consent by a person who . . . knew or had reason to know
that his knowledge of the trade secret was . . . acquired under cir-
cumstances giving rise to a duty to maintain its secrecy or limit its
use.‖ Id. § 13-24-2(2)(b). Mercer at least arguably disclosed
InnoSys‘s trade secrets to Google and to the DWS without
InnoSys‘s consent. And she did so even though she knew or
should have known that she had a duty to maintain the secrecy of
that information.
¶28 Alternatively, there was also evidence of misappropriation
by unlawful acquisition under Utah Code section 13-24-2(2)(a).
This subsection defines misappropriation as ―acquisition of a
trade secret of another by a person who knows or has reason to
know that the trade secret was acquired by improper means.‖ Id. §
13-24-2(2)(a). Mercer at least arguably violated this subsection by
copying a confidential InnoSys business plan onto a thumb drive
under suspicious circumstances on the day of her termination. Ini-
tially, Mercer claimed that her acquisition of the business plan
was legitimate and proper—that she had simply taken it home
with her to review in the ordinary course of her employment. But
she eventually recanted that assertion, admitting that she had cop-
ied it onto a thumb drive on the day she was terminated. And she
never provided any explanation for why she took the thumb drive
home (after having been fired) and never returned the infor-
mation. That is further evidence of misappropriation—at least
enough evidence to establish a genuine issue of material fact as to
Mercer‘s acquisition of the business plan by ―improper means.‖
See Id. § 13-24-2(1) (defining ―[i]mproper means‖ as ―theft, brib-
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ery, misrepresentation, breach or inducement of a breach of a du-
ty to maintain secrecy, or espionage through electronic or other
means‖).
¶29 The district court effectively acknowledged InnoSys‘s proof
of misappropriation in its disposition of Mercer‘s motion for
summary judgment. Instead of finding a lack of unlawful disclo-
sure or acquisition, the district court found that ―[a]ny and all dis-
closures regarding InnoSys made by Defendant whether verbal or
in the form of emails, specifically to Workforce Services; to the
Administrative Law Judge; and to defendant‘s attorneys were nec-
essary and appropriate in dealing with the issue of unemployment com-
pensation.‖ (emphasis added) Yet that conclusion only underscores
the strength of InnoSys‘s claim. The UTSA states no basis for a
―necessary and appropriate‖ defense to the unauthorized disclo-
sure of a trade secret. And absent such basis, we cannot conclude
that Mercer is entitled to judgment as a matter of law; InnoSys has
at least arguably established a prima facie case of misappropria-
tion.
¶30 Mercer‘s only challenge to this point on appeal is her vague
assertion that she was entitled as an InnoSys employee ―to com-
plete the work she was hired to perform,‖ and that she therefore
―never obtained a trade secret by improper means.‖ But as noted
above, misappropriation may be established under subsection
(2)(b) upon proof of unauthorized disclosure or use, without proof
of acquisition by improper means. See id. § 13-24-2(2)(b)(ii)(B) (de-
fining misappropriation as ―disclosure or use of a trade secret of
another without express or implied consent by a person who . . .
knew or had reason to know that his knowledge of the trade se-
cret was . . . acquired under circumstances giving rise to a duty to
maintain its secrecy or limit its use‖). The undisputed evidence
shows that Mercer copied protected trade secrets onto her person-
al email account and thumb drive, allowing her to take those se-
crets with her after her employment ended. And she did so de-
spite having signed a non-disclosure agreement, showing that she
owed a duty to InnoSys to maintain the secrecy of those trade se-
crets and limit their use. These facts easily satisfy the statutory
standard when viewed in the light most favorable to InnoSys on
summary judgment.
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¶31 In any event, as also noted above, there is evidence of mis-
appropriation by Mercer in the form of acquisition by ―improper
means‖ under sub-section (2)(a). The evidence under this sub-
section focuses on the suspicious circumstances of Mercer‘s copy-
ing of the confidential business plan onto a thumb drive on the
day of her termination. When viewed in the light most favorable
to InnoSys as the non-moving party, the record indicates that
there is at least a genuine issue of material fact as to whether Mer-
cer‘s appropriation of the business plan amounted to ―theft,‖
―breach of a duty to maintain secrecy,‖ or ―espionage through
electronic or other means.‖ Id. § 13-24-2(1).6
¶32 The above facts are at least arguably sufficient to sustain a
prima facie case of misappropriation under the UTSA. And these
same facts are sufficient to allow InnoSys to withstand Mercer‘s
motion for summary judgment. First, under well-settled princi-
ples of trade secret law, InnoSys‘s prima facie case gives rise to a
rebuttable presumption of irreparable harm. Second, despite some
contrary arguments raised by the dissent, the presumption has
not been rebutted by Mercer on the record before us on summary
judgment. We reverse summary judgment on that basis.
1. The Presumption of Irreparable Harm
¶33 A trade secret is a right of property.7 Such rights are pro-
tected by a legal presumption of harm.8 Thus, a trespass on a right
6 It is black letter law that ―[a]n appellate court . . . . views the
facts and all reasonable inferences drawn therefrom in the light
most favorable to the nonmoving party.‖ R & R Indus. Park, L.L.C.
v. Utah Prop. & Cas. Ins. Guar. Ass’n, 2008 UT 80, ¶ 18, 199 P.3d 917
(internal quotation marks omitted). Yet the dissent declares that
―inconsistencies in Ms. Mercer‘s testimony are susceptible to an
innocent explanation,‖ and theorizes alternative ―innocent‖ rea-
sons for Mercer‘s behavior. Infra ¶ 93. This theorizing is incompat-
ible with our summary judgment standard.
7 Microbiological Research Corp. v. Muna, 625 P.2d 690, 696 (Utah
1981) (―A trade secret . . . is under the majority view held to be
property, with power in the owner thereof to make use of it to the
exclusion of the world or to deal with it as he pleases. As a prop-
(continued…)
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of property is actionable upon any physical invasion of it, regard-
less of whether the invasion causes measurable damage.9 The pre-
sumption of harm flows from the very nature of a property right,
which at its core is a right to exclude others.10 With this in mind,
the law presumes that the infringement of a property right is
erty right, the trade secret is protected against its appropriation or
use without the consent of the owner.‖ (footnote omitted)).
8 RESTATEMENT (SECOND) OF TORTS § 158 (1965) (a trespasser is
―subject to liability . . . irrespective of whether he thereby causes
harm to any legally protected interest of the other‖); 8 DAVID A.
THOMAS, THOMPSON ON REAL PROPERTY § 68.01(2d ed. 2005) (―[A]
trespass is actionable when any physical invasion at all can be
proved, no matter how slight or inconsequential.‖); 8 RICHARD R.
POWELL, POWELL ON REAL PROPERTY § P6.07[1] (2015) (―Trespass .
. . is actionable even if no damage actually occurs as a result of the
entry.‖); see also Purkey v. Roberts, 2012 UT App 241, ¶ 19, 285 P.3d
1242 (neighbor who built a fence on adjoining property was liable
for trespass ―irrespective of whether [his neighbors] suffered any
harm other than to their legally protected interest‖).
9 POWELL, supra 8, § P6.07[5][b]; THOMPSON, supra 8, § 68.06(d)(2).
10 Alliant Techsystems, Inc. v. Salt Lake Cnty. Bd. of Equalization,
2012 UT 4, ¶ 23, 270 P.3d 441 (―[I]t is well recognized that an own-
er traditionally has rights to use and possess property to the ex-
clusion of others.‖). The legally protectable interests of an owner
of property encompass the right of exclusion, and the law pre-
sumes that an infringement of that right is inherently harmful.
RESTATEMENT (SECOND) OF TORTS § 163, cmt. d (―The wrong for
which a remedy is given . . . consists of an interference with the
possessor‘s interest in excluding others from the land.‖); 1 DAN B.
DOBBS, ET AL., THE LAW OF TORTS § 49 (2d ed. 2011) (―The gist of
the tort [of trespass] is intentional interference with rights of ex-
clusive possession; no other harm is required.‖); W. PAGE KEETON,
ET AL., PROSSER AND KEETON ON THE LAW OF TORTS § 13 (5th ed.
1984) (action of trespass, at bottom, is ―[a]n interference with [the]
exclusive possessory interest‖).
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Opinion of the Court
harmful, and sustains a remedy of an injunction to vindicate that
right and prevent future harm.11
¶34 The property right in a trade secret partakes of these ele-
ments. A long-settled principle of trade secret law recognizes a
presumption of harm upon proof of misappropriation. ―Over the
years, courts have often ruled that a trade secret claimant is enti-
tled to a rebuttable presumption of irreparable harm for the pur-
poses of injunctive relief . . . .‖ 4 ROBERT M. MILGRIM & ERIC E.
BENSEN, MILGRIM ON TRADE SECRETS § 15.02[1][c] (2013) (citing ex-
tensive cases).12 The basis of this presumption is the difficulty of
measuring the extent of actual economic injury. The courts have
acknowledged that ―it is axiomatic that unprotected disclosure of
a trade secret destroys the secret and [that] it is self-evident that
unauthorized use of a trade secret ordinarily enlarges the risk of
unauthorized disclosure.‖ Id. And they have consistently noted
that the impact on the value of a trade secret ―often will not be
readily compensable in damages because of the difficulties in-
volved in valuing the consequences of the destruction of a trade
secret.‖ Id. These concerns combine to sustain the basis for a pre-
sumption of irreparable harm, and a right under the UTSA to the
11 DOBBS, supra 10, § 56 (―Courts will issue injunctions to prevent
trespasses that threaten to continue or to be repeated.‖); POWELL,
supra 8, § P6.07[5][b] (“The nature of the tort of trespass indicates
that it may be continuous or repeated or threatened to be repeat-
ed. Injunctive relief is appropriate in any of these cases.‖).
12 See also 2 RUDOLF CALLMANN, CALLMANN ON UNFAIR
COMPETITION, TRADEMARKS AND MONOPOLIES § 14:39 (4th ed. 2015)
(explaining that ―[a] remedy at law normally is inadequate‖ in
cases of trade secret misappropriation, and noting that ―an injunc-
tion is a proper response of equity‖); 4 DAN B. DOBBS, ET AL., THE
LAW OF TORTS , § 739 (―[W]here future revelation is threatened, the
owner may frequently obtain an injunction.‖); Sylmark Holdings
Ltd. v. Silicone Zone Int’l Ltd., 783 N.Y.S.2d 758, 772 (N.Y. Sup. Ct.
2004) (same).
14
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issuance of an injunction without regard to proof of measurable
economic injury to the plaintiff.13
¶35 This principle is well-ingrained in the caselaw under the
UTSA14 and under related Utah cases.15 The presumption of irrep-
arable harm is widely endorsed and rarely questioned. And
13 The point is not ―that a plaintiff‘s allegations of threatened fu-
ture use or disclosure are particularly trustworthy.‖ Infra ¶ 76
(emphasis added). It is that a prima facie case of misappropriation
establishes a presumption of irreparable harm. Such a presump-
tion, moreover, is not conclusive. It may be rebutted by a defend-
ant. Absent rebuttal, however, the benefit of the doubt on the
need for an injunction goes to the party whose trade secret has
been misappropriated. That is particularly appropriate on a mo-
tion for summary judgment filed by the accused misappropriator,
given that the non-moving party is entitled to reasonable infer-
ences in its favor.
14 See, e.g., Kendall Holdings, Ltd. v. Eden Cryogenics LLC., 630 F.
Supp. 2d 853, 867 (S.D. Ohio 2008) (under the Ohio UTSA, ―irrep-
arable harm is generally presumed‖); Computer Assocs. Int’l v.
Quest Software, Inc., 333 F. Supp. 2d 688, 700 (N.D. Ill. 2004) (under
the Illinois UTSA, ―[t]here is a presumption of irreparable harm to
the plaintiff in cases of trade secret misappropriation‖); Union
Nat’l Life Ins. Co. v. Tillman, 143 F. Supp. 2d 638, 641–42 (N.D.
Miss. 2000) (under the Mississippi UTSA, ―to be awarded an in-
junction,‖ a plaintiff ―need not demonstrate irreparable injury; a
violation of the Act itself constitutes irreparable injury‖); Tracer
Research Corp. v. Nat’l Env’t Serv. Co., 843 F. Supp. 568, 582 (D.
Ariz. 1993) (once a plaintiff has established misappropriation un-
der the Arizona UTSA, ―it is presumed that it will suffer irrepara-
ble and immediate harm‖).
15 See Sys. Concepts, Inc. v. Dixon, 669 P.2d 421, 428 (Utah 1983)
(holding that ―a likely or actual ‗threatened‘ harm‖ is sufficient to
sustain injunctive relief, as it is ―an anticipatory remedy purposed
to prevent the perpetration of a threatened wrong or compel the
cessation of a continuing one,‖ and concluding that a former em-
ployee working for a competitor is enough to infer such future
harm (internal quotation marks omitted)).
15
INNOSYS v. MERCER
Opinion of the Court
where it has been questioned, it has usually been only to clarify
that the presumption may be rebutted,16 as in circumstances
16 See cases cited supra 14. The dissent proffers a different stand-
ard. Citing Faiveley Transport Malmo AB v. Wabtec Corp., 559 F.3d
110, 118–19 (2d Cir. 2009), it suggests that the presumption of ir-
reparable harm should not apply absent ―a showing of future
harm through unauthorized disclosure.‖ Infra ¶ 77. But the Faive-
ley formulation assumes away the problem presented here; it
acknowledges that a ―rebuttable presumption of irreparable harm
might be warranted in cases where there is a danger that, unless
enjoined, a misappropriator of trade secrets will disseminate those
secrets to a wider audience or otherwise irreparably impair the
value of those secrets.‖ 559 F.3d at 118. The key question concerns
whether there is a sufficient ―risk of ‗further dissemination or ir-
reparable impairment of value.‘‖ Infra ¶ 77 (quoting Faiveley, 559
F.3d at 118). For reasons explained below, we conclude that there
is a sufficient risk to sustain the presumption in this case—
particularly given the summary judgment posture of the case. In
any event, the Faiveley standard is not universally accepted. On its
face, the Faiveley opinion acknowledges decisions in the same cir-
cuit holding ―that a presumption of irreparable harm automatical-
ly arises upon the determination that a trade secret has been mis-
appropriated.‖ 559 F.3d at 118. And other courts have repudiated
the Faiveley analysis. See E.I. DuPont de Nemours & Co. v. Kolon In-
dus., Inc., 894 F. Supp. 2d 691, 707 (E.D. Va. 2012) (criticizing Faive-
ley as ―remarkable, overly simplified,‖ and inconsistent with the
basic premise that ―difficulty in establishing monetary damages
permits injunctive relief‖).
The key question is who gets the benefit of the doubt as to the
threat of future harm in a case of alleged misappropriation of a
trade secret. The dissent would give it to Ms. Mercer, entitling her
to summary judgment absent proof by InnoSys of an actual threat
of future disclosure. We see the matter differently. Because
InnoSys has at least arguably established a prima facie case of
misappropriation, InnoSys gets the benefit of the doubt (particu-
larly on summary judgment)—a benefit translating into a rebutta-
ble presumption of irreparable harm. There is no need for a ―re-
buttable presumption,‖ after all, if proof is required at the outset.
16
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Opinion of the Court
where the trade secret has become so generally known that it no
longer exists.17
¶36 And even when it is questioned, it is not generally on the
grounds identified by Mercer and echoed in the dissent. See infra
¶¶ 74, 76–84 (requiring, as a precondition of the presumption of
irreparable harm, proof of a likelihood of disclosure beyond the
initial misappropriation). When the courts have questioned the
presumption of irreparable harm, they have not generally re-
quired proof of a likelihood of additional disclosures or of meas-
urable economic harm as a prerequisite to the issuance of injunc-
tive relief.18 Instead, the courts have simply suggested that the
presumption of irreparable harm may be rebuttable, as in circum-
stances where the trade secret has become so generally known
that it no longer exists.
¶37 Those circumstances are not presented here. In fact, as ex-
plained below, infra ¶¶ 55–59, here the presumption of irreparable
17 DVD Copy Control Ass’n Inc. v. Bunner, 10 Cal. Rptr. 3d 185,
194–95 (Cal. Ct. App. 2004) (reversing entry of preliminary injunc-
tion in the face of evidence that the secret may have become ―gen-
erally known,‖ such that ―a preliminary injunction prohibiting
disclosure would have done nothing to protect the secret because
the secret would have ceased to exist‖).
18 That would turn the venerable element of irreparable harm on
its head. The essence of this element is in reserving equitable relief
for cases where the evidence of measurable economic damage is
unreliable—rendering the legal remedy of monetary damages in-
adequate. It would turn that principle upside down to require
proof of measurable economic harm, or even a likelihood of dis-
closure beyond the initial misappropriation, as a prerequisite to
injunctive relief. The ―threat of disclosure of the trade secret‖ enti-
tles trade secret claimants ―to a rebuttable presumption of irrepa-
rable harm for the purposes of injunctive relief.‖ MILGRIM §
15.02[1][c]. And here that threat is easily present given that Mer-
cer has (a) shown a willingness to disclose the secrets before; and
(b) forensic analysis cannot determine whether she still has the
misappropriated material, and she is unwilling to submit her hard
drives and e-mail account to further analysis.
17
INNOSYS v. MERCER
Opinion of the Court
harm was affirmatively reinforced by evidence of irreparable
harm presented by InnoSys. So InnoSys‘s only deficiency was in
failing to quantify the monetary impact of Mercer‘s misappropria-
tion, and that failure is beside the point under the authority cited
above.
2. Applicability and Rebuttal of the Presumption
¶38 In an attempt to avoid or rebut the presumption of irrepa-
rable harm, the dissent alleges that there is no ―evidence of a
threatened disclosure‖ of trade secrets given Mercer‘s assertion
that she ―deleted the [InnoSys material] from her Gmail account
and the thumb drive‖ and InnoSys‘s alleged failure to establish
Mercer‘s ―continued possession of InnoSys‘s documents.‖ Infra
¶ 81. On that basis, the dissent insists that InnoSys‘s claim fails in
light of InnoSys‘s purported failure to present evidence of threat-
ened harm sufficient to sustain an injunction.
¶39 The dissent‘s approach falls short on two grounds: (a) the
issue it raises was not preserved; and (b) Mercer‘s deletion of her
email messages fails to rebut the presumption of irreparable harm
in the circumstances of this case.
a. Preservation
¶40 First, the issue raised by the dissent is not properly before
us. Mercer never asserted—in the district court or on appeal—that
there was no basis for an injunction because InnoSys had not rebut-
ted Mercer‘s assertion that she ―deleted‖ the files in question.19
19 Mercer has asserted that ―InnoSys failed to produce evidence
of any actual or threatened harm.‖ But the basis of that argument
has always been that InnoSys failed to ―provide a single shred of
evidence of any actual or threatened damage‖ to its business. So
the focus of InnoSys‘s briefing and argument has been on the im-
pact on its business, not on Mercer‘s continued access to InnoSys‘s
files.
On one narrow point, Mercer has asserted that her deletion of
InnoSys material from her Gmail account and thumb drive
―mooted‖ one of InnoSys‘s claims. But that argument was limited
(continued…)
18
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Opinion of the Court
Thus, we cannot properly fault InnoSys for failing to marshal ―ev-
idence that Ms. Mercer had retained electronic files containing
InnoSys‘s trade secrets.‖ Infra ¶ 83. That was not an issue in the
district court and it is not an issue on appeal.
¶41 We have the authority to affirm on grounds that differ
from those relied on by the court below. 20 But that authority is
limited. It is confined to circumstances in which the alternative
grounds for affirmance are ―apparent‖ on the face of the record.
Commercial Real Estate Inv., L.C. v. Comcast of Utah II, Inc., 2012 UT
49, ¶ 14, 285 P.3d 1193. And that is hardly the case here (for rea-
sons explained below). InnoSys, moreover, is at least entitled to an
opportunity to be heard on this matter. We will not affirm sum-
to InnoSys‘s replevin action—a claim that is not before us on this
appeal. The limited nature of that argument only underscores the
problem. It emphasizes that InnoSys could not properly have an-
ticipated the need to establish Mercer‘s continued access to
InnoSys files as a predicate to the showing of threatened harm
necessary to justify an injunction.
20 As the dissent indicates, we have previously asserted the right
to affirm on a ground ―not raised in the lower court.‖ Infra ¶ 85;
Blaisdell v. Dentrix Dental Sys., Inc., 2012 UT 37, ¶ 5 n.1, 284 P.3d
616 (internal quotation marks omitted). But the general authority
to affirm on unpreserved grounds does not sustain the propriety
of so doing in any particular case. We should do so, in any event,
only where the basis for affirmance is ―apparent on the record.‖
Id. (internal quotation marks omitted). And in this case the dis-
sent‘s basis is simply not apparent—and cannot be, given that
Mercer never challenged InnoSys‘s right to an injunction on the
ground that it had not rebutted Mercer‘s assertion that she deleted
the files in question, so InnoSys had no reason to put such evi-
dence in the record. (For that reason, any lack of evidence is in no
way telling, and no basis for affirmance.) The general question of
―whether evidence of a threatened harm precluded summary
judgment‖ on InnoSys‘s request for injunctive relief was certainly
before the court. Infra ¶ 86. But the specific issue of a need to rebut
Mercer‘s assertion that the files in question had been deleted was
neither raised nor ruled upon.
19
INNOSYS v. MERCER
Opinion of the Court
mary judgment against a claimant on a ground on which it has
never been heard.
b. Mercer‘s ―voluntary reform‖
¶42 The dissent‘s approach ultimately fails on its merits in any
event. A defendant‘s voluntary reformation and cessation of un-
lawful activity forecloses the need for an injunction only in the ra-
re case in which the defendant‘s reform is ―irrefutably demon-
strated and total.‖ 5 J. THOMAS MCCARTHY, MCCARTHY ON
TRADEMARKS AND UNFAIR COMPETITION § 30:11 (4th ed. 2015) (cit-
ing cases). In other words, ―a defendant claiming that its volun-
tary compliance moots a case bears the formidable burden of
showing that it is absolutely clear the allegedly wrongful behavior
could not reasonably be expected to recur.‖ Friends of the Earth,
Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 190 (2000).
―Otherwise, a defendant could engage in unlawful conduct, stop
when sued to have the case declared moot, then pick up where he
left off, repeating this cycle until he achieves all his unlawful
ends.‖ Already, LLC v. Nike, Inc., 133 S. Ct. 721, 727 (2013).21
21 The dissent seeks to avoid the burden-shifting impact of these
precedents by attempting to distinguish Mercer‘s circumstances
from those at issue in the cited cases. Thus, while a voluntary re-
former ―retains the capability to reinitiate the harmful conduct in
the future,‖ the dissent insists that Mercer ―undisputedly deleted
InnoSys‘s emails and files,‖ such that ―the future use or dissemi-
nation of the files is not just a matter of self-restraint.‖ Infra ¶ 88.
And in light of such evidence, the dissent faults InnoSys for not
―produc[ing] evidence that Ms. Mercer retains the capacity to use
its documents in the future.‖ Id. That response falls short because
it assumes facts not in evidence, and on a point not raised below,
and gives the benefit of the doubt on the matter to the moving
party on summary judgment. Because all reasonable inferences go
to InnoSys (as the non-moving party), we cannot presume that
Mercer lacks anything but self-restraint. And her failure to make
an irrefutable, clear showing of a lack of capacity is significant.
The point is not to shift the burden to Mercer ―to prove that an
injunction should not issue.‖ Infra ¶ 90. InnoSys retains that bur-
(continued…)
20
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Opinion of the Court
¶43 Under this authority, InnoSys is not required to accept
Mercer‘s claim of voluntary compliance at face value. Instead the
burden shifts to Mercer to carry the ―formidable burden of show-
ing that it is absolutely clear [that] the allegedly wrongful behav-
ior could not reasonably be expected to recur.‖ Already, Inc., 133 S.
Ct. at 727(citing Friends of the Earth, 528 U.S. at 190). And here she
has failed to do so; the record, in fact, includes ample grounds for
suspicion of Mercer‘s self-serving assertions as to her destruction
of her copies of InnoSys‘s trade secrets, see infra ¶¶ 10–11, 28, 31,
and those grounds alone are enough to defeat summary judg-
den. By carrying the burden of establishing a prima facie case of
misappropriation, however, InnoSys shifted to Mercer the burden
of showing that her alleged voluntary reform was enough to allay
its concerns of irreparable harm. Such a showing, moreover, con-
cerns more than just the question of mootness. See id. (suggesting
that the issue is purely one of mootness). The voluntary reform
issue also goes to the risk of threatened harm, and in the circum-
stances of this case the burden fell to Mercer to show that her vol-
untary reform from her apparent misappropriation cannot rea-
sonably be expected to recur.
Mercer failed to do so. First, the notion that Mercer may have
destroyed existing electronic documents does not rule out the
possibility that she retained other copies elsewhere. The forensic
expert never ruled that out. He said that ―it is difficult to verify one
way or the other whether InnoSys emails were forwarded to third
parties, whether InnoSys data was moved to other external drives,
whether other email accounts were used to forward data, or
whether InnoSys data was used in some other way, shape, or
form.‖ (emphasis added). And the forensic analysis found over
2000 hits for ―innosys‖ on Mercer‘s hard drive, and concluded
that even after being deleted, files still exist in unallocated and
slack space on the hard drive until they are overwritten by saving
a new file in that space. The report also cautioned that no searches
for words other than ―innosys‖ were conducted, and that key-
word searches are limited in what they find. The expert hardly
gave reason for a clean bill as to Mercer; instead he recommended
a more complete forensic examination.
21
INNOSYS v. MERCER
Opinion of the Court
ment.22 Thus, to the extent evidence of Mercer‘s possession of
trade secrets is somehow lacking, it is Mercer, and not InnoSys,
whose case is undermined. See Polo Fashions, Inc. v. Dick Bruhn,
Inc., 793 F.2d 1132, 1135 (9th Cir. 1986).23
22 See 5 J. THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND
UNFAIR COMPETITION § 30:11 (4th ed. 2015) (―Even if the defendant
has ceased wrongful activities, an injunction should be granted
where defendant‘s intentions are in doubt.‖).
23 The dissent‘s cases are distinguishable on the above grounds.
Thus, the notion that the threatened harm targeted by the injunc-
tion is a risk ―too ‗remote and speculative‘ to merit an injunction,‖
infra ¶ 84 (quoting Almurbati v. Bush, 366 F. Supp. 2d 72, 78
(D.D.C. 2005)), has no application here, where InnoSys has made a
prima facie showing of misappropriation and the burden of prov-
ing reform has shifted to Mercer. In Almurbati, the plaintiffs ―ex-
tensively rel[ied] on news reports and articles that suggest that the
government is involved in a conspiracy,‖ as well as declarations
only the plaintiffs were privy to from unidentified officials who
had no decision-making authority. Id. It was on that basis that the
Almurbati court found that there was ―no evidence in the record
. . . support[ing] the petitioners‘ allegations.‖ Id. That is far from
the case here. And unlike in Am. Airlines, Inc. v. Imhof, 620 F. Supp.
2d 574, 580 (S.D.N.Y. 2009), Mercer has hardly ―made clear‖ that
third parties ―would not receive‖ the InnoSys trade secrets. In-
stead there is a substantial risk of such disclosure—for all the rea-
sons set forth above.
The dissent also relies on Johnson v. Hermes Assocs., Ltd., 2005 UT
82, 128 P.3d 1151, but the facts of that case support our conclu-
sions. In Johnson, this court affirmed the district court‘s grant of
injunctive relief to the plaintiffs because the defendant failed to
contest the plaintiff‘s sworn evidence with his own specific sworn
evidence. Id. ¶¶ 21–27. That is also the case here. InnoSys has pro-
duced evidence arguably supporting a prima facie case of misap-
propriation, with its presumption of irreparable harm, and rein-
forced it with evidence arguably establishing irreparable harm.
Mercer has, at most, shown there are genuine issues of this mate-
(continued…)
22
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Opinion of the Court
¶44 The Polo Fashions case is instructive. In that case the district
court refused to grant a permanent injunction against a trademark
infringer on the ground that the plaintiff presented no evidence
that the defendant planned to repeat its acts of infringement. Id. at
1135–36. In light of the nature of the infringement and defendant‘s
refusal to stop until the risk of liability was apparent, the Ninth
Circuit reversed under an abuse of discretion standard, holding
that the plaintiff has no burden to introduce evidence that de-
fendants are likely to infringe again. Id. The court‘s commentary is
equally applicable here: ―If the defendants sincerely intend not to
infringe, the injunction harms them little; if they do, it gives
[plaintiff] substantial protection.‖ Id. at 1135.
¶45 The same should be said of Mercer. If she sincerely intends
not to infringe the InnoSys trade secrets, an injunction harms her
little; if on the other hand she harbors such ideas, an injunction
will provide substantial protection for InnoSys.
¶46 On this record, Mercer has failed to rebut the presumption
of irreparable harm. There are, at a minimum, genuine issues of
material fact defeating her motion for summary judgment.24 Even
without the presumption of irreparable harm, moreover,
InnoSys‘s claim would likely survive summary judgment in light
of the actual proof of irreparable harm advanced by InnoSys (and
described in part II.B. below).
B. Breach of the Non-Disclosure Agreement
¶47 Much of the above also suffices to foreclose summary
judgment on InnoSys‘s claim for breach of the NDA. The pre-
rial fact, and, more likely, actually failed to refute Innosys‘s evi-
dence.
24 Our holding on this point does not foreclose the possibility of
a more fulsome showing by Mercer after remand. Perhaps at a
later stage she will carry the ―formidable burden of showing that
it is absolutely clear the allegedly wrongful behavior could not
reasonably be expected to recur.‖ Already, LLC v. Nike, Inc., 133 S.
Ct. 721, 727 (2013) (internal quotation marks omitted). She has not
done so on this record, however, and we reverse on that basis.
23
INNOSYS v. MERCER
Opinion of the Court
sumption of irreparable harm also precludes summary judgment
on InnoSys‘s NDA claim.25
¶48 Moreover, InnoSys‘s claim would survive summary judg-
ment even absent the presumption, as it has presented actual evi-
dence of threatened harm. InnoSys‘s evidence is at least sufficient
to establish genuine issues of material fact on the question of Mer-
cer‘s continued access to the trade secret information, and thus a
threat of future harm.
¶49 First, InnoSys introduced evidence concerning Mercer‘s use
of a web-based Gmail account to access InnoSys‘s trade secrets.
On this issue, InnoSys established that the InnoSys material had
been transferred to Google‘s possession, that the actual content of
Gmail messages is screened and employed for Google‘s business
and advertising purposes, and that Google retains deleted emails
from Gmail accounts.26
25 See Brake Parts, Inc. v. Lewis, 443 F. App‘x 27, 32 (6th Cir. 2011)
(recognizing that the nature of irreparable harm is the same in a
non-disclosure agreement case as it is in a trade secret case); Bowe
Bell & Howell Co. v. Harris, 145 F. App‘x 401, 404 (4th Cir. 2005) (af-
firming preliminary injunction on claim for misappropriation of
trade secrets and breach of nondisclosure agreement based on a
―likely misappropriat[ion]‖ of trade secrets and ―likely vio-
lat[ion]‖ of nondisclosure agreements); see also UTAH CODE §
13-24-2(2)(b)(ii)(B) (recognizing, as a basis for establishing trade
secret misappropriation, proof of use of trade secret information
with knowledge that the information was ―acquired under cir-
cumstances giving rise to a duty to maintain its secrecy or limit its
use‖ (emphasis added)).
26 InnoSys argued that Gmail is not bound by a confidentiality
agreement. InnoSys‘s CTO stated, among other things, that
―Gmail maintains and processes the content of e-mail messages
for the purpose of delivering advertising,‖ and that InnoSys ―no
longer has the ability to control and maintain [the information ]
. . . Ms. Mercer transferred to her Gmail account.‖ InnoSys addi-
tionally submitted evidence of Google‘s privacy policy, which
stated that Gmail uses the ―content of messages‖ in its advertising
(continued…)
24
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Opinion of the Court
¶50 InnoSys also submitted a declaration from an intellectual
property attorney attesting to the harmful effects of the disclosure
to Google. This witness stated that ―[i]nventions cannot be patent-
ed in other countries after public disclosure, and cannot be pa-
tented in the US after the expiration of a one year grace period fol-
lowing a public disclosure.‖ He further explained that as a result,
―[t]he Google Terms of Service associated with Gmail accounts in
force at the time of this statement do cast a colorable cloud on the
value of confidential intellectual property transmitted using a
Gmail account.‖
¶51 InnoSys even submitted evidence of Mercer‘s continued
access to InnoSys‘s trade secrets and of the ongoing threat of dis-
closure. One piece of such evidence came from InnoSys‘s IT spe-
cialist. He testified that Gmail ―would never let you delete a mes-
sage,‖ and that ―[o]nce it went to their servers . . . you can‘t make
it go away.‖ That alone is enough to establish an ongoing threat of
disclosure, or at least a genuine issue of such a threat.27
services. InnoSys‘s CTO also stated that ―merely . . . deleting
emails from one email account will not necessarily result in the
data being destroyed.‖ Finally, in a deposition, InnoSys‘s IT spe-
cialist referred to tech news reports that Gmail ―would never let
you delete a message,‖ and that ―[o]nce it went to their servers . . .
you can‘t make it go away‖ because ―Google always keeps a copy
of it.‖
27 The above evidence cannot be dismissed on the grounds iden-
tified by the dissent. First, the declaration from legal counsel was
no mere ―legal opinion[],‖ as in the cases cited in the dissent. Infra
¶ 94 n.3. The declaration in question proffered a legal and factual
basis for concluding that InnoSys was subject to future risk as a
result of Mercer‘s misappropriations. Mercer, moreover, raised no
objection to the declaration (neither in the district court nor on
appeal)—certainly not on the ground raised by the dissent. So
InnoSys had no opportunity to respond, and we have no basis for
questioning this evidence (as does the dissent). The same goes for
the dissent‘s challenge to InnoSys‘s evidence of the potential for
access to Mercer‘s Gmail. Absent any objection questioning the
declarant‘s ―personal knowledge‖ or basis for ―giv[ing] expert tes-
(continued…)
25
INNOSYS v. MERCER
Opinion of the Court
¶52 That same point was hammered home by further evidence
presented by InnoSys. As to the trade secrets that Mercer misap-
propriated by disclosing them to DWS in her unemployment
hearing, for example, the record was sufficient to establish Mer-
cer‘s ongoing authority to reopen the file in her case and thereby
access the relevant trade secrets. Thus, when InnoSys sought an
order protecting against any further disclosure of its trade secrets,
the ALJ openly denied having the authority to enter such an or-
der, and indicated that all he could offer was the department‘s pol-
icy of ―resist[ing] all attempts by outside agencies to access these
records.‖ That is hardly reassuring. If anything, it establishes that
Mercer is an ongoing threat—since a former claimant in a DWS
proceeding is entitled to access to her own file in a prior DWS pro-
ceeding to which she was a party.28
¶53 A further piece of the evidentiary picture concerns the
equivocations and inconsistencies in Mercer‘s own testimony. She
ultimately admitted telling two different stories about when and
why she had accessed InnoSys‘s protected business plan. Supra
¶¶ 10–11, 28, 31. These equivocations and inconsistencies under-
mine her credibility and introduce a core genuine issue as to her
supposed intent to reform and never again harm InnoSys.
timony‖ on the matter, infra ¶ 94 n.3, we are no in position to re-
ject the evidence on these grounds, as they have been neither pre-
served nor briefed.
28 Compare UTAH CODE §§ 63G-2-201(3)(a), -302(1)(a) (classifying
―records concerning an individual‘s eligibility for unemployment
insurance benefits‖ as ―private‖ records), with id. § 63G-2-202(1)(a)
(―Upon request . . . a government entity shall disclose a private rec-
ord to . . . the subject of the record.‖ (emphasis added)). The dissent
would reject this point on the ground that ―[t]here appears to be
no record evidence that suggests the emails were retained in
DWS‘s files,‖ and thus ―no indication that Ms. Mercer would seek
to access the DWS files in the future.‖ Infra ¶ 94 n.3. This point,
however, is a matter subject to inference from legal principles on
which we can take judicial notice. And any doubt on the matter
should go to InnoSys as the non-moving party.
26
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Opinion of the Court
¶54 Finally, the evidence advanced to this point by InnoSys
does not attempt to quantify the economic impact on InnoSys or
to measure the extent of any unjust enrichment flowing to Mercer.
Those failures might be a barrier to InnoSys‘s ultimate recovery of
monetary damages. But they have nothing to do with any failure
to establish ―irreparable harm.‖ And where injunctive relief is an
available remedy, the claim cannot properly be dismissed on the
ground that InnoSys has failed to develop a basis for a monetary
damages remedy.
¶55 The NDA itself specifically contemplated this circum-
stance. It expressly stated that in the event of a breach ―it may be
impossible to measure in money the damage to [InnoSys].‖ And it
accordingly authorized InnoSys to seek ―an injunction‖ to ―mini-
mize or prevent damage‖ to InnoSys.
¶56 InnoSys made an ample showing of irreparable harm. And
we cannot properly fault it for not framing that harm in quantifia-
ble terms. Cf. Overholt Crop Ins. Serv. Co. v. Travis, 941 F.2d 1361,
1371 (8th Cir. 1991) (holding that plaintiff was entitled to injunc-
tive relief to prevent disclosure of trade secrets under a non-
disclosure agreement as to future harms, as well as monetary
damages for actual harm that had already occurred and was
quantifiable). We accordingly reverse summary judgment on the
NDA claim and remand for further proceedings not inconsistent
with this opinion.29
C. Breach of Fiduciary Duty
¶57 The above grounds are also sufficient to sustain reversal of
InnoSys‘s claim for breach of fiduciary duty. This claim, like the
others, was dismissed on the basis of InnoSys‘s purported failure
to present evidence of actual economic harm. And again, the am-
ple grounds for a finding of irreparable injury suffice to reverse
that decision. See Norand Corp. v. Parkin, 785 F. Supp. 1353, 1355
29 The dissent asserts, without elaboration, that ―InnoSys‘s claim
for breach of fiduciary duty is preempted by the UTSA.‖ Infra
¶ 97. That question was not raised below or briefed on appeal,
however, so we do not reach it.
27
INNOSYS v. MERCER
Opinion of the Court
(N.D. Iowa 1990) (enjoining a former employee from working
with a competitor because of the likely existence of a fiduciary du-
ty not to disclose trade secrets and other confidential infor-
mation). We reverse on that basis.
¶58 In so holding, we need not and do not address the caselaw
endorsed by the dissent. See infra ¶¶ 96–97 (discussing CDC Resto-
ration & Constr., LC v. Tradesmen Contractors, LLC, 2012 UT App 60,
¶ 48, 274 P.3d 317, and Frantz v. Johnson, 999 P.2d 351, 357–58
(Nev. 2000)). These cases address an important question of
preemption—of whether a common law fiduciary duty claim is
preempted by the UTSA. But that issue was neither preserved be-
low nor argued on appeal, and we accordingly decline to reach it.
D. Rule 11 Sanctions and Fee Award
¶59 Finally, the merits analysis above is also sufficient to sus-
tain the reversal of the district court‘s decisions entering rule 11
sanctions against InnoSys and awarding Mercer attorney fees.
Now that InnoSys has prevailed on Mercer‘s motion for summary
judgment on all counts, Mercer cannot be entitled to sanctions or
fees.
¶60 Mercer‘s claim to a fee award arose under a provision of
the NDA and under Utah Code section 78B-5-825. Yet both of
those provisions limit their authorization of fee awards to prevail-
ing parties. See UTAH CODE § 78B-5-825(1) (providing for ―reasona-
ble attorney fees to a prevailing party‖ where the action or defense
was ―without merit and not brought or asserted in good faith‖
(emphasis added)); (InnoSys NDA section providing that the re-
covery of ―reasonable attorneys‘ fees‖ ―may be granted‖ to ―the
prevailing party‖ in any ―action at law or in equity brought to en-
force . . . the terms of this Agreement‖ (emphasis added)). Now
that Mercer‘s motion for summary judgment has been denied on
all counts, she is in no sense a prevailing party. Her request for
fees must accordingly also be denied.
¶61 The same goes for Mercer‘s request for sanctions under
UTAH R. CIV. P. 11. In entering sanctions, the district court con-
cluded that InnoSys had asserted its claims for an improper pur-
pose—in violation of UTAH R. CIV. P. 11(b)(1). Any possible prem-
ise for that conclusion is eliminated by our decision reversing the
28
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Opinion of the Court
entry of summary judgment against InnoSys. For reasons dis-
cussed in detail above, InnoSys has, to this point in this litigation,
identified good faith grounds in fact and law to assert its claims
against Mercer. And that is sufficient to defeat Mercer‘s request
for sanctions under rule 11(b)(1).
¶62 The filing of a complaint with a good faith basis in law and
fact cannot sustain sanctions on the grounds of ―being presented
for an[] improper purpose‖ under rule 11(b)(1).30 The rationale for
this conclusion is straightforward: If a complaint has a good faith
basis in law and fact, its assertion is at least presumptively for a
proper purpose—to assert the plaintiff‘s right to recover on its
claims. In other words, ―[a] party should not be penalized for or
deterred from seeking and obtaining warranted judicial relief
merely because one of his multiple purposes in seeking that relief
30 See Sussman v. Bank of Israel, 56 F.3d 450, 458–59 (2d Cir. 1995);
Nat’l Ass’n of Gov’t Emps., Inc. v. Nat’l Fed’n of Fed. Emps., 844 F.2d
216, 223–224 (5th Cir. 1988); Townsend v. Holman Consulting Corp.,
929 F.3d 1358, 1362 (9th Cir. 1990) (―With regard to complaints
which initiate actions, we have held that such complaints are not
filed for an improper purpose if they are non-frivolous.‖);
Burkhart ex rel. Meeks v. Kinsley Bank, 852 F.2d 512, 515 (10th Cir.
1988) (―[I]f counsel filed [a] . . . complaint which was warranted by
existing law or a good faith argument for the extension, modifica-
tion, or reversal of existing law, then any suggestion of harass-
ment would necessarily fail.‖ (internal quotation marks omitted)).
See also Oliveri v. Thompson, 803 F.2d 1265, 1272 (2d Cir. 1986)
(―[Under the court‘s inherent power to impose sanctions,] we
have declined to uphold [sanctions] . . . absent both clear evidence
that the challenged actions are entirely without color, and [are tak-
en] for reasons of harassment or delay or for other improper pur-
poses‖ (third alteration in original) (emphasis added) (internal
quotation marks omitted)); William W. Schwarzer, Sanctions Un-
der the New Federal Rule 11, 104 F.R.D. 181, 196 (1985) (―If a reason-
ably clear legal justification can be shown for the filing of the pa-
per in question, no improper purpose can be found and sanctions
are inappropriate.‖).
29
INNOSYS v. MERCER
Opinion of the Court
may have been improper.‖ Sussman v. Bank of Israel, 56 F.3d 450,
459 (2d Cir. 1995).31
¶63 That is not to say that ―the filing of a[ny] paper for an im-
proper purpose is immunized from Rule 11 sanctions simply be-
cause it is well grounded in fact and law.‖ Nat’l Ass’n of Gov’t
Emps., 844 F.2d at 224. In cases involving ―repetitious or excessive
filings,‖ the courts have recognized that even a meritorious claim
may be advanced for an improper purpose like harassment. Id.32
As to the ―filing of an original complaint,‖ however, there is no
possibility of any repetition or excessiveness, and thus the courts
have generally held that the filing of a ―well grounded‖ complaint
―cannot generally serve as a basis for imposing sanctions.‖ Id.
¶64 We apply that general rule here. And we reverse on that
basis. Several of the grounds for sanctions identified by the dis-
trict court went to InnoSys‘s failure to present a copy of the NDA
signed by Mercer. Those grounds went by the wayside when
InnoSys discovered the original document. The other grounds,
moreover—regarding InnoSys‘s alleged retaliatory motives for
filing suit—are irrelevant as a matter of law. If InnoSys had a
good faith basis in fact and law for its claims (as we conclude that
it did), it matters not that it may have harbored an ulterior motive
of retaliation.
——————
31 Cf. Eldrige v. Johndrow, 2015 UT 21, ¶ 68, 345 P.3d 553 (―[I]t will
never be the defendant‘s motivation by itself that leads to liabil-
ity.‖).
32 See also id. (noting relevance of motive in abuse of process cas-
es).
30
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J. DURHAM, dissenting
JUSTICE DURHAM, dissenting:
¶65 I respectfully dissent from the majority opinion. I would
affirm summary judgment against InnoSys on all claims. InnoSys
failed to create a dispute of material fact that would preclude
summary judgment on both its damages claims and its claims for
injunctive relief.
I. SUMMARY JUDGMENT ON INNOSYS‘S DAMAGES CLAIMS
FOR MISAPPROPRIATION OF TRADE SECRETS AND FOR
BREACH OF CONTRACT
¶66 It is well established in Utah that to overcome a motion
for summary judgment on a claim for which damages is an ele-
ment, the plaintiff must show evidence of damages. Borghetti v.
Sys. & Comput. Tech Inc., 2008 UT 77, ¶ 31, 199 P.3d 907 (―[I]n or-
der to overcome summary judgment [plaintiff] must come for-
ward with admissible ‗evidence that rises above speculation and
provides a reasonable, even though not necessarily precise, esti-
mate of damages.‘‖). ―At the pleading stage, general factual alle-
gations of injury resulting from the defendant‘s conduct may suf-
fice . . . . In response to a summary judgment motion, however,
the plaintiff can no longer rest on such mere allegations, but must
set forth by affidavit or other evidence specific facts, which for
purposes of the summary judgment motion will be taken to be
true.‖ Brown v. Div. of Water Rights of the Dep’t of Nat. Res., 2010 UT
14, ¶ 14, 228 P.3d 747 (quoting Lujan v. Defs. of Wildlife, 504 U.S.
555, 561 (1992)).
¶67 Damages constitute a necessary element of a contract
claim. Bair v. Axiom Design, L.L.C., 2001 UT 20, ¶ 14, 20 P.3d 388.
If, by the summary judgment stage, a plaintiff has made no show-
ing of damages on a contract claim, there is no reason to proceed
to trial because the plaintiff has not presented evidence on which
a jury could find that it is entitled to relief. See Giusti v. Sterling
Wentworth Corp., 2009 UT 2, ¶ 52, 201 P.3d 966.
¶68 Actual damages is also a necessary element of a damages
claim under the Uniform Trade Secrets Act (UTSA). The UTSA
provides for three specific forms of damages: compensation for
actual loss, disgorgement of unjust enrichment, and reasonable
royalties. UTAH CODE § 13-24-4(1). Where a statute provides for a
particular amount or form of damages, ―[a]ny expansion of the
damages that may be recovered must be undertaken by the legis-
31
INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
lature, not the courts.‖ Adkins v. Uncle Bart’s, Inc., 2000 UT 14,
¶ 40, 1 P.3d 528; see also Transamerica Mortg. Advisors, Inc. (TAMA)
v. Lewis, 444 U.S. 11, 19 (1979) (―[I]t is an elemental canon of statu-
tory construction that where a statute expressly provides a partic-
ular remedy or remedies, a court must be chary of reading others
into it.‖). Federal and state courts have unanimously interpreted
the UTSA‘s list of forms of damages to be exclusive and have
therefore required plaintiffs to show evidence of damages in one
of these categories.1
1 See Litton Sys., Inc. v. Ssangyong Cement Indus. Co., 107 F.3d 30,
1997 WL 59360, at *7–8 (Fed. Cir. 1997) (holding that California‘s
codification of the UTSA requires plaintiffs to show damages in
one of the three listed categories); Firetrace USA, LLC v. Jesclard,
800 F. Supp. 2d 1042, 1054 (D. Ariz. 2010) (granting summary
judgment to defendant former employee because ―[p]laintiffs
ha[d] not met their burden to overcome summary judgment by
showing evidence they were proximately damaged by [defend-
ant‘s] use of confidential information‖); Furmanite Am., Inc. v. T.D.
Williamson, Inc., 506 F. Supp. 2d 1134, 1142 & n.8 (M.D. Fla. 2007)
(holding that ―[i]f [plaintiff] cannot show at trial . . . that [it] suf-
fered any damages in the actual loss of such materials, [plaintiff]
cannot recover for the misappropriation‖); Alphamed Pharm. Corp.
v. Arriva Pharm., Inc., 432 F. Supp. 2d 1319, 1335–39 (S.D. Fla. 2006)
(granting judgment as a matter of law in favor of a defendant be-
cause the plaintiff produced no evidence of ―an actual loss, unjust
enrichment, or a reasonable royalty related to the misappropria-
tion of [the plaintiff‘s] trade secrets‖), aff’d, 294 F. App‘x 501 (11th
Cir. 2008); Storage Tech. Corp. v. Cisco Sys., Inc., No. CIV.00-2253
(JNE/JGL), 2003 WL 22231544, at *9–10 (D. Minn. Sept. 25, 2003)
(holding that the defendant was ―entitled to summary judgment
because [the plaintiff] fail[ed] to submit a viable damages theory‖
for actual losses, unjust enrichment, or a reasonable royalty) aff’d,
395 F.3d 921 (8th Cir. 2005); FAS Techs., Ltd. v. Dainippon Screen
Mfg. Co., No. C 00-01879 CRB, 2001 WL 637451, at *3–4 (N.D. Cal.
May 31, 2001) (holding that a plaintiff seeking to recover damages
under the California codification of the UTSA must show evi-
dence of harm); News Am. Mktg. In-Store, Inc. v. Marquis, 862 A.2d
837, 846 (Conn. App. Ct. 2004) (―Actual damage is a necessary el-
(continued…)
32
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J. DURHAM, dissenting
¶69 InnoSys produced no evidence of any damages caused by
Ms. Mercer‘s breach of the NDA or misappropriation of trade se-
crets. According to the evidence produced by InnoSys, Ms. Mercer
kept work emails after she was terminated. She also failed to re-
turn a business plan that her supervisor instructed her to review
shortly before she was fired. She then used some of the emails in
an administrative unemployment benefits hearing to defend her-
self from InnoSys‘s assertion that she was fired for incompetence.
After Ms. Mercer learned that InnoSys was displeased that she
still possessed work emails and the business plan, she deleted
them. InnoSys produced no evidence that Ms. Mercer ever used or
disclosed the documents in any way that harmed InnoSys or un-
justly enriched herself. Absent any evidence of actual loss, unjust
enrichment, or a basis for an award of reasonable royalties, sum-
mary judgment as to InnoSys‘s damages claims was not error. See
Carbo Ceramics, Inc. v. Keefe, 166 F. App‘x 714, 725 (5th Cir. 2006)
(affirming summary judgment because the plaintiff ―failed to
meet its burden of presenting sufficient evidence demonstrating a
triable issue of material fact as to actual damages recoverable un-
der its trade secret misappropriation claim‖); Firetrace USA, LLC v.
Jesclard, 800 F. Supp. 2d 1042, 1054 (D. Ariz. 2010) (granting sum-
mary judgment in a misappropriation and breach-of-contract case
against a former employee because ―[p]laintiffs ha[d] not met
their burden to overcome summary judgment by showing evi-
dence they were proximately damaged by [defendant‘s] use of
confidential information‖); U.S. Gypsum Co. v. LaFarge N. Am., Inc.,
508 F. Supp. 2d 601, 639–41 (N.D. Ill. 2007) (dismissing contract-
based breach-of-confidentiality claims against a former employee
because the former employer made no showing of damages).
¶70 At minimum, therefore, Ms. Mercer is entitled to partial
summary judgment in her favor on InnoSys‘s claims for damages.
ement that must be proven by the plaintiff to prevail on its trade
secrets claim.‖); Unilogic, Inc. v. Burroughs Corp., 12 Cal. Rptr. 2d
741, 748–750 (Ct. App. 1992) (affirming judgment of nonsuit
where plaintiff admitted it suffered no financial loss and did not
show evidence of unjust enrichment or reasonable royalty).
33
INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
II. SUMMARY JUDGMENT ON INNOSYS‘S INJUNCTIVE
RELIEF CLAIMS FOR MISAPPROPRIATION OF TRADE
SECRETS AND FOR BREACH OF CONTRACT
¶71 In addition to damages, InnoSys sought injunctive relief
for its misappropriation of trade secrets and breach of contract
claims. An injunction does not require proof of actual damages; a
court may grant equitable injunctive relief upon a showing of
threatened future harm. Sys. Concepts, Inc. v. Dixon, 669 P.2d 421,
428 (Utah 1983). The majority opinion bases its reversal of sum-
mary judgment upon its conclusion that even if there is no evi-
dence of actual damages or unjust enrichment, there is a dispute
of fact as to whether there is a threat of future harm that could jus-
tify injunctive relief. I disagree.
A. The Presumption of Irreparable Harm
¶72 One of the necessary elements of a claim for injunctive re-
lief is proof of irreparable harm. See UTAH R. CIV. P. 65A(e) (a pre-
liminary injunction requires a showing that ―[t]he applicant will
suffer irreparable harm unless the order or injunction issues‖).
―Irreparable injury justifying an injunction is that which cannot be
adequately compensated in damages or for which damages cannot
be compensable in money.‖ Hunsaker v. Kersh, 1999 UT 106, ¶ 9,
991 P.2d 67 (internal quotation marks omitted). ―It is thus well-
established that an injury is irreparable only if it cannot be un-
done through monetary remedies.‖ Dennis Melancon, Inc. v. City of
New Orleans, 703 F.3d 262, 279 (5th Cir. 2012) (internal quotation
marks omitted).
¶73 Several jurisdictions have adopted a presumption that the
disclosure of a trade secret constitutes an irreparable harm that
justifies an injunction. The presumption of irreparable harm is
based upon the fact that the disclosure of a trade secret has the po-
tential to destroy the legal protections afforded to a trade secret if
it becomes generally known. See 4 ROBERT M. MILGRIM & ERIC E.
BENSEN, MILGRIM ON TRADE SECRETS § 15.02[1][c] (2013) (noting
that ―unprotected disclosure of a trade secret destroys the secret‖).
Because ―of the difficulties involved in valuing the consequences
of the destruction of a trade secret,‖ id., some courts have adopted
a presumption that the harm associated with an unauthorized
disclosure is irreparable, see FMC Corp. v. Taiwan Tainan Giant In-
dus. Co., 730 F.2d 61, 63 (2d Cir. 1984) (holding that ―the loss of
34
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J. DURHAM, dissenting
trade secrets cannot be measured in money damages‖); Kendall
Holdings, Ltd. v. Eden Cryogenics LLC, 630 F. Supp. 2d 853, 867 (S.D.
Ohio 2008) (holding that ―[t]he loss of trade secrets is usually con-
sidered an irreparable harm [that] cannot be measured in money
damages― (alterations in original) (internal quotation marks omit-
ted)). Thus, once the risk of future disclosure has been established,
courts have presumed that the harm caused by the disclosure
would be irreparable, justifying injunctive relief.
¶74 But we need not decide whether to espouse this judicially
created presumption because it does not apply here. The key issue
in this case is not whether an unprotected disclosure of InnoSys‘s
trade secrets would produce an irreparable harm that could not be
readily measured in money damages. Rather, the question pre-
sented is whether InnoSys produced evidence of a threatened fu-
ture disclosure of InnoSys‘s files. Infra ¶¶ 79–86.
¶75 The majority, however, adopts a broader interpretation of
the judicially created presumption that the harm occasioned by an
unauthorized disclosure of a trade secret is irreparable—i.e., not
easily remedied by money damages. The majority opinion holds
that there is ―a presumption of harm upon proof of misappropria-
tion.‖ Supra ¶ 34. Thus the majority appears to endorse the propo-
sition that when a plaintiff seeks an injunction in a case involving
trade secrets, there is a presumption of a threat of future harm ra-
ther than merely a presumption that any harm would be irrepara-
ble.
¶76 The majority‘s broad interpretation of the presumption of
irreparable harm, however, is not supported by the reasoning that
produced the presumption in the first place. The unauthorized
disclosure of a trade secret has been presumed to lead to irrepara-
ble harm because of the difficulty of assigning a monetary value
to the loss of the secret. The presumption of irreparable harm is
not based upon an assumption that a plaintiff‘s allegations of
threatened future use or disclosure are particularly trustworthy,
shifting the burden of proof on this issue. See Water & Energy Sys.
Tech., Inc. v. Keil, 1999 UT 16, ¶¶ 8, 14, 974 P.2d 821 (party seeking
an injunction for misappropriation of trade secrets bears the bur-
den of proof); Amylin Pharm., Inc. v. Eli Lilly & Co., No. 11-CV-1061
JLS NLS, 2011 WL 5237558, at *2 (S.D. Cal. June 8, 2011) (rejecting
as speculative a plaintiff‘s assertion that the defendant would
misuse confidential information at a future date), aff’d, 456 F.
35
 INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
App‘x 676 (9th Cir. 2011). Indeed, the leading commentator on
trade secrets has noted that the presumption of irreparable harm
is not a presumption that harm will occur: ―[C]ourts have often
ruled that a trade secret claimant is entitled to a rebuttable pre-
sumption of irreparable harm for the purposes of injunctive relief,
at least where there is a threat of disclosure of the trade secret.‖
4 ROBERT M. MILGRIM & ERIC E. BENSEN, MILGRIM ON TRADE
SECRETS § 15.02[1][c] (2013) (emphasis added) (footnote omitted).
¶77 The Second Circuit has affirmed that absent evidence of a
risk of prospective disclosure, a presumption of irreparable harm
simply would not arise:
We have previously observed that the loss of trade
secrets cannot be measured in money damages
where that secret, once lost, is lost forever. Some
courts in this Circuit have read this passing observa-
tion to mean that a presumption of irreparable harm
automatically arises upon the determination that a
trade secret has been misappropriated. That reading
is not correct. A rebuttable presumption of irrepara-
ble harm might be warranted in cases where there is
a danger that, unless enjoined, a misappropriator of
trade secrets will disseminate those secrets to a wid-
er audience or otherwise irreparably impair the val-
ue of those secrets.
Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110, 118 (2d
Cir. 2009) (internal quotation marks omitted). The presumption of
irreparable harm does not apply, however, where there is not a
risk of ―further dissemination or irreparable impairment of val-
ue.‖ Id. Thus the Second Circuit directly rejected the proposition
that the presumption applies in the absence of a showing of future
harm through unauthorized disclosure. See also Campbell Soup Co.
v. ConAgra, Inc., 977 F.2d 86, 92–93 (3d Cir. 1992) (rejecting a plain-
tiff‘s argument that ―irreparable harm must be presumed
where . . . the elements of a trade secret claim have been satisfied‖
and refusing to apply the presumption where the plaintiff did not
show that the defendant intended to use or disclose the trade se-
cret).
¶78 Therefore, the presumption of irreparable harm does not
apply to the threshold question of whether InnoSys has produced
36
Cite as: 2015 UT 80
J. DURHAM, dissenting
evidence of a threat of future injury through unauthorized disclo-
sure of its trade secrets. The issue in this case is not whether a fu-
ture harm is irreparable because it cannot be remedied through
money damages, but rather whether there is evidence of a threat
of future harm at all. I turn now to that question.
B. No Evidence of Threatened Harm
¶79 In addition to actual damages, InnoSys sought injunctive
relief. But ―[t]he fact the relief sought is injunctive does not excuse
a showing of injury, whether actual or threatened.‖ Intel Corp. v.
Hamidi, 71 P.3d 296, 303 (Cal. 2003) (alteration in original) (inter-
nal quotation marks omitted). In Utah, a party seeking a perma-
nent injunction must show that ―irreparable harm would result‖
without the injunction. Johnson v. Hermes Assocs., Ltd., 2005 UT 82,
¶ 13, 128 P.3d 1151 (emphasis added) (listing the requirements for
a permanent injunction); 42 AM. JUR. 2D Injunctions § 33 (2010)
(―An injunction will not be granted to restrain acts, however ir-
regular or unauthorized, that do not injure the complainant.‖) The
threatened injury must be ―a real and immediate injury, not an
abstract injury or one that is conjectural or hypothetical.‖ Ramos-
Santos v. Hernandez-Nogueras, 867 F. Supp. 2d 235, 260 (D.P.R.
2012). A court will not exercise its power to grant injunctive relief
―to allay a mere apprehension of injury at an indefinite future
time.‖ 42 AM. JUR. 2D Injunctions § 34 (2010); accord United States v.
W. T. Grant Co., 345 U.S. 629, 633 (1953) (injunction requires a de-
termination ―that there exists some cognizable danger of recurrent
violation, something more than [a] mere possibility‖).
¶80 If the evidence presented by a plaintiff seeking injunctive
relief ―is insufficient to justify issuance of a permanent injunction,
the trial court simply ha[s] no discretion to exercise,‖ and sum-
mary judgment is proper. DVD Copy Control Ass’n, Inc. v. Kaleides-
cape, Inc., 97 Cal. Rptr. 3d 856, 876 (Ct. App. 2009) (internal quota-
tion marks omitted); Shaw v. Tampa Elec. Co., 949 So. 2d 1066, 1070
(Fla. Ct. App. 2007) (holding that a court may deny a request for
injunctive relief in a summary judgment proceeding if it is clear
the plaintiff cannot meet the requirements for an injunction).
¶81 InnoSys did not present evidence of a threatened disclo-
sure of its trade secrets that would cause it harm. InnoSys argued
below that Ms. Mercer‘s retention of emails and other electronic
documents after she was terminated created a threat of future
37
INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
harm that justified an injunction against her. Ms. Mercer present-
ed evidence that she no longer had access to InnoSys‘s documents
because she deleted them. InnoSys agrees that Ms. Mercer deleted
the files from her Gmail account and the thumb drive—indeed, it
brought a spoliation claim based upon the deletions. Furthermore,
InnoSys‘s forensic analysis of Ms. Mercer‘s computers, thumb
drive, and Gmail account confirmed that she no longer had the
electronic documents. But InnoSys contends that Ms. Mercer‘s as-
sertions that she did not forward the files to another electronic
storage device or email account prior to deletion may be false, and
that she may have had the continuing ability to disclose or use
InnoSys‘s documents in the future. Thus, the propriety of sum-
mary judgment on the injunctive relief claim hinges upon whether
a dispute of material fact existed as to Ms. Mercer‘s continued
possession of InnoSys‘s documents.
¶82 The party opposing summary judgment ―may not rest
upon the mere allegations or denials of the pleadings, but the re-
sponse, by affidavits or as otherwise provided in this rule, must
set forth specific facts showing that there is a genuine issue for tri-
al.‖ UTAH R. CIV. P. 56(e). If the opposing party fails to produce
specific evidence creating a dispute of material fact, summary
judgment shall be entered. Id.; Johnson, 2005 UT 82, ¶ 21 (affirming
summary judgment on injunction claim where the opposing party
―failed to contest [the moving party‘s evidence] with specific
sworn evidence as required under rule 56(e)‖).
¶83 Here, InnoSys did not produce any evidence that Ms.
Mercer had retained electronic files containing InnoSys‘s trade se-
crets. Before this litigation began, Ms. Mercer sent a letter to
InnoSys asserting she did not copy or transfer InnoSys emails pri-
or to deleting them. In her depositions, she affirmed that she no
longer had access to the emails or the business plan because she
permanently deleted them. And forensic scrutiny of Ms. Mercer‘s
email account and electronic storage devices yielded no evidence
that relevant files had been copied prior to deletion. In short,
InnoSys produced no evidence indicating that Ms. Mercer secretly
retained copies of InnoSys‘s files. It merely speculates that
Ms. Mercer may still have access to the files. See Titaness Light
Shop, LLC v. Sunlight Supply, Inc., 585 F. App‘x 390, 391 (9th Cir.
2014) (―To establish a likelihood of irreparable harm, conclusory
or speculative allegations are not enough.‖).
38
Cite as: 2015 UT 80
J. DURHAM, dissenting
¶84 Absent evidence supporting a conclusion that Ms. Mercer
retained the ability to use or disseminate the InnoSys files, sum-
mary judgment was appropriate because InnoSys‘s allegations
that Ms. Mercer posed a potential future risk to the company and
its trade secrets are too ―remote and speculative‖ to merit an in-
junction. Almurbati v. Bush, 366 F. Supp. 2d 72, 78 (D.D.C. 2005);
Johnson, 2005 UT 82, ¶ 13 (requiring parties seeking injunctions to
show that harm ―would‖ result from the absence of an injunc-
tion); see also Am. Airlines, Inc. v. Imhof, 620 F. Supp. 2d 574, 580
(S.D.N.Y. 2009) (where a former employee offered to delete or re-
turn all copies of documents and computer files he had taken
from his former employer, injunctive relief was not warranted be-
cause the former employer ―failed to establish the requisite threat
of irreparable injury in respect of the copied documents‖).
C. Preservation
¶85 The majority asserts that because Ms. Mercer did not spe-
cifically argue below that InnoSys‘s injunctive relief claims failed
because it did not produce evidence of a threatened future harm
of unauthorized disclosure, this issue was not preserved and
should not be considered by this court. Supra ¶¶ 40–41. But this
argument ignores our well-established rule that the preservation
rule does not apply to arguments for the affirmance of a judgment
below:
The appellate court will affirm the judgment, order,
or decree appealed from if it is sustainable on any
legal ground or theory apparent on the record, even
though such ground or theory differs from that stat-
ed by the trial court to be the basis of its ruling or ac-
tion, and this is true even though such ground or
theory is not urged or argued on appeal by appellee,
was not raised in the lower court, and was not considered
or passed on by the lower court.
Blaisdell v. Dentrix Dental Sys., Inc., 2012 UT 37, ¶ 5 n.1, 284 P.3d
616 (emphasis added) (internal quotation marks omitted); accord
Bailey v. Bayles, 2002 UT 58, ¶ 10, 52 P.3d 1158; Goodsel v. Dep’t of
Bus. Regulation, 523 P.2d 1230, 1232 (Utah 1974).
¶86 At any rate, InnoSys raised the issue of whether evidence
of a threatened harm precluded summary judgment as to the in-
junctive relief claims. The issue of whether there was a dispute of
39
INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
fact regarding future harm, therefore, was preserved because it
was presented to the district court for resolution. Gressman v.
State, 2013 UT 63, ¶ 45, 323 P.3d 998 (an issue is preserved if one
party presents it to the district court in a manner that gives the
court the opportunity to rule on it).
D. Voluntary Reform
¶87 Citing trademark caselaw, the majority also argues that
Ms. Mercer‘s ―voluntary reformation and cessation of unlawful
activity‖ by deleting InnoSys‘s files does not necessarily defeat
InnoSys‘s claim for injunctive relief. Supra ¶¶ 42–46. As the Su-
preme Court has noted, ―the court‘s power to grant injunctive re-
lief survives discontinuance of the illegal conduct.‖ W. T. Grant
Co., 345 U.S. at 633. The principle that voluntary reformation does
not necessarily defeat an injunctive relief claim makes sense in
situations where a trademark infringer voluntarily stops the ille-
gal activity after a lawsuit is filed. Where the only impediment to
future harmful conduct is the defendant‘s self-imposed restraint,
the likelihood of prospective infringement of an intellectual prop-
erty right is a question of fact for the court. See id. (if the defendant
discontinues the illegal conduct, the moving party must still show
―that there exists some cognizable danger of recurrent violation‖).
¶88 This case, however, is fundamentally different from the
voluntary reformation caselaw cited by the majority. Unlike the
typical trademark infringer who ceases illegal activity but retains
the capability to reinitiate the harmful conduct in the future, Ms.
Mercer undisputedly deleted InnoSys‘s emails and files. Thus, the
future use or dissemination of the files is not just a matter of self-
restraint. InnoSys has not produced evidence that Ms. Mercer re-
tains the capacity to use its documents in the future. Absent evi-
dence that she retained the ability to use or distribute the files,
summary judgment was appropriate.2
2 In support of its argument that the district court improperly
granted summary judgment, the majority also quotes Polo Fash-
ions, Inc. v. Dick Bruhn, Inc., 793 F.2d 1132, 1135–36 (9th Cir. 1986),
which states: ―If the defendants sincerely intend not to infringe,
the injunction harms them little; if they do, it gives [the plaintiff]
substantial protection of its trademark.‖ Supra ¶ 44. Although the
(continued…)
40
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J. DURHAM, dissenting
¶89 The majority cites Supreme Court precedent for the
proposition that ―‗a defendant claiming that its voluntary compli-
ance moots a case bears the formidable burden of showing that it
is absolutely clear the allegedly wrongful behavior could not rea-
sonably be expected to recur.‘‖ Already, LLC v. Nike, Inc., 133 S. Ct.
721, 727 (2013) (quoting Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 528 U.S. 167, 190 (2000)). The majority concludes
that under this precedent, ―the burden shifts to Mercer to carry
the ‗formidable burden of showing that it is absolutely clear [that]
the allegedly wrongful behavior could not reasonably be expected
to recur‖ in order to avoid an injunction against her. Supra ¶ 43
(alteration in original); see also supra ¶ 43 n.24 (―[T]he burden of
proving reform has shifted to Mercer.‖). The majority also sug-
gests that Ms. Mercer must satisfy this ―‘formidable burden‘‖ in
order to prevail on remand. Supra ¶ 46 n.25.
¶90 Already, LLC and Friends of the Earth, however, do not
shift the burden to a defendant to prove that an injunction should
not issue. In both of these cases, the defendant claimed that a fed-
eral court had no Article III authority to adjudicate an injunctive
relief claim because the defendant‘s actions had rendered the case
or controversy moot. Already, LLC, 133 S. Ct. at 726–27; Friends of
the Earth, 528 U.S. at 173–74. Thus, the Supreme Court‘s pro-
nouncement that a defendant bears a ―formidable burden‖ was
made in the specific context of the defendant‘s argument that a
federal court lacked the authority to even adjudicate the injunc-
tive relief claim. Because Ms. Mercer never claimed that InnoSys‘s
injunctive relief claims were moot or challenged the district
court‘s authority to decide these claims, Already, LLC and Friends
of the Earth do not apply here.
relative burden borne by the defendant is certainly relevant when
a court weighs the equities of granting an injunction, a plaintiff
may not be relieved of the burden of providing evidence of a
threatened irreparable harm. ―[I]njunctions will not be issued
merely to allay the fears and apprehensions or to soothe the anxie-
ties of the parties. Nor will an injunction be issued to restrain one
from doing what he is not attempting and does not intend to do.‖
Campbell Soup Co. v. ConAgra, Inc., 977 F.2d 86, 92 (3d Cir. 1992)
(internal quotation marks omitted).
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INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
¶91 Indeed, the Supreme Court has long recognized that alt-
hough
the court‘s power to grant injunctive relief survives
discontinuance of the illegal conduct[,] . . . . the mov-
ing party must satisfy the court that relief is needed.
The necessary determination is that there exists
some cognizable danger of recurrent violation,
something more than the mere possibility which
serves to keep the case alive.
W. T. Grant Co., 345 U.S. at 633. Even though voluntary refor-
mation does not divest the court of power to issue an injunction, it
also does not relieve the moving party of the burden of meeting
the requirements of proving an injunction is required. As noted
above, InnoSys has failed to meet this burden by creating a dis-
pute of material fact regarding a threat of future harm. But even if
the majority disagrees with my conclusion regarding the proprie-
ty of summary judgment on the injunctive relief claims, on re-
mand, InnoSys still bears the burden of showing that the elements
of a permanent injunctive relief claim have been satisfied in this
case. Johnson, 2005 UT 82, ¶ 13 (listing the requirements for a per-
manent injunction); Water & Energy Sys., 1999 UT 16, ¶¶ 8, 14.
(party seeking an injunction bears the burden of proof).
E. Inconsistent Testimony
¶92 On appeal, InnoSys contends that summary judgment on
the injunction claim was inappropriate because it alleges Ms. Mer-
cer gave false sworn testimony during a hearing on her unem-
ployment benefits claim. InnoSys notes that Ms. Mercer incorrect-
ly stated in the unemployment benefits hearing that she obtained
the business plan the day before she was terminated because her
supervisor instructed her to review it. She later clarified in this lit-
igation that she acquired the plan on the day of her termination,
although before InnoSys fired her. Ms. Mercer also testified in the
unemployment benefits hearing that InnoSys‘s IT specialist gave
her permission to transfer her work emails to her personal Gmail
account. She then clarified in this litigation that she informed the
IT specialist of her intention to forward the emails and he never
told her not to do so.
¶93 The inconsistencies in Ms. Mercer‘s testimony are suscep-
tible to an innocent explanation. The minor discrepancies may be
42
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J. DURHAM, dissenting
explained by the fact that Ms. Mercer did not anticipate that
InnoSys would question her about her retention of work emails or
the business plan, which was unrelated to the reasons for her ter-
mination at issue in the unemployment benefits hearing. Once she
was given notice of the claims InnoSys raised in this litigation, she
could have simply produced more precise testimony. Moreover,
her transfer of work emails to her Gmail account and her acquisi-
tion of an electronic copy of the business plan also do not neces-
sarily bespeak a nefarious intent to acquire InnoSys‘s trade secrets
for later distribution or use. Ms. Mercer informed InnoSys‘s IT
specialist of her intent to forward her work emails to Gmail and
InnoSys does not contend that it discouraged or forbade this ac-
tion. And Ms. Mercer‘s supervisor instructed her to review the
business plan the day before she copied it to a thumb drive. Thus,
her actions could have been motivated by nothing more than her
stated desire to work from home, something she often did. Fur-
thermore, the fact that she openly revealed to InnoSys that she
had the emails and business plan by filing them in the unem-
ployment benefits proceeding, apparently unaware that she had
violated any legal duties by retaining the files after her termina-
tion, indicates that she did not intend to secretly use or distribute
InnoSys‘s documents.
¶94 However, these are not the only inferences that could be
drawn from the evidence. A fact-finder could conclude that Ms.
Mercer intentionally lied during the employment benefits hearing
in an attempt to avoid suspicion of wrongdoing. And the acquisi-
tion of emails and the business plan in a manner that allowed Ms.
Mercer to retain them after her termination could itself be seen as
an indication of an intent to use or distribute these documents. See
E.I. DuPont de Nemours & Co. v. Kolon Indus., 894 F. Supp. 2d 691,
711 (E.D. Va. 2012) (in determining the scope of an injunction,
courts may ―assess[] the misappropriator‘s conduct in effecting
the misappropriation‖). Thus, if Ms. Mercer had access to
InnoSys‘s trade secrets, summary judgment on the injunction
claim likely would be inappropriate because Ms. Mercer‘s intent
to use or distribute the information at some point in the future
would be subject to conflicting inferences. But that is not the case
here. InnoSys argued below that Ms. Mercer‘s acquisition of work
emails and documents created a danger of future harm. InnoSys
did not, however, present any evidence that Ms. Mercer retained
copies of InnoSys documents after she deleted them from her
43
INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
Gmail account and thumb drive. Supra ¶¶ 79–86. Absent any evi-
dence that Ms. Mercer had the ability to use or distribute the doc-
uments, the question of her intent to do so is irrelevant.3
3 The majority argues that there is a dispute of material fact
precluding summary judgment for several other reasons. The ma-
jority opinion cites, for example, the declaration of an attorney
who opined that Google‘s terms of service agreement may permit
Google to claim ownership of intellectual property transmitted
through its email service and that the use of Gmail may constitute
a public disclosure for the purpose of obtaining patent protection.
Supra ¶ 50. But these are legal opinions (and unsupported legal
opinions to boot). A nonmoving party ―cannot avoid summary
judgment by reference to inadmissible legal opinions.‖ Hein-
Muniz v. Aiken Reg’l Med. Ctrs., 905 F. Supp. 2d 729, 742 (D.S.C.
2012), aff’d, 532 F. App‘x 342 (4th Cir. 2013); see also Owen v. Kerr-
McGee Corp., 698 F.2d 236, 240 (5th Cir. 1983) (―[A]llowing an ex-
pert to give his opinion on the legal conclusions to be drawn from
the evidence both invades the court‘s province and is irrelevant.‖).
The majority also argues that there is a dispute of material fact
as to whether Ms. Mercer could gain access to the work emails in
the future because she might be able to recover them from Google
despite being deleted. Supra ¶ 51. InnoSys, however, produced
only the equivocal testimony of its IT employee to support its
claim that the emails still resided on Google‘s servers. The
InnoSys employee testified:
I don‘t know much about it, but there was much talk
on tech news about the fact Gmail would never let
you delete a message. . . . [E]ven if a user deletes - -
this may have changed - - at least for a considerable
period of time, if a user deletes an e-mail from
Google, you can‘t make it go away.
This is not evidence because InnoSys‘s IT employee has no per-
sonal knowledge regarding the presence of deleted emails on
Google‘s servers, nor was he qualified to give expert testimony
regarding Google‘s servers. Moreover, the employee gave no tes-
timony regarding a user‘s ability to retrieve deleted emails from
Google.
(continued…)
44
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J. DURHAM, dissenting
III. SUMMARY JUDGMENT ON INNOSYS‘S BREACH OF
FIDUCIARY DUTY CLAIM
¶95 As with the contract and misappropriation claims, the
district court dismissed InnoSys‘s claim for breach of fiduciary
duty on the grounds that InnoSys failed to establish damages
stemming from Ms. Mercer‘s alleged breach. Because the breach
of fiduciary duty claim rests upon the same evidence and reason-
ing as the contract and misappropriation claims, I would affirm
for the same reasons stated above. I would also affirm on the ad-
ditional ground that the breach of fiduciary duty cause of action is
precluded by the UTSA.
¶96 The UTSA explicitly states that ―this chapter displaces
conflicting tort, restitutionary, and other law of this state provid-
ing civil remedies for misappropriation of a trade secret,‖ UTAH
CODE § 13-24-8(1), unless the remedy sought is contractual, a civil
remedy that is ―not based upon misappropriation of a trade se-
cret,‖ or criminal, id. § 13-24-8(2). Thus, civil remedies that are
―based upon misappropriation of a trade secret‖ are precluded by
the UTSA. In other words, ―a claim is preempted to the extent that
it is based on factual allegations supporting a misappropriation of
trade secrets or otherwise confidential information.‖ CDC Restora-
tion & Constr., LC v. Tradesmen Contractors, LLC, 2012 UT App 60,
¶ 48, 274 P.3d 317; accord Frantz v. Johnson, 999 P.2d 351, 357–58
(Nev. 2000) (examining an identical statutory provision and de-
termining that a breach of fiduciary duty claim was preempted by
Nevada‘s UTSA).
Finally, the majority suggests that Ms. Mercer could retrieve
paper copies of the emails from the file of her DWS proceedings.
Supra ¶ 52. But because this theory was not advanced below or in
the appellate briefs, a key factual predicate to this argument is
missing from the record. There appears to be no record evidence
that suggests the emails were retained in DWS‘s files of the un-
employment benefits proceedings. Furthermore, there is no indi-
cation that Ms. Mercer would seek to access the DWS files in the
future. See Campbell Soup Co., 977 F.2d at 92 (―[A]n injunction [will
not] be issued to restrain one from doing what he is not attempt-
ing and does not intend to do.‖ (internal quotation marks omit-
ted)).
45
INNOSYS, INC. v. MERCER
J. DURHAM, dissenting
¶97 It is clear that in this case InnoSys‘s claim for breach of fi-
duciary duty is based upon the same factual allegations that
would support its claim for misappropriation of trade secrets.
InnoSys argues that Utah law imposes a fiduciary duty upon em-
ployees who receive confidential information during the course of
their employment to (a) keep that information confidential, (b) not
compete with their employer by using that information, and
(c) return the information upon termination. InnoSys then alleges
that it disclosed confidential information to Ms. Mercer under the
protection of a signed NDA (thereby giving rise to the fiduciary
duty) and that Ms. Mercer subsequently breached that duty by
disclosing the confidential information during the DWS hearing.
But as shown above, InnoSys must utilize these same facts to sub-
stantiate its claim for misappropriation of trade secrets. Therefore,
InnoSys‘s claim for breach of fiduciary duty is preempted by the
UTSA, and its dismissal was proper for this additional reason.
46