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TAP Worldwide, LLC v. Becker

July 12, 2010

TAP WORLDWIDE, LLC, A DELAWARE LIMITED LIABILITY COMPANY, PLAINTIFF,
v.
ERNEST ANTHONY BECKER AKA TONY BECKER, AN INDIVIDUAL, AND DOES 1-25, INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Dolly M. Gee United States District Judge

ORDER RE PLAINTIFF'S MOTION FOR PRELIMINARY INJUNCTION

This matter is before the Court for hearing on July 12, 2010 on the Order to Show Cause ("OSC") Re Preliminary Injunction. For the reasons set forth below, the motion is GRANTED in part and DENIED in part.

I. PROCEDURAL HISTORY

On July 2, 2010, Plaintiff TAP WORLDWIDE, LLC filed (1) a complaint in this Court seeking declaratory judgment and damages for copyright infringement, violation of the Computer Fraud and Abuse Act, violation of the Uniform Trade Secrets Act, and conversion; and (2) an application for a temporary restraining order ("TRO") and OSC re preliminary injunction. Following a hearing on that same day, this Court issued a TRO and OSC re preliminary injunction requiring Defendant ERNEST ANTHONY BECKER to appear on July 12, 2010 to show cause why a preliminary injunction should not issue.

II. FACTUAL BACKGROUND

Plaintiff is in the business of manufacturing and selling off-road parts and accessories. Plaintiff is not in the business of developing or selling software products. In 2003, Defendant was hired to manage Plaintiff's export operations, a position he held until June 25, 2010. During the time he was employed with Plaintiff, Defendant developed a software program designed to expedite processing of export shipments. According to Defendant (and not controverted by Plaintiff), "[t]his is an internet based product where any company can become a member and for a monthly fee [use all the benefits of this software]. Such benefits include the ability to fill the government and other forms which presently are being completed by hand or otherwise." (Decl. of Ernest Anthony Becker in Opp'n to App. for TRO and Prelim. Inj. at 2, filed 7/7/2010, ("Becker Decl.").) [Doc. #18].*fn1 Plaintiff asserts that it "was unaware of the existence of the Software." (Pltf's Memo of Pts and Auth in Supp of App for TRO and OSC Re Prelim Inj., filed 7/2/2010) [Doc. # 4]. According to Defendant (and not controverted by Plaintiff), "[he] did not spend any of [his] working hours on either doing the market research or developing the software. All the time spent has been off working hour [sic]. [He] did not use any of the equipment of TAP in developing this software." (Becker Decl. at 2.)

III. LEGAL STANDARD GOVERNING PRELIMINARY INJUNCTIONS

Federal Rule of Civil Procedure 65 governs the issuance of preliminary injunctions. The purpose of such injunctions is to preserve the rights and relative positions of the parties, i.e., the status quo, until a final judgment issues. See U.S. Philips Corp. v. KBC Bank N.V., 590 F.3d 1091, 1094 (9th Cir. 2010) (citing Univ. of Tex. v. Camenisch, 451 U.S. 390, 395, 101 S.Ct. 1830, 68 L.Ed.2d 175 (1981)). Plaintiffs seeking a preliminary injunction in a case involving the public interest must show that (1) they are likely to succeed on the merits; (2) they are likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in their favor; and (4) an injunction is in the public interest. Dominguez v. Schwarzenegger, 596 F.3d 1087, 1092 (9th Cir. 2010), petition for cert. filed, 78 USLW 3581 (Mar. 24, 2010); see also Winter v. Natural Res. Def. Council, Inc., __ U.S. __, 129 S.Ct. 365, 374, 172 L.Ed.2d 249 (2008).

IV. DISCUSSION

Plaintiff seeks a preliminary injunction as follows:

1. Restraining and enjoining Defendant from preventing in any manner TAP Worldwide, its servants, agents or employees, from accessing and using the MyExportDocs software via the Internet website www.myexportdocs.com (the "Software"). In order to comply with this Order, Defendant must restore access to MyExportDocs such that TAP Worldwide may continue to access and use the Software as it did prior to Mr. Becker cutting off access to the Software;

2. Restraining and enjoining Defendant from making use of, transferring, distributing or reproducing the current version of the Software or any derivative versions of the Software, with the exception of those activities specifically permitted by this Order;

3. Restraining and enjoining Defendant from selling, licensing or transferring the domain name www.myexportdocs.com, and from using such domain name, with the exception that Defendant shall be permitted to continue to operate www.myexportdocs.com for the sole purpose of allowing TAP Worldwide to access and use the Software as it previously did in connection with its export operations. All other use of the website is hereby immediately enjoined;

4. Restraining and enjoining Defendant from using transferring, disclosing, copying or in any manner distributing any confidential information of TAP Worldwide obtained by Defendant during his employment with TAP Worldwide, including but not limited to any TAP Worldwide customer or product pricing information; and

5. Requiring Defendant to safeguard and refrain from damaging, altering or modifying the Software and Software source code, including any associated documentation, manuals and the like, and any of Plaintiff's confidential information (e.g., customer ...


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