United States District Court, N.D. California
ORDER DENYING PLAINTIFF'S EX PARTE APPLICATION
FOR PRELIMINARY RELIEF Re: Dkt. No. 71
HAYWOOD S. GILLIAM, JR. United States District Judge
3, 2017, Plaintiff Enertrode, Inc. (“Enertrode”)
filed its Ex Parte Application for Temporary Restraining
Order and Order to Show Cause Re: Preliminary Injunction
(“Application”), Dkt. No. 71 (“Pl.'s
Appl.”), supporting brief, Dkt. No. 71-1
(“Pl.'s Br.”), and other supporting
documents, Dkt. Nos. 72-2 to 72-12. On May 8, 2017,
Defendants General Capacitor Co. Limited (“GC
LTD”), General Capacitor International, Inc. (“GC
Inc.”), and General Capacitor, LLC (“GC
LLC”) (collectively, “GC Companies”) timely
filed their opposition, Dkt. No. 73 (“Defs.'
Opp'n.”), and supporting documents, Dkt. Nos.
74-81. Enertrode's Application seeks to enjoin GC
Companies and Jianping Zheng (a.k.a. Jim Zheng), and
“their employees, officers, directors, agents and
persons acting with or in concert with them or on their
behalf” from taking the following actions: (1)
“[m]oving, transporting, concealing, or secreting the
Electrode Manufacturing Line [(“EML”)] or the
related electrode manufacturing technology, or any portion
thereof”; (2) “[s]elling, pledging, disposing,
transferring or conveying the [EML], or any piece or portion
thereof, or the related electrode manufacturing technology,
or any interest therein”; (3) “[d]estroying,
altering, damaging, or otherwise impairing the [EML] or the
related electrode manufacturing technology”; or (4)
“[u]sing the Lithium Electrode Invention
[(“LEI”)], related trade secret data, and any
other Enertrode technology or trade secret.” Pl's
Appl. at 2.
Rule of Civil Procedure 65 governs temporary restraining
orders and preliminary injunctions. A preliminary injunction
enjoins conduct pending a trial on the merits. See
Fed. R. Civ. P. 65(a). A temporary restraining order enjoins
conduct pending a hearing on a preliminary injunction.
See Fed. R. Civ. P. 65(b). The standard for issuing
a temporary restraining order is the same as for a
preliminary injunction. See Stuhlbarg Int'l Sales Co.
v. John D. Brush & Co., 240 F.3d 832, 839 n.7 (9th
Cir. 2001) (“substantially identical” analysis).
relief is “an extraordinary remedy that may only be
awarded upon a clear showing that the plaintiff is entitled
to such relief.” Winter v. Nat. Res. Def.
Council, 555 U.S. 7, 22 (2008). To receive this relief,
the plaintiff “must establish  that he is likely to
succeed on the merits,  that he is likely to suffer
irreparable harm in the absence of preliminary relief, 
that the balance of equities tips in his favor, and  that
an injunction is in the public interest.” Id.
at 20. However, the Ninth Circuit has held that “a
‘likelihood' of success per se is not an absolute
requirement.” Drakes Bay Oyster Co. v. Jewell,
747 F.3d 1073, 1085 (9th Cir. 2014). “Rather, serious
questions going to the merits and a hardship balance that
tips sharply toward the plaintiff can support issuance of an
injunction, assuming the other two elements of the
Winter test are also met.” Id.
(quoting All. for the Wild Rockies v. Cottrell, 632
F.3d 1127, 1132 (9th Cir. 2011)). Regardless, under either
the Winter test or the “serious
questions” test, a preliminary injunction may not issue
unless the court finds that “a certain threshold
showing is made” as to each of the four elements.
Leiva-Perez v. Holder, 640 F.3d 962, 966 (9th Cir.
Enertrode fails to show that it is likely to suffer
irreparable harm in the absence of preliminary relief.
Enertrode's argument regarding this factor is primarily
predicated on Defendants' alleged plans to transfer the
EML to Hong Kong or China, or to sell the EML to a
third-party within the United States. See Pl.'s
Br. at 10-11. However, in light of two declarations filed by
Defendants' counsel under penalty of perjury,
Plaintiff's argument is not persuasive. See Dkt.
No. 74 (“Narancic Decl.”); Dkt. No. 78
(“Moye Decl.”). Together these declarations
state, inter alia, that GC LLC does not plan to
begin moving the EML until June 1, 2017; that the EML will be
moved to a warehouse within a few miles of its existing
location in Tallahassee, Florida; that the GC Companies have
no plans to sell the EML either in whole or in part; and that
the GC Companies will agree not to sell the EML prior to July
30, 2017, though they reserve the right sell thereafter
because the EML allegedly is not fully functional.
See Narancic Decl. ¶¶ 6, 8, 9; Moye Decl.
¶¶ 21-24. Similarly, Enertrode fails to
substantiate the assertion that it will suffer a
“substantial loss of business” unless the Court
enjoins Defendants' use of the LEI and other alleged
trade secrets. See Pl.'s Br. at 12-13. The Court
is unconvinced by Enertrode's contention that calculating
such a loss would be “difficult, if not impossible,
” see Id. at 13, given that its President has
stated under penalty of perjury that the alleged trade secret
appropriation has been ongoing since at least January 4,
2016, see Dkt. No. 71-2 (“Zhong Decl.”)
Enertrode filed an ex parte application for preliminary
relief in state court thirteen months ago, asserting a claim
of irreparable harm nearly identical to its arguments in the
Application. Compare Narancic Decl. Ex. B (state
court brief) at 8-9 with Pl's Br. at 10-11.
Enertrode contends that, absent preliminary relief, it cannot
inspect the EML to support its lawsuit, see
Pl.'s Br. at 11, yet provides no explanation as to why it
has not arranged to inspect the EML during the 13 months
since filing its state court application, see
Narancic Decl. ¶ 4. As the Ninth Circuit has held, a
“long delay before seeking a preliminary injunction
implies a lack of urgency and irreparable harm.”
Oakland Tribune, Inc. v. Chronicle Pub. Co., 762
F.2d 1374, 1377 (9th Cir. 1985). This is true not only as to
removal of the EML, but also as to further use of the LEI.
See, e.g., Eros Tours & Travel, Inc. v.
Infinitywaves, LLC, No. CV 14-5095 PA (PJWX), 2015 WL
11457691, at *3 (C.D. Cal. Feb. 9, 2015) (finding that
“delay alone warrant[ed] denial” of
plaintiffs' preliminary injunction motion, where
approximately 10 months had passed since alleged discovery
that defendants had misappropriated plaintiffs' trade
extent Enertrode argues that a presumption of irreparable
harm applies if it shows a likelihood of success on its trade
secret misappropriation claim, see Pl.'s Br. at
11-12, the Court has significant doubts that such a
presumption would be consistent with the Supreme Court's
decisions in Winter and eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388 (2006). In
eBay, the Supreme Court stated that the four-factor
test was derived from “well-established principles of
equity, ” and explained “that the decision
whether to grant or deny injunctive relief rests within the
equitable discretion of the district courts, and that
such discretion must be exercised consistent with
traditional principles of equity, in patent disputes no
less than in other cases governed by such
standards.” 547 U.S. at 391, 394 (emphasis added).
In Winter, the Supreme Court held that “[a]n
injunction is a matter of equitable discretion; it does
not follow from success on the merits as a matter of
course.” 55 U.S. at 32 (emphasis added). The Ninth
Circuit has confirmed that “presuming irreparable harm
in a copyright infringement case is inconsistent with, and
disapproved by, the Supreme Court's opinions in
eBay and Winter.” Flexible
Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d
989, 998 (9th Cir. 2011); see also Herb Reed Enters., LLC
v. Florida Entm't Mgmt., Inc., 736 F.3d 1239, 1249
(9th Cir. 2013) (reaching same conclusion regarding
irreparable harm in trademark infringement cases). Multiple
district courts have cited Flexible Lifeline Systems
in holding that eBay and Winter also
preclude applying a presumption of irreparable harm in trade
secret cases. See Bartech Sys. Int'l, Inc. v. Mobile
Simple Sols., Inc., No. 2:15-cv-02422-MMD-NJK, 2016 WL
3002371, at *3; V'Guara Inc. v. Dec, 925
F.Supp.2d 1120, 1126 (D. Nev. 2013). Given its doubt that
Enertrode's claimed presumption exists post-eBay
and Winter (if it ever existed), the Court will not
assume that Enertrode would be entitled to a presumption of
irreparable harm as to Defendants' further use of the LEI
if it could show a likelihood of success on the merits.
the Court finds that Enertrode fails to demonstrate a
likelihood of irreparable harm absent preliminary
relief. On this ground alone, Enertrode's
Application must be denied. See Small v. Avanti Health
Sys., LLC, 661 F.3d 1180, 1191 (9th Cir. 2011)
(“After Winter, a district court cannot grant
an injunction unless the [plaintiff] has shown that
irreparable harm is ‘likely'; the
‘possibility' of harm is insufficient to meet the
[plaintiffs] burden.”); see also Calence, LLC v.
Dimension Data Holdings, PLC, 222 Fed. App'x. 563,
566 (9th Cir. 2007) (affirming district court's denial of
preliminary injunction: court was not required to reach the
likelihood of success on the merits where it determined that
there was no evidence of irreparable harm, and did not err in
failing to presume irreparable harm because of alleged trade
secret loss).Consequently, the Court does not reach
Enertrode's showing as to the other three factors.
However, the Court notes that the GC Companies have raised
facially compelling arguments regarding the other factors,
such that the Court has substantial doubts as to whether any
future application for a preliminary injunction by Enertrode
could succeed. At a minimum, in any such application,
Enertrode would need to identify a substantial
change in circumstances demonstrating the required likelihood
of irreparable harm, and explain why, based upon controlling
authority, a different result is warranted. In addition, any
such application would need to address the substantial
arguments raised in GC Companies' opposition suggesting
that Enertrode has a low likelihood of success on the merits
on its claims for several reasons.
foregoing reasons, the Court DENIES Enertrode's
Application without prejudice.
 GC objects to Enertrode's use of
“Lithium Electrode Invention” on the ground that
the term “improperly impl[ies] that pressing lithium
foil on the surface of an electrode that already has been
manufactured is part of manufacturing an electrode.”
Defs.' Opp'n at 6 n.1. However, GC nonetheless uses
the term, albeit typically in quotations. See, e.g.,
id. at 20. To avoid any confusion that use of an
alternative term might cause, the Court uses the terms
“Lithium Electrode ...