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UNITED STATES DISTRICT COURT

WESTERN DISTRICT OF WASHINGTON

AT SEATTLE

SHAININ II, LLC, et al.,

Plaintiffs,

v.

JOHN ALLEN, et al.,

Defendants.

NO. C06-420P

ORDER ON PLAINTIFFS’ MOTION

FOR PRELIMINARY INJUNCTION

This matter comes before the Court on Plaintiffs’ motion for a preliminary injunction. (Dkt.

No. 5). Plaintiffs filed this motion concurrently with their complaint, which raises claims for breach of

contract, trademark infringement and unfair competition under the Lanham Act, tortious interference,

Washington Consumer Protection Act violations, and misappropriation of trade secrets. After

Defendants’ counsel appeared in this matter, the Court held a status conference with the parties and

set a briefing schedule for the preliminary injunction motion. The Court held a hearing on this matter

on May 11, 2006. 

Having reviewed the papers and pleadings submitted by the parties and having considered the

evidence and argument presented at the hearing, the Court hereby GRANTS IN PART and DENIES

IN PART Plaintiffs’ motion for a preliminary injunction. Subject to the more specific limitations

discussed in the body of this Order, the Court finds that Plaintiffs are entitled to a preliminary

injunction to enjoin Defendants: (1) from performing or rendering services for certain clients for whom

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they performed services while employed by Plaintiffs; and (2) from including Plaintiffs’ trademarks in

the metatags for websites operated by Defendants. The Court finds that a preliminary injunction is not

warranted with respect to the remainder of the Plaintiffs’ claims. This Order is contingent on

Plaintiffs’ posting of security in the amount of $5,000 no later than 5:00 p.m. on May 17, 2006.

Pursuant to Fed. R. Civ. P. 52(a), the Court’s findings of fact and conclusions of law are set

forth below.

Findings of Fact

1. Plaintiffs are Shainin II, LLC; Shainin LLC; and Red X Holdings LLC, all of which are

affiliated Nevada limited liability companies with their principal place of business in Anacortes,

Washington. The Court will refer to Plaintiffs collectively as “Shainin.” Shainin provides consulting

and training services to help manufacturing and product development businesses avoid and reduce

costs associated with technical problems. 

2. Defendants are John Allen, a resident of New Hampshire; John Allen LLC, a Delaware

company; David Hartshorne, a citizen and resident of the United Kingdom; The New Science of Fixing

Things, Ltd, a United Kingdom company; and David Hartshorne, Ltd., a United Kingdom company. 

3. Mr. Allen previously worked for Shainin as a consultant, an employee, and a member. 

Mr. Allen resigned from Shainin in the summer of 2004. Mr. Allen now offers consulting and training

services through John Allen LLC.

4. Mr. Hartshorne was affiliated with Shainin at various times as a member and as a

consultant. He states that he resigned as a member of Shainin in the summer of 2003. Mr. Hartshorne

continued to perform some consulting work for the company after resigning as a member. He

terminated his consulting agreement with Shainin in December 2005. Mr. Hartshorne now offers

consulting and training services through David Hartshorne, Ltd.

5. Mr. Allen and Mr. Hartshorne executed employment agreements while affiliated with

Shainin. For example, Mr. Allen executed an Employment Consultant Agreement that became

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effective on May 5, 2003. This Agreement includes a non-competition clause. At Section 9.4, the

Agreement provides:

Employee . . . agrees that, during the Term of this Agreement and for a period of three (3)

years after the termination of this Agreement . . . Employee will not perform or render services

for any client of SLLC [Shainin LLC] either as an advisor, employee or consultant, or directly

or indirectly participate in any way in the provision or rendering of services for any client of

SLLC, whether or not the Shainin System or the Shainin Technology or Red X trademarks are

used in connection with such services. For purposes of this Section 9.4, a “client of SLLC” is

any person or entity for whom an SLLC consultant, Member or employee, has performed

consulting or other services during the three (3) years immediately preceding termination of

this Agreement. . . . 

(Dkt. 2-1, Ex. C, § 9.4). This Agreement also provides that “[t]he parties acknowledge that the time,

scope, geographic area and other provisions of this Section 9 have been specifically negotiated by

sophisticated commercial parties and agree that all such provisions are reasonable under the

circumstances of the activities contemplated by this Agreement. . . .” (Id. § 9.7). 

6. Mr. Hartshorne also executed an agreement with Shainin that includes a noncompetition clause. From the record, it appears that the most recent non-competition agreement

applicable to Mr. Hartshorne is a “Standard Consultant Agreement” signed by Mr. Hartshorne on July

8, 1998. (Dkt. 1-2, Ex. 5). This non-competition agreement is largely the same as Mr. Allen’s,

although it does not include an acknowledgment that the agreement is “reasonable.” Mr. Hartshorne

alleges that this non-competition agreement will expire in August 2006, a point that Plaintiffs have not

disputed.

7. Plaintiffs maintain that the employment agreements executed by Mr. Allen and Mr.

Hartshorne include provisions that bar them from soliciting Shainin’s clients. However, Plaintiffs have

not cited specific non-solicitation language from either agreement, nor has the Court been able to find

express non-solicitation clauses in the agreements.

8. Shainin provided Mr. Allen and Mr. Hartshorne with lists that included the Shainin’s

clients to whom their respective non-competition agreements would allegedly apply. See Third Decl.

of Shainin, Exs. 16 & 17. The list provided to Mr. Allen included more than 150 clients, while the list

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provided to Mr. Hartshorne included more than 100 clients. It is not clear from the record what

criteria Shainin used to determine whether a company qualified as a “client” for inclusion on these

lists. 

9. Since ending their affiliations with Shainin, Mr. Allen and Mr. Hartshorne have worked

together in connection with a business called “The New Science of Fixing Things, Ltd.” According to

Mr. Hartshorne, he and his wife are the sole owners of The New Science of Fixing Things Ltd. See

Hartshorne Decl. ¶ 1; cf. Allen Decl. ¶ 30 (stating that Mr. Hartshorne is the sole owner of The New

Science of Fixing Things). The company is incorporated in the United Kingdom.

10. The website for The New Science of Fixing Things has included, among other things, a

description of seminars that the company plans to offer. Plaintiffs have introduced a page from the

website that describes the seminars, which states:

The New Science of Fixing Things now offers a new two-day seminar taught by founders

David Hartshorne and John Allen. This fast-paced seminar teaches the lessons they have

learned in their careers as professional problem solvers working on planes, trains, and

automobiles and everything in between, through a series of cases they will teach with the style

and wit they are known for. The seminar will excite engineers and technical people, as well

[as] engineering and quality directors as it delves into the principles of good strategy and sound

technical models to fix things...fast.”

(Dkt. No. 3-2, Ex. E at 6).

11. The New Science of Fixing Things has scheduled a seminar to take place in Michigan

on May 17-18, 2006. At the hearing on this matter, Defendants’ counsel indicated that the fee for

attending the Michigan seminar is $1,250. Plaintiffs’ counsel also indicated at the hearing that Shainin

conducts seminars that are similar to the type of seminars that Defendants plan to conduct.

 12. Mr. Allen acknowledges that he has invited employees of Shainin’s clients to attend 

seminars for The New Science of Fixing Things. Mr. Allen states: 

In March 2006, we posted notice of our initial seminar on the New Science of Fixing Things

website. I also invited persons who worked for clients that I had worked with while at Shainin

to this public seminar. In my view, inviting these people to a public seminar did not amount to

solicitation of work. I could write a book and they could choose to read. I could present the

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1

 “Shainin Technology” is defined in the Agreement as “proprietary techniques, Algorithms (as

defined herein), methods, software and copyrighted lecture materials currently used in the U.S. and

abroad by Red X and its licensees, including those embodied in the Shainin System (as defined

herein),” as well as “all improvements, enhancements and modifications to the Shainin Technology

prepared by or for Red X or its licensees, SLLC.” Id. § 3.8

2

 The “Shainin System” is defined in the Agreement as “the strategies for, and methods of,

statistical engineering, management consulting, statistical analysis, and problem solving, as applied to

manufacturing quality control, productivity improvement, defect prevention, product reliability

improvement evaluation, product development, product liability improvement and liability prevention,

and methods for improving product and process control and research productivity developed or

owned by Red X, including those which are currently in use of Red X or have been used in the past by

Red X or its predecessors or licensees (including Employee) as part of their consulting operations; and

all improvements, enhancements and modifications to the Shainin System made during the term of this

Agreement.” Id. § 3.7

ORDER - 5

same material orally and pictorially at a seminar. I made very clear to persons who I knew to

be Shainin clients that I could not work for them due to my contract with Shainin.

(Allen Decl. ¶ 46).

13. Both Mr. Allen and Mr. Hartshorne executed various confidentiality or non-disclosure

agreements with Shainin. For example, Mr. Allen executed an Employment Consultant Agreement

that became effective on May 5, 2003 and which includes the following provision:

During the Term and thereafter, Employee shall maintain as confidential and shall not use,

publish or disclose the Shainin Technology1 or the Shainin System2 in any form, except as

expressly provided by this Agreement, without the prior written approval of SLLC.

(Dkt. No. 2-1, Ex. C, § 9.1). This Agreement also provides that Mr. Allen shall maintain the

confidentiality of “certain business plans, customer lists, and other confidential business information of

SLLC, as well as certain confidential information of SLLC’s clients.” Id. § 9.2. Mr. Hartshorne’s

confidentiality agreements include similar terms. See, e.g., Dkt. No. 1-2, Ex. 5, §§ 9.1 - 9.3 and 3.7 -

3.8 (1998 Standard Consulting Agreement executed by Mr. Hartshorne).

14. Plaintiffs maintain that Mr. Allen and Mr. Hartshorne have disclosed or will disclose

information that is confidential or proprietary to Shainin, in violation of their confidentiality

agreements. Mr. Allen and Mr. Hartshorne sharply dispute that they have disclosed or will disclose

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3

 In connection with this motion, the parties have filed a significant amount of materials under

seal. The Court has provisionally granted the parties leave to file these materials under seal. Because

this Order will not be under seal, the Court generally errs on the side of caution in this Order in

discussing information or materials that one side or the other has deemed confidential. The Court’s

caution in discussing such materials should not be construed as a determination that these materials are

in fact confidential or proprietary.

4

 One court has described metatags as “hidden HTML code intended to describe the contents

of the web page. On many search engines, the more often a term appears in the metatags of a

particular web page, the more likely it is that the web page will be ‘hit’ in a search for that keyword

and the higher on the list of ‘hits’ the web page will appear.” Interactive Prods. Corp. v. A2Z Mobile

Office Solutions, Inc., 326 F.3d 687, 692 (6th Cir. 2003).

ORDER - 6

any information that is confidential or proprietary to Shainin. In large part, the testimony and evidence

submitted by the parties is diametrically opposed. On the limited record before the Court at time, the

Court cannot resolve these factual disputes with any degree of certainty, particularly in light of the

highly technical nature of the disputed issues. In particular, the Court finds that Plaintiffs have not

demonstrated a probability of success on their claims that Defendants’ use of energy function models

has violated or is likely to violate their confidentiality agreements with Shainin.3

15. David Hartshorne has maintained a website (www.david-hartshorne.com) which

discusses his consulting services, as well as the seminars offered through The New Science of Fixing

Things. The metatags4 for this website have included a number of terms that Plaintiffs have registered

as trademarks, including but not limited to the terms “SHAININ,” “RED X,” “GREEN Y,” and

“FEMCA.” (Dkt. No. 3-1, Ex. B). Plaintiffs also claim trademark rights to two other terms (“B VS

C” and “COMPONENT SEARCH”) that have been included in similar forms in the metatags for Mr.

Hartshorne’s site, although Plaintiffs have not registered those marks. 

Conclusions of Law

1. A preliminary injunction is appropriate if: (1) the moving party will suffer irreparable

injury if relief is denied; (2) the moving party will likely prevail on the merits at trial; (3) the balance of

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potential harm favors the moving party; and (4) in certain cases, the public interest favors granting

injunctive relief. Textile Unlimited, Inc. v. A..BMH Co., Inc., 240 F.3d 781, 786 (9th Cir. 2001). In

seeking a preliminary injunction, a plaintiff meets its burden by demonstrating either: (1) a

combination of probable success on the merits and the possibility of irreparable injury; or (2) that

serious questions are raised and the balance of hardships tips sharply in its favor. Id. These two

formulations are not separate tests but represent two points on a sliding scale in which the required

degree of irreparable harm increases as the probability of success decreases. United States v. Odessa

Union Warehouse Co-op, 833 F.2d 172, 174 (9th Cir. 1987). 

2. Plaintiffs seek a preliminary injunction based on their claims for breach of contract,

violations of the Lanham Act, tortious interference, and violations of the Washington Consumer

Protection Act. By letter sent to the Court prior to the hearing in this matter, Plaintiffs withdrew the

portion of their original preliminary injunction motion that was based on alleged violations of the

Uniform Trade Secrets Act, RCW 19.108.010 et seq. 

Breach of Non-Competition Agreements

3. Plaintiffs argue that Defendants have violated or intend to violate their contracts with

Shainin by soliciting and providing services to Shainin’s clients. Defendants argue that the noncompetition agreements are unreasonable in scope and unenforceable.

4. The non-competition agreements at issue in this case are governed by Nevada law. By

statute, Nevada expressly permits employers to enforce non-competition agreements, as long as they

are reasonable in scope and duration. See Nev. Rev. Stat. § 613.200(4)(a). Defendants do not argue

that the duration of the non-competition agreements are unreasonable. Instead, they argue that the

agreements are unreasonable in scope.

5. The Nevada Supreme Court has adopted the following test for evaluating the

reasonableness of a non-competition agreement:

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[T]he test usually stated for determining the validity of the [non-competition] covenant as

written is whether it imposes upon the employee any greater restraint than is reasonably

necessary to protect the business and good will of the employer. A restraint of trade is

unreasonable, in the absence of statutory authorization or dominant social or economic

justification, if it is greater than is required for the protection of the person for whose benefit

the restraint is imposed or imposes undue hardship upon the person restricted. The period of

time during which the restraint is to last and the territory that is included are important factors

to be considered in determining the reasonableness of the agreement.

Hansen v. Edwards, 426 P.2d 792, 793 (Nev. 1967). 

6. Nevada courts have sometimes limited the scope of non-competition agreements that

are unreasonably overbroad, without holding that the agreements are unenforceable in their entirety. 

See, e.g., Hansen, 426 P.2d at 794; Ellis v. McDaniel, 596 P.2d 222, 224-25 (Nev. 1979). But cf.

Jones v. Deeter, 913 P.2d 1272, 1275 (Nev. 1996) (holding that overbroad covenant not to compete

was per se unreasonable and therefore unenforceable). In addition, Mr. Allen’s agreement expressly

provides that if a court finds that the non-competition restrictions in his agreement are unreasonable,

“the parties hereto agree that the maximum period or scope reasonable under the circumstances shall

be substituted for the stated period or scope, and that such court . . . shall be allowed to revise the

restrictions contained herein to cover the maximum period and scope determined by such court to be

permitted by law.” (Dkt. No. 2-1, Ex. C, § 9.7).

7. The parties agree that there is no Nevada case law on whether a non-competition

agreement is reasonable if prohibits an employee from soliciting or performing services for any of the

former employer’s clients, regardless of geographic location or whether the employee had actually

performed services for the client. Defendants note that courts in some jurisdictions have held that

such restrictions are overbroad and unenforceable. See, e.g., American Software USA, Inc. v. Moore,

448 S.E.2d 206, 209 (Ga. 1994) (“[A] prohibition against doing business with any of an employer’s

customers, whether or not a relationship existed between the customer and the former employee, is

overbroad.”) (emphasis in original); Pinnacle Performance, Inc. v. Hessing, 17 P.3d 308, 312 (Idaho

Ct. App. 2001) (“[A] prohibition against doing business with an employer’s clients, without regard to

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whether a relationship existed between the client and the employee, is an overbroad means of

protecting the employer’s interest in the goodwill developed by the employee.”). However, Plaintiffs

note that courts in other jurisdictions have enforced such limitations. See, e.g., Dam, Snell &

Taveirne, Ltd. v. Verchota, 754 N.E.2d 464, 470 (Ill. App. 2001) (enforcing non-competition

agreement that barred accountant from providing accounting services to any of former employer’s

clients, regardless of whether former employee had provided services to such clients during her

employment). 

8. The Court concludes that Plaintiffs have not shown a probability of success on their

claims that the non-competition clauses, as written, are enforceable under Nevada law. There is a lack

of Nevada case law considering the enforceability of non-competition clauses that are similar in scope

to those presented here. The Court has little basis to find that the Nevada Supreme Court would

uphold a non-competition clause that bars an employee from performing services for any of an

employer’s clients, without regard to geographic location or whether the employee himself had

performed services for the client. 

9. However, the Court concludes that the Nevada Supreme Court would likely find that

the non-competition clauses at issue in this case are reasonable and enforceable to the extent that they

preclude Defendants from performing or rendering services for clients for whom they performed

services while employed by Shainin. The Court concludes that Nevada courts would likely find that

such a restriction reasonably prevents Defendants from using client relationships they built as a result

of their employment with Shainin for their own benefit, rather than for Shainin’s benefit. 

10. Plaintiffs have offered evidence indicating that Defendants are likely to perform or

render services to clients for whom they performed services while at Shainin unless a preliminary

injunction issues. It is undisputed that Mr. Allen invited persons employed by clients for whom he

performed services while at Shainin to attend seminars to be conducted by The New Science of Fixing

Things. It is not clear that such solicitations, in and of themselves, violate Mr. Allen’s nonCase 2:06-cv-00420-MJP Document 41 Filed 05/15/06 Page 9 of 17
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competition agreement with Shainin, since the Court has not located language in his agreement that

expressly prohibits solicitation of Shainin’s clients. However, these solicitations plainly suggest that

Mr. Allen and Mr. Hartshorne intend to provide or render services for their former Shainin clients

through seminars to be offered by The New Science of Fixing Things.

11. To the extent that Plaintiffs seek to enjoin Defendants from performing or rendering

services for Shainin clients for whom Defendants performed services while employed at Shainin, the

balance of hardships tips sharply in Plaintiffs’ favor. Plaintiffs may lose business opportunities to

Defendants unless such conduct is enjoined, while any hardships that Defendants may experience as a

result of such a modest restriction would be minimal.

12. To the extent that Plaintiffs seek a broader injunction that would enjoin Defendants

from performing or rendering services for any persons or entities who were Shainin clients in the three

years preceding the termination of Defendants’ respective non-competition agreements, the Court

finds that the balance of hardships does not tip sharply in Plaintiffs’ favor. While Plaintiffs may lose

business opportunities to Defendants as a result of such conduct, Defendants would also experience

significant hardships. Shainin seeks to preclude Defendants from performing or rendering services to

more than 100 Shainin clients, including a number of large companies in the United States and abroad. 

Defendants’ ability to conduct business would be significantly restricted if they are precluded during

the course of this litigation from performing or rendering services to more than 100 companies.

13. To determine the appropriate scope of injunctive relief, the Court must determine the

termination dates of Defendants’ respective non-competition agreements with Shainin. The record is

not entirely clear in this regard. For Mr. Allen, it appears that his agreement was terminated on

September 12, 2004. See 3rd Shanin Decl., Ex. 17 (letter to Mr. Allen from Shanin’s counsel

indicating that his employment agreement would be deemed terminated as of September 12, 2004). 

As a result, his non-competition agreement would remain in effect until September 12, 2007, to the

extent it is enforceable. For Mr. Hartshorne, it appears that his agreement was terminated no later than

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August 31, 2003, making the non-competition agreement effective until no later than August 31,

2006. See Defs.’s Opp. at 12 (asserting that Mr. Hartshorne’s non-competition provision expires in

August 2006); Pls.’ Amended Proposed Order at ¶ 3 (similar). 

14. As written, the non-competition agreements prohibit Defendants from performing or

rendering services for persons or entities who were clients of Shainin for the three years immediately

preceding termination of their respective agreements. For the reasons discussed above, the Court

finds that a Nevada court would likely find that this provision is enforceable to the extent that it bars

Defendants from performing or rendering services to a person or entity for whom Defendants

performed services as an employee, consultant, or member of Shainin during the three-year period

preceding the termination of their respective employment agreements.

15. Therefore, Mr. Allen will be enjoined from performing or rendering services for

persons or entities for whom he performed services as a Shainin employee, consultant, or member

between September 13, 2001 and September 12, 2004. Unless otherwise ordered by the Court, this

injunction will remain in effect until September 12, 2007, when Mr. Allen’s non-competition provision

expires. This restriction will apply to Mr. Allen and to John Allen LLC, as well as to their officers,

agents, servants, employees, and other persons acting in concert with them.

16. Mr. Hartshorne will be enjoined from performing or rendering services for persons or

entities for whom he performed services as a Shainin employee, consultant, or member between

September 1, 2000 and August 31, 2003. Unless otherwise ordered by the Court, this injunction will

remain in effect until August 31, 2006, when Mr. Hartshorne’s non-competition provision expires. 

This restriction will apply to Mr. Hartshorne, David Hartshorne, Ltd., and The New Science of Fixing

Things, Ltd., as well as to their officers, agents, servants, employees, and other persons acting in

concert with them.

17. These restrictions do not preclude Defendants from conducting the seminar that The

New Science of Fixing Things plans to offer in Michigan on May 17-18, 2006. However, this seminar

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may not be attended by persons or employees of entities for whom Mr. Allen or Mr. Hartshorne

performed services as a Shainin employee, consultant, or member in the three years immediately

preceding the termination of their employment agreements. Mr. Allen’s non-competition agreements

prohibits him from performing or rendering services to Shainin clients “either as an advisor, employee

or consultant,” while Mr. Hartshorne’s non-competition agreement bars him from “directly or

indirectly perform[ing] consulting services” for Shainin clients. These restrictions on serving as an

advisor or consultant may be read to restrict Mr. Allen and Mr. Hartshorne from teaching seminars

that are attended by their former Shainin clients, particularly in light of the fees that are charged to

attend the seminars. 

18. Defendants will not be enjoined from soliciting or performing services for persons or

entities who were not Shainin clients but who are simply part of a Shainin client’s supply chain. To

the extent that Plaintiffs suggest that such a restriction is warranted by provisions of Defendants’ noncompetition agreements that bar Defendants from “directly or indirectly” participating in the provision

or rendering of services for Shainin clients, the Court concludes that a Nevada court would likely find

such restrictions to be overbroad. 

 Breach of Confidentiality Agreements

19. Plaintiffs also argue that Defendants have violated their confidentiality agreements with

Shainin or will violate those agreements unless a preliminary injunction issues. The confidentiality

agreements are governed by Nevada law. 

20. By statute, Nevada permits employers to require employees to execute and enforce

confidentiality agreements. See Nev. Rev. Stat. § 613.200(4)(b) (employers may prohibit an employee

from “[d]isclosing any trade secrets, business methods, lists of customers, secret formulas or processes

or confidential information learned or obtained during the course of his employment . . ., if the

agreement is supported by valuable consideration and is otherwise reasonable in its scope and

duration.”).

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21. On the limited record before it, the Court cannot conclude that Plaintiffs have

demonstrated a probability of success on their claims that Defendants have violated or will violate the

terms of their confidentiality agreements with Shainin. The facts underlying these claims are sharply

disputed by the parties and are highly technical. The Court is not able to resolve these factual disputes

with any degree of certainty, given the diametrically opposed testimony and evidence offered by the

parties and the limited record before the Court. Indeed, this is the type of case in which the Court

would be likely to seek appointment of an independent expert pursuant to Fed. R. Evid. 706. As the

Ninth Circuit has noted, “[i]n deciding a motion for a preliminary injunction, the district court ‘is not

bound to decide doubtful and difficult questions of law or disputed questions of fact.’” Int’l Molders’

& Allied Workers’ Local Union No. 164 v. Nelson, 799 F.2d 547, 551 (9th Cir. 1986). 

22. Even if the Court were to find that Plaintiffs have raised serious questions going to the

merits of their claims that Defendants have violated or will violate the confidentiality provisions of

their employment agreements, the balance of hardships does not tip so sharply in Plaintiffs’ favor as to

warrant a preliminary injunction. Plaintiffs would likely suffer some degree of hardship if Defendants

were to disclose Plaintiffs’ proprietary or confidential information. However, Defendants would also

suffer significant hardships if they were enjoined from conducting seminars or performing consulting

services in the manner requested by Plaintiffs. Mr. Allen maintains that he has spent a significant

amount of time developing the ideas that he and Mr. Hartshorne intend to present through The New

Science of Fixing Things and that they have incurred a significant amount of costs, expenses, and

liabilities to develop these ideas, establish a website, and produce seminar materials. (Allen Decl. ¶

53). Mr. Allen estimates that if he and Mr. Hartshorne are precluded from working and using their

methodology, they will incur between $200,000 to $1,000,000 in lost revenue over the next 2 to 12

months. Id. In light of these contentions, the balance of hardships does not tip so sharply in

Plaintiffs’ favor as to warrant injunctive relief.

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Trademark Infringement Claims

23. Plaintiffs also raise claims for trademark infringement. At the hearing on this matter,

Plaintiffs’ counsel indicated that their request for injunctive relief for trademark infringement is based

on the use of Plaintiffs’ trademarks in the metatags of Defendants’ websites. It is undisputed that a

website operated by Defendant David Hartshorne has included Plaintiff’s registered trademarks in its

metatags, including the trademarks “SHAININ,” “RED X,” “GREEN Y,” and “FEMCA.” Mr.

Hartshorne’s site has also included confusingly similar variations of terms to which Plaintiffs claim

trademark rights, including “B VS C” and “COMPONENT SEARCH.” 

24. Under Ninth Circuit law, the use of a plaintiff’s trademarks in the metatags of a

defendant’s website may give rise to a claim for trademark infringement. See Brookfield Commc’ns,

Inc. v. West Coast Entm’t Corp., 174 F.3d 1036, 1061-65 (9th Cir. 1999). In such cases, the use of

another’s trademarks in metatags may result in “initial interest confusion” by diverting Internet users

to the defendant’s website, thereby allowing the defendant to benefit the goodwill the plaintiff has

developed in its marks. Id. at 1062. However, it should be noted that the use of another’s trademarks

in metatags does not automatically result in trademark infringement. For example, the use of

trademarks in metatags may be a permissible “nominative use” of the trademark. See, e.g., Playboy

Enters., Inc. v. Welles, 279 F.3d 796 (9th Cir. 2002) (holding that use of trademarks for “playboy”

and “playmate” in metatags of a model’s website constituted nominative use). 

25. At a minimum, the Court concludes that Plaintiffs have raised serious questions going

to the merits of their claims of trademark infringement based on Defendant Hartshorne’s use of

Shainin’s trademarks in website’s metatags. 

26. The Court also finds that the balance of hardships tips sharply in Plaintiffs’ favor with

respect to their request for an injunction regarding Defendants’ use of Plaintiffs’ trademarks in

metatags. Defendants would suffer little if any hardship by being restrained from using Plaintiffs’

trademarks in metatags during the pendency of this action. Indeed, Defendants’ counsel indicated at

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the hearing that Defendants have already removed the metatags from Mr. Hartshorne’s website,

suggesting that Defendants will suffer no hardship if they are enjoined from such conduct.

Remaining Claims

27. Plaintiffs also raise claims for tortious interference, unfair competition, and violations of

the Washington Consumer Protection Act. These claims are essentially based on the same factual

allegations supporting the claims discussed above, and the parties’ briefing on these claims is not

extensive. In ruling on the pending motion, the Court finds that it is not necessary to reach these

additional claims. Even if the Court were to conclude that Plaintiffs have demonstrated that a

preliminary injunction is warranted with respect to these claims, the injunctive relief ordered by the

Court would not be materially different than the relief ordered below.

Injunctive Order

Consistent with the findings of fact and conclusions of law set forth above, the Court finds that

Plaintiffs’ motion for a preliminary injunction should be granted in part and denied in part. The Court

ORDERS as follows:

During the pendency of this action, Defendants are restrained and enjoined as follows:

1. Defendants John Allen and John Allen LLC, and each of their officers, agents, servants,

employees, and other persons acting in concert with them, are prohibited from performing or

rendering services for any person or entity for whom Mr. Allen performed services as an employee,

member, and/or consultant of Shainin between September 13, 2001 and September 12, 2004. Unless

otherwise ordered by the Court, these restraints will remain in effect until September 12, 2007.

2. Defendants David Hartshorne, David Hartshorne, Ltd., and The New Science of Fixing

Things, Ltd., and each of their officers, agents, servants, employees, and other persons acting in

concert with them, are prohibited from performing or rendering services for any person or entity for

whom Mr. Hartshorne performed services as an employee, member, and/or consultant of Shainin 

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between September 1, 2000 and August 31, 2003. Unless otherwise ordered by the Court, these

restraints will remain in effect until August 31, 2006.

 3. Defendants shall not include Plaintiffs’ trademarks or confusingly similar marks in the

metatags for any of their websites, including the marks SHAININ, RED X, GREEN Y, FEMCA, B

VS C, or COMPONENT SEARCH.

4. This Order shall not be construed as precluding Defendants from conducting the

seminar that The New Science of Fixing Things plans to offer in Michigan on May 17-18, 2006. 

However, this seminar may not be attended by persons or employees of entities for whom Mr. Allen or

Mr. Hartshorne performed services as a Shainin employee, consultant, or member in the three years

immediately preceding the termination of their respective employment agreements. 

5. This Order shall not be construed as enjoining Defendants from soliciting or performing

services for persons or entities who are not Shainin clients but who are simply in the supply chain of a

Shainin client.

Fed. R. Civ. P. 65(c) provides that “[n]o restraining order or preliminary injunction shall issue

except upon the giving of security by the applicant, in such sum as the court deems proper, for the

payment of such costs and damages as may be incurred or suffered by any party who is found to have

been wrongfully enjoined or restrained.” At the hearing on this matter, Defendants’ counsel indicated

that only a nominal bond would be necessary if the Court were to limit injunctive relief in the manner

prescribed in this Order. Therefore, the Court sets security in the amount of $5,000, which Plaintiffs

shall post by 5:00 p.m. on Wednesday, May 17, 2006. This Order shall be contingent on the posting

of such security.

Conclusion

For the reasons discussed above, the Court finds that Plaintiffs are entitled to a preliminary

injunction to enjoin Defendants: (1) from performing or rendering services for certain clients for whom

they performed services while employed by Plaintiffs; and (2) from including Plaintiffs’ trademarks in

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the metatags for websites operated by Defendants. The Court finds that a preliminary injunction is not

warranted with respect to the remainder of the Plaintiffs’ claims. This Order is contingent on

Plaintiffs’ posting of security in the amount of $5,000 no later than 5:00 p.m. on May 17, 2006.

This Order is necessarily based on a limited record and does not serve as a final adjudication of

Plaintiffs’ claims or a final determination regarding Defendants’ obligations under their contracts with

Shainin. “[T]he findings of fact and conclusions of law made by a court granting a preliminary

injunction are not binding at trial on the merits,” and a court may reach opposite conclusions on a

more complete record. University of Texas v. Camenisch, 451 U.S. 390, 395 (1981). 

 The clerk is directed to send copies of this order to all counsel of record.

Dated: May 15, 2006

s/Marsha J. Pechman 

Marsha J. Pechman

United States District Judge

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