2004 D e c i sion s O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit
2-12-2004 

# D o eble rs P A H y br id s v . D o eble r S eed s P r e c e de n t i al or N on-P r e c e de n t i al : N on-P r e c e de n t i al D ocke t N o . 03-4108

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Thi s de c i sion i s br ou gh t t o you for f r e e a nd ope n a c c e s s b y the O p inion s of the U nit e d S t at e s C our t of Appe al s for the Thir d C ir c uit at V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. It h as be e n a c c e pt e d for inclusion in 2004 D e c i sion s b y a n author i z e d a dmini s tr at or of V i l l a no va U nive r sit y S choo l of L a

w Di g it al Re posit or y

. F or mor e infor m at ion, p le as e c on t a ct Be n j a min . C a rl s on@l a

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A H y br id s v . D oeb le r S e e d s " (2004). 2004 D e cisio n s . P ape r 1007. h tt p://d i g it alc ommon s .l a

w . v i l l a no va . e du/thir dc ir c uit_2004/1007* Honorable Thomas N. O’Neill , Jr ., SeniorDistrict Judge for

the Unit ed Stat es District Court f or t he Easter n District

of Pennsyl vania, sitti ng by designa ti on. NOT PRE CEDENT IAL THE UNITED STATES COURT OF APPEALS

FO R T HE TH IRD CIR CU IT

___________ No. 03-4108

___________ DOEBLER' S PENNSYLVANI A HYBRIDS, INC.
v. DO EBL ER SE EDS , LLC, d/b/a T.A. Doeb ler Seeds; TA YL OR DO EB LE R, III, an individ ual, Ap pellan ts

___________ ON APPEAL FROM THE UNI TED STATES DIST RICT COURT FO R T HE MID DL E D ISTR ICT O F PE NN SY LV AN IA

(D.C. Civi l No. 03-cv- 01079) District Judge: T he H onorab le James F . McC lure, Jr.

___________ Submitte d Under Third Circ uit LAR 34.1(a)

January30, 2004 BE FO RE : NY GA AR D a nd F UE NT ES , Circu it Judges
.

and O’ NEILL, * Distri ct Judge
. (Fil ed February12, 2004)2 ___________ OPINI ON OF THE COURT

___________ NY GA AR D, Circu it Judge
.

This case i s an expedited inte rlocut ory appeal byAppellant s T.A. Seeds (formerl y known as Doebler Seeds, LLC) and Tay lor Doebler , II I (“Doebler III” ) of a preli minaryinjunct

ion ente red by the Dist

rict Court. The Dis tri ct Court e ntered t he injunct ion to pr otect

Appellee Doebler s’ Pennsy lvania Hybri ds, I nc. (“DPH”) from the harmful act s of T.A. Seeds a nd Doebler II I that alle gedlyinclude d unfair c ompetition, tr ade mark di lu ti on, and mis app ro pr ia ti on o f tra de s ecret s. We wil l a ffi rm. I. Because the fac ts ar e known to the parties , and we write only for them, our fa ctu al s um m ar y is b rie f. T hi s c as e s tem s fro m a d isp ut e o ve r th e c on tro l o f f am ilyowned businesses , al l of which have s imil ar names. T.A. Doebler & Son, l ater renamed Doebler Seeds, LLC and then T.A. Seeds, is a seed growing business. DPH is a business that markets se eds grown by T. A. Doebler & Son and other gr owers, under the tr ade name Doebler’s. The Doebler’s t rade name has been i n use for 30 y ears and i s conside red by the public to be sy nonymous with DPH. DP H also does subs tanti al res earch and testi ng of new hybrid seeds.3 In late 2002, becaus e of disagreements with the seni or management of DPH, Doebler III resigned bot h his employment and posit ion on the board of the
com pan y. Do eble r III m ainta ined , how eve r, ex clus ive c ont rol o ver T.A . Do eble r & So n. He renamed the company Doeblers’ Seeds, LLC and developed a pl an to grow and market see d corn in competiti on with DPH. He hired many of the employ ees who fo rme rl y worke d f

orDPH. After Doebler I II fai led to respond to a ce ase-and- desist letter, DPH sued alleg ing , inter alia , unfai r competi tion, trademark dilution, a nd misappropriati on of trade
se cr et s. The Di stri ctCourt g ra nt ed apr el imi nary in ju nctio n en

jo in in g App el la nt s f

ro m: (1) usin g the D oeble r’s ma rk or a ny conf using ly similar va riation; (2 ) eng aging in un fair competition; ( 3) offeri ng for sal e any of a lis t of twenty- one seed corn hybrids s old by DPH; and (4) comparing any of its hybrids t o those sol d by DPH. On reconside rati on, the Distri ct Court refused to a mend the inj unction, but requi red DPH to post a bond for
secu rity. In respo nse to the C ourt’s c once rn ab out n ame conf usion , Do ebler III agree d to
rename his comp any T.A. Se eds (“TA S”). II.

A preliminary injunct

ion is an appealabl e inte rlocut ory order under 28 U.S.C. § 1292(a )(1). We review a District Court ’s grant of a prel iminary

injunct ion for abu se o f dis creti on, e rror o f law , or c lear m istak e of fac t. Vuitto n v. W hite , 945 F.2d 569, 574 (3d Cir. 1991 ).4 App ellants TA S and D oebler III argue o n appe al that the preliminary injunct ion was in er

ror becaus e it: (1) i mposed rest rictions on competi tion des pite t he lack of a non-compete a greement; (2) was overbr oad; (3) overestimated t he harm to DPH and underestim ated the harm to TA S; and (4) m istakenly concluded DP H’s trade se crets were misappropriate d. Appell ants’ clai ms are merit less and requir e lit

tle di scussi on. The preli minaryinjunct ion was not an abus e of discretion nor an error of law. D PH show ed: (1) a reaso nable prob ability of su ccess on th e me rits; (2) irrep arable injury; (3) harm outweighing poss ible harm to other parti es; and ( 4) that

the inj unction
wo uld be in the p ubl ic int eres t. See Novarti s Consumer Health, Inc. v. Johnson & Johnson-Merck Consumer Pharms. Co. , 290 F.3d 578, 586 (3d Cir. 2002) . Ap pellan ts are in cor rect t hat th e D istrict Co urt e rred in its a sses sm ent o f ha rms to th e pa rties. Custom er confu sion to the detrim ent of D PH is inevitable, since the TA S em ployees are sub st antia ll y deriv ed f

ro m DPH, th e t wo co mpan ie s s el l t he s ame p ro duc ts in th e s ame
m ar ke t, a nd th e c om pa ni es ar e lo ca ted in th e s am e to w n. A dd itio na lly, T A S e m pl oys many of DPH’s former employ ees in pos iti ons that will result

in inevi table discl osures of trad e se crets . See Pepsico, Inc. v. Redmond , 54 F.3d 1262, 1269-70 (7th Cir. 1995) (concludi ng that a

company made out a

case of trade secret misappropriation where an employe e “possess ed extensi ve and intimate knowledge” about st rategi c goals and without an “ uncanny abili ty to compartmentali ze information” would end up rely ing on that knowle dge, and l ikening t he sit uation to one where the company“finds i tsel f in the1. Pen nsy lvan ia co urts ha ve n ot ex plicitly ad opte d the inev itable d isclos ure

doctr ine f

rom Pepsico, Inc. , butwe predict that , underthe ci rcumstance s, the Pennsylvani a Supreme Court would appl y itor some vari ati on ther eof. In Air P rodu cts & C hem icals , Inc . v. Jo hns on, the Super iorCourt of Pennsylvani a aff

ir med a prel iminar y inj uncti on prevent ing a f ormer employee f

rom discl osing conf

ident ial inf ormati on to a new employer or part ici pati ng in certai n aspect s of hi s new em ploy m ent w here disclo sure w ould be a risk. 44 2 A .2d 1 114 , 112 4-25 (Pa. S upe r. Ct. 1982) . The Court reasone d that the tri al court’ s “expre ssi on of i ts determinat ion of the l ikel ihood of

discl osure was pr oper, ” but st opped short of sayi ng discl osure was “inevi tabl e.” Id. at 1124. Using Air P rodu cts as a sign po st for w he n P en nsy lva nia co urts are w illing to g ran t an inju nc tion ag ain st m isa pp rop riatio n o f tra de se cre ts, w e co nc lud e th at th e in jun ctio n e nte red he re w as pro pe r. 5 position of a coach, one of whose play ers has l eft, play book in hand, to joi n the opposi ng team be fore the big g ame”). 1

Ap pellan ts’ argu men t that no non -com pete a greem ents w ere sig ned is ir re le va nt . A ppe ll an ts ’ l iabi li ty is not pr emi se d on th e fac t t

ha t t he y co mpe te d wi th DPH, but rath er on the fa ct that the y used D PH ’s ow n con fiden tial infor matio n to co mp ete against them. The new TAS employees have made use of thei r contac t li sts deve loped at DPH and T AS marketing st aff have made dir ect compari sons between their pr oducts and those of DPH, incl uding tel ling cus tomers t hat “basi call y the same people t hat produce d [DPH] hybrids
. . . will now be produci ng [TAS] hybri ds.”

The prelim inary injun ction w as na rrow ly tailored, as it p reclud ed on ly unf air com petition . The injunc tion pre vente d TA S fro m se lling on ly 21 of its 5 0 hybrid seed corn varieti es—those that were simil ar or i dentic al to DPH products . Also, on reconsi derati on the Court amended the inj unction to allow TAS to selleven the 216

alle gedlyinfri nging hy brids a s feed corn, provided t hat it did not di sclose the pedi gree and v ariety to bu yers. Sim ilarly, we co nclud e that th e D istrict Co urt w as w ithin its disc retio n in refu sing to co nfin e the inju nctio n to “the No rthe ast.”

Appellants incorrectl y characterize the preli minary inj unction as a permanent i njuncti on. The evidenc e does not s upport anything more t han a specul ative conclusi on that t

he injunc tion wil l put TAS out of busi ness. Furthermore, the bond poste d by D PH will reim burse TA S fo r any hard ship su ffere d bec ause of the injunc tion, if it wins the lawsuit on the merit s.

Finall y, appell ants cl aim that the Dist rict Court err ed by exc luding an affidavi t from evi dence. Appell ants gl oss over t he fact t hat the y fi rst attempt ed to pres ent the af fidav it at the rec onsid eration hearin g. Th e D istrict Co urt w as un der n o ob ligation to consider such evidenc e at that ti me. III. For th e fo re goi ng r eas ons , we wil l a ffi rm.7

_________________________ TO THE C LERK:

Please fi le the foregoing opi nion.
/s/ Richard L . Nygaard Circuit Judge8