Court Opinion

ID: 9727704
Source: CourtListenerOpinion
Date Created: 2023-08-26 13:48:28.679114+00
Date Added: 2024-06-11T18:25:41.836634
License: Public Domain

GARRARD, Presiding Judge,
dissenting.
I concur with the majority up to the point it commences consideration of the court's power to enter injunctive relief under the Trade Secrets Act, IC 24-2-8-1 et seq., and application of the Act to the injunction entered by the trial court.
In order to appreciate the statutory scheme it is helpful to recall briefly the scene at common law. Trade secrets have traditionally been protected and injunctive relief has been both popular and effective *1078as a remedy. (No doubt this was due in part to uncertainty as to a proper measure of damages; an uncertainty removed in large part by the Act.)
Nevertheless, and oftentimes dependent upon the particular facts at hand, courts were wont to disagree as to whether the essence of the offense was the taking of a property right or the breach of trust involved in violating a confidential relationship. See, e.g., Mr. Justice Holmes' opinion for the Court in E.I. Dupont de Nemours Powder Co. v. Masland (1917), 244 U.S. 100, 37 S.Ct. 575, 61 L.Ed. 1016.
Seeking to clarify, consolidate and make uniform the law in this area, the Act supplies a definition for protectable trade secrets and for misappropriation. It provides for injunctive relief, for monetary damages in addition to or in lieu of an injunction, and for exemplary damages where there is a willful and malicious misappropriation. The Act also provides for attorney fees.
The provision covering injunctions appears at IC 24-2-38-8. Subsection (a) states:
"Actual or threatened misappropriation may be enjoined. Upon application to the court, an injunction shall be terminated when the trade secret has ceased to exist, but the injunction may be continued for an additional reasonable period of time in order to eliminate commercial advantage that otherwise would be derived from the misappropriation."
Commentators on the Act appear to agree that it is the intent of the Act to eliminate the perpetual injunction as an available remedy. See, e.g., Lyden, The Deterrent Effect of the Uniform Trade Secrets Act, 69 J. Pat. & T. Off. Soc'y. 427 (Aug. 1987); Keitzke, The Uniform Trade Secrets Act, 64 Marq.L.Rev. 277 (1980).
The Act does not, however, employ that term nor does it speak expressly in terms of preliminary or temporary injunctions. It simply states that the injunction shall be terminated when the trade secret has ceased to exist.1 On the other hand, our Trial Rule 65 relating to injunctions addresses temporary restraining orders and preliminary injunctions and our decisions continue to refer to temporary injunctions and permanent injunctions.
In modern practice the term "temporary restraining order" has clearly come to denote a restraining order issued without notice pursuant to TR 65(B) as distinguished from a temporary or preliminary injunction issued with notice and after hearing. ("'Temporary and "preliminary" are used interchangeably in referring to an injunction issued pursuant to TR 65(A).
An ambiguity arises, however, when we speak of permanent injunctions. "Permanent" may be taken in the sense of "perpetual" for this is often its effect.2 It may also be taken simply to refer to the final injunction ordered after the trial on the merits, as distinguished from a temporary imjunction issued after only preliminary proofs to maintain status quo.
The Uniform Trade Secrets Act does not purport to address these procedural distinctions. It leaves them to normal state practice. In my view it is a misapplication of the Act to equate its limitation on the permissible duration of the injunction with the finality of the order. (In other instances of permanent injunctions it has long been recognized that the court retains jurisdiction to modify or revoke the injunction as changed circumstances may dictate. 42 Am.Jur.2d, Injunctions Sec. 324, pp. 324-25.) Thus, even the fact that the terms of the injunction describe it as permanent is not critical, The point is that the party enjoined is entitled to relief (subject to the reasonable period extension) once the trade secret has ceased to exist.
This analysis requires consideration of two more questions not specifically addressed by the Act. When has a trade secret ceased to exist and, procedurally, who bears the burden of proof?
*1079The language of Section 8(a) clearly supports the interpretation that the enjoined party is not entitled to relief until the trade secret has actually ceased to exist as a matter of fact. On the other hand, the definition of "trade secret" contained in IC 24-2-8-2 posits that the information, etc., in order to qualify as a trade secret, is not "readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use." To this extent then the plaintiff must establish the definitional requirement to be entitled to relief and he bears the burden of doing so. Onee he has made a prima facie case that a trade secret exists, the burden of going forward with evidence that the secret is readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use shifts to the defendant who then bears the risk of non-persuasion.
Once this has been done and relief granted, the burden rests upon the enjoined party to establish that the trade secret has, in fact, ceased to exist. Ordinarily this will require proof that some other entity has discovered the information, etc. by legit imate means and has put it to competitive use. At that juncture an assertion of mere discoverability will be unavailing on principles of res judicata.
In the case before us there was ample evidence of a trade secret. Moreover, the evidence disclosed that reverse engineering would not disclose the dimensional tolerances developed by Tuthill. I disagree with the majority determination that the injunction must be expressly limited as to its duration at the time it is entered and the implication that the owner of a trade secret seeking injunctive relief as a part of his case must establish when the trade secret status of his information, ete. will likely expire. -It is enough under the Act that the enjoined party may seek relief at that time.
Moreover, I do not find the injunction to have been too vague or overbroad.
I would therefore affirm the trial court.

. Except that it may be continued for a reasonable period to eliminate unfair advantage.

. That the majority opinion equates the terms can be seen from its reliance on subsection (c) of IC 24~-2-3-3 and the distinction it is careful to draw between temporary injunctions as a favored form of relief under the Act and permanent injunctions, which it considers an extreme remedy.