Court Opinion

ID: 1016547
Source: CourtListenerOpinion
Date Created: 2013-07-04 21:51:10.000375+00
Date Added: 2024-06-11T10:06:13.719956
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                              No. 04-2539

BOWE BELL & HOWELL COMPANY,

                                              Plaintiff - Appellee,

           versus

ALBERT M. HARRIS; MICHAEL BROOKS; NIELS
ANDERSEN; JEFFREY LEUTNER; RICHARD A. NESTOR;
DAVID    MEEHLING;     DOCUMENT     SERVICES,
INCORPORATED,   d/b/a  Trans-Print   Software
Service, d/b/a Trans-Print Services,

                                            Defendants - Appellants.

Appeal from the United States District Court for the District of
Maryland, at Baltimore. Richard D. Bennett, District Judge. (CA-
04-3418-RDB)

Argued:   May 25, 2005                      Decided:   July 15, 2005

Before WILKINS, Chief Judge, and TRAXLER and KING, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Timothy Guy Smith, Silver Spring, Maryland, for Appellants.
Douglas Glenn Edelschick, MCDERMOTT, WILL & EMERY, L.L.P.,
Washington, D.C., for Appellee. ON BRIEF: Melise Blakeslee, Sarah
E. Hancur, MCDERMOTT, WILL & EMERY, L.L.P., Washington, D.C.; Scott
H. Phillips, SEMMES, BOWEN & SEMMES, Baltimore, Maryland, for
Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).

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PER CURIAM:

       Plaintiff Bowe Bell + Howell Company (BBH) brought an action

against      Defendants,    Document    Services,      Inc.   d/b/a      Trans-Print

Services      (TPS)   and   several     individuals     associated       therewith,

alleging federal copyright and trademark infringement and related

state law claims. BBH moved for a preliminary injunction to enjoin

Defendants from conducting any business related to a software

package called TransFormer.             The district court granted BBH’s

motion and Defendants appeal from this order.                 We affirm.

                                        I.

       In 1997, BBH purchased the assets of The Harris Group for

$5,000,000.      The Harris Group’s primary asset included TransFormer

and    its   intellectual    property        rights--such     as   the   software’s

copyrights, trademarks, and exclusive right to license--and its

related trade secrets and software “know-how,” which included the

provision of software maintenance to TransFormer users.                         The

individual Defendants were all employees or shareholders of The

Harris Group. In fact, Defendants Albert Harris and Michael Brooks

originally developed TransFormer.

       After BBH’s purchase, the individual Defendants continued to

work    in    some    capacity    for    BBH.     To    protect     TransFormer’s

intellectual property rights and trade secrets, BBH required its

employees      and    customers   to    agree     to   keep    confidential     all

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proprietary information related to TransFormer.           Employees signed

either a nondisclosure or a noncompetition agreement, or both.

Customers purchasing the product agreed to certain licensing terms,

which prohibited sharing the product with others without BBH’s

prior written consent.

      Over time, the individual Defendants voluntarily resigned or

were terminated from their employment at BBH.             Before Defendant

Brooks left BBH, however, he sent Defendant Harris, who had already

left the company, BBH’s 267-page customer list containing hundreds

of customer names, contact information, and service histories.

This list was saved on a password protected BBH server which was

securely stored in BBH’s Baltimore office and accessible only by

BBH employees.

      After leaving BBH, Defendant Brooks incorporated TPS, and the

other individual Defendants associated themselves with TPS in some

capacity.   TPS advertised itself in a press announcement as having

been formed by “the original developer and owner of The Harris

Group’s . . . software” and as “an alternative vendor for users of

the   TransFormer   .   .   .   perform[ing]   software   maintenance   and

provid[ing] programmer coding services.”          J.A. 41.    In all, the

announcement made eleven references to the registered trademark,

“TransFormer,” and also mentioned The Harris Group and BBH several

times.

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      After a two-day hearing, the district court issued a written

order granting BBH’s motion for a preliminary injunction and

enjoining Defendants from conducting any business relating to

TransFormer.    In reaching its decision, the district court applied

the four-factor test relevant to determining whether injunctive

relief is appropriate in a given case. The district court examined

(1)   the   likelihood    of    irreparable       harm   to    the    plaintiff    if

injunctive relief were denied; (2) the likelihood of harm to the

defendant if relief were granted; (3) the likelihood of success on

the merits; and (4) the public interest. See Blackwelder Furniture

Co. v. Seilig Mfg. Co., 550 F.2d 189, 195-97 (4th Cir. 1977).

      In considering these factors, the district court found the

irreparable harm to BBH in denying the injunction substantially

greater than the harm to Defendants in granting the injunction.

The district court concluded that the balance of hardships plainly

favored BBH in large part because the evidence demonstrated a

likelihood of success on the merits as to several of BBH’s claims

for misappropriation of trade secrets, trademark and copyright

infringement,    and     breach    of     noncompetition       and   nondisclosure

agreements.     Many of these violations, the district court noted,

could not be compensated by money damages alone.                   In contrast, the

district    court   determined       that      the   harm     to   Defendants     was

relatively small because TPS’s business was still evolving and

involved    working      with     other       software   products      aside    from

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TransFormer.    The district court further pointed out that the

individual Defendants, who are well-educated, can work with other

types of computer software too.

     Particularly with respect to BBH’s likelihood of success on

the merits, the district court determined that in “cop[ying] the

TransFormer source code from the licensee” onto the TPS computer

and using TransFormer to service customers,         J.A. 1452, TPS likely

violated the TransFormer License Agreement.         Further, in using the

registered trademark, “TransFormer,” eleven times in its press

announcement, TPS’s advertising was likely to cause, and continue

to cause, confusion in the marketplace.           While employed by BBH,

moreover, Defendant Brooks’ transmission of BBH’s customer list to

Defendant Harris, who was no longer employed with BBH, likely

misappropriated a BBH trade secret.          Finally, the district court

found that many of the individual Defendants’ association with TPS

likely   violated   either   their   noncompetition    or   nondisclosure

agreements with BBH.

     The district court also determined that the public interest

favored granting the injunction.         The district court reasoned that

the public has an interest in enforcing restrictive covenants that

protect business interests, and that the public has an interest in

preventing the misleading and deceptive use of trademarks or the

infringement of copyrights.

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     After having thoroughly analyzed the evidence presented by the

parties with respect to each factor, the district court concluded

that all the relevant factors weighed in favor of granting BBH’s

motion for preliminary injunction and, accordingly, issued an order

to that effect.

                                  II.

     “We review the grant or denial of a preliminary injunction for

abuse of discretion, recognizing that ‘preliminary injunctions are

extraordinary remedies involving the exercise of very far-reaching

power to be granted only sparingly and in limited circumstances.’”

MicroStrategy, Inc. v. Motorola, Inc., 245 F.3d 335, 339 (4th Cir.

2001) (quoting Direx Israel, Ltd. v. Breakthrough Med. Corp., 952

F.2d 802, 816 (4th Cir. 1991)).    “We review factual determinations

under a clearly erroneous standard and legal conclusions de novo.”

Safety-Kleen, Inc. (Pinewood) v. Wyche, 274 F.3d 846, 859 (4th Cir.

2001).

     After careful consideration of the parties’ positions, both as

presented in their briefs and at oral argument, we find nothing in

the record to suggest that the district court abused its discretion

in granting BBH’s motion for preliminary injunction.     Defendants

have failed to demonstrate that any fact found by the district

court is clearly erroneous or that any conclusion of law drawn from

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those facts is in error.   Accordingly, we affirm based on the well-

reasoned opinion of the district court.

                                                           AFFIRMED

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