Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:In an attempt to compete with Bell Helicopter Textron Inc. in the helicopter replacement blade market, IAC Ltd. spent approximately $1 million to design and prepare for the manufacture of a replacement blade for Bell’s 206B helicopter. The price of the blade will be slightly lower than Bell’s replacement blade. At the time, IAC was a licensed Bell customer service facility, whereby it received proprietary data on blades such as the 206B. IAC had agreed to use the data solely for repairing Bell helicopters. Jim Van Horn of Van Horn Aviation was to develop the blade, while IAC’s principal, Randy Stevens, would manufacture and market the blade. Van Horn planned to use documents obtained through the Freedom of Information Act and reverse engineering to create an original design. He could not get information on the 206B blade from the public domain, so he got information on the OH-58 blade � which was similar to the 206B � from public documents, including the Depot Maintenance Work Report for Bell’s OH-58 helicopter that Van Horn purchased from Newport Aeronautical Sales. Through various tests, Van Horn noticed that the contour and twist data from both the 206B and OH-58 blades were identical. He used this data, as well as some of the same sealants and adhesives Bell used, to create his own designs. Upon learning of IAC’s plans in making a competing blade, Bell sued IAC for misappropriation of trade secrets, unfair competition, theft of trade secrets, breach of contract and breach of fiduciary duty. Bell secured a temporary restraining order and then a temporary injunction. IAC challenged the grant of the injunction. IAC argued that Bell did not establish the existence of a trade secret or show irreparable harm. HOLDING:Affirmed. In addressing IAC’s first argument, the court noted that, in determining whether to grant a trade secret protection by a temporary injunction, a trial court does not determine whether the information sought to be protected is, in law and fact, a trade secret. Rather, the trial court determines whether the applicant has established that the information is entitled to trade secret protection until the trial on the merits. The court found Bell had met this initial burden. Bell produced evidence showing the measures it took to guard the secrecy of the data surrounding the 206B, the amount of effort it expended in developing the data, the value of the data, and the difficulty with which the data could be duplicated by others. Bell produced evidence that it took measures to protect the secrecy of the data contained in the DMWR and the extent to which that information was known outside of Bell’s business. All of this was evidence relating to one part of the test used to determine if trade secret protection is available. The court then turned to evaluating the evidence of whether IAC acquired the trade secrets through a breach of a confidential relationship or discovered it by improper means. The court reiterated that the contour and twist data for the 206B blade was identical to that for the replacement blade. Such evidence tended to support a reasonable inference that IAC acquired the 206B data through a breach its confidential relationship with Bell. Furthermore, Bell’s showing that the DMWR was not available through attorney general publication centers, the drawings upon which the DMWR was based were not available through a FOIA request, and Newport Aeronautics provided the DMWR only on a “need to know” basis was evidence that raised the possibility that the disclosure of the DMWR was improper. The court then considered whether Bell met its burden of showing that a probable, imminent and irreparable injury would result before trial absent a temporary injunction. The court observed that, when a defendant possesses trade secrets and is in a position to use them, harm to the trade secret owner is presumed. The threatened disclosure of the secret constitutes irreparable injury as a matter of law. Also, the loss of business goodwill Bell may suffer counts as irreparable injury. The court reviewed the terms of the injunction and disagreed with IAC that they were unduly vague, imprecise or devoid of required findings. The injunction identified Bell’s harm and explained why it was irreparable. It explicitly stated that Bell had shown that IAC had possession of Bell data entitled to trade-secret protection and was actively using that information to compete with Bell in the replacement blade market. Likewise, the injunction properly identified the precise conduct in which IAC was enjoined from engaging. The injunction clearly prohibited IAC from using, disclosing, destroying, transferring, copying, communicating, transmitting or publishing this information. The court made additional rulings favoring Bell on admission of certain expert testimony and in the amount of the bond. OPINION:John Cayce, C.J.; Cayce, C.J.; Dauphinot and Gardner, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.