UCAR Inc., a Chinese rival to Uber Inc.,
UCAR Inc. ()

A federal judge in San Jose has turned back a preliminary injunction bid from China-based ride-hailing company UCAR Inc. in a trade secret lawsuit against four former employees of its U.S. subsidiary.

UCAR and its lawyers at RuyakCherian sued four software developers in March claiming they stole company trade secrets when they resigned abruptly earlier this year to start their own driverless-car venture.

U.S. District Judge Edward Davila of the Northern District of California previously granted a temporary order barring the men from working on any project “based on UCAR data, information, or work product developed while at UCAR.” But after Davila’s temporary restraining order was issued after briefing from only the UCAR side, the employees’ lawyers at Quinn Emanuel Urquhart & Sullivan cried foul, claiming they hadn’t entered their appearance in the case because of alleged gamesmanship by UCAR.

On Wednesday, after a full presentation by the Quinn Emanuel team, Davila said a preliminary injunction wasn’t necessary. He found that though the employees reformatted their UCAR-issued laptops upon leaving the company, effectively erasing any data on them, they had regularly uploaded their work to UCAR servers. The employees all filed declarations maintaining that there wasn’t any unsaved work remaining on their laptops upon their departure. They further declared that they no longer had any of UCAR’s information and they have no intent to use UCAR data going forward.

“In sum, UCAR has offered no proof that there is an imminent threat of use or disclosure of its confidential information or trade secrets,” Davila wrote. “In light of these shortcomings, UCAR has not demonstrated that irreparable harm is likely, rather than just possible.”

Quinn Emanuel’s Claude Stern called Davila’s opinion “remarkable.”

“What’s remarkable about this is the number of times that the judge uses the phrases ‘equivalent to speculation’ and ‘without evidence’” in describing the plaintiff’s case, Stern said. He said the case “smells a lot like” FLIR Systems v. Parrish, a 2009 case where a panel of the California Court of Appeal affirmed a $1.6 million attorney fee award for defendants finding that a trade secrets case was brought in bad faith. “You’d think they would have come forth with some sort of serious evidence if they had it,” Stern said.

Reached by email, RuyakCherian’s Korula “Sunny” Cherian declined to comment.