Clarifying the legal principle that an injunction will only be entered if there is no adequate remedy at law, the Ohio Court of Appeals held recently that an award of damages for past trade secret misappropriation is not inconsistent with, and does not preclude granting, injunctive relief to prevent future harm. Litigation Management, Inc. v. Bourgeois, 2011 Ohio 2794 (Ct. of App. of Cuyahoga County, OH, June 9, 2011).
Litigation Management, Inc. (LMI) provides litigation support services. A number of LMI employees who had signed not-compete and confidentiality agreements left the company’s employ and formed a direct competitor which then used LMI’s trade secrets. LMI sued for damages and injunctive relief, and the damages case went to trial. After the close of the evidence, the judge blue-penciled the geographic limitations set forth in the agreements (substituting “the Greater Cleveland Metropolitan Area” for any place in the country) and submitted the case to the jury. It returned verdicts for LMI against all of the defendants.
LMI’s post-trial motion for an injunction, however, covering the period of time the defendants had worked in violation of their agreements, was denied. The trial court held that “not only is an adequate remedy at law available, it has been given. The wrong of competing unfairly has been righted by the jury’s award: LMI has received fair and reasonable redress.”
LMI appealed. The appellate court reversed, agreeing with LMI that the monetary relief was intended as a make-whole remedy only with regard to misconduct to the date of trial. The appropriate relief for future, threatened violations is an injunction. So, in the view of the Ohio Court of Appeals, there was nothing inconsistent about granting both compensatory damages and an injunction. The moral is that one who misappropriates trade secrets can be hit with both a monetary award for past wrongs and severely debilitating injunctive relief.