Tang v. Vaxin Inc et al

Filing 47

MEMORANDUM OPINION, as set out, re the Motion for a Preliminary Injunction by Defendant Vaxin Inc. (Doc. 29.) Upon consideration of the record, the submissions of the parties, and the relevant law, the court is of the opinion that defendant's Motion for a Preliminary Injunction, (Doc. 29), is due to be denied. An order in accordance will be entered contemporaneously with this Memorandum Opinion. Signed by Judge Sharon Lovelace Blackburn on 3/31/15. (CTS, )

FILED
2015 Mar-31 PM 03:54
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
DE CHU CHRISTOPHER TANG,
Plaintiff,
vs.
VAXIN, INC., and WILLIAM J.
ENRIGHT,
Defendants.

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Case No. 2:13-cv-401-SLB

MEMORANDUM OPINION
This case is presently pending before the court on the Motion for a Preliminary
Injunction by Defendant Vaxin Inc. (Doc. 29.)1 Plaintiff filed this action against defendants
Vaxin Inc. and William J. Enright alleging, among other things, False Claims Act violations,
fraud, and breach of contract. (See Doc. 14.) Defendant Vaxin Inc. filed this Motion for a
Preliminary Injunction seeking to enjoin plaintiff “from using and disclosing Vaxin’s
intellectual property in violation of an Employee Innovation, Non-Competition and NonSoliciation Agreement with Vaxin, . . . enjoin[] him from making threatening or other
communications to Vaxin’s directors, officers, shareholders, employees, investors or those
otherwise in privity with Vaxin[,] and . . . order[] him to sign and file a power of attorney in
support of a Korean patent application to prevent its abandonment as required by this
agreement.” (Doc. 29 at 1.) Upon consideration of the record, the submissions of the parties,

1

Reference to a document number, [“Doc. ___”], refers to the number assigned to
each document as it is filed in the court’s record.

and the relevant law, the court is of the opinion that defendant’s Motion for a Preliminary
Injunction, (Doc. 29), is due to be denied.
I. PRELIMINARY INJUNCTION STANDARD
“The purpose of a preliminary injunction is merely to preserve the relative positions
of the parties until a trial on the merits can be held.” Univ. of Texas v. Camenisch, 451 U.S.
390, 395 (1981). “A preliminary injunction is an extraordinary and drastic remedy; it is
never awarded as of right.” Munaf v. Geren, 553 U.S. 674, 689-90 (2008) (internal
quotations and citations omitted). Further, granting a preliminary injunction “is the exception
rather than the rule.” Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir. 2000) (quoting Texas
v. Seatrain Int’l, S.A., 518 F.2d 175, 179 (5th Cir. 1975)). “In each case, courts must balance
the competing claims of injury and must consider the effect on each party of the granting or
withholding of the requested relief.” Winter v. Natural Resources Defense Council, Inc., 555
U.S. 7, 24 (2008) (internal quotations and citations omitted). In this Circuit –
In order to prevail on an application for a preliminary injunction, the
plaintiff must clearly establish all of the following requirements:
(1) ... a substantial likelihood of success on the merits; (2) irreparable injury will
be suffered unless the injunction issues; (3) the threatened injury to the movant
outweighs whatever damage the proposed injunction may cause the opposing
party; and (4) if issued, the injunction would not be adverse to the public
interest.
Bloedorn v. Grube, 631 F.3d 1218, 1229 (11th Cir. 2011) (quoting Am. Civil Liberties Union
of Fla., Inc. v. Miami–Dade Cnty. Sch. Bd., 557 F.3d 1177, 1198 (11th Cir. 2009). “In
exercising their sound discretion, courts of equity should pay particular regard for the public
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consequences in employing the extraordinary remedy of injunction.” Winter, 555 U.S. at 24
(quoting Weinberger v. Romero-Barcelo, 456 U.S. 305, 312 (1982)).
II. FACTUAL BACKGROUND
During his employment with Vaxin, plaintiff signed an Employee Innovation, NonCompetition and Non-Solicitation Agreement (“the Agreement”), (see Doc. 29-1 at 18),
which defendant explains as follows:
Under the Agreement, Plaintiff agreed that all “Proprietary Information,” as
defined by the Agreement, was the sole property of Vaxin and that Vaxin was,
and would be, the sole and exclusive owner of all patents, copyrights, mass
works, trade secrets and other rights in any “Proprietary Information.”
Plaintiff also assigned to Vaxin any and all rights, title and interest that he
had, or might acquire, in any “Proprietary Information” and agreed not to
disclose or use such information without Vaxin’s consent except as necessary
to perform his regular duties as an employee of Vaxin. Paragraph 2 of the
Agreement sets forth these agreements:
2. Ownership and Nondisclosure of Proprietary Information. All
Proprietary Information is the sole property of Vaxin, Vaxin’s assigns
and Vaxin’s customers. Vaxin, Vaxin’s assigns and Vaxin’s customers
will be the sole and exclusive owner of all patents, copyrights, mask
works, trade secrets and other rights in the Proprietary Information. I
hereby do and will assign to Vaxin all rights, title, and interest I may
have or acquire in the Proprietary Information. At all times, both during
my employment by Vaxin and after termination of such employment,
I will keep in confidence and trust all Proprietary Information, and I
will not use or disclose any Proprietary Information or anything directly
relating to Proprietary Information without the written consent of
Vaxin, except as may be necessary in the ordinary course of performing
my duties as an employee of Vaxin.
Further, under the Agreement, Plaintiff agreed to assign, and did in fact assign,
to Vaxin all of his right, title and interest in any and all “Innovations,” as
defined by the Agreement, as well as any associated intellectual property rights
that he might solely or jointly conceive, reduce to practice, create, derive,
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develop or make during his employment with Vaxin. Paragraphs 4 and 5 of the
Agreement set forth these agreements:
4. Innovations. As used in this Agreement, the terms “Innovations”
means all processes, machines, manufactures, compositions of matter,
improvements, inventions (whether or not protectable under patent
laws), works of authorship, information fixed in any tangible medium
of expression (whether or not protectable under copyright laws), moral
rights, mask works, trademarks, trade names, trade dress, trade secrets,
know-how, ideas (whether or not protectable under trade secret laws),
and all other subject matter protectable under patent, copyright, moral
right, mask work, trademark, trade secret, or other laws.

5. Assignment of Innovations. I hereby agree promptly to disclose and
describe to Vaxin, and I hereby do and will assign to Vaxin or Vaxin’s
designee my entire right, title, and interest in and to each of the
Innovations, and any associated property rights, which I may solely or
jointly conceive, reduce to practice, create, derive, develop, or make
during the period of my employment with Vaxin, which either (a)
relate, at the time of conception, reduction to practice, creation,
derivation, development, or making of such Innovation, to Vaxin’s
business or actual or demonstrably anticipated research or development,
or (b) were developed on any amount of Vaxin’s time or with the use
of any of Vaxin’s equipment, supplies, facilities, or trade secret
information, or (c) resulted from any work I performed for Vaxin.

Also, Plaintiff agreed under the Agreement to perform all acts that Vaxin
deemed necessary or desirable to enable it to obtain and enforce its rights, title,
benefits and enjoyment “throughout the world” in “Proprietary Information”
and in “Innovations” assigned to Vaxin, including the “execution of
documents and assistance … in the filing, prosecution, registration, and
memorialization of assignment of any applicant patents.” Paragraph 6 sets
forth this agreement:

6. Cooperation in Perfecting Rights to Propriety Information and
Innovations. I agree to perform, during and after my employment, all
acts deemed necessary or desirable by Vaxin to permit and assist Vaxin,
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at Vaxin’s expense, in obtaining and enforcing the full benefits,
enjoyment, rights, and title throughout the world in the Proprietary
Information and Innovations assigned to Vaxin. Such acts may include,
but are not limited to, execution of documents and assistance or
cooperation (a) in the filing, prosecution, registration, and
memorialization of assignment of any applicant patents, copyrights,
mask work, or other applications, (b) in the enforcement of any
applicable patents, copyrights, mask work, moral rights, trade secrets,
or other proprietary rights, and (c) in other legal proceedings related to
the Proprietary Information or Innovations.

Finally, under the Agreement, Vaxin and Plaintiff acknowledged and agreed
that violation of the Agreement would result in irreparable and continuing
damage to Vaxin and that Vaxin would be entitled to injunctive relief or a
decree for specific performance in addition to monetary damages.
(Doc. 29 ¶¶ 9-12.) Plaintiff developed a technology called “DVD” during his employment
with Vaxin, and defendant contends this technology falls within the definition of both
“Proprietary Information” and “Innovation” under the Agreement. (Id. ¶13.) Since the
termination of plaintiff’s employment with Vaxin, plaintiff has conducted research and
published at least two articles about the DVD technology.2 (Id. ¶ 19; see Doc. 29-1 Ex. D &
E.) At no time after plaintiff’s employment ended has defendant consented to plaintiff using
the DVD technology to conduct research or to disclose any information relating to the
technology. (Id. ¶ 20.)

2

Defendant attached two published articles written by plaintiff that discuss the
DVD technology but did not clarify if these are the only two published articles plaintiff
wrote on the topic. (See Doc. 29 ¶ 19.)
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III. DISCUSSION
A. Request for Order to Sign and File Power of Attorney
The court first notes that defendant’s Motion is moot as to its request for an order
requiring plaintiff to sign and file a power of attorney in support of a Korean patent
application. Plaintiff executed a power of attorney on September 6, 2014. (See Doc. 33 at 5.)
Therefore, defendant’s Motion on this point will be denied as moot.
B. Request to Enjoin the Use and Disclosure of Vaxin’s Intellectual Property
Plaintiff next seeks a preliminary injunction enjoining plaintiff from using and
disclosing its intellectual property in violation of the Employee Innovation, Non-Competition
and Non-Solicitation Agreement (“the Agreement”) with Vaxin. (Doc. 29 at 1.)
For the court to grant the requested injunction, defendant must show that all of the
following elements are met:
(1) ... a substantial likelihood of success on the merits; (2) irreparable injury
will be suffered unless the injunction issues; (3) the threatened injury to the
movant outweighs whatever damage the proposed injunction may cause the
opposing party; and (4) if issued, the injunction would not be adverse to the
public interest.
Bloedorn v. Grube, 631 F.3d 1218, 1229 (11th Cir. 2011) (quoting Am. Civil Liberties Union
of Fla., Inc. v. Miami–Dade Cnty. Sch. Bd., 557 F.3d 1177, 1198 (11th Cir. 2009). The court
finds that defendant has failed to do so.
Count One of defendants’ Counterclaim alleges plaintiff breached the Agreement by
using and disclosing Proprietary Information and Innovations belonging to Vaxin. While the

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court finds that defendant likely will succeed on the merits of this claim because plaintiff
appears to have validly assigned any rights he may have had in the DVD technology to
Vaxin when he signed the Agreement, the court need not decide the issue. Defendant’s
failure to show irreparable injury is dispositive of defendant’s Motion on this issue. See
Siegel v. LePore, 234 F.3d 1163, 1176 (11th Cir.2000) (“Significantly, even if Plaintiffs
establish a likelihood of success on the merits, the absence of a substantial likelihood of
irreparable injury would, standing alone, make preliminary injunctive relief improper.”).
Defendant contends it “will suffer irreparable harm and damage in the absence of
preliminary injunctive relief [because] . . . Vaxin will lose the exclusivity of [the DVD]
technology and suffer dilution and confusion regarding its rights to it.” (Doc. 19 ¶ 33.)
Defendant further alleges that plaintiff’s use of the technology to conduct research and
publish articles “undermine[s] Vaxin’s ability to raise funds and continue its research and
development because these activities disparage and call into question Vaxin’s ownership of
the DVD technology.” (Id. ¶ 34.) The only specific injury defendant points to is “a potential
transaction with a third party [that] could have fully funded Vaxin,” which “fell through in
part” due to plaintiff’s actions. (Id. ¶ 34.)
Defendant has failed to show why ordinary contract remedies are insufficient to
protect its ordinary contract rights. Defendant acknowledges that the potential transaction,
discussed above, fell through only “in part” due to plaintiff’s action, and defendant has not
shown that money damages cannot adequately compensate it for the alleged financial loss

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it incurred as a result of the unsuccessful deal. The court finds that defendant has not
identified an injury that monetary damages could not correct at a later date.
The key word in this consideration is irreparable. Mere injuries, however
substantial, in terms of money, time and energy necessarily expended in the
absence of a stay are not enough. The possibility that adequate compensatory
or other corrective relief will be available at a later date, in the ordinary
course of litigation, weighs heavily against a claim of irreparable harm.
Diamond Power Intern., Inc. v. Clyde Bergemann, Inc., 370 F. Supp. 2d 1339, 1349 (N.D.
Ga. 2005) (quoting United States v. Jefferson Cnty., 720 F.2d 1511, 1520 (11th Cir.1983));
see also Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1276 (11th Cir. 2001) (“To
the extent that Suntrust will suffer monetary harm from the infringement of its copyright,
harms that may be remedied through the award of monetary damages are not considered
‘irreparable.’”). See also Diamond Power Intern., Inc., 370 F. Supp. 2d at 1348-48, for its
discussion of Salsbury Labs., Inc. v. Merieux Labs, Inc., 735 F. Supp. 1537, 1543 (M.D. Ga.
1987):
In that case, the plaintiff manufacturer of certain vaccines sued and alleged
that the defendant had misappropriated its trade secrets which it used to
create a competing vaccine. The plaintiff sought a preliminary injunction
to prohibit the defendant from selling a competing product. The plaintiff
argued that unless the court enjoined the defendant from selling the
competing vaccine, it would lose large profits and that its image, reputation
and goodwill among its customers would be damaged. The district court
rejected the plaintiff's argument and concluded that because the plaintiff
could be compensated for lost sales through monetary damages, injunctive
relief was not appropriate.
Id. (internal citations omitted).

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While defendant attempts to align this case with Medi-Weightloss Franchising USA,
LLC v. Medi-Weightloss Clinic of Boca Raton, LLC, No. 8:11-cv-2437-T-30MAP, 2012 WL
260902, (M.D. Fla. Jan. 3, 2012), the comparison is too tenuous. In Medi-Weightloss
Franchising, the plaintiffs sought a preliminary injunction against defendants Dr. Martinez
and Medi-Boca to enjoin the defendants from continued operation of a weightloss clinic in
accordance with a non-compete agreement, from disclosing or publishing plaintiffs’
confidential information, from using plaintiffs’ proprietary and copyrighted information,
from using programs that were confusingly similar to plaintiffs’, and from using “Medi” as
a trade name. Id. at *1. The court granted a preliminary injunction, finding that plaintiffs
had shown irreparable harm from, among other things, “hav[ing] to compete with former
franchisees and employees who agreed not to engage in such competition, . . . los[ing] the
exclusivity and confidentiality of its proprietary and confidential information, . . . [and]
suffer[ing] dilution and confusion associated with its intellectual property as well as its
products and services. Id. at *8.
Plaintiff’s scientific discussion of the DVD technology in published articles is not
analogous to the Medi-Weightloss Franchising plaintiffs’ injury from the defendant’s
continued competition and use of plaintiffs’ trademarks. Further defendant has not shown
that it has, in fact, “suffer[ed] dilution and confusion” regarding its rights to the DVD
technology based on the articles and research already published or that plaintiff intends to
publish more articles that could cause defendant to “lose exclusivity of [that] technology”

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in the future. Simply because plaintiff, who defendant acknowledges developed the DVD
technology, discusses the technology in publications does not mean that potential investors
will assume that plaintiff holds the rights to the technology.
Additionally, defendant states that, under a clause in the Agreement governing
“Injunctive Relief,” a violation of the Agreement necessarily results in irreparable damage
to Vaxin. (Doc. 29 ¶ 12.) The relevant clause provides that a “breach of any of the promises
or agreements contained herein will result in irreparable and continuing damage to Vaxin
for which there will be no adequate remedy at law, and Vaxin will be entitled to injunctive
relief and/or specific performance, and such other relief as may be proper (including
monetary damages if appropriate).” (Doc. 29-1 at 17.) However, the court has not found that
plaintiff breached the Agreement, as that decision is reserved for a later stage in the
proceedings. Therefore, at this stage, this provision in the Agreement does not overcome
binding Eleventh Circuit case law holding that “harms that may be remedied through the
award of monetary damages are not considered ‘irreparable.’” Suntrust Bank v. Houghton
Mifflin Co., 268 F.3d 1257, 1276 (11th Cir. 2001).
If defendant ultimately prevails, an adequate remedy for financial harm incurred as
a result of plaintiff’s alleged use and disclosure of the DVD technology will be available.
The court also notes that its denial of defendant’s Motion is without prejudice to defendant’s
right to seek a preliminary injunction if future circumstances warrant it or if defendant can
show non-monetary, irreparable harm under the current circumstances. Further, by denying

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defendant’s Motion, the court does not imply that plaintiff is not required to abide by the
contractual obligations of the Agreement. Based on the foregoing, defendant’s Motion on
this issue will be denied.
C. Request to Enjoin Plaintiff from Communicating with Defendants
Lastly, defendant asks the court to enjoin plaintiff “from making threatening or other
communications to Vaxin’s directors, officers, shareholders, employees, investors or those
otherwise in privity with Vaxin.” (Doc. 29 at 1.) Because Vaxin seeks a preliminary
injunction on behalf of individuals, the court must first determine if Vaxin has standing to
move for the injunction. To have standing to move for an injunction, a party must have
suffered an “injury in fact —an invasion of a legally protected interest which is (a) concrete
and particularized, and (b) actual or imminent, not conjectural or hypothetical,”—that is
fairly traceable to the challenged conduct, and “it must be likely, as opposed to merely
speculative, that the injury will be redressed by a favorable decision.” Lujan v. Defenders
of Wildlife, 504 U.S. 555, 560-61(1992) (internal quotations and citation omitted). An
association attempting to bring a claim on behalf of its members must also meet the
following requirements to have standing: “(a) its members would otherwise have standing
to sue in their own right; (b) the interests it seeks to protect are germane to the organization's
purpose; and (c) neither the claim asserted nor the relief requested requires the participation
of individual members in the lawsuit.” United Food and Commercial Workers Union Local

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751 v. Brown Grp., Inc., 517 U.S. 544, 553 (1996) (quoting Hunt v. Wash. State Apple
Adver. Com’n, 432 U.S. 333, 343 (1977)).
Defendant has not demonstrated that its “directors, officers, shareholders, employees,
agents, attorneys, investors, and those otherwise in privity with Vaxin” have suffered an
“injury in fact” that is concrete and particularized and actual or imminent, as opposed to
hypothetical, from the alleged threatening communications plaintiff has made. Therefore,
defendant Vaxin cannot meet the first prong of the associational standing test, requiring that
the individuals on whose behalf Vaxin seeks the injunction “would otherwise have standing
to sue in their own right.”
However, even if Vaxin had standing, the court finds that the requirements for a
preliminary injunction on this issue have not been met. William Enright,3 the CEO of Vaxin,
testified that he has “genuine fears about what Dr. Tang could do to harm us” because “in
recent history patent attorneys with the firm of Wood, Phillips, Katz, Clark & Mortimer were
shot and killed by a disgruntled client,” (Doc. 29-1 at 9), and defendant characterized
plaintiff’s communications as “death threats,” (Doc. 29 ¶ 22.) As evidence of this concern,
defendant attached an email from plaintiff in which plaintiff states as follows:
Dear Board,
I offered you an olive branch to settle our conflict by following science,
reason, and evidence wherever they lead without involving attorneys in my

3

Enright is a defendant in this action but is not a party to this Motion.
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email letter dated 11 May 2014 (copied below). However, the only response
I received was an attorney’s threat dated 7 August 2014 (copied below). If
Board should support this man-eating crime, the only option I have is to
schedule a meeting between you and God. Overall, I did not choose war;
war chose me.
The immediate action I have to take is to warn all the funding agencies and
investors not to support the crime and any lawsuit associated with it. I
believe it is illegal to spend federal money to kill an inventor for feeding a
pirate. I am truly sorry that all the trust, money, and hard work invested into
Vaxin over so many years have to end up this way.
DC Tang
(Doc. 29-1 at 8-9.) While a death threat would create serious alarm likely necessitating the
involvement of appropriate law enforcement personnel, plaintiff’s communications (at least
those provided in the record) do not appear to threaten the safety of defendants or any other
party in privity with Vaxin. The court questions the extent to which defendants are
concerned for the safety of individuals in privity with Vaxin because defendant briefly raises
this concern in the argument section of its brief, stating only that “granting the requested
relief [would] promote[] the public interest by ensuring that proper social order is
maintained [and] that proper business order is maintained,” and that “[p]laintiff’s threatening
communications . . . undermine Vaxin’s ability to attract investment and obtain grants
because of the potential risks associated with them.” (See Doc. 29 ¶¶ 34, 37.)
At most, plaintiff’s communications to defendants may be improper and annoying,
but this injury is not the type of irreparable injury for which courts grant the “extraordinary”
remedy of a preliminary injunction. Because the court finds that plaintiff’s communications

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do not suggest a serious threat, the court finds that the harm to plaintiff’s rights to speak
freely in litigation would significantly outweigh the annoyance or inconvenience to
defendants from receiving plaintiff’s hyperbolic communications and that an injunction
would also be adverse to the public interest of protecting speech. See, e.g., Lincoln Mem’l
Univ. Duncan Sch. of Law v. Am. Bar Ass’n, 2012 WL 137851, at *19 (11th Cir. Jan. 18,
2012) (“If the Court were to grant the requested preliminary injunctive relief, it seems as
though defendant will suffer substantial harm. Particularly, defendant's free speech rights
will be compromised, and the Supreme Court has noted that interference with free speech,
‘for even minimal periods of time, unquestionably constitutes irreparable injury.’”) (quoting
Elrod v. Burns, 427 U.S. 347, 373 (1976)). Therefore, the court finds that defendant’s
request for the court to enjoin plaintiff from sending threatening communications to
individuals connected with Vaxin is due to be denied.
IV. CONCLUSION
Defendant Vaxin’s Motion for a Preliminary Injunction, (Doc. 29), is due to be
denied. An order in accordance will be entered contemporaneously with this Memorandum
Opinion.
DONE this 31st day of March, 2015.

SHARON LOVELACE BLACKBURN
UNITED STATES DISTRICT JUDGE

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