VIKEN DETECTION CORPORATION, v. VIDERAY TECHNOLOGIES INC., et al
Filing
50
Judge Nathaniel M. Gorton: ORDER entered. MEMORANDUM AND ORDER: For the forgoing reasons, plaintiffs motion for a preliminary injunction (Docket No. 9 ) is DENIED. So ordered. (Vieira, Leonardo)
Case 1:19-cv-10614-NMG Document 50 Filed 06/14/19 Page 1 of 23
United States District Court
District of Massachusetts
VIKEN DETECTION CORPORATION,
Plaintiff,
v.
VIDERAY TECHNOLOGIES INC. and
PAUL E. BRADSHAW,
Defendants.
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Civil Action No.
19-10614-NMG
MEMORANDUM & ORDER
GORTON, J.
Viken Detection Corporation (“Viken” or “plaintiff”) filed
a complaint against Videray Technologies Inc. (“Videray”) and
its founder and president, Paul Bradshaw (“Bradshaw”)
(collectively “defendants”), alleging that Bradshaw
misappropriated confidential information of Viken when he left
the company to form Videray and to produce and market a
competing product using that information.
Viken asserts that
defendants’ conduct constitutes a violation of 1) the Defend
Trade Secrets Act (“the DTSA”), 18 U.S.C. § 1836(b)(1), and 2)
the Computer Fraud and Abuse Act (“the CFAA”), 18 U.S.C. § 1030,
as well as 3) misappropriation of trade secrets under M.G.L. c.
93, §§ 42 and 42A, 4) breach of contract, 5) breach of the duty
of loyalty and 6) tortious interference with contracts.
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In April, 2019, Viken filed a motion for a temporary
restraining order and a preliminary injunction enjoining
defendants and their agents and employees from: 1) using and/or
disclosing Viken’s trade secrets or other confidential
information; 2) proceeding with the commercialization, sale,
marketing and development of Videray’s competing product; and 3)
destroying any potentially relevant information, including but
not limited to data in defendants’ business and personal email
accounts, Dropbox accounts, cellular telephones and business and
personal computers and components which relate to handheld X-ray
backscatter imagers.
Viken also sought an order directing defendants to return
to plaintiff all confidential and proprietary information
acquired during their confidential relationship with Viken or
obtained from another having a confidential relationship with
Viken.
Shortly thereafter, this Court denied the motion for a
temporary restraining order but scheduled a hearing on the
motion for a preliminary injunction.
For the reasons that
follow, the motion for a preliminary injunction will be denied.
I.
Background
A.
The Parties
Viken is a Delaware corporation with its principal place of
business in Newton, Massachusetts.
was named Heuresis Corporation.
Prior to February, 2019, it
Viken produces and sells hand-2-
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held x-ray scanners used by law enforcement and security
professionals to discover concealed explosives, narcotics and
other contraband quickly and cost-effectively.
Among Viken’s
main products is the HBI-120, which is an ergonomic, hand-held
x-ray backscatter imaging device.
Videray is alleged to be a Delaware corporation with its
principal place of business in Boston, Massachusetts.
Bradshaw
is allegedly a resident of Hull, Massachusetts, and the founder
and president of Videray.
Viken.
He is also a former employee of
Videray has developed the PX1 which is a hand-held x-ray
backscatter imager.
B.
Bradshaw’s Employment with Viken
Viken hired Bradshaw in November, 2013, as its Director of
Engineering.
He also allegedly acted as Viken’s Information
Technology (“IT”) Administrator during his time at the company.
At some point during his employment, Bradshaw and six other
employees were assigned to a team to develop the HBI-120.
Dr.
Peter Rothschild, Viken’s physicist and Chief Technology
Officer, led this team in developing the HBI-120 which took over
two years and cost millions of dollars.
As part of his role on that team and as Viken’s Director of
Engineering, Bradshaw had access to the company’s proprietary
and confidential information regarding the design, performance,
marketing and strategic plan for the HBI-120, as well as
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potential modifications, improvements and design changes to that
device.
That information was stored electronically on Viken’s
server and on certain employee computers which were subject to
access restrictions and password protection.
In his capacity as
IT Administrator, Bradshaw was also allegedly charged with
implementing and overseeing most or all of the electronic access
controls used to protect the HBI-120 proprietary and
confidential information.
In addition to storing proprietary and confidential
information on his desktop computer and laptop, Bradshaw also
stored nearly 1,800 files related to the manufacturing, design
and cost of the HBI-120 in his personal Dropbox account.
He
also maintained files related to the plans for other Viken
products in his personal Dropbox, including trade secrets with
respect to Viken’s x-ray fluorescence systems.
That account
also contained nearly 1,000 files that are allegedly
confidential property of American Science & Engineering
(“AS&E”), the company for which both Bradshaw and Dr. Rothschild
worked before joining Viken.
Other employees on Viken’s research and development team
purportedly had access to the files in Bradshaw’s Dropbox
account, including Dr. Rothschild, and the former CEO of Viken
(then known as Heuresis), Henry Grodzins (“Grodzins”), who was
also aware that Bradshaw was using his Dropbox account to store
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sensitive information.
The current CEO of Viken, Jim Ryan,
attests, however, that he is not aware that anyone at the
company previously knew that Bradshaw stored sensitive Viken
documents in his personal Dropbox account.
Viken requires all new employees to sign a nondisclosure
agreement (“the NDA”) to further ensure protection of its trade
secrets and confidential information.
as a condition of his employment.
Bradshaw signed the NDA
Pursuant to that contract, he
agreed that
[a]t all times, both during my employment by [Viken]
and after its termination for whatever reason, I will
keep in strictest confidence and trust all Proprietary
Information, and I will not use or disclose any
Proprietary Information without the written consent of
the Company, except as may be necessary in the
ordinary course of performing my duties to the
Company.
The NDA defines “Proprietary Information” as including, among
other things,
(i) information relating to products, inventions,
materials, compounds, discoveries, trade secrets,
know-how, improvements, developments, methods,
designs, algorithms, techniques, processes, formulas,
strategies, software and documentation, and computer
programs of the Company . . . , (ii) reports, studies,
data, plans, forecasts, projections, financial
statements, budgets, business forms, contract forms,
licenses, prices, costs, and lists of (and other
information relating to) investors, customers,
clients, suppliers and employees of the
Company . . . , [and] (iii) information relating to
transactions or prospective transactions involving the
Company . . . .
Bradshaw also agreed that
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[i]n the event of the termination of my employment by
me or by the Company for any reason, I will deliver to
the Company all documents, notes, drawings,
specifications, data, and other materials of any
nature pertaining to my work with the Company and/or
containing Proprietary Information (and delete all
electronic copies of such documents, notes, drawings,
specifications, data and other materials from any
personal computers and other electronic storage
devices that I own or control), and I will not retain
any copies of the foregoing.
Furthermore, he agreed that during his employment and for a
period of one year thereafter, he would not 1) recruit or
solicit for employment an employee of Viken or an affiliate of
the company (or a former employee within his or her one-year
grace period) or 2) interfere with Viken’s business
relationships with other persons or companies by inducing or
attempting to induce a person or company to refrain from or
discontinue doing business with Viken.
Finally, he agreed that
damages at law would be an insufficient remedy to Viken in the
event of a breach of the NDA and that it could obtain immediate
injunctive relief to restrain the breach or threatened breach of
the agreement or to specifically enforce any of its terms.
C.
The Alleged Misconduct
In June, 2017, Katie McCabe (“McCabe”), a former employee
of Viken, informed the company that while Bradshaw was still
working at Viken, he told her that he planned to leave and start
a new company that would produce and sell a competing product.
She also alleged that Bradshaw met with a potential investor
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while employed at Viken to solicit funds for his new company.
He also purportedly solicited co-workers at Viken to join him at
his new company and that as part of that solicitation, he
accessed confidential salary and equity information from Viken’s
protected server to induce the employees to join him.
She also
alleged that Bradshaw failed to share customer feedback with
Viken as to potential product improvements while telling his coworkers that his new product would include those improvements.
She told Viken that Bradshaw asked other employees to help him
collect confidential Viken customer information for use at his
new company.
Finally, Bradshaw apparently told McCabe that, in
reference to a computer on which he kept proprietary and
confidential information about the HBI-120, “I have everything I
need”.
Bradshaw denies those allegations but at least one other
employee of Viken has verified McCabe’s assertions.
In May or June, 2017, as a result of McCabe’s allegations,
Viken terminated Bradshaw’s employment.
A few days later,
however, then-CEO Grodzins offered to reinstate Bradshaw because
he believed that McCabe was lying or exaggerating about
Bradshaw’s alleged misconduct.
Bradshaw alleges that Dr.
Rothschild was aware that he was asked to return to Viken.
Bradshaw refused the offer of reemployment and has also declined
to sign a proffered non-compete agreement with Viken on two
occasions since leaving the company.
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Viken alleges that within two months of leaving the
company, Bradshaw formed Videray.
Videray has developed and is
about to market the PX1 which apparently has the same external
design, ergonomics and operating characteristics as Viken’s HBI120.
Viken alleges that the PX1 1) is the same size and shape,
2) uses approximately the same x-ray energy and power and 3)
likely achieves the same x-ray shielding requirements for user
safety as the HBI-120 by using
a combination of Viken trade secrets involving
characteristics of the X-ray anode, X-ray shielding
material (alloy), and source-detector geometry.
Viken asserts that it first learned about Videray’s
development of the PX1 in March, 2019, and that the PX1
includes certain design modifications that were taken from
confidential Viken documents which Videray advertises as
product advantages on its website.
Those modifications
include 1) increased power by upgrading to “140 [keV]”, 2)
providing “[i]mage analysis and processing . . . object
recognition capability” and 3) using a touch screen
interface with additional buttons to control the device.
Viken purportedly maintained those design modifications as
trade secrets for possible future use and Bradshaw had
access to that information during his employment with
Viken.
Plaintiff refers to the files maintained in
Bradshaw’s personal Dropbox account (which it discovered
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through a forensic examination of Bradshaw’s old laptop
left with Viken after his separation from the company) as
evidence that he misappropriated and misused proprietary
and confidential information after he left Viken.
In March, 2019, Viken was informed by its distributor in
Asia that Videray was bidding on a Vietnam tender which was
still open at that time.
It also learned from a representative
of the National Aeronautics and Space Administration that
Videray had an open order for an initial 100 units of the PX1.
Viken believes that a Chinese company called Nuctech may be
supplying that order based on Bradshaw’s past contacts with the
company while employed with Viken which defendants deny.
D.
The Parties’ Arguments and Relevant Affidavits
Viken asserts that Bradshaw misappropriated proprietary and
confidential information with respect to the HBI-120 in order to
develop and market a competing product in violation of trade
secret law and various provisions of his NDA.
It submits that
the use and dissemination of that confidential information will
cause irreparable harm to Viken because it will no longer enjoy
the competitive advantage of those trade secrets.
It thus seeks
a preliminary injunction to restrain defendants’ further use of
those trade secrets and the production and sale of any products
developed using that proprietary and confidential information.
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Defendants respond that Bradshaw never solicited funds from
investors or employees to join his new company while at Viken.
Nor did he access any computers or confidential information
without authorization or fail to share customer feedback with
Viken about its products.
Defendants assert that McCabe’s
allegations as to Bradshaw’s alleged misconduct are false and
that he was wrongfully terminated.
They also maintain that
Bradshaw deleted all Viken files from his personal Dropbox
account upon his termination and did not continue to have access
to those files after his separation from the company.
They
submit that his Dropbox account only contained non-confidential
manufacturing data which were sent to suppliers.
Defendants aver that they developed the PX1 without the use
of Viken’s proprietary and confidential information.
They claim
that the PX1 uses x-ray anode characteristics, x-ray shielding
materials and source-detector geometry different from the HBI120 and that the general size, shape, power usage and general
weight of a x-ray scanner are not protectable trade secrets
because they are generally known information in the industry.
Moreover, x-ray shielding requirements cannot be a trade secret
because they are mandated by law.
Defendants submit that both
the HBI-120 and the PX1 share the same external design elements
of the AS&E Mini-Z which was developed by Bradshaw and Dr.
Rothschild while they worked together at AS&E.
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They also assert
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that the alleged confidential improvements of 1) increased x-ray
energy, 2) improved image analysis and 3) using buttons to
control the device were not confidential ideas but rather goals
or aspects shared by all competitors in the industry.
Defendants conclude that this suit is merely an attempt by Viken
to stifle competition and to force Videray out of business.
Finally, defendants declare that Viken comes to this Court
with unclean hands and thus its motion for injunctive relief
should be denied as a matter of equity.
They argue that
Rothschild engaged in misconduct while working at AS&E,
including by misappropriating proprietary information of AS&E,
forming a business plan for Viken (then known as Heuresis) while
at AS&E and soliciting Bradshaw to join his new company while at
AS&E in violation of his non-solicitation agreement.
Dr.
Rothschild denies those allegations of impropriety.
In support of their arguments, defendants submitted the
sworn affidavit of Lee Grodzins (“Dr. Grodzins”), a physicist
and engineer with extensive experience in researching and
developing x-ray scanner technology.
Rothschild and Bradshaw at AS&E.
He worked with Dr.
He states that Bradshaw
developed the protype handheld x-ray scanner that would become
AS&E’s Mini-Z, while Dr. Rothschild’s primary contribution was
the software coding for the product.
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Dr. Grodzins attests that every x-ray backscatter device
will necessarily contain basic universal elements that are known
by all designers in the industry and thus are not proprietary,
including 1) an x-ray tube or other radiation source, 2) a
scanning method, 3) a shielding element and 4) software to
translate the radiation pulses into images.
He also asserts
that a company called Newton Scientific designs the x-ray tubes
used in the products developed by AS&E, Viken and Videray and
that the design and associated power of those tubes is
proprietary to Newton Scientific and not to Viken or any other
company.
Finally, Dr. Grodzins describes the various
differences between the designs of Viken’s HBI-120 and Videray’s
PX1, most importantly that 1) the PX1 is heavier than the HBI120 due to its larger detector array and 2) the two devices use
different chopper wheel designs.
Defendants also submitted the affidavit of former-CEO
Grodzins.
He is the co-founder and former CEO, President and
Chairman of the Board of Directors of Viken (then known as
Heuresis).
He explains that he knew that Bradshaw used his
personal Dropbox account to maintain Viken files, that everyone
working in research and development had access to the files in
his Dropbox and that he had no problem with Bradshaw using his
Dropbox account for that purpose.
He also claims that McCabe
fabricated the allegations against Bradshaw, including that
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Bradshaw was planning or operating a competing business while at
Viken.
Finally, former-CEO Grodzins states that when Bradshaw
returned his company desktop computer and laptop, he watched
Bradshaw delete all company files from both devices.
Defendants also submitted the affidavit of Louis Wainwright
(“Wainwright”) who used to work with Dr. Rothschild and Bradshaw
at AS&E.
He attests that he was the Project Manager at AS&E and
that Bradshaw developed the prototype device that would become
the Mini-Z while under his supervision.
Wainwright explains
that there are conventional features of x-ray backscatter
devices common to all instruments in the market, including a
shielding element and chopper wheel, and that there is a limited
number of design options available for those elements which are
not proprietary.
He asserts that the 1) size, 2) shape, 3)
energy, 4) power and 5) weight of handheld x-ray backscatter
devices are readily known to anyone in the field which makes it
impossible to determine whether proprietary information from one
manufacturer was used by another.
Wainwright also notes the
differences between the chopper wheel design and detector
geometry of the HBI-120 and the PX1.
He concludes that Bradshaw
had demonstrated the skill and knowledge while at AS&E to be
able to fully design Videray’s PX1 without any of Viken’s
alleged proprietary and confidential information.
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In response to the affidavits submitted by defendants,
plaintiff submitted the affidavit of Joseph Callerame
(“Callerame”), the former Chief Technology Officer of AS&E.
He
attests that he supervised Dr. Rothschild and Bradshaw when they
worked together at AS&E and that Dr. Rothschild, not Bradshaw,
was primarily responsible for the design and development of the
Mini-Z.
Callamere contends that, “[w]hile Mr. Bradshaw was a
good mechanical engineer”, his main role was to execute Dr.
Rothschild’s design.
II.
Motion for a Preliminary Injunction
A.
Legal Standard
In order to obtain a preliminary injunction, the moving
party must establish 1) a reasonable likelihood of success on
the merits, 2) the potential for irreparable harm if the
injunction is withheld, 3) a favorable balance of hardships and
4) the effect on the public interest. Jean v. Mass. State
Police, 492 F.3d 24, 26-27 (1st Cir. 2007).
Out of these
factors, the likelihood of success on the merits “normally
weighs heaviest in the decisional scales.” Coquico, Inc. v.
Rodriguez-Miranda, 562 F.3d 62, 66 (1st Cir. 2009).
The Court may accept as true “well-pleaded allegations [in
the complaint] and uncontroverted affidavits.” Rohm & Haas Elec.
Materials, LLC v. Elec. Circuits, 759 F. Supp. 2d 110, 114, n.2
(D. Mass. 2010) (quoting Elrod v. Burns, 427 U.S. 347, 350, n.1
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(1976)).
The Court may also rely on otherwise inadmissible
evidence, including hearsay, in deciding a motion for
preliminary injunction. See Asseo v. Pan Am. Grain Co., Inc.,
805 F.2d 23, 26 (1st Cir. 1986).
Ultimately, the issuance of
preliminary injunctive relief is “an extraordinary and drastic
remedy that is never awarded as of right.” Peoples Fed. Sav.
Bank v. People’s United Bank, 672 F.3d 1, 8-9 (1st Cir. 2012)
(quoting Voice of the Arab World, Inc. v. MDTV Med. News Now,
Inc., 645 F.3d 26, 32 (1st Cir. 2011)).
B.
Application
1.
Likelihood of Success
i.
Breach of Contract
Under Massachusetts law, to prove a breach of contract the
plaintiff must demonstrate that: 1) “there was an agreement
between the parties”; 2) “the agreement was supported by
consideration”; 3) “the plaintiff was ready, willing, and able
to perform his or her part of the contract”; 4) “the defendant
committed a breach of the contract”; and 5) “the plaintiff
suffered harm as a result”. Bulwer v. Mount Auburn Hosp., 46
N.E.3d 24, 39 (Mass. 2016).
A valid contract in the form of the NDA clearly existed.
The only dispute is whether Bradshaw breached the terms of that
agreement.
Viken submits that Bradshaw breached the NDA by,
among other things, using proprietary and confidential
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information without the written consent of the company,
retaining copies of that information after he left the company
and soliciting employees to join his new company while still
employed at Viken.
Defendants contest all of those allegations.
At both the hearing and in its written submissions,
plaintiff was unable to direct the Court to a single feature of
the PX1 which contained allegedly proprietary or confidential
information of Viken.
Indeed, plaintiff does not contest the
affidavits of Dr. Grodzins and Wainwright which assert that the
shared features of the PX1 and the HBI-120 are generic design
elements generally known in the industry.
Moreover, while
plaintiff argues that Bradshaw has overstated his contribution
to the development of the Mini-Z and HBI-120, it does not
dispute that Bradshaw has extensive knowledge and experience in
this area of technology (and thus is capable of developing an xray backscatter imaging device based on that expertise).
Indeed, in the counter affidavit submitted by plaintiff,
Callerame admits Bradshaw is a capable mechanical engineer.
Nor has Plaintiff referred the Court to any particular
combination of commonly known design elements that, when
combined, constitutes proprietary or confidential information.
There are apparently key differences between the designs of the
PX1 and the HBI-120, such as the design of the chopper wheel and
the use of a different software system for testing the x-ray
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device.
Those differences suggest defendants did not merely
copy the proprietary and confidential features of the HBI-120.
Rather, Viken relies on circumstantial evidence that
Bradshaw’s personal Dropbox account contained numerous files
related to the HBI-120 as well as accusations of McCabe from
2017.
With respect to the files contained in the Dropbox
account, defendants provide the sworn affidavit of former-CEO
Grodzins that he saw Bradshaw delete all of those sensitive
files before departing the company.
Defendants also submit that
plaintiff obtained copies of the Dropbox files from the hard
drive of Bradshaw’s returned work laptop rather than from his
current Dropbox account which plaintiff seems to admit in the
affidavit of its current CEO.
The management of Viken in 2017
clearly did not believe the accusations of McCabe because
Bradshaw was asked to return only a few days after his
termination.
It is strange then that plaintiff now relies on
those very same discredited allegations to support its motion
for injunctive relief.
Perhaps most telling is the statement of plaintiff’s
counsel at the hearing that Viken would need discovery to
determine what proprietary or confidential features defendants
misappropriated.
A preliminary injunction is an extraordinary
form of relief requiring more than mere speculation to justify.
See, e.g., In re Rare Coin Galleries of Am., Inc., 862 F.2d 896,
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902 (1st Cir. 1988).
At this stage, plaintiff has referred the
Court only to design features of the PX1 and HBI-120 which are
generally known and universal in the industry.
The mere fact
that the two devices share those features does not support an
inference that defendants copied them from Viken by using its
proprietary and confidential information.
Plaintiff has not
therefore met its burden of demonstrating a reasonable
likelihood of success on its claim for breach of the NDA.
ii.
Misappropriation of Trade Secrets
A plaintiff can establish misappropriation of trade secrets
under M.G.L. c. 93, § 42 by proving that the defendant acquired
the trade secret through improper means (including by theft,
bribery, misrepresentation or breach of contract but not by
reverse engineering) or by disclosing or using the trade secret
of another obtained through improper means without that person’s
consent. M.G.L. c. 93, § 42.
A plaintiff may also bring a claim
under the DTSA for misappropriation of a trade secret if it is
related to a product or service used in or intended to be used
in interstate or foreign commerce. 18 U.S.C. § 1836(b)(1).
The
standard for misappropriation under the DTSA is substantially
similar to that under Massachusetts law. Compare 18 U.S.C.
§ 1839(5)-(6), with M.G.L. c. 93, § 42(1)-(2).
To prevail on a claim of misappropriation of trade secrets
under Massachusetts law, a plaintiff must establish that 1) the
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information at issue constitutes a trade secret, 2) the
plaintiff took reasonable measures to secure the confidentiality
of the information and 3) the defendant obtained the trade
secret through improper means. Optos, Inc. v. Topcon Medical
Systems, Inc., 777 F. Supp. 2d 217, 238 (D. Mass. 2011); see
also M.G.L. c. 93, § 42(4) (defining “trade secret”).
A trade
secret is any confidential information used in the plaintiff’s
business that “gives [the owner] an advantage over competitors
who do not know or use it”. Id. (quoting J.T. Healy & Son, Inc.
v. James A. Murphy & Son, Inc., 260 N.E.2d 723, 729 (Mass.
1970)).
Matters of public knowledge or information generally
known in an industry cannot be a trade secret. J.T. Healy, 260
N.E.2d at 729; see also Ruckelhaus v. Monsanto Co., 467 U.S.
986, 1002 (1984).
For the same reasons that plaintiff has failed to
demonstrate a reasonable likelihood of success on its breach of
contract claim, so too has it has failed to demonstrate a
likelihood of success on its claims for misappropriation of
trade secrets.
Viken has not shown that any common features of
the PX1 and the HBI-120 are protectable.
According to the sworn
affidavits of experts in the field, the 1) size, 2) shape, 3)
energy, 4) power and 5) weight of a handheld x-ray backscatter
device and the use of 6) an x-ray tube, 7) a scanning method, 8)
a shielding element and 9) software to translate the radiation
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pulses into images are all features generally known in the
industry and thus not trade secrets.
Plaintiff has not
controverted the statements of defendants’ affiants.
Indeed,
the particular x-ray anode used by AS&E, Viken and Videray is
supplied by the same third-party manufacturer and thus at least
that component is not the proprietary information of Viken.
Moreover, plaintiff has not suggested that any particular
combination of those individually unprotectable components is
somehow a protectable trade secret of Viken.
It has not
therefore shown that any of the features of the HBI-120 is a
trade secret, let alone that defendants actually took or used
that information through improper means.
iii. CFAA Claim
A claim under the CFAA requires a plaintiff to prove that
the defendant
knowingly and with intent to defraud, accesse[d] a
protected computer without authorization, or
exceed[ed] authorized access, and by means of such
conduct furthere[d] the intended fraud and obtain[ed]
anything of value, unless the object of the fraud and
the thing obtained consists only of the use of the
computer and the value of such use is not more than
$5,000 in any 1-year period.
18 U.S.C. § 1030(a)(4).
The phrase “without authorization” is
not defined in the statute, but this Court has previously held
that it should be read broadly to include an employee who
accesses his employer’s computer, without the employer's
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knowledge, to acquire an interest adverse to his employer.
Guest-Tek Interactive Entm’t, Inc. v. Pullen, 665 F. Supp. 2d
42, 45 (D. Mass. 2009) (citing EF Cultural Travel BV v.
Explorica, Inc., 274 F.3d 577, 582-84 (1st Cir. 2001)).
To
“exceed authorized access” is defined as
to access a computer with authorization and to use
such access to obtain or alter information in the
computer that the accesser is not entitled so to
obtain or alter.
18 U.S.C. § 1030(e)(6).
Plaintiff has shown that it maintained sensitive
information on its computers and server and that Bradshaw
accessed that information and downloaded it to his personal
Dropbox account.
It has not demonstrated, however, that he did
so without the permission or consent of Viken.
Indeed, other
members on Viken’s research and development team, including Dr.
Rothschild, apparently had access to the files on Bradshaw’s
personal Dropbox account (as shown through emails sent to and
from Dr. Rothschild’s account) and former-CEO Grodzin attests
that he was aware of and had no issue with Bradshaw’s use of his
personal Dropbox account for that purpose.
Furthermore, as explained above, plaintiff has not
demonstrated a reasonable likelihood that Bradshaw used that
information in a manner that was adverse to the interests of
Viken or in violation of his obligations under the NDA.
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Case 1:19-cv-10614-NMG Document 50 Filed 06/14/19 Page 22 of 23
Accordingly, plaintiff has not met its burden of demonstrating a
reasonable likelihood of success on the merits of its claim for
violation of the CFAA.
2.
Potential for Irreparable Harm
While the likelihood of the success on the merits provides
the “touchstone of the preliminary injunction inquiry”, the
Court also considers the second element, namely irreparable
harm. Philip Morris, Inc. v. Harshbarger, 159 F.3d 670, 674 (1st
Cir. 1998).
Once a plaintiff has demonstrated a reasonable likelihood
of success on a claim for misappropriation of trade secrets,
irreparable harm is presumed. EchoMail, Inc. v. Am. Express Co.,
378 F. Supp. 2d 1, 4 (D. Mass. 2005).
Because Viken has failed
to demonstrate a reasonable likelihood of success on its claim
for misappropriation of trade secrets, it is not entitled to
that presumption of irreparable harm.
Furthermore, it is
speculative at this point that defendants have or will use any
of the proprietary and confidential information of Viken.
Bradshaw is subject to a presumably valid NDA and is expected to
continue to comply with the terms of that agreement but a
preliminary injunction at this stage is unwarranted.
Given that plaintiff has failed to satisfy the first two
prongs, it is unnecessary for the Court to address the remaining
factors.
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Case 1:19-cv-10614-NMG Document 50 Filed 06/14/19 Page 23 of 23
ORDER
For the forgoing reasons, plaintiff’s motion for a
preliminary injunction (Docket No. 9) is DENIED.
So ordered.
/s/ Nathaniel M. Gorton______
Nathaniel M. Gorton
United States District Judge
Dated June 14, 2019
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