Injunctions are common in trademark litigation. Suppose a global social media behemoth decides to use the name META. Suppose it doesn’t first do a trademark search to see who is already using META and for what kinds of products and services. Suppose it turns out there’s a small company already using META for arguably related products and services.
I know, it’s a crazy hypothetical, but stay with me.
The small company, the “senior” user, might get an injunction prohibiting the big company, the “junior” user, from using META as a trademark. That’s pretty obvious.
But what if the judge also orders the big company not to use “any trademark confusingly similar to META” or “any trademark that infringes on plaintiff’s META mark”?
There’s an obvious problem. Let’s say the big company decides to use BETA instead. Is that confusingly similar? Does it infringe? There’s no way to know for sure until a court rules on the issue.
Not only that, but “confusingly similar” is precisely the issue in dispute in a trademark lawsuit (typically).
So not only does the “confusingly similar” injunction require the defendant to guess whether a judge will find its new trademark is confusingly similar or not, that question will usually be a matter in dispute between the two parties.
For these very reasons, it is a general rule of trademark law that an injunction must specifically identify the trademark the defendant is not allowed to use, rather than relying on general language like “any mark confusingly similar to plaintiff’s mark.”
As trademark guru McCarthy explains in his treatise:
An injunction which merely forbids a defendant from performing “acts of unfair competition,” or from “infringing upon plaintiff’s trademarks and trade secrets” adds nothing to what the law already requires. If an injunction is so worded, then the factual elements of what exactly is “unfair competition” or “trademark infringement” must be re-hashed all over again in a contempt hearing.
5 McCarthy on Trademarks and Unfair Competition § 30:13 (4th ed.).
In short, an injunction that effectively just tells the defendant not to violate the law is not sufficiently specific.
The Specificity Requirement
The same kind of specificity problem often comes up in lawsuits involving non-competes, trade secrets, and other “departing employee” issues.
There are two big recurring issues:
1. Does an injunction that restricts the use or disclosure of confidential information need to specifically identify the restricted confidential information?
2. Does an injunction that restricts contact with customers need to specifically name the restricted customers?
The issue is essentially the same in any state, but I’ll look at Texas law as an example, because that’s where I practice.
First some general principles:
- An injunction must be “specific in terms” and “describe in reasonable detail and not by reference to the complaint or any other document, the act or acts sought to be restrained.” Tex. R. Civ. P. 683.
- An injunction “must be as definite, clear and precise as possible and when practicable it should inform the defendant of the acts he is restrained from doing, without calling on him for inferences or conclusions about which persons might well differ and without leaving anything for further hearing.” Villalobos v. Holguin, 208 S.W.2d 871, 875 (Tex. 1948); accord Hellenic Inv., Inc. v. Kroger Co., 766 S.W.2d 861, 866 (Tex. App.—Houston [1st Dist.] 1989, no writ).
- Lack of specificity in the injunction cannot be cured by pointing to the defendant’s alleged knowledge outside the four corners of the injunction. Computek Computer & Office Supplies, Inc. v. Walton, 156 S.W.3d 217, 222-23 (Tex. App.—Dallas 2005, no pet.).
- An injunction does not have to “specifically enumerate every possible act that might constitute and unauthorized practice.” Lasser v. Amistco Separation Products, Inc., No. 01-13-00690-CV, at *3 (Tex. App.—Houston [1st Dist.] Feb. 6, 2014, no pet.) (mem. op.). It should be broad enough to “prevent repetition of the evil sought to be stopped,” even if the conduct takes a “somewhat different form calculated to circumvent the injunction as written.” Id. (citing San Antonio Bar Ass’n v. Guardian Abstract & Title Co., 291 S.W.2d 697, 702 (Tex. 1956)).
- But the injunction does need to “spell out the details of compliance in clear, specific and unambiguous terms so that [the defendant] will readily know exactly what duties or obligation are imposed upon him.” Drew v. Unauthorized Practice of Law Comm., 970 S.W.2d 152, 156 (Tex. App.—Austin 1998, pet. denied).
With these general principles in mind, let’s consider an injunction that orders an employee not to use or disclose the “confidential” or “proprietary” or “trade secrets” information of her former employer.
The Specificity Requirement Applied to Restricted Customers and Restricted Information
You can immediately see the problem. If the injunction does not specifically identify what the confidential information is, it may be difficult for the employee and her lawyer to figure out what information is covered.
A potential solution is to insert a definition of confidential information that tracks the definition in the employee’s employment agreement. But usually that won’t help much. Those definitions tend to be both overbroad and vague, i.e. they use broad terms and define virtually everything as confidential.
The problem is compounded by the fact that there is usually a dispute about what information is or is not confidential, or a trade secret.
For example, let’s say the former employer claims that its customer lists are trade secrets. The former employee has a list of her own customers (either an actual written list, or a list in her mind—in theory it doesn’t really matter which). The employee contends the list is not a trade secret because the names of the customers are readily available to competitors. The former employer disagrees.
This is not theoretical. I make these kind of arguments—on both sides—all the time in my practice.
In this situation, an injunction that does not define the confidential information or trade secrets specifically puts the employee in an untenable position: can she use her knowledge of her customer list or not?
Of course, she could just use it, and if the opposing party complains that she violated the injunction, she just says “no, there’s no violation because the injunction says trade secrets and that list is not a trade secret.” But what if the judge disagrees?
Would you believe the judge has the power to hold the employee in contempt of court?
You see the problem.
But let’s consider the issue from the former employer’s perspective as well. There are several good reasons for not trying to specifically define the confidential information or trade secrets.
First, the employer would argue, as a practical matter the parties to the lawsuit usually know what the disputed confidential information is. When the employee complains that she can’t tell from the injunction what the confidential information is, the former employer sometimes has a decent argument that the employee is just playing coy or feigning ignorance.
You don’t know what the confidential information is, the employer might say, how about we start with the hundred-page customer list you downloaded and emailed yourself on your last day of work?
Second, it’s difficult to draft a specific definition that will capture all of the employer’s confidential information, especially early in a lawsuit when the employer is still in the dark about what the employee has.
Third, there’s a practical problem with listing specific trade secrets in a court order. You’re spilling the secrets to the world! (But this is easily solved by referring to a list in a sealed exhibit.)
These are potentially valid points, depending on the facts, but overall I think the employee usually has the better argument. When an injunction prohibits the use of unspecified confidential information, it leaves the defendant to guess about one of the very issues on which the parties usually disagree.
Another common feature of a temporary injunction in a departing employee lawsuit is prohibiting the employee from soliciting or doing business with a certain category of customers. The category might be “customers of Employer,” or “customers of Employer the Employee serviced, or “customers of Employer the Employee sold to in her last year of employment.”
This kind of injunction raises the same kind of specificity issues and arguments we’ve already covered as to confidential information.
Texas Case Law
So what does the Texas case law say about these issues? Does a temporary injunction need to define the restricted confidential information specifically? Does it have to identify the restricted customers specifically?
I’d say the “weight of authority” is on the specificity side, but admittedly, it’s a mixed bag.
There are Texas cases holding that an injunction that did not specifically identify the confidential information or trade secrets was not sufficiently specific.[1]
On the other hand, there are some Texas cases holding that an injunction that did not specifically identify the confidential information or trade secrets was still sufficiently specific.[2]
We find the same kind of split over naming the customers.
There are Texas cases holding held that an injunction that did not specifically identify the customers was not sufficiently specific.[3]
But some Texas cases have held that an injunction that did not specifically identify the customers was still sufficiently specific.[4]
As Yogi Berra said, it’s like déjà vu all over again.
So what gives? Is the difference in these cases due to differences in the facts, or differences in philosophy?
Probably some of both. Either way, if you represent the party asking for an injunction in a departing employee lawsuit, it’s probably better to draft a proposed injunction that specifically describes the restricted confidential information and names the restricted customers. Otherwise, you’re just giving the other party an issue to appeal.
Zach Wolfe (zach@zachwolfelaw.com) is a Texas trial lawyer who handles non-compete and trade secret litigation at Zach Wolfe Law Firm. Thomson Reuters named him a Texas “Super Lawyer”® for Business Litigation in 2020 and 2021.
These are his opinions, not the opinions of his firm or clients, so don’t cite part of this post against him in an actual case. Every case is different, so don’t rely on this post as legal advice for your case.
[1] See, e.g., Retail Services WIS Corp. v. Crossmark, Inc., No. 05-20-00937-CV, 2021 WL 1747033, at *12 (Tex. App.—Dallas May 4, 2021, pet. denied) (mem. op.); Cooper Valves, LLC v. ValvTechnologies, Inc., No. 14-16-00879-CV, 2017 WL 3090159, at *9 (Tex. App.—Houston [14th Dist.] July 20, 2017, no pet.); Lasser v. Amistco Separation Products, Inc., No. 01-13-00690-CV, at *4-5 (Tex. App.—Houston [1st Dist.] Feb. 6, 2014, no pet.) (mem. op.); Ramirez v. Ignite Holdings, Ltd., No. 05-12-01024-CV, 2013 WL 4568365, at *2 (Tex. App.—Dallas Aug. 26, 2013) (mem. op.).
[2] See, e.g., IAC, Ltd. v. Bell Helicopter Textron, Inc., 160 S.W.3d 191, 201-2 (Tex. App.—Fort Worth 2005, no pet.); HMS Holdings Corp. v. Public Consulting Group, Inc., No. 05-15-00925-CV, 2016 WL 1179436, at *3-4 (Tex. App.—Dallas March 28, 2016, no pet.) (mem. op.).
[3] See, e.g., Retail Services WIS Corp. v. Crossmark, Inc., No. 05-20-00937-CV, 2021 WL 1747033, at *13 (Tex. App.—Dallas May 4, 2021, pet. denied) (mem. op.); Super Starr Int’l, LLC v. Fresh Tex Produce, LLC, 531 S.W.3d 829, 849-50 (Tex. App.—Corpus Christi 2017, no pet.); Computek Computer & Office Supplies, Inc. v. Walton, 156 S.W.3d 217, 222-23 (Tex. App.—Dallas 2005, no pet.).
[4] See, e.g., Thomas v. A*Med Management, Inc., No. 01-19-00564-CV, 2020 WL 5269412, at *6-7 (Tex. App.—Houston [1st Dist.] Sept. 3, 2020, no pet.) (mem. op.); Lockhart v. McCurley, No. 10-09-00240-CV, 2010 WL 966029, at *4-5 (Tex. App.—Waco March 10, 2010, no pet.) (mem. op.); Cottingham v. Engler, 178 S.W.2d 148, 151 (Tex. Civ. App.—Dallas 1944, no writ). See also Rugen v. Interactive Business Systems, Inc., 864 S.W.2d 548, 552-53 (Tex. App.—Dallas 1993, no writ) (injunction that referred to customers identified on two sealed exhibits was sufficiently specific).
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