Opinion
No. 05-03-00785-CV.
Opinion filed January 26, 2004.
On Appeal from the 298th Judicial District Court Dallas County, Texas Trial Court Cause No. 03-02992-M.
Affirm.
Before Justices MORRIS, WRIGHT, and RICHTER.
MEMORANDUM OPINION
This is an accelerated appeal from the trial court's grant of a temporary injunction prohibiting misappropriation of trade secrets, contact with former customers, and solicitation of employees to work for a different company. The appellant presents three issues claiming 1) the trial court clearly abused its discretion in granting the temporary injunction, because appellee's predecessor in interest, NSSI, did not transfer its common law cause of action to appellee, 2) none of the information appellee sought to protect was confidential or a trade secret and appellee failed to introduce evidence that showed a wrongful act was committed by appellant, and 3) the injunctive relief granted to appellee exceeded the relief requested. We affirm the decision and order of the trial court to grant the temporary injunction. The facts are known to the parties, and we do not recite them in any detail. Further, because all dispositive issues are settled in law, we issue this memorandum opinion. See Tex.R.App.P. 47.1.
A party may file an accelerated appeal when an interlocutory order grants or refuses a temporary injunction. Tex. Civ. Prac. Rem. Code Ann. § 51.014(4) (Vernon Supp. 2004); Tex.R.App.P. 28.1. In reviewing a temporary injunction, we recognize the purpose of the temporary injunction is to preserve the status quo until the case can be tried on its merits. Rugen v. Interactive Bus. Sys., 864 S.W.2d 548, 550 (Tex. App.-Dallas 1993, no writ). Because an appeal of an order granting or denying a temporary injunction is an appeal from an interlocutory order, the merits of the applicant's case are not presented for appellate review. Id. This Court will reverse a temporary injunction order only if we determine that the record shows a clear abuse of discretion on the part of the trial court. Id. at 550-51; Strickland v. Medtronic, Inc., 97 S.W.3d 835, 837 (Tex. App.-Dallas 2003, pet. dism'd w.o.j.). The appellate court is not to substitute its judgment for that of the trial court, but must only determine whether the court's action was so arbitrary as to exceed the bounds of reasonable discretion. Rugen, 964 S.W.2d at 551. On appellate review, we draw all legitimate inferences from the evidence in the light most favorable to the trial court's judgment. Id. To warrant a temporary injunction, the applicant need only show a probable right to permanent relief upon a trial on the merits and a probable injury during the pendency of the trial unless the injunction issues. Id. The trial court abuses its discretion when it misapplies the law to established facts or when the evidence does not reasonably support the findings of probable injury or probable right of recovery. Id.; Seaborg Jackson Ptnrs. v. Beverly Hills Sav., 753 S.W.2d 242, 245 (Tex. App.-Dallas 1988, no writ).
In appellant's first issue, he challenges the standing of appellee to assert a cause of action for misappropriation of trade secrets. In support of this assertion, he claims appellee's predecessor in interest, NSSI, did not transfer its common law cause of action to appellee. It is undisputed that the common law cause of action for misappropriation was the theory presented at trial. The assets of the predecessor in interest, NSSI, were purchased by appellee in bankruptcy proceedings. An asset purchase agreement set forth the terms of the conveyance. Pursuant to the agreement, appellee acquired "all trade secrets, inventions, engineering designs, product specifications and processes pertaining to the purchased assets." Under the excluded assets section of the asset purchase agreement, certain causes of action were excluded from the transfer. That section provides "with the exception of purchaser's right to enforce the contracts and warranties related to the purchased assets, and any causes of action under any non-compete agreements conveyed to purchaser . . . seller does not by this agreement agree to transfer to purchaser any claims or causes of any sort, all of which shall be retained by seller." Appellant claims this latter provision reserves the right to enforce the common law cause of action for misappropriation to NSSI, and therefore, appellee lacked standing to bring suit.
Although there was a non-competition clause in appellant's employment contract, the issue was solely submitted on the common law cause of action. Therefore, any contractual claims or issues are not before us.
Appellee claims the latter provision of the asset purchase agreement only contemplates causes of action that were extent on the date of the transfer and that it retains the right to enforce a common law cause of action for misappropriation concerning the trade secrets it obtained under the agreement. We agree. If appellee could not protect its trade secrets, then it would have obtained nothing by virtue of the asset purchase agreement. We overrule appellant's first issue.
In his second issue, appellant asserts the trial court erred when it issued a temporary injunction because appellee failed to introduce any evidence of a wrongful act by appellant and it failed to establish that the information it sought to protect was confidential or a trade secret. Appellee claims that these issues go to the merits of the litigation and are not proper subjects for appealing the order granting the temporary injunction. Although the merits are not presented for review in an appeal of an order granting or denying an injunction, the evidence must reasonably support the findings of probable injury and probable recovery. Rugen, 964 S.W.2d at 550-51.
Under Texas law, trade secret misappropriation is established by showing a trade secret existed, the trade secret was acquired through a breach of a confidential relationship or discovered by improper means, and use of the trade secret without authorization of the plaintiff. Avera v. Clark Moulding, 791 S.W.2d 144, 145 (Tex. App.-Dallas 1990, no writ); Alcatel USA, Inc. v. DGI Tech., 166 F.3d 772, 784 (5th Cir. 1999).
There is sufficient information in the record to reasonably support the findings of probable injury and probable recovery. Appellee showed that appellant acquired secret information while an employee of the seller of the trade secrets. The information was disclosed confidentially to appellant for use while employed. The trade secrets were developed over time, through effort and expense.
The information was not readily available elsewhere. The information gave appellee an advantage over its competition. There was evidence before the trial court that appellant copied the confidential information from a computer disk without permission, and before the injunction was granted, used that information while employed at a competitor of appellee. Under these circumstances we cannot say the trial court's action was so arbitrary as to exceed the bounds of reasonable discretion. Rugen, 964 S.W.2d at 551. We overrule appellant's second issue.
In his third issue, appellant asserts that the injunction order as written exceeded the relief sought by appellee. Although we agree that the injunction order language does not exactly parallel the language used in the petition, we do not believe that the injunction order was too broad or granted greater relief than was requested. If anything, the injunction order used clarifying language when the petition used more general language. For example, the relief sought included protection of confidential business information. The injunction order protects confidential business information, including specific references to particular items of confidential information. The petition sought to prohibit appellant from generally calling on appellee's customers. The injunction order simply identifies and enumerates the actual customers appellant is prohibited from contacting. (Appellant had been exposed to confidential information concerning those specified customers.) Again, under these circumstances, the trial court did not abuse its discretion. We overrule appellant's third issue.
We affirm the order of the trial court that granted appellee a temporary injunction to preserve the status quo pending the outcome of the trial.