Avery Dennison Corp. v. Transact Techs., Inc.

An injunction was not granted when the plaintiff failed to carry the burden of proof that the defendant used trade secrets in developing a machine.

Opinion (O’Toole): Plaintiff, Avery Dennison Corporation ("Avery"), appealed from a judgment entry denying its application for a preliminary injunction against defendant, TransAct Technologies, Inc. ("TransAct"). Avery produced food safety terminals, which helped food service businesses control inventory and prevent food spoilage. Avery’s newest model was the FreshMarx Automated Labeling System which contained a touch screen and two printers. An employee of Avery, until 2011, was familiar with the FreshMarx machine. TransAct does business in the foodservice industry, and that employee came to know representatives of TransAct at trade shows. Conversations between Avery and TransAct occurred regarding a proposal that Avery uses TransAct printers, but those talks were terminated in September 2010. Upon the termination of these discussions between the companies, The same employee began individual discussions with TransAct and accepted a position with TransAct in late March 2011 as vice president in charge of food service technology. Eventually, Avery became aware of a new TransAct machine, the Ithaca 9700, which contained a touchscreen as well as two printers. Avery filed suit against TransAct and the former employee seeking preliminary and permanent injunctions. Among Avery’s complaints were misappropriate of trade secrets and inevitable disclosure of trade secrets against both defendants. The trial court denied the application for injunctive relief. A trial court’s decision to grant or deny a preliminary injunction is reviewed for abuse of discretion. Avery argued on appeal that the trial court’s order denying a preliminary injunction was contrary to the manifest weight of the evidence, and claimed that the record demonstrated that the former employee stole confidential business plans from Avery and was contacted shortly after the theft by TransAct. Moreover, Avery alleged that TransAct developed its printer which incorporates crucial features and designs similar to Avery’s machine. In assessing the manifest weight of the evidence, a reviewing court weighs the evidence and all reasonable inferences, considers the credibility of witnesses, and determines whether in resolving conflicts in the evidence, the finder of fact clearly lost its way and created such a manifest miscarriage of justice that the judgment must be reversed. The trial court found that TransAct presented substantial evidence that it developed its machine through information generally available to the public and reverse engineering. Avery countered that this was overcome by evidence regarding lengthy and secretive negotiations between their former employee and TransAct as well as the similarities between the two machines. Avery simply failed to carry its burden of proof that TransAct used Avery’s trade secrets in the machine’s development, and that it will thus be likely to prevail ultimately on the merits. The Trial Court's refusal to grant injunctive relief was AFFIRMED.