Obtaining Injunctive Relief Based Upon the Misappropriation or Threatened Misappropriation of Trade Secrets

Section 8.01-620 of the Virginia Code provides that the circuit courts have jurisdiction to award injunctions. Va. Code. Ann. § 8.01-620. Although the circuit courts have such jurisdiction, they are careful in issuing injunctions because the Virginia Supreme Court has held that “[t]he granting of an injunction is an extraordinary remedy and rests upon the sound judicial discretion to be exercised upon consideration of the nature and circumstances of a particular case.” Preferred Sys. Solutions, Inc. v. GP Consulting, LLC, 284 Va. 382, 401 (2012) (quotation omitted).

Although the Virginia Supreme Court has referred to injunctive relief as an extraordinary remedy, it has not prescribed the precise test for the circuit courts to apply when determining whether to grant temporary injunctive relief. As a result, the circuit courts have applied the four-part test enunciated by the United States Supreme Court and adopted by the United States Court of Appeals for the Fourth Circuit. SanAir Techs. Lab., Inc. v. Burrington, 91 Va. Cir. 206, 207 (2015). In order to satisfy the four-part test, the party moving for the injunction must “‘establish (1) that he is likely to succeed on the merits, (2) that he is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in his favor, and (4) that an injunction is in the public interest.’” MeadWestvaco Corp. v. Bates, 91 Va. Cir. 509, 519 (2013) (quoting Winter v. NRDC, Inc., 555 U.S. 7, 20 (2008).

In contrast with temporary injunctive relief, the Supreme Court has established the test to be applied when a plaintiff seeks permanent injunctive relief. Specifically, where permanent injunctive relief is sought, the plaintiff “has the burden to demonstrate ‘irreparable harm and the lack of an adequate remedy at law.’” MeadWestvaco, 91 Va. Cir. at 518 (quoting Black & White Cars, Inc. v. Groome Transp., Inc., 247 Va. 426, 431 (1994)).

Section 59.1-337 of the Virginia Code provides that “actual or threatened misappropriation of trade secrets may be enjoined,” expressly authorizing a plaintiff to obtain injunctive relief under such circumstances. Va. Code. Ann. 59.1-337. However, this statutory authorization does not relieve a party seeking injunctive relief from establishing the elements of either the four-part test for temporary injunctive relief or the two-part test when permanent injunctive relief is sought. Thus, a party seeking temporary injunctive relief based upon the misappropriation or threatened misappropriation of trade secrets would need to demonstrate (i) the existence of a trade secret, (ii) that the trade secret has been misappropriated or that the defendant has threatened to misappropriate the trade secret, (iii) a likelihood of irreparable harm, (iv) that the equities balance in its favor, and (v) that the public interest will be served by the issuance of an injunction.

With respect to the likelihood of irreparable harm, courts have often found that the loss of a trade secret results in irreparable harm because trade secrets derive their value from their secrecy. MeadWestvaco, 91 Va Cir. at 530 (citing Home Funding Group, LLC v. Myers, 2006 U.S. Dist. LEXIS 90285, at *5 (E.D. Va. 2006). With respect to the public interest, Virginia courts have held that the “[p]ublic interest is served by protecting trade secrets and confidential information from misappropriation.” MeadWestvaco, 91 Va. Cir. at 531 (citing Dionne v. Southeast Foam Converting & Packaging, Inc., 240 Va. 297, 304 (1990)).

If you’re ready to file a case, or just want advice on the matter, Contact Keithley Law, PLLC today by calling (703) 454-5147and schedule an initial consultation in our Fairfax law office with one of our attorneys. We can walk you through the steps to get the most out of your case.