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Doubleclick Inc. v. Paikin - 402 F. Supp. 2d 1251 (D. Colo. 2005)

Rule:

In order to obtain preliminary injunctive relief, the moving party must establish: (1) a substantial likelihood that the movant will eventually prevail on the merits; (2) a showing that the movant will suffer irreparable injury unless the injunction issues; (3) proof that the threatened injury to the movant outweighs whatever damage the proposed injunction may cause the opposing party; and (4) a showing that the injunction, if issued, would not be adverse to the public interest.

Facts:

Defendant DoubleClick, Inc. was a Delaware corporation in the business of providing cooperative data services and analytical services designed to help direct marketers succeed in their business. Plaintiff Lori Paikin worked for DoubleClick as a Senior Vice President of Merchandise Services in their Abacus division until Feb. 2005, when she decided to leave the company. The parties entered into a separation agreement which provided that Paikin be placed on paid sabbatical for one month, and continue to pay her regular base salary for six months thereafter. These payments would be accelerated if Paikin got a new job that did not violate the separation agreement. In return, Paikin agreed to various waivers of liability and confidentiality and non-competition clauses which generally prohibited Paikin from ever disclosing DoubleClick's confidential information, and from working for DoubleClick's competitors for up to one year and seven months. The agreement also provided that if Paikin breached those prohibitions, DoubleClick would be entitled to an injunction. A few months later Paikin notified DoubleClick that she had accepted a new job unrelated to her work with DoubleClick. In response, the company paid Paikin her remaining separation pay in a lump sum. Then, in July 2005, DoubleClick learned that Paikin was working for Next Action Corporation, a direct competitor of DoubleClick. Therefore, DoubleClick filed an action in federal district court seeking an order enjoining Paikin from violating the separation agreement and from misappropriating DoubleClick's trade secrets.

Issue:

Was DoubleClick entitled to injunction to prevent Paikin from misappropriating its trade secrets?

Answer:

Yes.

Conclusion:

The district court held that DoubleClick had met its burden with respect to the likelihood of success on the merits by presenting evidence tending to show that it had trade secrets and that Paikin knew of them, thereby falling under Colo. Rev. Stat. § 8-2-113(2)(b), and that there was a question of fact as to whether Paikin's former job fell under Colo. Rev. Stat. § 8-1-113(2)(d). The court concluded that the irreparable harm, balance of hardships, and public interest factors also weighed in favor of granting a preliminary injunction.

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