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Digital Mentor, Inc. v. Ovivo USA, LLC

United States District Court, W.D. Washington, Seattle

January 24, 2018

DIGITAL MENTOR, INC., Plaintiff,
v.
OVIVO USA, LLC; OVIVO U.S. HOLDING INC.; VALERE MORISSETTE; MARC BARBEAU; DOES 1-20, Defendants.

          ORDER

          Honorable Richard A. Jones United States District Judge

         This matter comes before the Court on Plaintiff Digital Mentor, Inc.'s (“Digital”) Motion for Temporary Restraining Order and Preliminary Injunction and Motion for Expedited Discovery. Dkt. # 11. For the reasons that follow, the Court GRANTS Plaintiff's Motion for Temporary Restraining Order and DENIES Plaintiff's Motion for Expedited Discovery.

         I. BACKGROUND

         Digital is an engineering consulting service with its principal place of business in Incline Village, Nevada. Digital is registered to do business in the state of Washington. Dkt. # 1 ¶ 1. Digital developed a mobile computing system, DigitalMentor, for the waste and wastewater industry to allow companies to monitor and maintain their equipment on mobile devices. Id. Defendant Ovivo USA, LLC provides equipment for water and wastewater treatment facilities throughout the United States and around the world. Id. ¶ 2. Defendant Ovivo U.S. Holding Inc. is a Delaware corporation that owns Ovivo USA, LLC. Defendant Ovivo, Inc., is a Canadian corporation that owns Ovivo U.S. Holding Inc. Id. ¶ 3. Defendant Valere Morissette is Vice President of Ovivo USA, LLC. Id. ¶ 6. Defendant Marc Barbeau is President of Ovivo USA, LLC, and President and CEO of Ovivo, Inc. Id. ¶ 7.

         In March of 2014, Digital marketed DigitalMentor to Defendants for use in their facilities and in conjunction with the sale of their equipment. The parties then entered into a licensing agreement. Pursuant to that licensing agreement, Digital agreed to create and license DigitalMentor for Defendants' facilities and customers under the name “digitalOPS” and Defendants granted Digital a non-exclusive limited license to Defendants' Standard Operating Procedures (“SOP”), manuals, technical drawings, etc. Dkt. # 11-1 at 10; Dkt. # 23 at 5. On or about November 1, 2014, Digital and Ovivo entered into a Non-Disclosure Agreement (“NDA”). Digital claims that, while under these contracts, Defendants copied DigitalMentor and created a “pirated” version of this product called, WaterExpert.

         On December 29, 2017, Digital filed a Complaint against Defendants seeking injunctive relief, alleging that Defendants violated the Defend Trade Secrets Act, 18 U.S.C. 1836, et seq. (“DTSA”), the Racketeer Influenced and Corrupt Organizations Act ("RICO”), 18 U.S.C. 1961, et seq., and committed trademark and copyright infringement. Digital also brings a breach of contract claim and several other state law claims.

         II. DISCUSSION

         A temporary restraining order is an “extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008).[1] To obtain a temporary restraining order, Digital must show that (1) it is likely to succeed on the merits, (2) it is likely to suffer irreparable harm in the absence of preliminary relief, (3) the balance of equities tips in its favor, and (4) an injunction is in the public interest. Stormans, Inc. v. Selecky, 586 F.3d 1109, 1127 (9th Cir. 2009).

         The Court finds that Digital demonstrated a likelihood of success on its breach of contract claim.[2] The parties entered into a Master Agreement in conjunction with the NDA. The NDA states that information that Digital revealed to Defendants regarding DigitalMentor is confidential and that Defendants are not to copy the software disclosed by Digital to Defendants under the terms of the agreement. Dkt. # 11 Ex. A. Digital contends that Defendants used their access to DigitalMentor pursuant to the Master Agreement to steal Digital's technology in violation of the NDA. Defendants do not dispute that there was a contract between the parties, only that the development of WaterExpert does not violate the contract. Defendants argue that they did not breach the NDA because any information used by them was not confidential because Digital was “extensively” marketing DigitalMentor, or was their intellectual property to use based on the terms of the Master Agreement.

         Based on the information available on the record at this time, Defendants' arguments are not convincing. Demonstrating and marketing a product does not immediately make the underlying technology of that product publicly available and free from the designation of confidential or proprietary. Defendants' claim that similarities between WaterExpert and DigitalMentor are merely a result of similar subject matter is similarly unconvincing. Digital's claim alleges similarities beyond the utility of both mobile computing systems in the water and wastewater treatment industries. Dkt. # 11-1 at 18.

         Digital will also suffer irreparable harm if its motion for a temporary restraining order is not granted. Digital is a small software engineering startup that developed DigitalMentor through personal labor, financial investment and development of expertise in the industry. Digital argues that Defendants' dominant position in the water and wastewater treatment industry has the potential to push Digital out of the market and has already substantially negatively impacted Digital's revenue and sales. In the absence of a temporary restraining order, the future of Digital as a company might be in danger.

         Considering Defendants' competitive advantage over Digital, the balance of equities tips in Digital's favor. A temporary restraining order would preserve the status quo until the preliminary injunction hearing is held. Further, granting the temporary restraining order would be in the public interest. There is a public interest in upholding NDA's, protecting intellectual property, and discouraging unfair business practices. Accordingly, the Court GRANTS Digital's Motion for a Temporary Restraining Order. Dkt. # 11.

         The Court ORDERS that each properly served Defendant and their officers, agents, servants, employees and attorneys, and all those acting in concert or participating with them, are restrained and enjoined from engaging in, committing or performing, either directly or indirectly, any and all of the following:

1. Using, disclosing, reproducing, summarizing, distributing, reverse engineering, decompiling and/or disassembling Digital Mentor's confidential trade ...

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