Procedural Posture

Procedural Posture

Plaintiffs, acquiring company and a partnership, sought a preliminary injunction to enforce a release agreement and non-compete agreement and to prevent use of an infringing trademark against defendants, the target company and some of its employees. The United States District Court for the Central District of California granted the preliminary injunction and the defendants appealed. Appellant was represented by a business attorney.

Overview

The district court did not err in finding that plaintiffs had established a likelihood of confusion, and thus a presumption of irreparable injury, on its trademark claims against the defendants. The district court did not clearly err in finding that the covenants not to compete were invalid because they were not ancillary to a valid employment contract. The district court did not err in finding that the acquiring company had established a likelihood of success against on its claims under the noncompete provision of a joint venture agreement. Although the covenant did not comply with the territorial limitations required by Cal. Bus. & Prof. Code § 16602 (2002), the district court properly applied the rule of severability and properly limited the scope of the covenant. On the misappropriation of trade secrets claim, the district court did not err in finding that the acquiring company failed to establish what “specific combinations” of materials and processes, which individually could not constitute protectable trade secrets, it viewed as trade secrets. However, injunction did not provide the enjoined parties with sufficient notice of the scope of their restricted conduct.

Outcome

The appellate court affirmed the decision of the district court in part and reversed the decision of the district court in part and remanded the case.

Overview

HOLDINGS: [1]-Plaintiff lacked standing to challenge irregularities in either the assignment or the securitization of his home loan because he was not a party to the assignment or securitization; [2]-Plaintiff had not stated a claim under the California Homeowner’s Bill of Rights because it was not clear from plaintiff’s allegations whether and when he requested a “foreclosure prevention alternative,” as required by Cal. Civil Code § 2923.7(a), such that the court could determine whether he was then wrongfully denied a single point of contact; [3]-Plaintiff’s claim for promissory estoppel was dismissed because he did not disclose anything beyond a terse and conclusory statement that an unidentified individual agreed to modify his loan, and he did not plead what he did or did not do in reliance on the alleged promise to modify his loan.

Outcome

Motion to dismiss granted.