Sysco sued Cymtek and CymMetrik Enterprise Co. Ltd. Accusing each of violating the Defend Trade Secrets Act, copyright infringement, and violation of Mass. G.L. c. 93A, all based on allegations that Sysco employees stole confidential files containing trade secrets and used the information to create Cymtek. Sysco was granted a temporary restraining order on November 17th, which ran through December 20th to permit the parties to brief the request for a preliminary injunction.
Judge Sorokin looked to the likelihood of success in determining the PI motion. With respect to the Defend Trade Secrets Act, he noted that all of the complained-of activity occurred in Taiwan (or elsewhere outside of the United States), and that no acts “in furtherance of the offense” were alleged to have occurred in the country. He rejected Sysco’s argument that sales of machines in the United States that were made outside of the United States using the allegedly stolen trade secrets established “use” of the secrets in the United States, finding that the statute does not cover products made using a trade secret if the products do not themselves contain the trade secret.
Judge Sorokin further rejected Sysco’s argument that the products made using the trade secret materials, in which Sysco claims copyright, constitute “derivative works” of the copyright. Accordingly, he found that Sysco had not established a likelihood of success on the copyright claim.
Finally, Judge Sorokin rejected the 93A claim outright, as that statute requires the acts complained of to have occurred primarily and substantially in Massachusetts. Both the plaintiff and the defendants are Taiwanese companies, and the alleged theft and use of the trade secrets occurred in Taiwan.
In light of this, Judge Sorokin denied the preliminary injunction and vacated the TRO. He further questioned whether Sysco had met its burden to establish personal jurisdiction over Cymtek.
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