ISC-Bunker Ramo Corp. v. Altech, Inc.

Majority - Marovich, District Judge

Yes, the district court properly issued a preliminary injunction because ISC demonstrated a strong likelihood of success on the merits for its claims of copyright infringement, trade secret misappropriation, and tortious interference with contract, coupled with irreparable harm, an inadequate remedy at law, and a favorable balance of hardships and public interest. The court adopted the magistrate's report and recommendation. For copyright infringement, ISC held valid copyrights for its software and manuals, established by registrations or pending applications, and confirmed through substantial evidence of originality. Altech directly infringed by making unauthorized copies of ISC's "The Guide" (with evidence of willful concealment of proprietary notices) and multiple copies of ISC's IDOS diagnostic software. The "first sale" doctrine did not apply because ISC exclusively licensed its software, thereby retaining control over distribution, and Altech's acquisition and redistribution constituted contributory infringement. Moreover, Altech's act of loading ISC's software into computers for use constituted direct copying and thus direct infringement. Irreparable harm was presumed in copyright cases and further supported by ISC's significant investment in developing its works. Regarding trade secret misappropriation, ISC's software (IDOS, operating systems), manuals, technical bulletins, and service procedures qualified as trade secrets under the Uniform Trade Secrets Act due to their economic value and ISC's reasonable and successful efforts to maintain their secrecy (e.g., proprietary legends, employee confidentiality agreements, restricted access, and licensing agreements). Altech was on clear notice of this confidentiality, evidenced by its principals' prior employment at ISC, the employment of numerous other ex-ISC employees who signed confidentiality agreements, and Altech's attempts to obliterate proprietary markings. Altech's misappropriation for its own use was a clear violation, causing irreparable harm to ISC. For tortious interference with contract, ISC's employment agreements contained valid and enforceable confidentiality and restrictive covenants under Washington law (the chosen state law, found not repugnant to Illinois policy). These covenants protected ISC's legitimate business interests, including investment in training, confidential information, and customer relationships, and were deemed reasonable in scope (national, given the nature of the business) and duration (tied to the confidentiality of the information, provisionally set at two years for the preliminary injunction). Altech knowingly interfered with these contracts by systematically hiring ex-ISC employees specifically to exploit their ISC training and access to confidential information to service ISC systems for Altech's competitive advantage, leading to continuous breaches and causing irreparable injury to ISC. The balance of hardships weighed heavily in ISC's favor, as Altech's infringing activities were a knowing and regular part of its business, while an injunction would protect ISC's substantial investment. The public interest strongly favored the injunction, as it preserved the integrity of intellectual property laws and fostered technological creativity and development.