Richards Layton & Finger
 

Judge Sleet Denies Motion for Temporary Restraining Order and Preliminary Injunction

March 7, 2017

In CrowdStrike, Inc. v. NSS Labs., Inc., C.A. No. 17-146-GMS (D. Del. Feb. 13, 2017), Judge Sleet denied plaintiff CrowdStrike, Inc.’s motion for a temporary restraining order and preliminary injunction. The plaintiff had engaged defendant NSS Labs., Inc. to privately test the plaintiff’s software for its strength in the face of cyber attacks. After a few rounds of private tests, the defendant informed the plaintiff that it would perform a public test of the software. The plaintiff sued to enjoin the defendant from disclosing the results of the public test at a technology conference, which began on February 14, 2017.

The defendant fought this request on subject matter jurisdiction grounds and argued that the plaintiff failed to meet the standard for preliminary injunctive relief. The Court found that the trade secrets claim, when read in a light most favorable to the plaintiff, allowed it to exercise jurisdiction over the action. The Court then went through each of the preliminary injunction factors, finding that the plaintiff was not likely to succeed on the merits of any of its claims and “ha[d] not demonstrated that it [wa]s likely to suffer irreparable harm if the temporary restraining order [wa]s not granted,” as the alleged harm (drop in sales due to a negative report at a technology conference) “d[id] not flow from” the plaintiff’s claims. Further, the Court went on to note that the defendant “would, in fact, suffer more harm than [the plaintiff] if the court were to grant [the plaintiff’s] request for a temporary restraining order and preliminary injunction.” Finally, the Court confirmed that injunctive relief was not appropriate as “the public has a very real interest in the dissemination of information regarding products in the marketplace,” including interest from the public tests of the plaintiff’s software. Therefore, the plaintiff’s requested relief was denied.

Key Points:  The speed with which Judge Sleet held a telephone conference on the motion for temporary restraining order (the same day as the filing) and decided the motion (a day after the answering brief was filed) suggests the Court is attempting to decide TRO and preliminary injunction cases quickly.