Core Labs. LP v. Spectrum Tracer Servs., LLC

No. 2013-1263
March 1, 2013
Federal Court
Federal Circuit
Court of Appeals for the Federal Circuit

On August 7, 2013, the Court of Appeals for the Federal Circuit granted a preliminary injunction in Core Labs. LP v. Spectrum Tracer Servs., LLC, reversing a decision of the United States District Court for the Western District of Oklahoma. Core Laboratories (Core) initially brought a number of claims, including trade secret misappropriation, against Spectrum Tracer Services (Spectrum), a company established by former Core employees. Both companies provided services to oil well operators to assist in tracing fossil fuels and underground fracking processes. Core sought a preliminary injunction on February 12, 2013, after a Tracer employee notified Core that Tracer had given him a software program clearly belonging to Core, and had asked him to recreate some of the program's functionality.

The District Court denied Core’s motion on March 13, 2013, stating that Core had failed to establish that it would be irreparably injured, because “any harm Core has suffered or may suffer . . . can be adequately remedied through an award of monetary damages.” The Federal Circuit reversed, holding that under Texas law, when a defendant possesses trade secrets and is in a position to use them, irreparable harm to the trade secret owner may be presumed. This decision upholds the proposition advanced by Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) that the economic value of a trade secret lies in the competitive advantage the secret confers on its owner. Because Core demonstrated that Spectrum possessed its trade secret, and further demonstrated that Core lost nearly $1 million worth of jobs to Spectrum, injunctive relief was clearly appropriate under Texas law.

Lourie, Newman, Taranto
Core Laboratories, LP
LLC, Spectrum Tracer Services
Uniform Trade Secrets Act