Designer Skin LLC v. S & L Vitamins, Inc., et al.
Ford Motor Company v. Robert Lane d/b/a Warner Publications
67 F. Supp.2d 745 (E.D. Mich., September 7, 1999)
Defendant is a student who came into possession of documents containing confidential information about plaintiff Ford Motor Company ("Ford") and its products, including photographs of automobiles that had not yet been brought to market, blueprints and sensitive internal Ford documents pertaining to its products and manufacturing operations. Defendant threatened to, and did publish a number of these documents on a web site he maintained. Defendant claimed that he was unaware of the identity of the individuals who delivered these materials to him. The court surmised that they were "likely former and current Ford employees" under a duty to keep such materials confidential.
Plaintiff Ford brought suit alleging, among other things, that defendant's conduct violated Michigan's Uniform Trade Secrets Act, Mich. Comp. Law Ann. Section 445.1901-1910. Plaintiff sought a preliminary injunction, enjoining defendant from "using, copying or disclosing any internal document of Ford Motor Company." Michigan's Trade Secrets Act authorized the issuance of injunctive relief enjoining the "disclosure ... of a trade secret of another ..." under the circumstances of the case at bar.
Notwithstanding its determination that "Ford ... presented evidence to establish that [defendant] is likely to have violated the Michigan Uniform Trade Secrets Act, the Act's authorization of an injunction violates the prior restraint doctrine and the First Amendment as applied under these circumstances." As a result, the Court denied plaintiff's application for injunctive relief.
Under the First Amendment, a prior restraint on speech will only issue in "exceptional cases." The Sixth Circuit has held that "to justify a prior restraint on pure speech, 'publication must threaten an interest more fundamental than the First Amendment itself.'" In a case similar to that at bar, Procter & Gamble Co. v. Bankers Trust Co., 78 F.3d 219 (6th Cir. 1996) the Sixth Circuit, in refusing to enjoin Business Week from publishing confidential documents subject to and obtained by Business Week in violation of a protective order prohibiting their disclosure, stated "the private litigants' interest in protecting their vanity or their commercial self interest simply does not qualify as grounds for imposing a prior restraint."
Following this precedent, as well as the Supreme Court's decisions in New York Times Co. v. United States, 403 U.S. 713 (1971) and Near v. Minnesota, 283 U.S. 697 (1931), the court held that issuance of the requested injunction would run afoul of the First Amendment. Said the court:
[T]his court is bound by existing precedent, and, under the broad holdings of the Pentagon Papers case and Procter & Gamble, may not enjoin [defendant's] publication of Ford's trade secrets and other internal documents.
In the absence of a confidentiality agreement or fiduciary duty between the parties, Ford's commercial interest in its trade secrets and [defendant's] alleged improper conduct in obtaining the trade secrets are not grounds for issuing a prior restraint.
Had defendant been an employee of Ford, or a party to a confidentiality agreement, the case would have been resolved differently because "an injunction may issue against one who plans to reveal a trade secret in violation of an employment contract or in breach of a fiduciary duty. Use of trade secrets in violation of a confidentiality agreement or in breach of a fiduciary duty is not protected by the First Amendment."
The full text of the court's decision can be found on a web site maintained by the United States District Court for the Eastern District of Michigan.