American Can Co. v. Mansukhani

• Decision Date: 15 August 1985
• Docket Number: 84-C-454.,No. 81-C-1372,81-C-1372
• Citation: 621 F. Supp. 111
• Parties: AMERICAN CAN COMPANY, Plaintiff, v. Ishwar MANSUKHANI, d/b/a Brand Associates, and Ruth Brand, d/b/a Brand Associates, and Brand M, Inc., Defendants. Ishwar MANSUKHANI, Ruth Mansukhani a/k/a Ruth Brand, and Brand M, Inc., Plaintiffs, v. AMERICAN CAN COMPANY, and American Technologies, Inc., Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

621 F. Supp. 111

AMERICAN CAN COMPANY, Plaintiff, v. Ishwar MANSUKHANI, d/b/a Brand Associates, and Ruth Brand, d/b/a Brand Associates, and Brand M, Inc., Defendants.

Ishwar MANSUKHANI, Ruth Mansukhani a/k/a Ruth Brand, and Brand M, Inc., Plaintiffs, v. AMERICAN CAN COMPANY, and American Technologies, Inc., Defendants.

Nos. 81-C-1372, 84-C-454.

United States District Court, E.D. Wisconsin.

August 15, 1985.

Andrew O. Riteris, Michael, Best & Friedrich, Milwaukee, Wis., for Mansukhanis.

Bruce O'Neill, Fox, Carpenter, O'Neill & Shannon, Milwaukee, Wis., for American Technologies.

George H. Solveson, Andrus, Sceales, Starke & Sawall, Milwaukee, Wis., Douglas W. Wyatt, Thomas A. O'Rourke, Wyatt, Gerber, Shoup, Scobey & Badie, and Robert J. Woolsey, Griggs, Baldwin & Baldwin, New York City, for American Can.

DECISION AND ORDER

WARREN, District Judge.

Two matters remain unresolved in Case Number 81-C-1372. First, the plaintiff has filed what is entitled a "Renewed Motion for a Supplemental Injunction," requesting that the Court permanently enjoin the defendants from manufacturing and selling jet inks numbered SK-2914 and SK-2916. Second, the defendants have filed a motion under Rule 65.1, Federal Rules of Civil Procedure, seeking $800,000.00 from Federal Insurance Company as damages allegedly incurred by the defendants due to the wrongful issuance of a temporary restraining order and preliminary injunction in the summer of 1983. The Court will grant the plaintiff's request for the supplemental injunction and will hold defendants' Rule 65.1 motion in abeyance pending an evidentiary hearing on that matter. In addition, the Court will lift the stay of discovery in Case Number 84-C-454.

The plaintiff's motion for a supplemental injunction arises out of an ex parte temporary restraining order issued by the Court on July 26, 1983, and a preliminary injunction issued on August 16, 1983. The restraining order enjoined the defendants from selling

jet inks of any type, including defendants' SK-2914 and SK-2916 jet inks, to any of plaintiff's customers, previously serviced by Mansukhani when he was employed by plaintiff or its predecessors, including the customers Anheuser-Busch Company and Beverage Products, Inc.

Order of July 26, 1983. The preliminary injunction enjoined the defendants from selling jet inks numbered SK-2914 and SK-2916, and was coupled with a permanent injunction which enjoined the defendants

from selling those commercial jet inks developed while defendant Mansukhani was employed by plaintiff's predecessor to the companies or individuals for whom those inks were specifically developed, or to any other companies or individuals. The set of inks so enjoined from sale by defendants includes but is not limited to those numbered R-453, P-473, and BK-493.

Order of August 16, 1983, at 6. As security for the restraining order and preliminary injunction, the plaintiff posted two bonds totalling $800,000.00, for which Federal Insurance Company was the surety.

The defendants successfully appealed the orders granting the TRO and the preliminary injunction, and the matter was remanded to this Court for further proceedings. American Can Company v. Mansukhani, 742 F.2d 314, 333-334 (7th Cir. 1984). The Court of Appeals reversed the temporary restraining order because it found no valid reason for the issuance of ex parte relief and because it believed that the procedural requirements of Rule 65(b), Federal Rules of Civil Procedure, had not been complied with. Id. at 321. The Court of Appeals reversed the preliminary injunction order because this Court had applied the functional or practical similarity standard in comparing plaintiff's protected trade secrets with defendants' ink formulas. That standard was applied for the purpose of determining plaintiff's likelihood of success on the merits. The Court of Appeals stated that the standard applied was incorrect because it expanded the original, narrow limits placed on the plaintiff's trade secrets by prohibiting the manufacture and sale of jet inks that were "compositionally similar" to the plaintiff's trade secrets instead of those that were "substantially derived" from the protected formulas. Id. at 326-327. The Court of Appeals also held that the use of the improper standard resulted in the issuance of a preliminary injunction which was too vague, and thus not in compliance with Rule 65(d). Id. at 326.

The Court of Appeals never addressed the merits of this case, such as whether defendants' inks SK-2914 and SK-2916 violated plaintiff's trade secrets. Nor did the Court of Appeals decide that injunctive relief could not have been obtained by the plaintiff; in fact, the Court specifically stated that it was not deciding "that...