Trademark Claims

Wells Fargo Wins TRO Against Former Employee for Disclosing Trade Secrets

Wells Fargo hired Bengtson in their wealth management department. Part of the employment contract contained a non-solicitation and a nondisclosure agreement. Bengtson left Wells Fargo to join Merrill Lynch. He immediately began soliciting Wells Fargo clients and disclosing information to Merrill Lynch. Wells Fargo brought suit for breach of contract and trade secret misappropriation.

The court had no trouble granting the TRO, but its take on Bengtson’s defense is interesting. Bengtson argued that Wells Fargo should be barred by the doctrine of unclean hands because they encouraged him to bring over client lists when they hired him from Piper Jaffray. The court rejected this argument, holding that Wells Fargo must have been guilty of unconscionable conduct in their employment contract with Bengtson for unclean hands to apply.

Appellate Practice

Arkansas Supreme Court Evades Review of Civil Justice Reform Act

Shipp was involved in a car wreck with Franklin and filed a lawsuit against him. Franklin filed a third-party complaint against Sanders, and Shipp amended her complaint to include Sanders as a defendant. Prior to trial, Shipp settled with Sanders. The remainder of the case proceeded to trial, with the jury finding Sanders 100% responsible for the accident.

On appeal, Shipp raised two constitutional challenges to the Civil Justice Reform Act. First, Shipp challenged the compensatory damages statute, which provides that the plaintiff can only present evidence of medical expenses that the plaintiff actually paid. See A.C.A. § 16-55-212. Shipp claims this statute violates the well-established collateral-source rule.

Second, Shipp challenged A.C.A. § 16-55-201, which provides that, for personal injury, the liability of each defendant is several only and not joint. Shipp claimed this statute improperly invades the power of the Arkansas Supreme Court to set rules of procedure.

The court decided not to address these questions on grounds of mootness. Because the jury returned a verdict finding Sanders 100% responsible, the case did not present joint tortfeasors to trigger analysis of these statutes. The jury verdict was affirmed.

Trademark Claims

Novus Wins Injunction on Trademark Claims but not for Noncompete Claims

Novus specializes in auto glass repair and has over 250 franchisees, including Oksendahl. The franchise contract prohibits franchisees from competing with Novus for 2 years after the expiration of the contract. It also prohibits use of Novus trademarks after expiration. When Oksendahl’s franchise expired, he continued to operate a competing business.

The court granted a partial injunction against Oksendahl prohibiting him from using Novus trademarks. However, the court determined that Novus failed to show irreparable harm on the noncompete claim. Oksendahl can operate the competing business while the case proceeds.

Trademark Claims

ABC Teacher’s Outlet Trademark Case Dismissed for Exception to First-Filed Rule

This case actually began on March 25, 2002 when School Specialty sent a cease and desist letter to ABC Teacher’s Outlet (ABC) accusing it of trademark infringement. ABC responded, but School Specialty never replied. Several years later, on November 14, 2006, and January 5, 2007, School Specialty sent additional letters threatening to file a lawsuit.

ABC filed a declaratory action in Minnesota on January 11, 2007, and served School Specialty on February 21. School Specialty filed suit in Wisconsin on February 6 and served ABC on February 21. The court dismissed this case as an exception to the first-filed rule because (1) the claim was for declaratory relief and (2) ABC knew of School Specialty’s intent to sue.

The court surprisingly gave no weight to the fact that School Specialty waited 5 years before actually filing the lawsuit. ABC should win on a laches defense whether Wisconsin or Minnesota ultimately hears the case.