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SJC rejects presumption of irreparable harm in trade secret case. Denial of preliminary injunction affirmed * The Supreme Judicial Court rejected a proposed presumption of irreparable harm for plaintiffs seeking preliminary injunctions in trade secret misappropriation cases. * Daikin Applied Americas sued two former employees and their new HVAC company, alleging misuse of confidential information to compete for its customers. * The court held that plaintiffs must provide specific evidence of irreparable harm under the Massachusetts Uniform Trade Secrets Act and traditional equitable principles. * The decision highlights the importance of demonstrating harm beyond monetary losses when seeking injunctive relief against former employees who lack noncompete or customer non-solicitation agreements. A company that showed a likely trade secret misappropriation claim against two former employees was not automatically entitled to a presumption of irreparable harm at the preliminary injunction stage, the Supreme Judicial Court has found. Plaintiff Daikin Applied Americas sued defendants Joseph Russo and Andrew Porter in Superior Court, alleging that they and their newly formed company used Daikin's confidential and trade secret information without its consent. Though the defendants agreed not to use and to return any confidential information in their possession, Daikin sought to enjoin them from competing by soliciting its customers, though neither of the defendants had signed either a noncompete or a non-solicitation agreement. In support of its motion, Daikin argued that assuming the likelihood of proving its trade secrets misappropriation case, it was entitled to a presumption that it would suffer irreparable harm absent its requested relief. A Superior Court judge denied the motion, finding that Daikin had to establish specific proof of such harm. The SJC affirmed. "Were we to adopt Daikin's theory, as long as parties seeking a preliminary injunction on a trade secrets claim could demonstrate a likelihood of success on the merits, no irreparable harm analysis would be required," Chief Justice Kimberly S. Budd wrote for the court. "That approach is inconsistent with both [the Massachusetts Uniform Trade Secrets Act] and the long-standing common-law equity principles that the act incorporates by reference." 'Scary' alternative. Jaffar Bari Shiek of Everett, one of the attorneys for the defendants, said he was happy for his clients, who were in a difficult position. "These were two union guys who left a big company to go off on their own," Shiek said. "It's pretty scary when your former employer comes after you in this capacity. If this decision had gone the other way, it would really deter individuals from going out and taking what they've learned over the course of many years to start their own business." Plaintiff's counsel Stephen T. Melnick of Boston could not be reached for comment. But Boston attorney Christopher S. Feudo, who handles trade secret suits, said the case is a cautionary tale for employers seeking injunctive relief. "They need to really assess what they're asking the court to enjoin the other party from doing and make sure they actually can show irreparable harm absent the entry of an injunction," he said. Feudo also wondered how the case would have played out if the employees had noncompete or non-solicitation agreements that they would have been violating by contacting their former employer's customers. Plaintiffs may just say, 'Look, I can file in federal court. I won't have to disclose my trade secrets with the same level of specificity [as under the MUTSA], and I can get an injunction even if I can't demonstrate irreparable harm, as long as I have evidence of misappropriation.' - John R. Bauer, Boston "In Massachusetts, customer non-solicitation agreements will be enforceable to the extent that they're reasonable and supported by legitimate business reasons," Feudo noted. "Here, they were asking the court to use its equitable power to impose a non-solicitation agreement on the defendants, and the court wouldn't do that." Boston lawyer Russell Beck speculated on how the decision would apply in a case involving the use of technical trade secrets as opposed to movement of clients. "I think the result will be the same moving forward, and that's perhaps where courts will look more at [the MUTSA's language authorizing injunctions to address] threatened misappropriation," Beck said. "But practitioners are still going to need to make sure they have some factual support for the argument that the use of their information is both likely to happen and that it would cause irreparable injury beyond the economic impact." Boston attorney John R. Bauer said the decision is consistent with language in the MUTSA empowering courts to issue injunctions upon principles of equity. "That means courts must do exactly as the court laid out here by requiring [the plaintiff] to prove that if the court doesn't enjoin the defendant, the plaintiff will suffer harm that can't be eliminated simply by having the defendant pay more in damages," Bauer said. Bauer also noted that the federal Defend Trade Secrets Act does not have similar language and that federal judges within the 1st Circuit commonly presume irreparable harm upon a showing of likelihood of success on the merits. "Plaintiffs may just say, 'Look, I can file in federal court. I won't have to disclose my trade secrets with the same level of specificity [as under the MUTSA], and I can get an injunction even if I can't demonstrate irreparable harm, as long as I have evidence of misappropriation,'" he said. Irreparable harm? Daikin provides and maintains HVAC systems for institutional clients. The defendants worked for Daikin for several years: Russo as a service supervisor and Porter as a technician. Both apparently had access to Daikin's business information, including customer data, pricing and margins on Daikin projects. According to Daikin, beginning in 2024, the defendants began sending the company's confidential information to their personal email addresses. Information allegedly included work contacts, pricing and cost information about construction projects and bids, photos of Daikin equipment, internal Daikin service bulletins, equipment passwords, and a link to Daikin's internal website. In December 2024, while still working for Daikin, the defendants formed a separate HVAC business, RPAC, LLC. Three months later, they left Daikin to begin working at RPAC. Daikin asserts that they used confidential information taken from Daikin to compete for its business and customers. In May 2025, Daikin sued the defendants in Middlesex Superior Court for trade secret misappropriation under both the MUTSA and state common law. THE ISSUE: Was a company that showed a likely trade secret misappropriation claim against two former employees automatically entitled to a presumption of irreparable harm at the preliminary injunction stage? DECISION: No (Supreme Judicial Court) LAWYERS: Stephen T. Melnick of Littler Mendelson, Boston (plaintiff) Dylan C. Barrett of Millstone Law, Waltham; Ronald W. Dunbar Jr. of Boston; Jaffar Bari Shiek of Everett (defense) The plaintiff also moved for a preliminary injunction requiring the defendants to return all confidential information, refrain from using the information they took, submit their devices so a third party could locate and delete any remaining confidential information, and refrain from soliciting Daikin's customers for one year. Before the motion hearing, the defendants agreed to the first two conditions and expressed a willingness to agree to a more limited forensic search than what Daikin proposed in the third condition. They did not, however, agree to refrain from soliciting Daikin customers for a year. The hearing proceeded on that issue, with Daikin asserting that it could show a likelihood of success on the merits and was thus entitled to a presumption that it would be irreparably harmed without the requested injunctive relief. But Judge John P. Pappas was unconvinced of a likelihood of success on the merits, noting a dispute as to whether any of the information taken actually constituted trade secrets and whether Daikin took steps to protect them. Pappas was also apparently unpersuaded by Daikin's arguments that irreparable harm could be presumed. Instead, he applied the so-called "well-known standard" under which the moving party must establish specific proof of irreparable harm due to loss of business when seeking a preliminary injunction. Because Daikin did not allege that any monetary loss it would suffer due to the defendants' actions was enough to threaten the existence of its business, Pappas denied Daikin's motion. The plaintiff sought interlocutory review, and the SJC took up the case on its own motion. Insufficient proof. Daikin argued that instead of applying the traditional standard for obtaining a preliminary injunction, the SJC should adopt the position that whenever a plaintiff establishes a likelihood of success on the merits of a trade secret misappropriation claim, irreparable harm is to be presumed. "We decline to do so," Budd said, explaining that such an approach would be inconsistent with the MUTSA and longstanding equity principles that the statute incorporated by reference. Budd noted that the U.S. Supreme Court applied similar reasoning when it held that presumptions of irreparable harm are inappropriate when considering injunctions in response to patent and copyright infringement. "Applying the same principles to this case, we reject the presumption Daikin proposes and instead hold that ordinary equitable principles should apply," the chief justice wrote. "Accordingly, the order denying the motion for a preliminary injunction is affirmed." Related Judicial profiles. Lawyers weekly no. 10-117-26.

Daikin Applied expands US modular cooling facility, boosts capacity 150%. Daikin Applied has opened an expanded Modular Solutions manufacturing facility in Phoenix, Arizona, increasing production capacity for custom-built hydronic and electric systems by approximately 150%. The 191,000-square-foot (approximately 17,745 m^2) facility supports factory-built cooling and mechanical systems for data centers, healthcare facilities, higher education campuses and industrial operations. The expansion increases the company's modular manufacturing footprint from 58,000 square feet (approximately 5,388 m^2) to 191,000 square feet (approximately 17,745 m^2). The facility enables complete systems to be assembled and tested before delivery, reducing onsite installation requirements and project schedule risks compared with traditional construction methods. The expanded production capabilities include in-house manufacturing and integration of Daikin-owned technologies, including Chilldyne direct-to-chip liquid cooling distribution units (CDUs) and DDC Solutions S-Series rack containment systems. Daikin Applied also provides integrated services covering system design, manufacturing, commissioning and ongoing service. The facility incorporates upgraded insulation, full LED lighting and high-efficiency Daikin R-32 rooftop HVAC units. According to the company, demand for factory-built cooling solutions is particularly strong in the data center sector, where accelerated construction schedules and increasing infrastructure requirements are driving interest in modular systems. "This expansion represents an important step in the continued growth of our Modular Solutions business," said Stephen McGee, general manager of Modular Solutions at Daikin Applied. "The additional capacity allows us to support more customers, take on larger projects and continue delivering the quality and reliability they count on." Topics: HVAC Recent Comments