Fujikura Composite America, Inc. v. Dee

• Court: District Court, S.D. California
• Decided: June 28, 2024
• Docket: 3:24-cv-00782
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 FUJIKURA COMPOSITE AMERICA, Case No.: 24-CV-782 JLS (MSB) INC., 12 ORDER GRANTING IN PART AND Plaintiff, 13 DENYING IN PART PLAINTFF’S v. MOTION FOR PRELIMINARY 14 INJUNCTION ALEXANDER DEE, an individual, and 15 3V PERFORMANCE LLC, a California (ECF No. 2) 16 Limited Liability Company, doing business as ARETERA GOLF, 17 Defendants. 18 19 20 Presently before the Court is Plaintiff Fujikura Composite America, Inc.’s 21 (“Plaintiff” or “Fujikura”) Ex Parte Motion for a Temporary Restraining Order and Order 22 to Show Cause Re Preliminary Injunction (“Mot.,” ECF No. 2). Plaintiff accompanied its 23 Motion with the supporting declarations of Fujikura’s president and chief operating officer 24 (“CEO”) David Schnider (“Schnider Decl.,” ECF No. 1-4) and Plaintiff’s counsel Shawn 25 J. Kolitch (“Kolitch Decl.,” ECF No. 1-3). 26 On May 7, 2024, the Court issued an Order (“Order,” ECF No. 12) (1) denying 27 Plaintiff’s request for a temporary restraining order and (2) construing Plaintiff’s Motion 28 as a motion for a preliminary injunction. Order at 7–8. 1 Defendants Alexander Dee (“Dee”) and 3V Performance Inc. (“Aretera”) 2 (collectively, “Defendants”) then filed their Opposition (Opp’n, ECF No. 24) on May 23, 3 2024, alongside the declaration of Alexander Dee (“Dee Decl.,” ECF No. 24-1) and select 4 evidentiary objections (“Evid. Objs.,” ECF No. 24-2). One week later, Plaintiff filed a 5 Reply (“Reply,” ECF No. 26), which included the declaration of Yoshihito Kogawa 6 (“Kogawa Decl.,” ECF No. 26-1) and a supplemental declaration by David Schnider 7 (“Suppl. Schnider Decl.,” ECF No. 26-2). 8 The Court held oral argument on June 26, 2024. ECF No. 29. Having carefully 9 considered the Parties’ submissions and the law, the Court now GRANTS IN PART AND 10 DENIES IN PART Plaintiff’s Motion for the following reasons. First, because 11 Defendants are presently depriving Plaintiff of its opportunity to enjoy a “first to market” 12 advantage stemming from the launch of novel technology, Plaintiff has shown likely 13 irreparable harm. Second, the weight of the evidence suggests Plaintiff is likely to succeed 14 on the merits. Third, any harm stemming from the cessation of sales of a product built 15 using a misappropriated idea does not shift the balance of the equities in Defendants’ favor. 16 Finally, issuing an injunction protecting Plaintiff’s trade secret golf shaft concept maintains 17 the balance—struck by the California legislature—between safeguarding employee 18 mobility and incentivizing innovation. 19 BACKGROUND 20 I. Fujikura Establishes Its Reputation 21 Plaintiff—a Delaware corporation headquartered in Carlsbad, California—produces 22 “golf shafts used by amateur and professional players worldwide.” Schnider Decl. ¶ 2. 23 Plaintiff hired Dee in 1998 as a design engineer. Id. ¶ 6. Before starting work, Dee signed 24 an agreement “assigning all of his rights in employment-related intellectual property 25 conceptions to Fujikura[] and prohibiting him from using or disclosing any of the 26 company’s confidential information outside of the scope of his employment.” Id.; see also 27 Compl. Ex. A (the “Confidentiality Agreement”). 28 / / / 1 That same year, Fujikura launched the “Speeder 757” golf shaft, the first shaft to 2 incorporate a multi-directional “Triax” material that “resist[s] ovalization of the shaft 3 throughout the swing.” Suppl. Schnider Decl. ¶ 3. By 2001, the Speeder shaft became 4 “the most popular shaft used by professional golfers on the PGA Tour.” Id. ¶ 4. This 5 popularity carried over to the consumer market—the “Speeder line” by 2006 was “the most 6 popular shaft line in both the OEM custom and aftermarket categories.” Id. Riding this 7 surge of popularity, Fujikura “roughly tripled its shaft business.” Id. 8 Eventually, however, every golfer ends up in a bunker. By 2007, other shaft 9 companies had mimicked Speeder’s internal construction, and Fujikura saw its market 10 share decline as a result. Id. ¶ 5. Based on this trend, Fujikura’s decisionmakers surmised 11 that their surge of success was largely due to their “first-to-market advantage with the trade 12 secret Triax shaft technology.” Id. ¶ 6. In the coming years, Fujikura thus developed new 13 golf shafts in hopes of recapturing its birdie streak. 14 Dee became vice president of engineering at Fujikura in 2008. Schnider Decl. ¶ 7. 15 While Dee was in this role, Fujikura launched multiple lines of golf shafts incorporating 16 “spread tow” woven carbon fibers—“fibers that have been pressed flat before being woven 17 together at right angles.”1 Id. ¶¶ 12–14. These included the “Blur” line in 2010 (which 18 used spread tow material in the outer layer of the shaft) and the “Ventus” line in 2018 19 (which incorporated a spread tow layer in the “mid/handle section of the shaft”). Id. ¶¶ 13– 20 14. In addition, the Ventus line incorporated a “trade secret technology . . . known as 21 VeloCore, which [allowed for] superior performance on the PGA Tour.” Suppl. Schnider 22 Decl. ¶ 7. 23 Fujikura hit it straight down the fairway with the Ventus line. Like Speeder before 24 it, Ventus first became the most popular shaft on the PGA Tour, and then “the most popular 25 premium shaft line in both the OEM custom and aftermarket categories.” Id. ¶ 8. Thanks 26 to this success, Fujikura once again “roughly tripled its shaft business.” Id. As with 27

28 1 Speeder, Fujikura’s decisionmakers believe that their “first-to-market advantage[]” with 2 VeloCore was crucial to their gains. Id. ¶¶ 10–11. 3 II. Plaintiff Develops the Axiom Line 4 Fujikura did not rest on its proverbial green jacket. Between 2018 and 2020, Dee 5 led the development of a “new line of ‘ultra-premium’ shafts” known as the Axiom line. 6 Schnider Decl. ¶¶ 15–16. These shafts used spread tow carbon material to a greater extent 7 than any other golf shaft; said material “ma[de] up between 45% and 60% of the weight of 8 the shaft.” Id. ¶¶ 15, 17. More specifically, Dee’s team hoped to use “spread tow fabric 9 in one or more of the bias plies[2] in the core of the shaft, potentially along the entire length 10 of the shaft, which to Fujikura’s knowledge had never been done before.” Id.¶ 15. After 11 more than two years of development efforts, Plaintiff discovered how to use spread tow 12 material for “most or all of the bias plies of a shaft,” i.e., “the entire core of the shaft.” Id. 13 ¶¶ 18–19. Plaintiff branded prototypes in this Axiom line as “AX1” or “Alpha 1.” Id. ¶¶ 14 20–21. 15 Once they had “essentially complet[ed] development” of the Axiom line, Plaintiff 16 shelved the project due to concerns that the line would compete with its already-on-the- 17 market Ventus line. Id. ¶ 22. That said, “Fujikura strictly maintained the confidentiality 18 of the [Axiom] research and development work,” as it “expected [it] might eventually 19 incorporate this work in future products.” Id. ¶ 23. Indeed, Plaintiff protects all its research 20 and development (“R&D”) work by locking its building with an alarm, requiring visitors 21 to sign-in and be accompanied by an employee, allowing only authorized personnel into 22 the R&D area, and limiting access to R&D secure file servers. Id. ¶ 30. 23 III. Dee Starts a New Company 24 Dee resigned from Fujikura in April of 2023. Id. ¶ 7. Six months later, “Fujikura 25 became aware that [Dee] planned to launch a competing golf shaft company called 26 27 28 2 A bias ply is a layer of carbon fiber in a golf shaft which is oriented at 45 degrees relative to the shaft 1 Aretera.” Id. ¶ 9. Dee then revealed information about Aretera’s first project—shafts 2 denominated “A1” and “Alpha”—on a podcast for golf enthusiasts. See Kolitch Decl. ¶ 2; 3 id. Ex. A at 28. Dee stated that spread tow material would (1) make up over half of the 4 shafts’ weight; and (2) be present in every part of the shaft that resists twist—i.e., “entirely 5 in the core of the shaft.” Id. at 13–14. Per Dee, this approach was “completely different” 6 and “innovative”—“no one ha[d] done something like [it].” Id. at 14. Moreover, this novel 7 structure allowed for significant performance advantages; specifically, “higher ball speeds” 8 and “lower spin off center shots.” Id. at 15. 9 IV. Did Dee Shaft Fujikura? 10 After hearing Dee’s podcast, Plaintiff became concerned that Dee misappropriated 11 its Axiom shaft concept. Schnider Decl. ¶ 9. Specifically, Plaintiff claims the following 12 concept as its intellectual property: using “spread tow, woven carbon fabric for one or more 13 of the bias plies in the core of the shaft,” wherein “spread tow material in the newly 14 developed shafts would make up between 45% and 60% of the weight of the shaft” (the 15 “Axiom Technology”). Mot. at 4. 16 V. Plaintiff Investigates 17 Aretera first demoed its golf shafts on January 23, 2024. Schnider Decl. ¶ 26. At 18 that point, Plaintiff “noticed striking visual similarities between the Aretera shafts and the 19 confidential branding concepts developed at Fujikura under [Dee’s] direction.” Id. After 20 Aretera’s shafts were formally launched in February, Plaintiff reverse-engineered them 21 and, in April of 2024, determined that “the Aretera shafts use technology created at 22 Fujikura under [Dee]’s supervision.” Id. ¶¶ 27–28; see also id. Ex. B (summarizing 23 investigatory findings that (1) the Aretera shafts used spread tow fabric “in three . . .plies 24 by two . . . sheets to make up the entire bias core of the shaft,” (2) the Axiom shafts “shared 25 the same and/or similar spread tow material layouts in combination with Pitch 70T carbon 26 fiber as Aretera,” and (3) both Aretera and Axiom shafts “don’t use any regular 27 unidirectional sheets as the bias core.”). 28 / / / 1 Defendants contest Plaintiff’s reverse-engineering determination. Specifically, Dee 2 declares under penalty of perjury that (1) “Aretera’s Alpha One line is not based on 3 Fujikura’s [Axiom] product line in any respect” and (2) he “did not use any Fujikura 4 confidential information in the development of Alpha One.” Dee Decl. ¶ 8 (emphasis 5 omitted). Dee also contends that Fujikura’s Axiom Technology is either already known in 6 the industry or “obvious” based on publicly available golf shaft designs. Dee Decl. ¶¶ 12– 7 19. Dee points out that Aldila’s Mamba shaft features spread tow fabric in “opposing 45- 8 degree angle formations” in the interior and exterior of its tip section, Mitsubishi’s 9 Diamana putter line incorporates spread tow fabric along most of the length of the shaft’s 10 exterior, and True Temper’s Project X shafts use spread tow fabric internally and externally 11 for various applications. Id.; see also id. Exs. A–C. 12 VI. Requested Injunction 13 Plaintiff seeks “to enjoin Defendants from (1) any further disclosure or use of 14 Fujikura’s confidential golf shaft technology involving the use of spread tow carbon 15 material in the bias plies of the shaft; and (2) any further use of Fujikura’s branding 16 concepts ‘Alpha 1’ or ‘AX1’ to advertise golf shafts, including ordering Defendants to stop 17 all advertising, sales, public disclosure, or discussion of [the] Aretera Alpha One Series of 18 golf shafts.” Mot. at 19. 19 LEGAL STANDARD 20 A preliminary injunction is “an extraordinary remedy that may only be awarded 21 upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat. Res. Def. 22 Council, Inc., 555 U.S. 7, 22 (2008). To obtain a preliminary injunction, the moving party 23 must show: (1) likely success on the merits; (2) likely irreparable harm in the absence of 24 preliminary relief; (3) that the balance of equities tips in their favor; and (4) that an 25 injunction is in the public interest. Id. at 20. Although the movant must make a showing 26 on each element, the Ninth Circuit employs a “version of the sliding scale” approach where 27 “a stronger showing of one element may offset a weaker showing of another.” All. for the 28 Wild Rockies v. Cottrell, 632 F.3d 1127, 1131–35 (9th Cir. 2011). Under this approach, a 1 court may issue a preliminary injunction where there are “‘serious questions going to the 2 merits’ and a balance of hardships that tips sharply towards the plaintiff . . . , so long as the 3 plaintiff also shows that there is a likelihood of irreparable injury and that the injunction is 4 in the public interest.” Id. at 1135. 5 Most preliminary injunctions are prohibitory; they “prohibit[] a party from taking 6 action and ‘preserve[] the status quo pending a determination of the action on the merits.’” 7 Marlyn Nutraceuticals, Inc. v. Mucos Pharma GmbH & Co., 571 F.3d 873, 878 (9th Cir. 8 2009) (quoting Chalk v. U.S. Dist. Court, 840 F.2d 701, 704 (9th Cir. 1988)). Where, by 9 contrast, a requested injunction would require the nonmovant to take affirmative action to 10 alter the status quo (i.e., a mandatory injunction), the movant must “establish that the law 11 and facts clearly favor her position.” Garcia v. Google, Inc., 786 F.3d 733, 740 12 (9th Cir. 2015). Indeed, “mandatory injunctions ‘are not granted unless extreme or very 13 serious damage will result and are not issued in doubtful cases.’” Marlyn Nutraceuticals, 14 571 F.3d at 879 (quoting Anderson v. United States, 612 F.2d 1112, 1115 (9th Cir. 1979)). 15 DISCUSSION 16 I. Evidentiary Objections 17 Defendants object to portions of the Schnider Declaration, arguing Schnider (1) 18 lacks personal knowledge about Fujikura’s technical analysis of Aretera’s shafts, (2) offers 19 insufficient facts to demonstrate that continued sale of Aretera’s shafts will harm Fujikura’s 20 goodwill or deprive it of a market head start, (3) improperly relies on statements made by 21 others, and (4) offers self-serving, conclusory testimony. Evid. Objs. Defendants also 22 contend Plaintiff has failed to authenticate its technical analysis under Federal Rule of 23 Evidence 901. Id. 24 The Court OVERRULES Defendants’ Objections. “Due to the urgency of 25 obtaining a preliminary injunction at a point when there has been limited factual 26 development, the rules of evidence do not apply strictly to preliminary injunction 27 proceedings.” Herb Reed Enters., LLC v. Fla. Ent. Mgmt., Inc., 736 F.3d 1239, 1250 n.5 28 (9th Cir. 2013). District courts may therefore rely on inadmissible evidence at their 1 discretion. See id. 2 Moreover, Plaintiff has largely cured the most damning of the Evidentiary 3 Objections—hearsay, lack of personal knowledge, and lack of factual basis—by submitting 4 the Supplemental Schnider Declaration and Kogawa Declaration in reply. The Evidentiary 5 Objections are thus stale. 6 II. Mandatory v. Prohibitory Injunction 7 Defendants next attempt to characterize Plaintiff’s proposed injunction as 8 mandatory. Opp’n at 7. Defendants recognize Plaintiff’s proposed injunction is phrased 9 as a prohibition—it prevents further disclosure/use of Fujikura’s technology and stops all 10 advertising, sales, public disclosure, or discussion of the Alpha One line by Defendants. 11 Id. Nevertheless, Defendants argue that because they would have to “take action” to “stop 12 all current sales and advertisement, reclaim and/or destroy existing inventory, and develop, 13 manufacture, and market a new product line,” Plaintiff should have to show the law and 14 facts clearly favor its position. Id. (emphasis omitted). 15 In making this argument, Defendants follow a well-worn path. Because injunctions 16 can often be stated in either mandatory or prohibitory terms, parties seeking to avoid 17 injunctions often rephrase proposed orders to impose affirmative requirements. See Tom 18 Doherty Assocs., Inc. v. Saban Ent., Inc., 60 F.3d 27, 34 (2d Cir. 1995) (“The distinction 19 between mandatory and prohibitory injunctions is not without ambiguities or critics.”). So, 20 to resolve whether a proposed injunction is mandatory, courts do not focus solely on 21 whether proposed injunctions are affirmatively phrased. Instead, courts assess whether a 22 proposed injunction alters the status quo: i.e., “the last, uncontested status which preceded 23 the pending controversy.” Marlyn Nutraceuticals, 571 F.3d at 879 (quoting Regents of the 24 Univ. of Cal. v. Am. Broad. Cos., 747 F.2d 511, 514 (9th Cir. 1984)); Tom Doherty Assocs., 25 60 F.3d at 34. 26

27 3 This is not to say that the Court has not assigned lesser or greater weight to evidence based on 28 circumstances indicating its reliability (or lack thereof). To the contrary, the Court has considered 1 Here, the status quo involves the situation immediately before Dee allegedly shared 2 Plaintiff’s trade secrets with Aretera. See GoTo.com, Inc. v. Walt Disney Co., 202 F.3d 3 1199, 1210 (9th Cir. 2000) (defining status quo in a trademark infringement case not as the 4 “situation before the filing of a lawsuit,” but instead as the situation “before Disney began 5 using its allegedly infringing logo”). Because Plaintiff’s proposed injunction would not 6 place Plaintiff in a more advantageous position—or Defendants in a worse position—than 7 where either stood before Defendants allegedly used Plaintiff’s trade secret, Plaintiff’s 8 proposed injunction does not qualify as mandatory.4 9 III. Preliminary Injunction Analysis 10 Here, all four Winter factors favor Plaintiff. The Court will begin with irreparable 11 harm, then address Plaintiff’s likelihood of success on the merits, and finally turn to the 12 balance of the equities and the public interest. 13 A. Irreparable Harm 14 A showing of likely irreparable harm is a threshold requirement for the issuance of 15 injunctive relief. Oakland Trib., Inc. v. Chron. Publ’g Co., 762 F.2d 1374, 1378 (9th Cir. 16 1985). “Irreparable harm exists only where there is a threatened imminent loss that will be 17 very difficult to quantify at trial.” Tom Doherty Assocs., 60 F.3d at 38. A plaintiff may 18 not rely on mere allegation but must instead submit “evidence showing [likely] irreparable 19 harm.” PolyPortables LLC v. Endurequest Corp., No. 116CV01291DADSKO, 2016 WL 20 8731384, at *3 (E.D. Cal. Oct. 28, 2016) (citing Herb Reed Enters., 736 F.3d at 1250). 21 Where the loss of a novel product is concerned, injunctive relief is appropriate when 22 “the availability of [the] product is essential to the life of the business or increases business 23 of the plaintiff beyond sales of that product—for example, by attracting customers who 24

25 4 Moreover, Defendants’ assertion that Plaintiff’s proposed injunction would require them to take 26 affirmative action is unsupported. Nowhere does Plaintiff’s proposed injunction require Defendants to reclaim and destroy existing inventory. And, to the extent that Defendants choose to develop a new 27 product to replace that which they are enjoined from selling, they do so of their own free will. The 28 injunction itself does not require such action. Cf. Marlyn Nutraceuticals, 571 F.3d at 878–9 (implying 1 make purchases of other goods while buying the product in question.” Tom Doherty 2 Assocs., 60 F.3d at 38 (emphasis omitted). With this principle in mind, the Ninth Circuit 3 held in Stuhlbarg International Sales Co. v. John D. Brush & Co. that “[e]vidence of 4 threatened loss of prospective customers or goodwill certainly supports a finding of the 5 possibility of irreparable harm.” 240 F.3d 832, 841 (9th Cir. 2001) (citing Tom Doherty 6 Associates for the proposition that “deprivation of opportunity to expand business is 7 irreparable harm”); cf. Lamb-Weston, Inc. v. McCain Foods, Ltd., 941 F.2d 970, 974 (9th 8 Cir. 1991) (affirming a preliminary injunction because a competitor’s misappropriation of 9 the plaintiff’s technique for creating “novel french fries” would allow said competitor to 10 “profit from its head start and to shut [the plaintiff] out of new markets it is trying to 11 reach”). 12 Following Stuhlbarg, numerous district courts in this Circuit have held that “a 13 defendant’s ability to gain a competitive advantage through the use of confidential 14 information to develop a competing product is sufficient to constitute irreparable harm.” 15 SolarPark Kor. Co. v. Solaria Corp., No. 23-CV-01181-AMO, 2023 WL 4983159, at *8 16 (N.D. Cal. Aug. 2, 2023) (quoting E.W. Bank v. Shanker, No. 20-CV-07364-WHO, 2021 17 WL 3112452, at *12 (N.D. Cal. July 22, 2021)); see also WeRide Corp. v. Kun Huang, 379 18 F. Supp. 3d 834, 853 (N.D. Cal. 2019) (noting competitor’s ability to use the plaintiff’s 19 trade secrets to accelerate its own progress would likely cause the plaintiff to be irreparably 20 harmed).5 It is upon this theory—Defendants’ usurpation of Plaintiff’s opportunity to 21 expand its business through the excitement generated by the release of a novel 22 technology—that Plaintiff relies. 23

24 5 Courts are uniform in their conclusion that threatened disclosure of a trade secret can constitute 25 irreparable harm. See, e.g., Faiveley Transp. Malmo AB v. Wabtec Corp., 559 F.3d 110, 118–19 (2d Cir. 2009). Here, however, Defendants have already disclosed Plaintiff’s alleged trade secret to the public by 26 (1) publicizing the Alpha One shaft concept and (2) releasing said golf shaft for sale. See Schnider Decl. ¶ 27. Defendants therefore cannot rely on disclosure to demonstrate a prospective risk of irreparable harm. 27 See CDI Energy Servs. v. W. River Pumps, Inc., 567 F.3d 398, 403 (8th Cir. 2009) (holding irreparable 28 harm factor weighed against preliminary injunction because the harm “to a large extent[] ha[d] already 1 Plaintiff has shown this form of irreparable harm is likely absent an injunction. First, 2 Plaintiff’s evidence indicates that novel shaft technologies allow for business expansion. 3 In two previous instances, Plaintiff launched a novel golf shaft technology and thereafter 4 enjoyed substantial market-share gains. See supra at 2–4. Second, Plaintiff has established 5 that the Axiom line is similarly situated to the Speeder and Ventus lines. Dee himself has 6 publicly attested that the Axiom Technology, like Ventus’ VeloCore, provides 7 performance advantages. Kolitch Decl. Ex. A at 15. Moreover, both Parties recognize that 8 Alpha One—like the Speeder and Ventus lines before it—is targeted at PGA Tour 9 professional players. See Dee Decl. ¶ 9; Schnider Decl. ¶ 27; Suppl. Schnider Decl. ¶¶ 4, 10 8. Alpha One thus threatens to follow the same path as Ventus and Speeder: (1) capture 11 PGA Tour professional players based on performance advantages and (2) leverage use by 12 professionals and the shaft’s associated reputational boost to rapidly expand market share 13 elsewhere. This likely usurpation of business opportunity constitutes irreparable harm.6 14 See Life Spine, Inc. v. Aegis Spine, Inc., 8 F.4th 531, 545–46 (7th Cir. 2021) (finding likely 15 irreparable harm because the defendant (1) sold a product developed using stolen trade 16 secrets to the same, difficult to identify group of customers as the plaintiff and (2) interfered 17 with the advantage the plaintiff gained from marketing its product as a unique offering). 18 Defendants’ arguments do not alter the Court’s conclusion. First, though Defendants 19 criticize Plaintiff’s evidence regarding lost goodwill as “purely speculative,” Opp’n at 21, 20 it is unclear what alternative form of evidence Plaintiff could provide to support their 21 theory of irreparable harm. See BP Chems. Ltd. v. Formosa Chem. & Fibre Corp., 229 22 F.3d 254, 263 (3d Cir. 2000) (crediting witness’s testimony as to damage to reputation, 23

24 6 True, Aretera has already launched its competing golf shaft. But the advantage associated with being 25 “first to market” appears to compound over time. See Suppl. Schnider Decl. ¶ 4 (describing how it took three years for the Speeder shaft to become professional golfers’ favorite shaft, and five to eight years for 26 Fujikura to reap the related tripling of its shaft business). This evidence suggests that Plaintiff is not yet too late to either (1) enjoy a first-to-market advantage if Aretera’s allegedly misappropriated shaft is 27 removed from the market now or (2) head off Aretera’s ability to wrongfully enjoy a first-to-market 28 advantage that rightfully should have been Fujikura’s. Cf. Lamb-Weston, 941 F.2d at 972–75 (affirming 1 credibility, and ability to license stemming from future misappropriation); Regents, 747 2 F.2d at 520 (relying on the plaintiffs’ description of anticipated interference with athlete 3 recruitment, dissipation of alumni support, and diminishing athletic rivalries to conclude 4 the plaintiffs faced likely irreparable harm). Moreover, requiring further evidence would 5 be in tension with the numerous courts that have issued (or affirmed) preliminary 6 injunctions based on similar evidence and theories. See, e.g., Lamb-Weston, 941 F.2d at 7 974. 8 Second, Plaintiff has not unduly delayed seeking relief. Though delay in seeking 9 preliminary relief counsels against a finding of imminent irreparable harm, courts have 10 declined to weigh “delay caused by a plaintiff’s good faith efforts to investigate” 11 misappropriation against the issuance of injunctive relief. See BP Chems., 229 F.3d at 264 12 (quoting Tom Doherty Assocs., 60 F.3d at 39). Here, Plaintiff delayed moving for a 13 preliminary injunction while awaiting confirmation, through testing of Aretera’s Alpha 14 One shafts, that said shafts use the Axiom Technology. See Reply at 9 (noting Plaintiff 15 completed its analysis of the Aretera shafts in mid-April of 2024 and commenced this 16 action approximately two weeks later). Moreover, Plaintiff did not sit idly by and allow 17 Aretera to proceed with its shaft development before commencing litigation. Instead, 18 Plaintiff sent Dee and Aretera multiple warnings regarding Dee’s alleged use of its trade 19 secrets. See Compl. Exs. B, D. Though it may have been more prudent for Fujikura to 20 move for injunctive relief prior to the release of Aretera’s shafts, Fujikura’s decision to 21 gather additional evidence does not preclude a finding of irreparable harm. 22 Finally, Plaintiff need not provide evidence of lost sales or market share since the 23 launch of Aretera’s shafts. To the extent Plaintiff can quantify its lost sales/market share, 24 said losses are redressable through monetary damages. See PolyPortables, 2016 WL 25 8731384, at *4 (“At best, plaintiff has presented some evidence that it has lost some sales 26 to defendant, allegedly because of its theft of trade secrets. If proven, this is precisely the 27 type of loss compensable by money damages, and it is therefore not irreparable.”). Such 28 evidence, even if available, thus would not weigh in favor of injunctive relief. 1 Plaintiff has not, however, shown that irreparable harm is likely to result from 2 Defendants’ use of the “Alpha 1” and “AX1” marks. The Court agrees that a mark not yet 3 used in commerce could possess potential economic value and therefore qualify as a trade 4 secret. See Mattel, Inc. v. MGA Ent., Inc., 782 F. Supp. 2d 911, 962 (C.D. Cal. 2011) 5 (concluding a reasonable fact finder could find that the doll name “Bratz” constituted a 6 trade secret). But to secure preliminary injunctive relief relating to the alleged 7 misappropriation of such a mark, Plaintiff must show that irreparable harm stemming from 8 the use of that mark is likely to occur absent an injunction. See Price v. City of Stockton, 9 390 F.3d 1105, 1117 (9th Cir. 2004) (“[A]n injunction must be narrowly tailored 10 to . . . remedy only the specific harms shown by the plaintiffs . . . .” (citation omitted)). 11 Plaintiff’s briefing dedicates no argument whatsoever to this point. So, as Plaintiff has not 12 met its burden to show likely irreparable harm stemming from continued use of the at-issue 13 marks, the Court’s remaining analysis will focus only on the Axiom Technology. See 14 Oakland Trib., 762 F.2d at 1376 (noting that where a plaintiff has not shown irreparable 15 harm, a court need not address the other Winter factors). 16 B. Likelihood of Success: Trade Secret Misappropriation] 17 Plaintiff brings trade secret claims under the federal Defend Trade Secrets Act 18 (“DTSA”) and the California Uniform Trade Secrets Act (“CUTSA”). Compl. ¶¶ 62–89. 19 Where past plaintiffs have elected this approach, “[c]ourts have analyzed the[] claims 20 together because the elements are substantially similar.” InteliClear, LLC v. ETC Glob. 21 Holdings, Inc., 978 F.3d 653, 657 (9th Cir. 2020). To succeed under either statute, “a 22 plaintiff must prove: (1) that the plaintiff possessed a trade secret, (2) that the defendant 23 misappropriated the trade secret; and (3) that the misappropriation caused or threatened 24 damage to the plaintiff.” Id. at 657–58. 25 1. Protectable Trade Secret 26 A trade secret is “(1) information, (2) that is valuable because it is unknown to others, 27 and (3) that the owner has attempted to keep secret” through reasonable measures. Id. at 28 657, 660. 1 a. Specific Information 2 A plaintiff must “describe the subject matter of the[ir] trade secret with sufficient 3 particularity to separate it from matters of general knowledge in the trade or of special 4 knowledge of those persons . . . skilled in the trade.” Imax Corp. v. Cinema Techs., Inc., 5 152 F.3d 1161, 1164–65 (9th Cir. 1998) (second alteration in original) (quoting Universal 6 Analytics, Inc. v. MacNeal-Schwendler Corp., 707 F. Supp. 1170, 1177 (C.D. Cal. 7 1989), aff’d, 914 F.2d 1256 (9th Cir. 1990)). This requirement ensures defendants have 8 sufficient information to “prepare a rebuttal.” InteliClear, 978 F.3d at 658. That said, “the 9 reasonable particularity standard . . . does not require explication of the trade secrets ‘down 10 to the finest detail or require a mini-trial on misappropriation before plaintiff is allowed 11 discovery.’” Alphonso Inc. v. Tremor Video, Inc., No. 22-CV-03629-NC, 2022 WL 12 17968081, at *2 (N.D. Cal. Oct. 31, 2022) (quoting STEMCELL Techs. Can. Inc. v. 13 StemExpress, LLC, No. 21-CV-01594-VC (LB), 2022 WL 585668, at *4 (N.D. Cal. Feb. 14 24, 2022)). Moreover, even if Plaintiff alleges Defendants misappropriated multiple trade 15 secrets, Plaintiff need only identify one trade secret with sufficient particularity to justify 16 an injunction as to that trade secret. See InteliClear, 978 F.3d at 659. 17 Plaintiff has satisfied the “specific information” requirement. For purposes of its 18 Motion,7 Plaintiff describes its trade secret as follows: “us[ing] spread tow fabric in one or 19 more of the bias plies in the core of the shaft, potentially along the entire length of the 20 shaft,” such that “[t]he amount of spread tow material . . . make[s] up between 45% and 21 60% of the weight of the shaft.” Schnider Decl. ¶¶ 15, 17. Plaintiff defines this trade secret 22 somewhat more narrowly in its Complaint, limiting it to shafts that contain spread tow 23 24 25 7 Plaintiff states that, though the rapid development of Alpha One suggests that Defendants may have misappropriated additional information, it is not proceeding under the theory that Defendants 26 misappropriated its “detailed design specifications, drawings, proprietary design software code, and/or physical prototypes.” Mot. at 13 n.2. Plaintiff, however, indicates it intends to later proceed under this 27 theory if discovery so warrants. Id. Though Defendants contended otherwise at oral argument, this 28 statement, when read in context, does not waive consideration, as evidence, of Alpha One’s rapid 1 material along the entire length of their core. See Compl. ¶ 63. Courts in California have 2 found descriptions of similar or even lesser particularity to be sufficient.8 3 Defendants quibble with Plaintiff’s definition, relying primarily on inconsistencies 4 between the Complaint and the Motion. Specifically, Defendants contend Plaintiff needs 5 to come forward with a single, defined trade secret. Per Defendants, because the trade 6 secret as defined in the Motion is broader than that described in the Complaint, Plaintiff 7 has not provided adequate specificity. Opp’n at 10–11. 8 In so arguing, Defendants misunderstand Plaintiff’s burden. Plaintiff need not limit 9 itself to one trade secret, but instead may proceed under the theory that Defendants 10 misappropriated multiple concepts from them. See InteliClear, 978 F.3d at 659 (noting the 11 plaintiff’s “hedging language” was “not fatal to [its] claim”). As both the trade secret 12 identified in the Motion and the trade secret identified in the Complaint are described with 13 sufficient particularity, Plaintiff may proceed regardless of differences between the two 14 documents.9 15 Lastly, the fact that Plaintiff seeks protection for an idea—placing a specific material 16 in the core of a shaft—does not preclude trade secret protection. Courts within and without 17 California have held that design concepts—including ideas for new products or 18 technologies—are protectable as trade secrets. See, e.g., Altavion, 171 Cal. Rptr. 3d at 731 19 (“[W]e reject any contention that Altavion’s [bar code] concept on the whole was 20 inherently not protectable as a trade secret. . . . [E]ven if some or all of the elements of 21 22 8 See, e.g., Whyte v. Schlage Lock Co., 125 Cal. Rptr. 2d 277, 285–86 (Ct. App. 2002) (finding sufficient, among other descriptions, “Schlage’s market research data”); Altavion, Inc. v. Konica Minolta Sys. Lab’y, 23 Inc., 171 Cal. Rptr. 3d 714, 728–33 (Ct. App. 2014) (rejecting the defendant’s contention that alleged 24 trade secrets were not described with sufficient particularity and concluding plaintiff’s bar-code concept was a protectable trade secret); Navigation Holdings, LLC v. Molavi, 445 F. Supp. 3d 69, 76 (N.D. Cal. 25 2020) (finding that the statement “a ‘specialized process for anodizing unfinished alloy tubes, before machining, for the aerospace industry’” sufficiently identified the alleged trade secret). 26 9 Defendants also argue that it is unclear what Plaintiff means by “bias layer,” “bias core,” and “bias plies.” 27 Opp’n at 11. Plaintiff, however, has expressly defined “bias plies.” See supra note 2. Moreover, Plaintiff 28 has made it sufficiently clear that “bias layer” and “bias core” both refer to one or more bias plies located 1 Altavion’s design were in the public domain and thus unprotectable, the combination was 2 a protectable trade secret . . . .” (emphasis in original); Learning Curve Toys, Inc. v. 3 PlayWood Toys, Inc., 342 F.3d 714, 716–19 (7th Cir. 2003)10 (concluding a reasonable jury 4 could find the plaintiff’s idea for a new toy—a wooden track with carved grooves to 5 simulate the sound of a locomotive—was entitled to trade secret protection); Yeiser Rsch. 6 & Dev. LLC v. Teknor Apex Co., 281 F. Supp. 3d 1021, 1044 (S.D. Cal. 2017) (“Concepts 7 have value independent of the product they eventually inspire.”). Stated simply, “ideas are 8 protectable as trade secrets.” Altavion, 171 Cal. Rptr. 3d at 735 (emphasis omitted and 9 capitalization altered). 10 Because Plaintiff has sufficiently identified a protectable form of information—its 11 concept for a novel shaft structure—Plaintiff has likely satisfied the first element of a trade 12 secret’s statutory definition. 13 b. Valuable Because It Is Unknown to Others 14 The definition’s second element has two prongs: a plaintiff’s trade secret must be 15 (1) secret (i.e., not generally known in the industry) and (2) valuable (i.e., confer a 16 competitive advantage on the trade secret’s holder). See Cal. Civ. Code § 3426.1(d)(1); 17 Altavion, 171 Cal. Rptr. 3d at 738–46. 18 i. Secrecy 19 First, secrecy. Here, there is no evidence that Plaintiff ever disclosed its Axiom 20 Technology to anyone outside of its business. Indeed, Schnider declares that (1) the 21 “[Axiom] shaft designs were conceived and developed entirely in-house at Fujikura,” and 22 (2) Fujikura has “strictly maintained the confidentiality of the [Axiom] research and 23 development work.” Schnider Decl. ¶¶ 16, 23. So, Plaintiff has not lost its trade secret 24 through disclosure. 25 / / / 26

27 10 Though the PlayWood court applied Illinois trade secrets law, California courts have recognized that 28 “case law applying UTSA enactments in other states is generally relevant in applying California’s UTSA.” 1 Defendants nevertheless contend that Plaintiff’s trade secret is generally known in 2 the golf shaft industry. Dee’s public statements, however, belie Defendants’ argument. Cf. 3 Masimo Corp. v. True Wearables, Inc., No. 2021-2146, 2022 WL 205485, at *2 (Fed. Cir. 4 Jan. 24, 2022) (“Under the CUTSA, evidence of how the owner of an alleged trade secret 5 and the alleged misappropriator treat that information is relevant to whether the 6 information is generally known.”). Dee, speaking on a podcast, referred to using “spread 7 tow fabric entirely in the core of the shaft” as “power grid technology.” Kolitch Decl. Ex. 8 A at 14. He then went on to state: “It’s completely different, it’s innovative, and it’s no 9 one [sic] has done something like this.” Id. In line with Dee, David Schnider declares that, 10 to Fujikura’s knowledge, the Axiom Technology “had never been [used] before.” Schnider 11 Decl. ¶ 15. If no other golf manufacturer has yet used spread tow material to make up the 12 core of a shaft or publicized such a concept, it seems unlikely said concept qualifies as 13 “generally known.” Moreover, to the extent Dee’s declaration contradicts the above 14 statement, Dee’s pre-litigation, public-facing testimony is entitled to greater weight than 15 his post-litigation, self-serving testimony. 16 Defendants reference three other golf shafts in an effort to prove Dee’s podcast 17 statements wrong. Unfortunately for Defendants, however, each example is 18 distinguishable. Dee first declares that Aldila’s Mamba shaft uses spread tow fabric at a 19 bias angle “in its tip section on both the interior and exterior of the golf shaft.” Dee Decl. 20 ¶ 14 & Ex. A. Next, Dee points out that Mitsubishi’s Diamana Putter line features spread 21 tow fabric applied on a bias along “the majority of the length” of the shaft’s “outer layers.” 22 Id. ¶ 15 & Ex. B. Finally, Dee notes True Temper Project X Black shafts use spread tow 23 fabric “on the outermost layers of the shaft.” Id. Ex. C at 1. 24 Plaintiff, however, does not claim as a trade secret the use of spread tow fabric as 25 applied to the tip of a golf shaft, the external layer of a golf shaft, or even a golf shaft’s 26 handle. See Schnider Decl. ¶ 14 (noting Fujikura’s Ventus shafts use a spread tow ply in 27 their handle section). Instead, Plaintiff asserts as its trade secret the use of spread tow 28 material to make up a shaft’s core. See id. ¶ 15. None of the above examples demonstrate 1 that this specific use of spread tow material is generally known in the industry. 2 Perhaps recognizing the above defects in their examples, Defendants alternatively 3 argue that Plaintiff’s purported trade secret is readily ascertainable, i.e., “obvious,” and 4 therefore not entitled to trade secret protection. Opp’n at 13–14. In California, however, 5 “whether information is ‘“readily ascertainable” is not part of the definition of a trade 6 secret.’” Imax, 152 F.3d at 1168 n.10 (quoting ABBA Rubber Co. v. Seaquist, 286 Cal. 7 Rptr. 518, 528–29 (Ct. App. 1991)). So, “under California law, information can be a trade 8 secret even though it is readily ascertainable, so long as it has not yet been ascertained by 9 others in the industry.” ABBA Rubber, 286 Cal. Rptr. at 528–29 (emphasis added). Indeed, 10 “[u]nlike ‘a patentable invention, a trade secret need not be novel or unobvious.’ ‘The idea 11 need not be complicated; it may be intrinsically simple and nevertheless qualify as a secret, 12 unless it is common knowledge and, therefore, within the public domain.’” PlayWood 13 Toys, 342 F.3d at 724 (citations omitted) (first quoting 2 Rudolf Callmann, The Law of 14 Unfair Competition, Trademarks and Monopolies § 14.15, at 14–124 (4th ed. 2003); and 15 then quoting Forest Lab’ys, Inc. v. Pillsbury Co., 452 F.2d 621, 624 (7th Cir. 1971)); see 16 also Sinclair v. Aquarius Elecs., Inc., 116 Cal. Rptr. 654, 658 (Ct. App. 1974) (“[I]t has 17 been said that a trade secret may be a device or process which is clearly anticipated in the 18 prior art . . . [;] [n]ovelty and invention are not requisite for a trade secret as they are for 19 patentability.”). Defendants, therefore, cannot escape liability under CUTSA by arguing 20 that Plaintiff’s trade secret is insufficiently creative. 21 Instead, ease of ascertainability is available in California only as a defense to 22 misappropriation. Put differently, Defendants can escape liability by proving that they did 23 not learn the concept for their powergrid technology from Plaintiff, but instead arrived at 24 the idea independently. See ABBA Rubber, 286 Cal. Rptr. at 529 n.9; Imax, 152 F.3d at 25 1168 n.10. Here, however, despite the numerous other statements Dee offers in his and 26 Aretera’s defense, neither Defendant offers evidence—apart from Dee’s self-serving 27 statements—showing that Aretera developed the idea to use spread tow technology in the 28 core of its shaft independently from Dee’s exposure to the idea at Fujikura. Obviousness, 1 therefore, will not save Defendants on this record. 2 ii. Independent Economic Value 3 When evaluating this prong, courts assess whether the trade secret “gives its owner 4 a competitive advantage.” 1 Roger R. Milgrim et al., Milgrim on Trade Secrets § 1.07A 5 (2024). Notably, as a product’s economic value need only be potential, technology 6 associated with an unreleased product can still have independent economic value. See Cal. 7 Civ. Code § 3426.1(d)(1). 8 Plaintiff’s Axiom Technology likely has potential independent economic value for 9 three reasons. First, Dee’s own public statements confirm the Axiom Technology leads to 10 improved golf performance. See Part III.A, supra. If a novel technology leads to improved 11 performance among users, it follows that said technology is valuable. See PlayWood Toys, 12 342 F.3d at 726. Second, and relatedly, Plaintiff’s Axiom Technology likely has the 13 potential to confer reputational and market share benefits. See Part III.A, supra. Numerous 14 courts have recognized that a novel technology’s potential to create such advantage 15 constitutes independent economic value. See, e.g., Lumex, Inc. v. Highsmith, 919 F. Supp. 16 624, 629–630 (E.D.N.Y. 1996); Lamb Weston, 941 F.2d at 972–74; Contour Design, Inc. 17 v. Chance Mold Steel Co., No. CIV. 09-CV-451-JL, 2010 WL 174315, at *6 (D.N.H. Jan. 18 14, 2010); Shanker, 2021 WL 3112452, at *12. So too here. 19 Finally, Schnider declares that Fujikura spent more than two years developing the 20 Axiom Technology and testing its feasibility. Schnider Decl. ¶¶ 15, 18. Such an 21 investment constitutes circumstantial evidence of the technology’s value. See, e.g., 22 Altavion, 171 Cal. Rptr. 3d at 744–45. 23 Defendants make much of Plaintiff’s decision not to launch its Axiom Technology 24 in 2020. Opp’n at 24 (“[I]t is peculiar that the [Axiom] product line suddenly became 25

26 11 The closest Dee comes to offering such evidence involves the following statements: “[Aretera] 27 independently created a unique and high performing golf club shaft product line . . . . Aretera’s Alpha 28 One line is not based on Fujikura’s [Axiom] product line in any respect. I also did not use any Fujikura 1 valuable to Plaintiff only after Mr. Dee . . . joined Aretera.”). Nothing in trade secret law, 2 however, requires an inventor to take their invention to market as fast as possible. See 3 1 Milgrim, supra, § 1.08 (“[E]very inventor has the right to keep his invention 4 secret . . . .”); cf. Sinclair, 116 Cal. Rptr. at 658 (“[A]ppellant’s claim that the inventor did 5 not utilize the device in [h]is own business is entirely immaterial . . . .”). So long as the at- 6 issue information (1) retains potential value and (2) remains secret, it will retain trade secret 7 protection regardless of how long the inventor sits on their creation. See PlayWood Toys, 8 342 F.3d at 729 (“Until disclosed . . . the trade secret should be entitled to protection.” 9 (quoting 1 Milgrim, supra, § 1.05)). So, if an inventor believes it will benefit her to delay 10 release of her valuable idea, trade secret law does not stand in her way. 11 Plaintiff, moreover, did not delay releasing its Axiom shafts because it deemed them 12 valueless. Instead, Plaintiff recognized that Axiom could render its Ventus line obsolete. 13 See Schnider Decl. ¶ 22 (noting Plaintiff “shelve[d] the [Axiom] project at least 14 temporarily” because “[t]he Ventus line had become so popular in the high-end 15 market . . . that Fujikura saw no need to introduce another competing line of premium 16 shafts.”). Such a decision does not, as Defendants contend, constitute evidence of lack of 17 value. 18 In sum, the weight of the evidence indicates that Plaintiff’s Axiom Technology 19 likely possesses potential independent economic value derived from its secrecy. 20 c. Reasonable Measures to Keep Secret 21 Unlike the previous elements of a protectable trade secret, this final prong requires 22 little analysis. Plaintiff need not demonstrate it perfectly preserved the secrecy of the 23 Axiom Technology; instead, Plaintiff need only show it took “reasonable steps to maintain 24 secrecy.” InteliClear, 978 F.3d at 660. Here, Schnider declares that (1) “[a]ll of Fujikura’s 25 employment agreements, including Mr. Dee’s, include an obligation not to use or disclose 26 any of Fujikura’s confidential information”; (2) “the Fujikura building is locked with an 27 alarm during non-business hours”; (3) “[a]ll visitors must check in and sign in, and visitors 28 are accompanied by a Fujikura employee at all times”; (4) “[o]nly authorized personnel are 1 allowed into the Fujikura R&D/Engineering area”; and (5) “Fujikura uses secure file 2 servers and is generally paperless.” Schnider Decl. ¶¶ 29–30. At the preliminary 3 injunction and summary judgment stages, courts have repeatedly held similar steps likely 4 constitute reasonable protections sufficient to confer trade secret status. See, e.g., 5 InteliClear, 978 F.3d at 661 (“InteliClear’s efforts to protect its trade secrets through 6 licensing agreements constitute reasonable measures . . . .”); Cutera, Inc. v. Lutronic 7 Aesthetics, Inc., 444 F. Supp. 3d 1198, 1207 (E.D. Cal. 2020) (similar). The Court finds 8 the same here.12 9 In sum, the Court concludes that Plaintiff has shown its Axiom Technology likely 10 constitutes a protectable trade secret. Whether Plaintiff is likely to succeed on the merits 11 turns, therefore, on whether Plaintiff has provided sufficient evidence of Defendants’ 12 misappropriation and resulting harm therefrom. 13 2. Misappropriation 14 Plaintiff relies on a “disclosure or use” theory of misappropriation. See Mot. at 14. 15 To commit misappropriation under this theory, a defendant must first “[d]isclos[e] or 16 use . . . a trade secret of another without express or implied consent.” Cal. Civ. Code 17 § 3426.1(b)(2). Second, “[a]t the time of disclosure or use, [the defendant must] kn[o]w 18 or ha[ve] reason to know that [their] knowledge of the trade secret was,” among other 19 possibilities, either “[a]cquired under circumstances giving rise to a duty to maintain its 20 secrecy or limit its use” or “[d]erived from or through a person who owed a duty to the 21 person seeking relief to maintain its secrecy or limit its use.” Id. § 3426.1(b)(2)(B)(ii), 22 (iii). 23 a. Disclosure or Use 24 Both Dee and Aretera likely misappropriated Plaintiff’s trade secret. First, Dee 25 owed a duty, through contract, to maintain the secrecy of information gained from—and 26 inventions he/his team developed during working hours while at—Fujikura. See 27

28 1 Confidentiality Agreement at 1–2; Schnider Decl. ¶ 6. Second, Dee admits that he oversaw 2 the development of Fujikura’s Axiom line, which, per Schnider, “use[d] spread tow fabric 3 in one or more of the bias plies in the core of the shaft, potentially along the entire length 4 of the shaft.” Id. ¶ 15; Dee Decl. ¶ 6. Third, Dee stated that the main innovation in the 5 Alpha One line—its “powergrid technology”—involves “spread tow fabric entirely in the 6 core of the shaft,” which is the very concept claimed as a trade secret by Plaintiff. Kolitch 7 Decl. Ex. A at 14. Lastly, Aretera launched its powergrid technology after spending 8 approximately six months developing the shaft. Dee Decl. ¶ 7; Schnider Decl. ¶ 27. The 9 pace of this development poses a marked contrast to the Dee-led effort at Fujikura, which 10 lasted more than two years. See id. 15–18. 11 The above evidence shows Dee (1) had access to Plaintiff’s trade secret concept and 12 (2) thereafter developed a product using a similar concept. Courts have inferred likely use 13 of a competitor’s trade secret based on similar evidence. See Stratienko v. Cordis Corp., 14 429 F.3d 592, 600 (6th Cir. 2005) (citing cases wherein the Second, Third, Fourth, Seventh, 15 Eighth, Ninth, and Federal Circuits permitted an inference of use based on circumstantial 16 evidence of access and similarity of design). Thus, Dee, and through him, Aretera, likely 17 used Plaintiff’s trade secret. 18 b. Defendants’ Knowledge 19 Both Dee and Aretera, moreover, likely knew or had reason to know that their 20 “powergrid technology” was misappropriated from Plaintiff. 21 Dee must have known that (1) he signed a contract requiring him to refrain from 22 disclosing or using information or inventions he accessed/created while at Fujikura and (2) 23 he or his team came up with the idea of using spread tow fabric to make up the core of a 24 shaft while at he was at Fujikura. Indeed, Plaintiff sent two warnings to Dee to remind him 25 of his obligations to Fujikura, one of which explicitly referenced “a new golf shaft 26 technology related to shafts with spread tow carbon fiber fabric in the bias layer.” Compl. 27 Ex. D at 3, id. Ex. B. 28 / / / 1 As for Aretera, absent the defense of independent invention, Dee’s knowledge of 2 from whence he acquired the concept for the Alpha One shaft can likely be imputed to 3 Aretera. To be sure, the Ninth Circuit has held “it is generally not appropriate to direct a 4 jury to impute an agent’s knowledge of a secret to the principal” where trade secrets are 5 concerned. See Droeger v. Welsh Sporting Goods Corp., 541 F.2d 790, 792–93 (9th Cir. 6 1976). In Droeger, however, the issue was whether imputation of knowledge from an 7 employee could conclusively preclude the defense of independent invention, even if the 8 employee in question never communicated the secret to their employer. See id. Droeger 9 did not hold a company can avoid misappropriation liability when profiting from a product 10 its founder created using misappropriated information. Cf. Beluca Ventures LLC v. Einride 11 Aktiebolag, 660 F. Supp. 3d 898, 911 n.8 (N.D. Cal. 2023) (concluding a managing 12 partner’s knowledge of his duty to maintain confidentiality can be imputed to his 13 corporation); Contour Design, 2010 WL 174315, at *7 (imputing, in a trade secrets case, 14 the knowledge of a corporation’s president to the corporation). And even if imputation 15 were unavailable, Aretera was made aware that ideas from Dee could be subject to trade 16 secret protection by Fujikura’s warning letters, at least one of which was addressed to 17 Aretera. See Compl. Exs. B, C, D. Aretera thus likely knew or had reason to know that 18 Dee’s shaft concept was Fujikura’s trade secret.13 19 c. Defendants’ Counterarguments 20 Defendants argue Plaintiff’s misappropriation theory relies on a trade secret 21 doctrine—inevitable disclosure—that California has rejected. Opp’n at 18 (citing Whyte, 22 125 Cal. Rptr. 2d at 290–94). This argument, however, mischaracterizes Plaintiff’s case. 23 The inevitable disclosure doctrine allows “a trade secret owner to prevent a former 24 employee from working for a competitor despite the owner’s failure to prove the employee 25

26 13 Finally, even if the above theories were insufficient, Aretera can likely be held vicariously liable for 27 Dee’s misappropriation. See Bombardier Inc. v. Mitsubishi Aircraft Corp., 383 F. Supp. 3d 1169, 1188 28 (W.D. Wash. 2019); SolarCity Corp. v. Pure Solar Co., No. CV1601814BRODTBX, 2016 WL 11019989, 1 has taken or threatens to use trade secrets.” Whyte, 125 Cal. Rptr. 2d at 281. Because this 2 doctrine presupposes that an employee cannot help but rely on his knowledge when 3 working for a competitor, it “results in an injunction prohibiting employment, not just use 4 of trade secrets.” Id. at 290. Here, because Plaintiff has offered substantial evidence 5 suggesting that Dee used the trade secret in question, Plaintiff need not rely on inevitable 6 disclosure. Moreover, Plaintiff does not seek an injunction preventing Dee from working 7 for Aretera. Consequently, the inevitable disclosure doctrine is irrelevant. 8 Nor is Defendants’ reliance on alleged differences between its Alpha One shafts and 9 Plaintiff’s Axiom shafts persuasive. Defendants argue the Alpha One shafts differ in 10 “design goals, target consumer profile, material selection, ply cutting process, tooling, and 11 specification, among other things.” Opp’n at 18–19 (footnotes omitted). Setting aside the 12 accuracy of these contentions,14 said differences have little relevance. Plaintiff has neither 13 claimed the specific type of spread tow material contained within its Axiom shafts, nor the 14 tooling of its shafts, as a trade secret. Instead, Plaintiff lays claim to the concept of using 15 layers of spread tow fabric at a bias along the core of a shaft. If, as the evidence to this 16 point shows, Defendants likely misappropriated this concept from Plaintiff, the fact that 17 their Alpha One shafts differ from Plaintiff’s Axiom prototypes in other respects does not 18 preclude misappropriation liability.15 19 The weight of the evidence thus suggests that Defendants likely misappropriated 20 Plaintiff’s Axiom Technology. 21 22 14 For instance, evidence before the Court suggests that both the Axiom and Alpha One lines target (1) the premium market and (2) professional golfers. See Schnider Decl. ¶¶ 15; Dee Decl. ¶ 9. 23

24 15 Defendants also cannot rely on the contention that they have made modifications to Plaintiff’s initial concept. Courts have recognized that “[t]he scope of what might constitute misappropriation is broad.” 25 Yeiser Rsch. & Dev., 281 F. Supp. 3d at 1047. Indeed, “[m]isappropriation includes not only wholesale pirating of an ideas [sic], but also the unauthorized utilization of an idea as a starting point or guide in 26 developing a process or as a means to understand what pitfalls to avoid.” Id. (quoting Savor, Inc. v. FMR Corp., No. CIV.A. 00C-10-149JRS, 2004 WL 1965869, at *8 (Del. Super. Ct. July 15, 2004)); see also 27 Mangren Rsch. & Dev. Corp. v. Nat’l Chem. Co., 87 F.3d 937, 944 (7th Cir. 1996) (“[I]f trade secret law 28 were not flexible enough to encompass modified or even new products that are substantially derived from 1 3. Damage to Plaintiff 2 Defendants’ Opposition does not address the third element of Plaintiff’s cause of 3 action—resulting damage. In any event, the Court has already found Plaintiff is likely to 4 suffer irreparable harm if Defendants are allowed to continue selling their Alpha One 5 shafts. See Part III.A, supra. 6 As all three elements of its claim are likely satisfied, the Court finds Plaintiff likely 7 to succeed on the merits of its trade secret misappropriation claim. 8 C. Balance of the Equities 9 To resolve this factor, the Court “must ‘balance the interests of all parties and weigh 10 the damage to each.’” CTIA - The Wireless Ass’n v. City of Berkeley, 928 F.3d 832, 852 11 (9th Cir. 2019) (quoting Stormans, Inc. v. Selecky, 586 F.3d 1109, 1138 (9th Cir. 2009)). 12 In the Order, the Court recognized that it was “particularly hesitant” to issue 13 Plaintiff’s requested temporary restraining order without briefing in opposition because 14 “Plaintiff’s injunction would bar Aretera’s sales in their entirety.” Order at 7. Defendants 15 seize on this language, arguing that “the relative size and strength of the parties strongly 16 suggest that the hardship suffered by Defendants will be tremendously greater should a 17 preliminary injunction issue [than would be] the hardship [suffered] by Plaintiff should a 18 preliminary injunction not issue.” Opp’n at 23. Now that both sides have had the 19 opportunity to submit evidence, however, the Court gives little weight to Defendants’ 20 hardship argument. This is true for two reasons. 21 First, though “[t]he threat of being driven out of business is sufficient to establish 22 irreparable harm,” hiQ Labs, Inc. v. LinkedIn Corp., 31 F.4th 1180, 1188 (9th Cir. 2022) 23 (alteration in original) (quoting Am. Passage Media Corp. v. Cass Commc’ns, Inc., 750 24 F.2d 1470, 1474 (9th Cir. 1985)), Defendants offer slim evidence suggesting that Plaintiff’s 25 proposed injunction is likely to put them out of business. See Dee Decl. ¶ 29. True, the 26 proposed injunction will prevent the sale of Aretera’s only “fully developed” product. 27 Id. ¶ 8. But nothing in Plaintiff’s injunction prevents Aretera from (1) developing and 28 selling other products and (2) attracting additional investors to keep themselves afloat in 1 the meantime. Indeed, in similar circumstances, the Seventh Circuit has affirmed a district 2 court’s decision to issue a preliminary injunction preventing further sales of a product 3 developed using likely misappropriated trade secrets. See Life Spine, 8 F.4th at 546 4 (recognizing the plaintiff would be required to pull a product and “possibly go[] out of 5 business,” but nevertheless concluding that “the potential harm to [the defendant] did not 6 tip the balance” (emphasis added)).16 7 Second, a contrary conclusion would reward Aretera for proceeding with the 8 development and sale of its Alpha One line despite receiving multiple warnings from 9 Fujikura. Courts have repeatedly rejected this outcome.17 See, e.g., Cadence Design Sys., 10 Inc. v. Avant! Corp., 125 F.3d 824, 829–30 (9th Cir. 1997) (noting where a plaintiff makes 11 a strong showing of likely success on the merits, harm to the infringer’s business stemming 12 from lost sales of the infringing work/product “cannot be accorded significant—if any— 13 weight”); Rebecca Bamberger Works, LLC v. Bamberger, No. 24-CV-706 JLS (DDL), 14 2024 WL 2805323, at *19 (S.D. Cal. May 31, 2024) (declining to “reward [the d]efendants 15 for their likely unlawful actions”); Pac. Aerospace & Elecs., Inc. v. Taylor, 295 F. Supp. 16 2d 1188, 1199 (E.D. Wash. 2003) (crediting plaintiff’s argument that “a defendant who 17 builds a business based upon a clear violation of the trade secrets and employment 18 agreements of the plaintiff cannot defeat a preliminary injunction by claiming the business 19 will be harmed . . . .”). The Court finds, given Plaintiff’s showing of likely irreparable 20 harm, see supra Part III.A, that the balance of the equities favors Plaintiff. 21 D. Public Interest 22 This portion of the analysis requires the Court to consider whether “the public 23 interests that might be injured by a preliminary injunction . . . outweigh the public interests 24

25 16 Notably, Dee’s declaration implies that Aretera is developing other product lines, see Dee Decl. ¶ 8, 26 and Defendants’ Opposition acknowledges Defendants could resort to developing other products, Opp’n at 23. 27

28 17 The same logic defeats Defendants’ argument regarding the reputational harm Dee may suffer from 1 that will be served.” See All. for the Wild Rockies, 632 F.3d at 1138. It “primarily 2 addresses impact on non-parties rather than parties.” CTIA, 928 F.3d at 852 (quoting 3 Bernhardt v. L.A. Cnty., 339 F.3d 920, 931–32 (9th Cir. 2003)). 4 Congress and California’s legislature, by passing trade secret legislation, have 5 indicated that the public interest favors the issuance of injunctions that prevent continued 6 misuse of trade secrets and trademarks. See Henry Schein, Inc. v. Cook, 191 F. Supp. 3d 7 1072, 1078 (N.D. Cal. 2016); Pyro Spectaculars N., Inc. v. Souza, 861 F. Supp. 2d 1079, 8 1092 (E.D. Cal. 2012); 11A Charles A. Wright et al., Federal Practice and Procedure 9 § 2948.4 (3d ed. April 2023 Update) (“A federal statute prohibiting the threatened acts that 10 are the subject matter of the litigation has been considered a strong factor in favor of 11 granting a preliminary injunction.”). 12 Tilting the other way, however, is the Golden State’s strong public policy in favor 13 of employee mobility. See Pyro Spectaculars, 861 F. Supp. 2d at 1092 (“California has a 14 ‘settled legislative policy in favor of open competition and employee mobility,’ protecting 15 ‘the important legal right of persons to engage in businesses and occupations of their 16 choosing.’” (quoting Edwards v. Arthur Andersen LLP, 189 P.3d 285, 291 (Cal. 2008))). 17 This is not a case where an employee has been caught stealing specific documents or 18 schematics from his company’s hard drive. Instead, this is a case where a former employee 19 is accused of repurposing a concept he and his team originally conceived while working 20 for the company. Enjoining conduct such as this will make it more difficult for 21 employees—particularly those employed in creative fields—to change employers. 22 Although these two California policies—aggressive enforcement of trade-secret 23 rights and vigorous defense of an employee’s right to move—initially appear in conflict, 24 they in fact operate in harmony. Dee was free to start Aretera because California law 25 precludes most forms of employee-targeted noncompete agreements. See Edwards, 189 26 P.3d at 291. In turn, as Fujikura cannot avail itself of the sure safeguard a noncompete 27 would provide, broad trade secret protections ensure Fujikura has a remedy in the event a 28 former employee seeks to reap the rewards of Fujikura’s R&D efforts. So, California’s 1 strong public policy favoring employee mobility does not here outweigh the public’s 2 interest in trade secret protection. 3 Indeed, entering an injunction here will not preclude Dee from continued 4 employment with Aretera. Dee remains free to work on ideas that Aretera can demonstrate 5 were developed independently from Dee’s employment at Fujikura. Moreover, Dee may 6 rely on the expertise he developed at Fujikura without running afoul of trade secrets law. 7 Dee is barred only from engaging in the very conduct he likely perpetrated here—copying 8 wholesale a concept at the heart of one of Fujikura’s prototypes. 9 Having now addressed all four factors, the Court concludes that Plaintiff has 10 satisfied its burden with respect to each. So, the Court will issue a preliminary injunction. 11 IV. Bond 12 Federal Rule of Civil Procedure 65(c) states that a preliminary injunction may issue 13 “only if the movant gives security in an amount that the court considers proper to pay the 14 costs and damages sustained by any party found to have been wrongfully enjoined or 15 restrained.” Despite the mandatory phrasing of this rule, Rule 65(c) “invests the district 16 court ‘with discretion as to the amount of security required, if any’” and allows a court to 17 “dispense with the filing of a bond when it concludes there is no realistic likelihood of 18 harm to the defendant from enjoining his or her conduct.” Jorgensen v. Cassiday, 320 F.3d 19 906, 919 (9th Cir. 2003) (emphasis in original) (quoting Barahona-Gomez v. Reno, 167 20 F.3d 1228, 1237 (9th Cir. 1999)). 21 Neither party addressed the issue of bond in their moving papers. When pressed at 22 oral argument, however, Plaintiff conceded a bond was necessary, stated Fujikura had the 23 ability to pay a bond, and suggested the amount be extrapolated from the Alpha One line’s 24 profits to date. Defendants agreed, indicating they would be willing to provide the 25 necessary sales information after the Parties finalized a protective order. 26 To avoid incentivizing delay of this production, the Court’s injunction will 27 commence seven days from the date of this Order, regardless of whether a bond has yet 28 been set or paid. If Defendants ultimately fail to post the bond set by the Court, however, 1 the Court will impose appropriate sanctions. 2 CONCLUSION 3 For the foregoing reasons, the Court GRANTS IN PART AND DENIES IN PART 4 Plaintiff’s Motion for Preliminary Injunction (ECF No. 2). Pending the conclusion of the 5 litigation in this matter,18 the Court ORDERS as follows: Except to the extent required to 6 comply with this Order or participate in this litigation, Defendants, their officers, agents, 7 servants, employees, attorneys, and anyone in active concert or participation with any of 8 the above SHALL NOT engage in any further disclosure or use of Plaintiff’s trade secret 9 golf shaft technology; specifically, using spread tow material in one or more of the bias 10 plies in the core of a shaft, such that spread tow material makes up between 45% and 60% 11 of the weight of the shaft. Accordingly, Defendants SHALL REFRAIN from further 12 advertising and sales of their Alpha One line so long as said line continues to incorporate 13 Plaintiff’s trade secret golf shaft technology. The Court GRANTS Defendants seven (7) 14 days to come into compliance with this Order. 15 / / / 16 / / / 17 / / / 18 / / / 19 / / / 20

21 18 Neither party addressed in their briefing the maximum length of a preliminary injunction in this case. 22 And, at oral argument, Defendants indicated a bond amount should cover the entirety of this litigation, including trial. Defendants’ only statement to the contrary—their contention, raised for the first time at 23 oral argument, that a preliminary injunction should last only the amount of time it took Plaintiff to reverse- 24 engineer the Alpha One shaft—is illogical. Had Defendants not likely misappropriated Plaintiff’s trade secret, there would be no Alpha One shaft for competing golf shaft manufacturers to reverse engineer. A 25 more accurate duration would instead seem to be the difference in time between Plaintiff’s R&D efforts and Defendants’ R&D efforts—approximately 1.5 years. 26 Absent full briefing by the parties, however, the Court declines to set a firm cut-off for a preliminary 27 injunction at this time. Though a preliminary injunction in this case should not continue indefinitely, see 28 Lamb-Weston, 941 F.2d at 975, a decision on the preliminary injunction’s ultimate length can await a 1 Lastly, the Parties SHALL FILE a joint proposal for a bond amount—including 2 || supporting evidence and not to exceed ten (10) pages of argument—within twenty-one (21) 3 || days of the date of this Order. 4 IT IS SO ORDERED. 5 ||Dated: June 28, 2024 psi L. Lo meeaitie- 6 on. Janis L. Sammartino United States District Judge

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