Halliburton Energy Services, Inc. v. Axis Technologies, LLC and Brian Wilkinson

444 S.W.3d 251, 112 U.S.P.Q. 2d (BNA) 1599, 2014 Tex. App. LEXIS 9360, 2014 WL 4291478
CourtCourt of Appeals of Texas
DecidedAugust 21, 2014
Docket05-13-00854-CV
StatusPublished
Cited by21 cases

This text of 444 S.W.3d 251 (Halliburton Energy Services, Inc. v. Axis Technologies, LLC and Brian Wilkinson) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Halliburton Energy Services, Inc. v. Axis Technologies, LLC and Brian Wilkinson, 444 S.W.3d 251, 112 U.S.P.Q. 2d (BNA) 1599, 2014 Tex. App. LEXIS 9360, 2014 WL 4291478 (Tex. Ct. App. 2014).

Opinion

OPINION

Opinion by Justice EVANS.

In this trade secret misappropriation case, Halliburton Energy Services, Inc. appeals from the trial court’s refusal to award it a permanent perpetual injunction against Axis Technologies, LLC and Brian Wilkinson after the jury found in favor of *254 Halliburton on all its claims. Halliburton further challenges the trial court’s failure to render a declaratory judgment in its favor on the issue of ownership of the property made the subject of the suit. We conclude the trial court erred in failing to award Halliburton all the relief it requested.

Factual Background

Halliburton Energy Services, Inc. designs, manufactures, and sells products related to oil and gas exploration and production. Among the products made and sold by Halliburton are wellbore plugging devices. Brian Wilkinson worked for Halliburton from 1998 to 2008 in the business unit principally responsible for the design and manufacturing of the company’s well-bore plugs. As a technician in that unit, Wilkinson was given access to highly confidential trade secret information including engineering drawings, materials specifications, and vendor information.

Wilkinson signed a contract entitled “Patent Agreement of Halliburton Company” as part of his employment -with the company. Under the Patent Agreement, Wilkinson agreed that, during and after the term of his employment with the company, he would not “use for himself or others, or divulge to others any secret or confidential information, knowledge, or data of Halliburton, obtained as a result of his employment.” In addition, Wilkinson agreed to disclose and assign the rights to anything he invented, in whole or in part, during his employment that related to company business. Finally, Wilkinson agreed to deliver to Halliburton “all mem-oranda, notes, records, drawings or other documents made or compiled by him or made available to him while employed by [Halliburton] concerning any process, apparatus, or product manufactured, used, developed, investigated, or considered by [Halliburton]” upon termination of employment as “[Halliburton’s] property.”

Three months before Wilkinson left his employment with the company, he began taking company documents and using the company’s confidential trade secret information to design and begin production of wellbore plugs for Axis Technologies, LLC. Halliburton presented evidence that Wilkinson continued to obtain confidential information from another Halliburton employee after he left the company and, within three weeks after leaving, Wilkinson hosted a commercial demonstration of a wellbore plug he developed for Axis. Axis ultimately sold over 1,300 wellbore plugs resulting in estimated revenues of $2.1 million and profits exceeding $500,000.

Halliburton brought this suit in January 2011 alleging claims against Wilkinson and Axis for misappropriation of trade secrets and breach of contract arising out of “a product or series of products known as the Axis ‘BLACK’ Bridge/Frac Plug” which Halliburton alleged Wilkinson manufactured and marketed through Axis. Halliburton later added a claim for breach of fiduciary duty. Halliburton sought monetary damages and attorney’s fees as well as equitable relief including a permanent injunction, declaratory judgment, and constructive trust. A jury unanimously found in favor of Halliburton on all its claims and awarded damages in the amount of $521,360 against Axis and $191,940.51 against Wilkinson. Halliburton filed a motion for judgment on the verdict in which it sought, in addition to judgment on the verdict for the monetary relief, both declaratory and injunctive relief under which Wilkinson and Axis would be permanently enjoined from using Halliburton’s trade secrets and would be required to deliver to Halliburton all designs and other related materials that served as the basis for the wellbore plugs and component parts built by Wilkinson.

*255 The trial court held a hearing on Halliburton’s motion and signed a judgment on August 6, 2012 awarding monetary damages in the amount found by the jury. The judgment also contained a permanent injunction prohibiting Wilkinson and Axis from disclosing Halliburton’s trade secrets and ordered Wilkinson and Axis to turn over all hard copies of documents, data, and information related to the wellbore plugs. With respect to use of the trade secrets, however, the judgment only enjoined Wilkinson and Axis for a period of ten months. The court did not render any declaratory relief. Halliburton filed a motion seeking to modify and supplement the judgment contending the ten month injunction provided inadequate relief and that it was entitled to a declaratory judgment as to its ownership of the wellbore plug designs. Halliburton further requested that Wilkinson and Axis be ordered to turn over and delete all electronic files containing information related to the plugs. On May 23, 2013, the trial court signed a second final judgment extending the duration of the injunction on Wilkinson and Axis’s use of the trade secrets until November 2013 and adding an order that they provide Halliburton with copies of all electronically stored or maintained information related to the plugs. Other than these two modifications, the judgment was unchanged. Halliburton then filed this appeal.

Analysis

A. Injunctive Relief for Trade Secret Misappropriation

In Halliburton’s first issue on appeal, it contends the trial court erred in limiting the injunction on appellees’ use of the misappropriated trade secrets to only eighteen months from the date of the jury’s verdict. Halliburton argues that only a permanent perpetual injunction -will remove the competitive advantage gained by appellees and provide Halliburton with complete relief from the consequences of the misappropriation.

1. Standard of Review

We review the trial court’s grant or refusal of a permanent injunction to determine whether it clearly abused its discretion. Priest v. Tex. Animal Health Comm’n, 780 S.W.2d 874, 875 (Tex.App.Dallas 1989, no writ). The trial court abuses its discretion when it acts arbitrarily and unreasonably, without reference to guiding rules or principles, or misapplies the law to the established facts of the case. Triantaphyllis v. Gamble, 93 S.W.3d 398, 402 (Tex.App.-Houston [14th Dist.] 2002, pet. denied). A trial court’s clear failure to analyze and apply the law correctly constitutes an abuse of discretion. See Webb v. Glenbrook Owners Ass’n, Inc., 298 S.W.3d 374, 380 (Tex.App.-Dallas 2009, no pet.).

2. Established Facts

Neither Wilkinson nor Axis appealed from the trial court’s judgment. Accordingly, the following facts, as found by the jury based on the jury instructions, must be taken as established by the evidence:

(i) Wilkinson and Axis made unauthorized use of Halliburton’s trade secrets. 1

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444 S.W.3d 251, 112 U.S.P.Q. 2d (BNA) 1599, 2014 Tex. App. LEXIS 9360, 2014 WL 4291478, Counsel Stack Legal Research, https://law.counselstack.com/opinion/halliburton-energy-services-inc-v-axis-technologies-llc-and-brian-texapp-2014.