Lasermaster Corp. v. Sentinel Imaging

931 F. Supp. 628, 1996 U.S. Dist. LEXIS 10166, 1996 WL 395885
CourtDistrict Court, D. Minnesota
DecidedFebruary 22, 1996
DocketCivil 3-95-981
StatusPublished
Cited by11 cases

This text of 931 F. Supp. 628 (Lasermaster Corp. v. Sentinel Imaging) is published on Counsel Stack Legal Research, covering District Court, D. Minnesota primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lasermaster Corp. v. Sentinel Imaging, 931 F. Supp. 628, 1996 U.S. Dist. LEXIS 10166, 1996 WL 395885 (mnd 1996).

Opinion

MEMORANDUM AND ORDER

DAVIS, District Judge.

This matter came before the Honorable Michael J. Davis on January 12, 1996 upon plaintiff, Lasermaster Corporation’s (“plaintiff’) motion for preliminary injunction. For the reasons set forth below, plaintiffs motion is denied in its entirety.

FACTUAL BACKGROUND

Before the Court is plaintiffs motion to enjoin defendant, Sentinel Imaging (“Sentinel”) from engaging in what plaintiff claims are violations of the Lanham Act and misappropriation of plaintiffs trade secrets. Plaintiff is a company based in Eden Prairie, Minnesota engaged in the development, manufacture and sale of wide-format ink jet printers, the computer hardware and software involved in running the printers, and the ink and printing media, i.e., paper or vinyl, used in the printing process. Defen *631 dant is involved in the sale of paper, film and ink into large format ink jet printers.

In late 1993, plaintiff introduced the Dis-playMaker Professional Printer (“DM Pro”) which prints photo-realistic images by any length and up to 36 inches wide. The DM Pro was designed for use by art professionals and other entities requiring high-quality print. Plaintiff markets the DM Pro along with a group of other LaserMaster products, including a computer, a docking station and, at the customer’s option, the LaserMaster ColorMark color management system.

In late 1994, defendant instituted a project to develop a large volume ink system that would be compatible with the DM Pro. According to defendant, it embarked upon this project after repeated requests by its customers to devise and market a lower priced ink system for use with the customers’ printers. In the spring of 1995, defendant completed its project and began marketing its own large volume ink system known as the “Color Key Ink Delivery System.” 1 It is the development and subsequent attempted sale of this system which spurred the present controversy.

Development of the Profiler-type Computer Chip

In approximately March, 1995, Brian Ha-berstroh, a former employee of LaserMaster, was contacted by the owner of a DisplayMaker printer to determine whether Haberstroh could duplicate the Profiler computer chip (“Profiler”). The Profiler is the computer chip sold with plaintiffs large volume ink delivery system and used in the “docking station” attached to the printer and electronically attached to the software that runs the printer. Haberstroh expressed interest in the idea and thereafter contacted Brian Falk, an electrical engineer who had worked at LaserMaster as a hardware engineer until November, 1993. According to defendant, Falk removed the case of the computer chip and stated that it would be “simple” to replicate the chip using the process of reverse engineering. On or about May 15, 1995, Haberstroh accepted a position with Sentinel and thereafter contracted with Falk to proceed with the project to reverse engineer the Profiler. Although they experienced a few minor problems, Haberstroh and Falk were ultimately able to replicate the Profile and, according to Haberstroh, print a perfect print on the DisplayMaker printer using the prototype Sentinel chip.

It is during the process of devising the Profiler prototype that plaintiff alleges Ha-berstroh used trade secret information which Haberstroh learned at LaserMaster. Specifically, plaintiff alleges that Haberstroh had access to plaintiffs highly-proprietary computer program known as “dongle.exe” used to configure the Profiler. Haberstroh claims that he never received a copy of the program, but plaintiffs alleges that his E-mail demonstrates that he had access to a copy of “dongle.exe” prior to departing from Laser-Master. Plaintiff further alleges that Haber-stroh asked Falk during the reverse engineering of the Profiler if it would help to have a copy of the “dongle.exe” program; Falk, however, refused.

Defendant counters, however, that no La-serMaster trade secret or confidential information was used to complete the Profiler prototype. Defendant claims that Falk had no difficulty ascertaining the software code and did not have access to a DisplayMaker printer.

Development and Advertising of Sentinel’s Inks

To duplicate an ink delivery system like BIDS, defendant contacted Formulabs, Inc., a specialty ink manufacturer located in California. John Urlaub, a product development chemist at Formulab, led the project and worked with Haberstroh to match the Laser-Master inks. After a process of trial and error over the course of a few months, defendant alleges that Urlaub developed an ink which, in Haberstroh’s opinion, was a “perfect visual match” with the LaserMaster inks. In the last week of September 1995, defendant finally launched its advertising campaign to promote its CKIDS product. It *632 is the particular advertisement from this campaign which plaintiff contends is violative of the Lanham Act. 2

The Customer Lists and the Media Trade Secrets

In addition to the Lanham Act violations, plaintiff contends that it is entitled to relief because defendant received the benefit of a number of plaintiffs trade secrets. Specifically, plaintiff argues that another of its former employees, Bruce Compton, divulged to defendant a number of customers from plaintiff’s confidential customer list who owned LaserMaster DM Pros and the key contacts at those customers. Plaintiff argues that Compton identified these names despite his prior signature on a nondisclosure agreement with plaintiff and despite his understanding that customer information was not to be disclosed. Defendant admits that Compton identified 25 to 30 customers he became familiar with dining his employment at LaserMaster as well as 10 to 20 additional customers whose names he recognized. Nevertheless, defendant argues that disclosure of this information does not violate any trade secret laws.

Additionally, plaintiff argues that Haber-stroh misappropriated at least two media trade secrets: (1) the existence of Teslin, a paper/plastic sheeting product manufactured by PPG Industries, Inc.; and (2) information relating to Rexham Graphics, plaintiffs media suppler. Defendant counters, however, that neither disclosure was improper because the information regarding both Teslin is heavily advertised for use with ink jet printers and defendant knew of Rexham Graphics long before Haberstroh’s arrival.

As set forth in detail below, the Court denies plaintiffs motion for preliminary injunction in its entirety.

DISCUSSION

The Eighth Circuit has established the following analysis to be used in considering a preliminary injunction motion:

[Wjhether a preliminary injunction should issue involves consideration of (1) the threat of irreparable harm to the movant; (2) the state of balance between this harm and the injury that granting the injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the merits; and (4) the public interest.

Dataphase Sys., Inc. v. C.L. Sys., Inc.,

Related

Cite This Page — Counsel Stack

Bluebook (online)
931 F. Supp. 628, 1996 U.S. Dist. LEXIS 10166, 1996 WL 395885, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lasermaster-corp-v-sentinel-imaging-mnd-1996.