## Facts

- American Can employed Ishwar Mansukhani as an ink chemist in its commercial jet-ink business beginning in 1976.
- Mansukhani signed an agreement to not use the employer’s trade secrets and to return all documents at the end of employment.
- After corporate ownership changes, Mansukhani continued working in the same laboratory for successor entities treated as a single employer for purposes of the dispute.
- Commercial jet inks were used for non-contact printing on delicate or unsuitable-for-contact surfaces, including date codes on aluminum cans and printing on plastic containers.
- After leaving American Can, Mansukhani and his wife formed competing businesses (Brand Associates and Brand M, Inc.).
- American Can alleged defendants misappropriated trade secrets by taking formulas and confidential documents and using them to sell inks to American Can’s customers.
- The district court issued an ex parte temporary restraining order (TRO) for ten days that (i) enjoined defendants from selling certain inks and (ii) authorized entry onto defendants’ premises to seize materials allegedly containing trade secrets.
- The district court later entered a preliminary injunction restricting conduct related to trade-secret misuse; defendants challenged the ex parte procedures and the breadth and specificity of the injunctive relief.

## Issues

1. Whether the district court’s ex parte TRO, including seizure authorization, satisfied the procedural requirements and safeguards of Federal Rule of Civil Procedure 65.
2. Whether the preliminary injunction was impermissibly broad or insufficiently specific under Rule 65(d) by failing to distinguish prohibited trade-secret use from lawful competition.

## Decision

- The Seventh Circuit affirmed the district court’s issuance of core injunctive protection against trade-secret misappropriation.
- The court held that ex parte TROs may be permissible in trade-secret cases in exceptional circumstances, but only with specific factual justification and strict compliance with Rule 65 safeguards.
- The court emphasized that seizure-type provisions are highly intrusive and require especially close judicial control, narrow limits, and prompt movement to an adversarial hearing.
- The court required that any ongoing injunctive relief be narrowly drawn and specific, tied to identifiable trade secrets and not drafted so broadly that it effectively bars legitimate competition.

## Legal Principles

- Ex parte temporary restraining orders in trade-secret disputes are disfavored and justified only when specific facts show immediate irreparable harm and a serious risk that notice would lead to destruction or concealment of evidence or trade secrets.
- Loss of a trade secret to a competitor can constitute irreparable harm because disclosure destroys the secret’s value in ways not readily compensable by damages.
- Rule 65’s procedural requirements apply fully in trade-secret cases, including time limits for ex parte TROs, adequate findings supporting relief, and the security requirement of Rule 65(c).
- Injunctions must satisfy Rule 65(d) by stating prohibited acts with reasonable detail and must be tailored to prevent unfair competition through misappropriation while allowing fair competition using public information and defendants’ own skills and experience.
- Court-authorized seizures in civil trade-secret litigation raise heightened due process concerns and must be constrained to prevent abuse and undue disruption.

## Conclusion

The Seventh Circuit approved strong injunctive measures to protect trade secrets but instructed that ex parte and seizure-based relief demands strict Rule 65 compliance and that trade-secret injunctions must be specific and narrowly limited to misuse of identifiable confidential information rather than broadly restraining lawful competition.


American Can Co. v. Mansukhani, 742 F.2d 314 (7th Cir. 1984)