## Facts

- Dr. Daniels acquired intellectual property and the “Provasca” trademark associated with a cardiovascular dietary supplement containing a seaweed extract.
- Dr. Daniels created “The Path to Provasca,” a confidential presentation compiling and organizing scientific research supporting the supplement.
- Dr. Daniels formed Daniels Health Sciences, L.L.C. (DHS) for research and development; his brother and a marketing executive formed Vascular Health Sciences, L.L.C. (VHS) to market the product.
- Dr. Daniels required confidentiality controls, including investor nondisclosure agreements and a CNDA signed by VHS restricting use and disclosure of Provasca-related confidential information.
- The parties failed to agree on a Provasca licensing arrangement; VHS exited the relationship.
- VHS then developed and marketed “Arterosil,” a competing product that used the same seaweed extract and allegedly relied on DHS’s confidential compilation and related materials.
- DHS sued VHS for, among other claims, Texas trade secret misappropriation and breach of the CNDA, and sought injunctive relief.
- The district court granted a TRO and then a preliminary injunction, finding likelihood of success on trade secret and contract claims, irreparable harm, favorable balance of hardships, and no disservice to the public interest.
- VHS obtained a stay pending appeal and challenged both the grant and breadth of the preliminary injunction.

## Issues

1. Whether the district court abused its discretion in granting a preliminary injunction based on DHS’s showing of (a) likelihood of success on Texas trade secret misappropriation and CNDA breach claims, (b) irreparable injury, (c) favorable balance of hardships, and (d) consistency with the public interest.
2. Whether the preliminary injunction’s scope was impermissibly broad and required reversal.

## Decision

- The Fifth Circuit affirmed the grant of the preliminary injunction, holding the district court did not abuse its discretion in finding the four preliminary-injunction factors satisfied.
- The court agreed that DHS showed a substantial likelihood of success that its confidential research compilation constituted a trade secret and that VHS likely misused it in developing and marketing Arterosil.
- The court also upheld the finding that VHS likely breached the CNDA by using confidential information beyond the agreement’s permitted purposes.
- The court upheld irreparable harm based on non-quantifiable injuries (including reputational and funding-related harms) and found VHS’s asserted harms largely monetary.
- The court recognized overbreadth concerns but declined to reverse, instead remanding with instructions to expedite trial and to attempt to narrow the preliminary injunction.
- The court lifted the appellate stay.

## Legal Principles

- A confidential compilation of scientific or technical information may qualify as a trade secret even if individual components are publicly known, so long as the compilation as a whole is not generally known and reasonable secrecy measures are used.
- Evidence of access to confidential materials and subsequent rapid development of a similar competing product may support a preliminary finding of likely trade secret use or misappropriation.
- Confidentiality and nondisclosure agreements restricting use and disclosure can support injunctive relief when the recipient likely uses protected information outside authorized bounds.
- Preliminary injunction rulings are reviewed for abuse of discretion; appellate courts generally do not reweigh evidentiary disputes supporting the district court’s likelihood-of-success and equitable-factor findings.
- Injunctive relief should be tailored to the proven interests; overbreadth concerns may be addressed through modification on remand rather than reversal, particularly where the enjoined party did not seek narrowing in the district court.

## Conclusion

The Fifth Circuit affirmed preliminary injunctive relief protecting a confidential scientific research compilation and enforcing a CNDA against a former marketing partner, while remanding to narrow the injunction’s scope and expedite trial.


Daniels Health Scis., L.L.C. v. Vascular Health Scis., L.L.C., 710 F.3d 579 (5th Cir. 2013)