## Facts

- Mallet & Company Inc. developed and sold baking release agents and maintained proprietary formulas, processes, and business information.
- Ada Lacayo and William “Chick” Bowers were long-time Mallet employees with access to Mallet’s technical and commercial information.
- Bundy Baking Solutions decided to enter the baking-release-agent market and created Synova LLC in 2017 to manufacture and sell competing products.
- While still employed by Mallet, Lacayo secretly accepted a position with Synova and copied files from Mallet’s database, including formulas and technical data, emailing them to herself.
- Synova used the information to accelerate development of competing release-agent formulas and related processes.
- Bowers allegedly shared Mallet’s internal pricing, performance, and customer information with Bundy, later joined Synova, and sold Synova products to former Mallet customers.
- Mallet sued in federal district court alleging trade-secret misappropriation and related unfair-competition claims and sought preliminary injunctive relief.

## Issues

1. Whether the preliminary injunction complied with Federal Rule of Civil Procedure 65(d) by identifying the alleged trade secrets and describing the restrained conduct with reasonable detail.
2. Whether the injunction was impermissibly broad because it effectively barred lawful competition without being tied to specified trade secrets.
3. Whether the district court abused its discretion under Rule 65(c) by setting a $500,000 bond rather than a substantially higher amount.

## Decision

- The Third Circuit vacated the preliminary injunction and remanded.
- The court held that a trade-secret preliminary injunction must adequately identify the allegedly misappropriated trade secrets; the order’s generalized references to “formulas” and production/marketing/sales information were insufficient.
- The court directed that any renewed injunction must state its terms specifically and be narrowly tailored to prevent misuse of defined trade secrets rather than restrain competition generally.
- The court instructed the district court to reconsider what equitable relief, if any, is warranted on remand and to reassess the amount of security required under Rule 65(c).

## Legal Principles

- Under Rule 65(d), an injunction must state its terms specifically and describe in reasonable detail the acts restrained or required; generic prohibitions against using “confidential,” “proprietary,” or “trade-secret” information are inadequate.
- A preliminary injunction based on trade-secret misappropriation must identify the protected trade secrets with sufficient clarity to permit meaningful review and to avoid restraining lawful competitive conduct.
- Trade-secret injunctions must be narrowly tailored to the misconduct found; broad market-wide bans on competing products are improper absent a tight connection to specified misappropriated secrets.
- Rule 65(c) security must be calibrated to the likely costs and damages from wrongful restraint; when the scope of injunctive relief is revisited, the bond should be revisited as well.

## Conclusion

The Third Circuit vacated a broad trade-secret preliminary injunction because it failed to specify the trade secrets and risked barring lawful competition; on remand, any injunctive relief must precisely define the protected information, be narrowly tailored, and be supported by an appropriate bond.


Mallet & Co. v. Lacayo, 16 F.4th 364 (3d Cir. 2021)