## Facts

- Pacific Aerospace & Electronics, Inc. (PAE), a Washington engineering and manufacturing company, relied on confidential customer information and proprietary technology.
- Edward Taylor (PAE Vice President for Engineering) and James Petri (PAE Engineering Manager) had access to PAE’s confidential information, customer lists, and proprietary information.
- Taylor and Petri signed agreements requiring confidentiality and assignment to PAE of inventions made during employment.
- After leaving PAE, Taylor and Petri allegedly formed or operated RAAD Technologies, Inc., a competing business.
- PAE alleged defendants accessed PAE computer systems without authorization (or exceeded authorized access), copied or retained data, and used it to benefit RAAD.
- PAE asserted the information had independent economic value and was subject to reasonable secrecy measures, qualifying as trade secrets under Washington law.

## Issues

1. Whether the complaint stated a civil claim under the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030, sufficient to support federal question jurisdiction.
2. Whether PAE met the requirements for a preliminary injunction based on likely success (CFAA and trade secret claims), irreparable harm, balance of hardships, and public interest.

## Decision

- The court held PAE adequately pleaded a CFAA claim and therefore invoked federal question jurisdiction.
- The court granted PAE’s motion for a preliminary injunction.
- The court found PAE showed a likelihood of success on its CFAA and Washington trade secret misappropriation claims.
- The court found irreparable harm due to threatened loss of competitive position, customer relationships, and control over proprietary technology.
- The court found the balance of hardships favored PAE; any harm to defendants flowed from the alleged misconduct.
- The injunction ordered defendants to return PAE property and restrained them from contacting PAE customers and selling technology derived from PAE proprietary information while the case proceeded.

## Legal Principles

- A properly pleaded civil claim under the CFAA can supply federal question jurisdiction in a dispute involving alleged unauthorized access to a private employer’s computer systems.
- For preliminary injunctive relief, a plaintiff must show likely success on the merits, irreparable harm, a favorable balance of hardships, and consistency with the public interest.
- Under Washington trade secret law, information may qualify as a trade secret when it has independent economic value from not being generally known and is subject to reasonable secrecy efforts, including confidentiality agreements.
- Irreparable harm may be established where misappropriation threatens loss of customer relationships, competitive standing, and control over proprietary technology, which may not be fully compensable through damages.

## Conclusion

The court sustained federal jurisdiction based on a pleaded CFAA claim and issued a preliminary injunction to prevent former employees and their alleged competing company from using or exploiting PAE’s confidential and trade secret information, requiring return of company property and restricting customer contact and related sales pending litigation.


Pacific Aerospace & Elecs., Inc. v. Taylor, 295 F. Supp. 2d 1188 (E.D. Wash. 2003)