## Facts

- SI Handling Systems, Inc. designed automated materials-handling systems and owned and refined the “CARTRAC” system, including detailed engineering specifications and tolerances developed for large industrial customers.
- Several former SI executives and employees left SI and joined entities associated with Michael E. Heisley (including Heico, Inc. and Sy-Con Technology Inc.).
- The departing personnel developed a competing system (“ROBOTRAC”), and SI alleged they used and disclosed confidential CARTRAC-related information in doing so.
- SI sued in federal court asserting trade secret misappropriation (among other claims) and sought preliminary injunctive relief.
- After an extensive evidentiary hearing, the district court entered a preliminary injunction broadly barring defendants from using or disclosing wide categories of CARTRAC-related information (including “know-how,” customer decision-maker identities, supplier information, and engineering data) and effectively restricting further work on ROBOTRAC.
- Defendants filed an interlocutory appeal challenging whether the protected material was actually trade secret and arguing the injunction was vague and overbroad.

## Issues

1. Which categories of information asserted by SI qualified as protectible trade secrets under Pennsylvania law?
2. Whether SI showed a reasonable probability of success on the merits sufficient to support preliminary injunctive relief.
3. Whether the district court properly assessed irreparable harm, balance of hardships, and public interest.
4. Whether the preliminary injunction was impermissibly vague or overbroad and therefore an abuse of discretion.

## Decision

- The Third Circuit vacated the preliminary injunction and remanded for reformulation.
- The court held that some claimed information could qualify as trade secrets (e.g., specific technical methods, dimensions, tolerances, and nonstandard specifications), but other categories protected by the order could not (e.g., general “know-how,” employee skill and experience, and certain customer/supplier-contact information obtainable through ordinary business means).
- The court concluded the injunction’s scope and lack of precision effectively operated as an improper noncompetition restraint and was, in key respects, vague and overbroad.

## Legal Principles

- A preliminary injunction is reviewed deferentially, but must be vacated for abuse of discretion, clear legal error, or serious mistake in evaluating the proof.
- Under Pennsylvania trade secret law, protectible trade secrets generally require (i) independent economic value from not being generally known or readily ascertainable by proper means and (ii) reasonable efforts to maintain secrecy.
- Trade secret protection may cover specific, non-obvious, confidential technical engineering details that provide a competitive advantage.
- Trade secret law does not permit an employer to restrain former employees from using their general skills, experience, or generalized business “know-how.”
- Information such as customer decision-maker identities and supplier alternatives, when obtainable through ordinary industry participation and standard business contacts, is not trade secret merely because it is useful to a competitor.
- Injunctive relief in trade secret cases must precisely identify the protected secrets and be narrowly tailored; it may not function as a de facto noncompetition order absent a valid basis.

## Conclusion

The Third Circuit required that any preliminary injunction for alleged misappropriation be limited to clearly identified, protectible technical trade secrets and rejected broad restraints that sweep in general employee knowledge, routine customer and supplier information, or that effectively bar lawful competition.


SI Handling Sys., Inc. v. Heisley, 753 F.2d 1244 (3d Cir. 1985)