Cole Schotz Secures Victory for Spark Connected in Preliminary Injunction Dispute With Semtech Corp.

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We are pleased to announce that we have secured a significant victory for our client Spark Connected LLC in convincing a federal court in Texas to deny in full the injunctive relief requested by Semtech Corp. Following several months of discovery, extensive briefing, and a two-day evidentiary hearing featuring expert testimony by both sides, Judge Kimberly C. Priest Johnson of the Eastern District of Texas sided with Spark Connected LLC in a September 10 decision

Spark is a wireless power start-up company led by three former Semtech employees, each of whom are also named in the lawsuit. The lawsuit began in October 2018, when Spark and its principals filed a declaratory judgment action in the Eastern District of Texas, asking the Court to declare that they had not misappropriated trade secrets or violated any of their agreements with Semtech. The next month, Semtech asserted counterclaims for trade secret misappropriation and breach of contract and filed a motion for preliminary injunction, which sought to shut down Spark’s business. The parties conducted discovery for several months, including depositions and expert reports.

In denying Semtech’s request, the Court made three key conclusions. First, Semtech had failed to adequately define its alleged trade secrets, thereby failing to comply with Rule 65(d) of the Federal Rules of Civil Procedure. Moreover, the alleged trade secrets were “overbroad, vague, and lack[ing] the specificity required to support injunctive relief.” Second, Semtech could not establish that it would suffer any irreparable harm in the absence of an injunction, particularly since the “evidence tends to indicate Semtech was no longer interested in the wireless power market or had shifted the focus of its business away from that segment….” Third, the Court noted that “Semtech’s delay in requesting injunctive relief, without an adequate explanation, leads the Court to conclude that Semtech suffers no irreparable harm.”

Because Semtech had failed to demonstrate irreparable harm, the Judge Johnson concluded that it was unnecessary to address the evidence regarding any of the substantive elements of Semtech’s claims, all of which were hotly-contested during the preliminary injunction hearing.

The Cole Schotz team that represented Spark Connected LLC included member Aaron D. Davidson and associates Timothy J. Craddock and Brian L. King.

As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.

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