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Norbrook Laboratories Ltd. v. G.C. Hanford Manufaturing Co.
Citation: 126 F. App'x 507Docket: No. 03-7720L, 03-9351CON
Court: Court of Appeals for the Second Circuit; March 22, 2005; Federal Appellate Court
Hanford Manufacturing Company appeals a preliminary injunction that prohibits it from producing and marketing Penicillin G Procaine (PGP) using any part of Norbrook Laboratories Limited’s in-situ process or confidential information. The appellate court reviews the district court's decision for abuse of discretion, affirming the injunction based on findings that Norbrook demonstrated irreparable injury and sufficiently serious questions regarding the merits of its unfair competition claim. The district court determined that Hanford misappropriated Norbrook's trade secret, establishing that Norbrook was the first to develop the in-situ process after extensive experimentation. Hanford's attempts to obtain Norbrook's process from various sources culminated in hiring a former Norbrook employee who quickly replicated the process for Hanford. The court found that Hanford's actions involved an element of bad faith, aligning with New York law’s definition of unfair competition, which requires misappropriation of another's labor and expenditures. Hanford contested the applicability of New York's unfair competition law without misappropriation of a trade secret; however, the appellate court noted that the trade secret's definition could become clearer in future proceedings. The court also ruled against Hanford's statute of limitations defense, determining that the claim was timely as Norbrook did not compete using the misappropriated information until 2002 and filed suit in 2003. Additionally, the district court's conclusion regarding the potential for irreparable harm to Norbrook was upheld, citing that the loss of market leadership constitutes irreparable harm. The balance of hardships was found to favor Norbrook. Consequently, the appellate court affirmed the district court's order without addressing the trade secret claim.