United States District Court, D. Delaware
February 10, 2017, CrowdStrike, Inc. filed suit against NSS
Labs. Inc. (D.I. 3). Presently before the court is
CrowdStrike's motion for a temporary restraining order
and preliminary injunction (D.I. 2), filed contemporaneously
with its Complaint. (D.I. 3). CrowdStrike's motion
requests that the court order NSS: (1) "to refrain from
using any CrowdStrike software in any public test"; (2)
"to refrain from publishing any document or writing
discussing or related to CrowdStrike, " its software,
its technology, or its information; (3) "to comply with
all contractual terms including destruction or return of the
Falcon software and any other CrowdStrike technology";
and (4) "to identify to CrowdStrike all circumstances in
which third parties have been provided by NSS Labs with
CrowdStrike technology or information already and ensure
return or destruction of all such technology and
information." (D.I. 2 at 12-13). For the reasons that
follow, this court will deny CrowdStrike's motion.
is a cybersecurity company that provides "cloud-based
endpoint threat detection to clients." (D.I. 3 at 2).
CrowdStrike developed the Falcon software to provide advanced
endpoint protection "by combining next-generation
antivirus, endpoint detection and response, and proactive
features." Id. NSS is a company .that, among
other things, tests cybersecurity software and tools
available in the marketplace to determine how well they stand
up to attacks. (D.I. 7 at 3); (D.I. 3 at 3). In addition to
conducting public tests, NSS also conducts private tests of
cybersecurity platforms under contracts with vendors. (D.I. 3
April 11, 2016, CrowdStrike and NSS executed the Private
Engagement Agreement #3246 ("Private Agreement"),
whereby NSS was to conduct a private test of
CrowdStrike's Falcon cybersecurity platform and provide
CrowdStrike with a report detailing the results of the test.
(D.I. 3, Ex. 2). According to the Complaint, NSS failed to
perform the tests in a way that CrowdStrike deemed accurate
and acceptable. (D.I. 3 at 11-12). NSS conducted additional
testing to attempt to remedy the failures CrowdStrike
identified. Id. at 8. Around January 18, 2016,
during discussions regarding a third round of private
testing, NSS notified CrowdStrike that it was planning to
perform a public test of the Falcon software. Id. It
is the results of NSS's public test that CrowdStrike
seeks to enjoin NSS from disclosing during a major technology
gathering which begins on February 14, 2017, known as the RSA
Conference. (D.I. 2 at 12-13).
STANDARD OF REVIEW
Rule of Civil Procedure 65 permits a party to seek a
preliminary injunction or a temporary restraining order prior
to trial proceedings. Fed.R.Civ.P. 65(a), (b). A preliminary
injunction is "an extraordinary remedy, which should be
granted only in limited circumstances." Frank's
GMC Truck Or., Inc. v. Gen. Motors Corp., 847 F.2d 100,
102 (3d Cir. 1988) (citation omitted). In certain situations
where a party faces the possibility of irreparable harm
before the court can hold a hearing on the motion for a
preliminary injunction, a temporary restraining order may be
appropriate to preserve the status quo and prevent such
irreparable harm. See Granny Goose Foods, Inc. v. Bhd. of
Teamsters & Auto Truck Drivers Local No. 70 of Alameda
Cty., 415 U.S. 423, 439 (1974). Specifically, a
temporary restraining order or a preliminary injunction
should only be granted if: (1) the plaintiff is likely to
succeed on the merits; (2) denial will result in irreparable
harm to the plaintiff; (3) granting the preliminary relief
will not result in even greater harm to the nonmoving party;
and (4) granting the injunction is in the public interest.
See Tanimura & Antle, Inc. v. Packed Fresh Produce,
Inc., 222 F.3d 132 (3d Cir. 2000) (citing Council
for Alternative Political Parties v. Hooks, 121 F.3d
876, 879 (3d Cir. 1997)). A court should balance these
factors in determining whether to grant either form of
relief, and should deny such relief where the plaintiff has
failed to establish each element. See NutraSweet Co. v.
Vit-Mar Enterprises, Inc., 176 F.3d 151, 153 (3d Cir.
1999); In re Arthur Treacher's Franchisee
Litig., 689 F.2d 1137, 1143 (3d Cir. 1982).
deciding whether to issue a temporary restraining order, the
Third Circuit has required courts to consider the four
elements defined in the Standard of Review. Each of these
elements will be considered in turn below. Before the court
addresses each element, it wishes to discuss the issue of
subject matter jurisdiction in this case.
jurisdiction is non-waivable, and, as such, "courts have
an independent obligation to satisfy themselves of
jurisdiction if it is in doubt." Nesbit v. Gears
Unlimited, Inc., 347 F.3d 72, 76 (3d Cir. 2003).
Accordingly, it is proper for the court to raise sua
sponte subject-matter jurisdiction concerns.
Id. Here, the parties are in federal court because
the complaint includes a count arising under of the laws of
the United States. See Merrell Dow Pharm. Inc. v.
Thompson, 478 U.S. 804, 808 (1986). The parties, both
being citizens of Delaware, do not satisfy the requirements
for diversity jurisdiction. 28 U.S.C. § 1332 (2012).
contends that federal jurisdiction is not proper here because
the Complaint "fails to plausibly state a claim under
the Defend Trade Secrets Act." (D.I. 7 at 6). While the
court does not have before it a Rule 12(b)(1) motion, it
still finds the customary 12(b)(1) analysis instructive.
See Fed. R. Civ. P. 12(b)(1). "A Rule 12(b)(1)
motion may be treated as either a facial or a factual
challenge to the court's subject matter
jurisdiction." Gould Elecs. Inc. v. United
States, 220 F.3d 169, 176 (3d Cir. 2000). When the court
analyzes a facial attack on subject-matter jurisdiction, it
must only consider the allegations in the complaint in the
light most favorable to the plaintiff. See Id. The
court finds the current arguments that NSS makes with regard
to subject-matter jurisdiction analogous to a facial attack
usually made in a 12(b)(1) motion. As such, though the court
finds CrowdStrikes' claim that NSS misappropriated trade
secrets tenuous at best, the court will exercise jurisdiction
over CrowdStrike's motion for a temporary restraining
order because it considers the facts alleged in the complaint
in the light most favorable to CrowdStrike.
Likelihood of Success on the Merits 1. Breach of
prove likelihood of success on the merits for a breach of
contact claim, CrowdStrike's first count in its
Complaint, the party must provide evidence of: "(1) a
contractual obligation; (2) a breach of that obligation by
the defendant; and (3) resulting damage to the
plaintiffs." Greenstar, LLC v. Heller, 814
F.Supp.2d 444, 450 (D. Del. 2011).
and NSS entered into the Private Agreement, which neither
party disputes was a valid contract. (D.I 2 at 6); (D.I. 7 at
7). At this stage in the proceedings, the court is not
persuaded that CrowdStrike is likely to succeed on the merits
of its breach of contract claim. CrowdStrike alleges that NSS
plans to publish information that it developed through use of
the Falcon software during the private tests. (D.I. 2 at
6-7). NSS maintains that any information it plans to disclose
in its report on the effectiveness of the Falcon tool it
acquired through its public, not private test. (D.I. 7 at
7-8). CrowdStrike argues, in turn, that the contract
prevented NSS from conducting a public test altogether. (D.I.
2 at ...