California Expanded Metal Products Company v. James A Klein, 2:16-cv-05968

Background

Parties previously settled patent litigation; the settlement conference transcript serves as the Settlement Agreement transferring patents to CEMCO and licensing them to ClarkDietrich while leaving UL safety listings with Blazeframe for Clark's benefit.
The Settlement Agreement included that UL approvals/listings would be “maintained” so Clark would continue to benefit from them; Blazeframe expressly stated it would retain and maintain those listings.
UL announced revised testing standards with a May 31, 2017 submission deadline and August 2017 compliance deadline, creating urgency to preserve or update listings.
Plaintiffs allege Defendants threatened to de-list Clark and refuse to assist with re-testing or share testing data; Plaintiffs sought TROs and then a preliminary injunction after interim relief and representations from Defendants proved unreliable.
The court found Plaintiffs likely to succeed on their claim that Blazeframe agreed to maintain UL listings for Clark, that de-listing would cause irreparable harm to Clark’s business/reputation, and that the balance of hardships and public interest favor injunctive relief.
The court ordered Defendants to refrain from actions causing Clark’s de-listing, to reinstate or maintain Clark’s listings if necessary, to produce UL testing/data files to Clark by May 25, 2017, limited Clark’s use of the files to obtaining certifications, and required Clark to post a $100,000 bond.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Settlement Agreement requires Blazeframe to maintain UL listings for Clark	Settlement terms and settlement transcript show Blazeframe agreed to maintain UL approvals so Clark would benefit	Blazeframe says it retained no duties to Clark and may abandon or not include Clark in re-testing	Court: Likely liable; agreement requires Blazeframe to maintain listings for Clark’s benefit
Whether Plaintiffs face irreparable harm absent injunction	Loss of UL listing would cause price erosion, lost contracts, reputational harm and market exclusion	Clark can obtain independent UL listing at its expense (~$98,000), so harm is remedial	Court: Irreparable harm likely — interim loss cannot be cured later and practical obstacles make timely independent certification unlikely
Whether balance of hardships/public interest favor injunction	Hardship to Plaintiffs is severe; burden on Blazeframe to continue listing or share existing data is minimal	Blazeframe claims financial/resource burden and safety/public interest concerns about untested products	Court: Balance favors Plaintiffs; sharing existing data imposes minimal hardship and public interest does not support blocking Clark from certification efforts
Scope of equitable relief (e.g., data production, reinstatement, bond)	Plaintiffs seek injunction, reinstatement, and production of testing/data to enable Clark to certify	Defendants resist production of proprietary data and any obligation to assist; offer to sell data instead	Court: Ordered injunctive relief, reinstatement if needed, compelled production of UL files for certification, and $100,000 bond

Key Cases Cited

Winter v. Natural Resources Defense Council, 555 U.S. 7 (establishes four-factor preliminary injunction standard)
Arcamuzi v. Continental Air Lines, 819 F.2d 935 (9th Cir. 1987) (sliding-scale formulation for injunctions: balancing success likelihood and irreparable harm)
Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127 (9th Cir. 2011) (clarifies that Winter factors must be satisfied even under sliding-scale approach)
Celsis in Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922 (Fed. Cir. 2012) (examples of harms constituting irreparable injury such as loss of goodwill and market share)