In Vaquero Energy, Inc v Jeff Herda, the United States District Court for the Eastern District of California granted a motion for a preliminary injunction compelling the defendants to produce passwords and related data to the plaintiff.

The plaintiff, Vaquero Energy, Inc, is an oil and gas company that contracted with the defendants in 2008 to provide information technology (IT) maintenance and support.  In 2014, Vaquero restructured its IT requirements and terminated the services of the defendants.  After the restructuring, however, the plaintiff found that certain passwords and systems no longer functioned.  The plaintiffs alleged that the defendants “accessed [the] computer system and imposed new passwords and access control limitations on key or critical PLC devices, a SCADA system, and central Vaquero operations and administrative software, hardware, firmware and systems.”  Although the plaintiff made several requests for the required passwords and related data files, the defendant failed to produce them.

The plaintiff sought an order that the defendant refrain from accessing the plaintiff’s systems and return “any and all system structure, data, documents, software, files and/or folders that [the defendants] ... downloaded, otherwise copied, or in any way received from Vaquero.”  The defendants argued that the requested code was proprietary and protected by copyright.  The defendants further argued that an order to produce its passwords to the code would result in the plaintiff obtaining access to proprietary, confidential and private material without any compensation to the defendants.

Applying the test for a preliminary injunction, the court found that (1) the plaintiff was likely to succeed on a number of grounds, (2) the plaintiff was likely to suffer irreparable harm, partially based on the potential of environmental damage, and (3) that the balance of equities favoured the plaintiff.  Therefore, the court ordered that the defendant refrain from accessing Vaquero’s computers and related systems, and that the defendants produce the requested passwords and related data.

E-TIPS® ISSUE

15 09 23

Disclaimer: This Newsletter is intended to provide readers with general information on legal developments in the areas of e-commerce, information technology and intellectual property. It is not intended to be a complete statement of the law, nor is it intended to provide legal advice. No person should act or rely upon the information contained in this newsletter without seeking legal advice.

E-TIPS is a registered trade-mark of Deeth Williams Wall LLP.