The Proof Required for a Massachusetts Trade Secret Injunction After Daikin

In Daikin Applied Americas Inc. v. Russo, SJC-13881 (Oct. 14, 2026), the Massachusetts Supreme Judicial Court held that a plaintiff seeking a preliminary injunction for trade secret misappropriation must prove irreparable harm, even if it establishes a likelihood of success on the merits. The plaintiff must show why the injury likely to occur without the requested relief cannot adequately be remedied through a final judgment.

The decision rejects an approach used in several District of Massachusetts cases, including DraftKings Inc. v. Hermalyn. Because Daikin had already obtained an order requiring the return of its confidential information and prohibiting its use, the company needed to show why a further restriction on customer solicitation was necessary to prevent irreparable harm. The SJC affirmed the denial of that restriction because Daikin had not made that showing.

Daikin sought to bar former employees from soliciting its customers

Daikin, a company that provides and maintains HVAC systems for institutional clients, alleged that two employees, Joseph Russo and Andrew Porter, forwarded confidential company information to personal accounts, formed a competing HVAC business while still employed, and later used the information to compete for Daikin customers. The materials included customer lists, project pricing and costs, service bulletins, and equipment passwords. The defendants denied that the materials they took were confidential or proprietary, apart from one nonpublic bid document. Daikin, slip op. at 2–3 & n.2.

Daikin asked the court to order the defendants to return its confidential information, stop using it, submit their devices for a forensic examination, and refrain from soliciting 75 identified customers for one year, including withdrawing pending bids. The court ordered the defendants to return and stop using the information, as they had agreed. The defendants also expressed a willingness to negotiate a narrower forensic examination, leaving the request to prohibit customer solicitation as the only contested issue at the injunction hearing.

Although the Superior Court judge questioned whether the information was sufficiently secret to qualify for protection under Massachusetts trade secret law and whether Daikin had adequately protected it, the court denied the requested ban on customer solicitation because Daikin had failed to show irreparable harm even if its claims were likely to succeed. The SJC transferred the appeal from the Appeals Court on its own initiative and affirmed the denial of the customer-solicitation injunction based on the lack of irreparable harm, without deciding whether Daikin was likely to succeed on its misappropriation claim.

The SJC confirms that trade secret injunctions require proof of irreparable harm

Relying on federal decisions that treated the loss of a trade secret as permanent, the plaintiff urged the SJC to presume irreparable harm whenever a plaintiff established that it was likely to succeed on the merits of its misappropriation claim. The Massachusetts Uniform Trade Secrets Act (MUTSA), however, authorizes injunctions “upon principles of equity,” which require a separate assessment of the injury likely to occur without the requested order. G. L. c. 93, § 42A(a).

The SJC rejected Daikin’s argument, reasoning that a blanket presumption would eliminate that assessment whenever a plaintiff showed likely success on its trade secret claim. The court reaffirmed the longstanding requirement that a party seeking a preliminary injunction must show irreparable harm and clarified that trade secret claims receive no exception. A judge must consider the particular allegations, the injury that a final judgment could not remedy, and whether the requested relief would prevent it. Daikin, slip op. at 10–13. The court drew on eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006), and federal appellate decisions applying traditional equitable principles to trade secret injunctions.

Daikin’s evidence of lost customers did not establish irreparable harm

Daikin also argued that, even without a presumption of irreparable harm, its evidence satisfied that requirement. Losing customers would mean losing goodwill and future maintenance revenue, and because maintenance needs were unpredictable, the company maintained that the future value of those relationships could not be calculated.

Daikin’s district manager identified customers with whom the employees had significant contact or about whom they had access to confidential information, but his affidavit did not explain how continued solicitation would damage Daikin’s goodwill or why the resulting losses could not be measured in money damages. Those assertions appeared only in counsel’s argument. The SJC concluded that economic models based on historical information could approximate lost HVAC sales and maintenance revenue, so uncertainty about their precise future value did not establish that a damages award would be inadequate. Daikin, slip op. at 9–10 & n.9.

Although the SJC recognized that economic harm may become irreparable when it threatens a business’s existence, it did not make that showing a requirement in every case. The governing question remains whether a final judgment can remedy the injury, including any injury to goodwill that the plaintiff supports with evidence.

The SJC rejects the presumption stated in DraftKings

Daikin relied on DraftKings Inc. v. Hermalyn, 732 F. Supp. 3d 84, 119–20 (D. Mass. 2024), to support its argument for a presumption of irreparable harm. In that case, the federal District Court stated that “irreparable harm is presumed at the preliminary injunction stage when the plaintiff shows a likelihood of success on its claims for misappropriation of trade secrets.” The SJC pointed out, however, that DraftKings also found irreparable harm independently of the presumption. Daikin, slip op. at 10–11 n.10.

In DraftKings, the executive had signed confidentiality, nonsolicitation, and noncompetition agreements before joining a direct competitor in a similar role. The District Court found that he likely misappropriated confidential information, breached his noncompete, and solicited DraftKings employees. His noncompete also acknowledged that a breach would cause irreparable harm. The court therefore had grounds to find irreparable harm without relying solely on a presumption, which distinguishes the result from Daikin’s request for relief without evidence establishing irreparable harm.

Implications for federal trade secret injunctions

Although the First Circuit affirmed DraftKings, 118 F.4th 416 (1st Cir. 2024), it focused on whether Massachusetts or California law governed the noncompete and whether the injunction should exclude California from its geographic scope. It did not address whether trade secret misappropriation creates a presumption of irreparable harm, so the appellate decision does not settle the issue left by Daikin.

Daikin clarified the proof required for a preliminary injunction under Massachusetts law without changing the elements of a trade secret misappropriation claim. Federal courts generally apply federal preliminary injunction standards, so whether they will continue to presume irreparable harm remains unsettled. But the SJC relied on federal equitable principles in rejecting the presumption, giving defendants a basis to challenge it in federal court and plaintiffs reason to prepare evidence of irreparable harm regardless of where they file.

Takeaways for trade secret injunction practice

It was not enough for Daikin to identify the customers it might lose and ask the court to presume irreparable harm from the alleged misappropriation. A plaintiff seeking to restrict a former employee from soliciting customers or competing needs supporting evidence explaining how it would be harmed, why damages would be inadequate, and why an order barring use or disclosure of the information would not sufficiently protect it.

For defendants, an agreement to return information and refrain from using it may address the demonstrated threat while preserving a challenge to broader restraints. The remaining dispute can then focus on the evidence supporting each additional restriction, including whether the claimed losses can reasonably be measured and whether the assertions about goodwill appear in an affidavit or only in the brief.

For background on the two statutes, see our guide to Massachusetts trade secret litigation under MUTSA and DTSA. Our commercial litigation team advises businesses seeking or opposing injunctions involving trade secrets and unfair competition.