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DTSA Seizures Are Not Effectively Injunctive for Appeal

Posted by James Juo | Nov 06, 2023 | 0 Comments

As a general rule, federal courts of appeals only have jurisdiction to review final decisions of the district courts. See Zurn Indus., LLC v. Allstate Ins. Co., 75 F.4th 321, 327 (3d Cir. 2023). One exception is for non-final preliminary injunctions. See 28 U.S.C. § 1292(a)(1).

To determine whether a non-final order is effectively injunctive, the Third Circuit applies a three-part “functional test”—whether the order (1) is “directed to a party,” (2) may be enforced by contempt, and (3) is “designed to accord or protect some or all of the substantive relief sought by a complaint in more than a [temporary] fashion.” Zurn, 75 F.4th at 326–27 (quoting Cohen v. Bd. of Trs. of Univ. of Med. & Dentistry of N.J., 867 F.2d 1455, 1465 n.9 (3d Cir. 1989) (quotation marks omitted)); see also Ramara, Inc. v. Westfield Ins. Co., 814 F.3d 660, 669–70 (3d Cir. 2016).

In Janssen Products LP v. Evenus Pharmaceuticals Laboratories Inc., No. 22-2426, — F.3d — (3d Cir. Oct. 26, 2023), the Court held that “no DTSA seizure order can satisfy the first or the second prong.” Because a seizure order is directed to law enforcement, a party cannot be held in contempt for failing to comply with an order that does not direct it to do or refrain from doing anything. Thus, according to the Third Circuit, a DTSA seizure order cannot be directly appealed because it is not an injunction.

The Court distinguished ex parte seizures under the Lanham Act because the text of the Lanham Act made plain that ex parte seizure orders granted under that statute are injunctions. Vuitton v. White, 945 F.2d 569, 572 (3d Cir. 1991) (concluding that Congress “viewed § 1116(d) seizure orders as a form of injunctive relief” when construing the text of § 1116(d) and 28 U.S.C. § 1292(a)(1) together). Also, seizures under the Lanham Act function like a temporary restraining order because Section 1116(d) requires a hearing within 15 days. Id. at 573.

The Third Circuit held that DTSA ex parte seizure rulings were not immediately appealable.

The attorneys at Thomas P. Howard, LLC litigate trade secret cases nationwide including in Colorado.

About the Author

James Juo

James Juo is an experienced intellectual property attorney. He has successfully litigated various intellectual property disputes involving patents, trademarks, copyrights, and trade secrets. He also has counseled clients on the scope and validity of patent and trademark rights.


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