Fox Rothschild Litigators Defeat Federal Court Injunction Bid in E-Commerce Technology Dispute
In a high-stakes battle over e-commerce technology, a Fox Rothschild litigation team led by partners Richard Scharlat and Ellie Barragry, along with associate Michael Burke, successfully blocked an injunction sought by Route App, Inc., the world’s leading provider of package tracking and shipping insurance services for e-commerce merchants.
Fox represents Marc Heuberger, an Israel-based e-commerce consultant who developed a new technology for online merchants after one of his clients – Defendant ElevatiONE, a UK-based beauty brand – became dissatisfied with Route due to ineffective claims handling and delays.
Route, a privately held company valued at more than $1 billion, accused Heuberger of breach of contract, tortious interference, and misappropriation of trade secrets, among other claims, alleging that he is marketing a “knock-off version” of Route’s product, which is installed as a widget on the merchant’s website.
But the Fox team argued that all of Route’s claims are premised on “baseless theories and false allegations” about the nature of Heuberger’s business and Route’s alleged trade secrets. Route’s motion for Temporary Restraining Order, they argued, should be rejected because it was nothing more than “a bad faith attempt to squash legitimate competition” and to litigate Heuberger out of business.
“If a billion-dollar behemoth is afraid of competition, the law says it should pivot rather than seek unwarranted injunctions against entrepreneurs,” the Fox team wrote in their brief.
Now a federal judge in Utah has refused to impose any injunction, issuing a decision that adopts many of Fox’s central arguments.
After extensive briefing and in-person oral argument, U.S. District Judge Ted Stewart concluded in his July 26, 2022 Memorandum Decision and Order that Route failed to satisfy the threshold requirements for obtaining an injunction because: (1) it could not demonstrate irreparable harm; (2) a determination of likelihood of success on the merits “required resolution of significant factual disputes central to those claims, including whether Defendants even had access to Route’s proprietary and confidential information;” (3) the balance of equities favored Heuberger; and (4) injunctive relief in this instance would be anti-competitive.
Judge Stewart noted that given Route’s position in the market, and under the circumstances, its loss of dozens of customers out of thousands did not outweigh the harm of preventing Heuberger from marketing and selling his technology.
Fox was supported by local counsel Walter A. Romney Jr., a partner at Clyde Snow & Sessions in Salt Lake City.