FROM DOC 324 FANTASTIC VICTORY FOR e.DIGITAL ON NON COMPETE CAUSE
in response to
by
Message: PACER digEcor - Rulings on Partial Summary Judgments
With this in mind, the court considers § 6. The parties’ strongest arguments concerning §
6 center on two factors: the interests of the states and the justified expectations of the parties.
digEcor argues that is apparent from the face of Paragraphs 1, 4, 5 and 6 of the 2002 NDA that
the parties expected that e.Digital would not be allowed to compete with digEcor. Moreover,
digEcor places emphasis on the fact that the parties specifically negotiated the length of the non-
2 Because the court finds that the non-compete provision is unenforceable under
California law, the court does not reach the question of whether the information disclosed met
the necessary requirements to be entitled to protection as confidential information.
10
compete clause, showing an expectation that it would be enforceable. digEcor further highlights
the 2002 NDA’s statement that the parties “agree that the terms and provisions of [the 2002
NDA] are valid and binding at all times.” (2002 NDA, ¶ 7, attached as Ex. 4 to digEcor’s Memo.
in Support.) Invalidating the non-compete clause under California law, argues digEcor, would
frustrate the parties’ justified expectation that e.Digital made a valid and binding commitment
not to compete with digEcor in the market for products based on the idea.
6 center on two factors: the interests of the states and the justified expectations of the parties.
digEcor argues that is apparent from the face of Paragraphs 1, 4, 5 and 6 of the 2002 NDA that
the parties expected that e.Digital would not be allowed to compete with digEcor. Moreover,
digEcor places emphasis on the fact that the parties specifically negotiated the length of the non-
2 Because the court finds that the non-compete provision is unenforceable under
California law, the court does not reach the question of whether the information disclosed met
the necessary requirements to be entitled to protection as confidential information.
10
compete clause, showing an expectation that it would be enforceable. digEcor further highlights
the 2002 NDA’s statement that the parties “agree that the terms and provisions of [the 2002
NDA] are valid and binding at all times.” (2002 NDA, ¶ 7, attached as Ex. 4 to digEcor’s Memo.
in Support.) Invalidating the non-compete clause under California law, argues digEcor, would
frustrate the parties’ justified expectation that e.Digital made a valid and binding commitment
not to compete with digEcor in the market for products based on the idea.
AND THE FINAL ANSWER : After reviewing the relevant case law, the court agrees with e.Digital. As explained by
the Tenth Circuit, “[a]lthough the parties may have expected the covenants [not to compete] to be
11
enforced, the policy of protecting justified expectations does not supersede all other
considerations.”
the Tenth Circuit, “[a]lthough the parties may have expected the covenants [not to compete] to be
11
enforced, the policy of protecting justified expectations does not supersede all other
considerations.”
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