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Trade Secret Injunctions After Daikin v. Russo: What SOLIDWORKS Teams Must Prove When Design Data Walks Out | SolidWorks | Register and Certify IP of CAD design

2026-10-21 14:50 News
On 14 October 2026, the Massachusetts Supreme Judicial Court ruled that a company asking for a fast court order in a trade secret case must prove actual irreparable harm. It cannot rely on a presumption, even when it is likely to win on the claim that its secrets were misused. The case, Daikin Applied Americas Inc. v. Russo, began when two employees of the commercial HVAC company left to run a competing business.
The ruling was about customer contacts, pricing and service information, not CAD files. But the rule covers any trade secret, and for engineering companies the most valuable trade secrets are often drawings, 3D models and manufacturing know-how. If a designer leaves and takes a copy of your SOLIDWORKS project folder, the first thing you will want is an urgent court order. This decision shows what a court in Massachusetts will ask for before it gives you one.
The short answer: evidence and contracts. Not a feeling that something bad happened. Here is what the court decided, why it matters beyond one state and one HVAC company, and what SOLIDWORKS teams can put in place now, before anyone hands in their notice.
TL;DR: a likely win is not enough for an urgent order

Massachusetts' highest court said a trade secret owner must show real harm that money cannot fix before a judge will grant a preliminary injunction. Lost sales that can be calculated did not count. Daikin also had no non-compete or non-solicitation agreement with the two employees, and the court would not hand it a restriction it had never agreed with them. For design teams the lesson is simple: put the right clauses in employment and supplier contracts, keep dated records of who created and accessed which design files, and be ready to explain in an affidavit why a leak of your models would cause harm that a later payment cannot repair.

What happened in Daikin v. Russo?

According to the ACHR News report on the ruling and a client advisory from the Boston law firm Nutter, Daikin Applied Americas claimed that two employees set up a competing business, RPAC, before they left. Before their departures, they allegedly forwarded confidential company information to personal email accounts. Nutter lists customer contacts, pricing and cost information, internal service bulletins and equipment passwords. ACHR News reports that the emails started in 2024 and that Daikin sued in May 2025 under common law and the Massachusetts Uniform Trade Secrets Act.
Daikin asked the Superior Court for a preliminary injunction that would require the former employees to:
  • return its confidential information;
  • stop using that information;
  • hand over their devices for a forensic examination;
  • stay away from 75 named Daikin customers for one year.
The two former employees agreed to the first three points in a limited form. They agreed to return the information, not to use it and to a limited forensic review. They fought the customer ban. Neither of them had signed a non-compete or a non-solicitation agreement. The Superior Court refused the customer ban because Daikin had not shown irreparable harm. Daikin appealed, and the Supreme Judicial Court unanimously affirmed that decision on 14 October 2026.

What did the court decide about irreparable harm?

Daikin argued that once a company shows it is likely to win a trade secret claim, irreparable harm should be presumed. The court said no. As Nutter summarises it, an employer seeking such an order must show actual irreparable harm instead of relying on a presumption, and that harm must be more than damages that can be counted.
ACHR News quotes the decision directly: "Harm is irreparable if it cannot be remedied through a final judgment." Lost HVAC sales and maintenance contracts can be calculated, so the court treated them as harm that money can fix later. According to Nutter, the court also found that Daikin's claims about lost goodwill were not backed by affidavit evidence in the lower court.
Two more points stand out for anyone who manages design data:
  • Contracts matter. Daikin had no non-compete or non-solicitation agreement with the two employees. In Nutter's reading, the court would not use a trade secret claim to give Daikin a restriction it had never bargained or paid for.
  • Cooperation reduces what a court will add. The former employees had already agreed to return the information and not to use it. With that in place, the court saw no basis for a further customer ban.
The ruling does not end the case. Daikin's trade secret claims continue, and the former employees remain barred from using its confidential information. What Daikin lost was the fast, extra restriction it wanted at the start.

Why does this matter for SOLIDWORKS teams if no CAD files were involved?

Because the rule is about trade secrets in general. Drawings, 3D models, tolerances, fixtures, BOMs and process notes are classic engineering trade secrets. Our guide to trade secret protection for CAD files explains why many companies rely on secrecy rather than patents for this kind of know-how.
In a design dispute, a company will often ask a court for an urgent order to stop a former engineer or a competitor from using its models. After this decision, at least in Massachusetts state courts, it must explain why a later money award would not repair the damage. That is easier to argue for some design data than for customer lists, for example when a leak would put unique geometry in a competitor's hands before you launch. But it still has to be argued with evidence, not assumed.
Other courts and other legal systems apply their own tests. We recently covered a very different outcome in India, where the Delhi High Court granted Dassault an interim injunction over unlicensed SOLIDWORKS use on the strength of concrete technical evidence. The common thread is the same: courts act faster when the evidence is ready.

What evidence helps when design data walks out of the door?

The table below compares what Daikin had, as reported, with what an engineering company can prepare in advance for its design data. It is general information, not legal advice.
Question a court asksIn Daikin v. Russo (as reported)What a SOLIDWORKS team can prepare
Was there a secret, and was it yours?Customer, pricing and service informationDated records of who created each design version
Was it taken or misused?Emails to personal accounts from 2024PDM access, check-out and export logs
Is the harm beyond money?Lost sales were calculable; goodwill claim lacked affidavit evidenceWritten explanation of what a leak of specific models would do, for affidavits
Did the person agree to limits?No non-compete or non-solicitation agreementEmployment IP clauses, NDAs and, where lawful, non-solicitation clauses
What has already been done?Employees agreed to return and not use the dataOffboarding checklist, return confirmation and device checks
Make your design records ready before you need them in court.

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Which contract clauses should engineering companies check?

The court's point about contracts is the most practical part of the ruling. A trade secret claim protects the secret itself. It does not automatically stop a former employee from working for a competitor or calling your customers. If you need those limits, they have to be agreed in advance and be enforceable where the employee works.
Massachusetts already restricts employee non-compete agreements by statute, so non-solicitation and confidentiality clauses carry much of the weight there. Rules differ by state and by country, so ask an employment lawyer which clauses are valid for your team. As a starting point, check that your contracts cover:
  • who owns designs created during employment, including work done at home or on personal devices, as described in our article on CAD asset ownership in employment contracts;
  • confidentiality that survives the end of employment, with a clear duty to return and delete company files;
  • non-solicitation of customers and staff where the law allows it;
  • the same points for freelancers, contractors and suppliers who receive your models.
Remember that an NDA is only a promise. Our guide to why NDAs alone are not enough for CAD files explains its limits, and our overview of contract clauses for CAD IP protection lists the wording to discuss with your lawyer.

What should SOLIDWORKS teams do now?

Most of this work is cheap and can be done before anyone leaves:
  1. Review contracts. Check employment, freelance and supplier agreements for IP ownership, confidentiality, return of files and, where lawful, non-solicitation.
  2. Lock down PDM. Give people access to the projects they work on, not the whole vault. The SOLIDWORKS PDM security guide explains permissions per folder and state.
  3. Keep access and export logs. Make sure check-outs, downloads and exports are recorded and kept long enough. See CAD file audit trails.
  4. Block easy exits. Limit personal email, personal cloud sync and USB drives on CAD workstations, as covered in our guide to preventing unauthorized CAD file downloads.
  5. Register key design versions. Keep independent, dated proof of who created which version, so you can show what was yours on which date.
  6. Write down why your designs matter. For key products, note what a leak would cost beyond lost sales, such as an early copy before launch or lost exclusivity with a customer. This is the raw material for an affidavit.
  7. Run a proper offboarding. Revoke access on the last day, collect devices, ask for written confirmation that files were returned and deleted, and note any recent large downloads.
  8. Act fast and with documents. If you suspect misuse, talk to a lawyer at once and bring logs, records and contracts. Our article on evidence requirements in CAD IP litigation explains what usually counts.

How does BORIS for SOLIDWORKS help?

In a trade secret dispute, the first questions are often basic: was this design yours, and did it exist in this form on this date? File metadata can be edited, and screenshots prove little. A court will want records it can trust.
BORIS for SOLIDWORKS, the add-in by CADChain, registers your CAD files with a blockchain timestamp from inside SOLIDWORKS and gives you a certificate of ownership for each registered version. It does not replace contracts, PDM permissions or a lawyer. It adds an independent, dated record that sits alongside them. See how blockchain records work as legal evidence, how to prove authorship of CAD designs and the BORIS plugin installation guide for SolidWorks.

How does this fit the bigger picture for CAD users?

Across our network this week, the common thread is proof and control over who can reach your design data:
The same questions run through our recent coverage of ransomware gangs stealing CAD drawings from manufacturers: if your design data leaves the company, can you show what it was, who made it and when?

Conclusion

Daikin v. Russo is a reminder that a strong feeling of being wronged does not get you an urgent court order. In Massachusetts, a trade secret owner must now show real harm that money cannot fix, and the court will look closely at what the employee actually agreed to.
For SOLIDWORKS teams, the work starts long before a dispute: clear contracts, tight PDM permissions, logs that are kept, a proper offboarding routine and dated proof of your own designs. Those are the documents a lawyer will ask for on day one.
Have your proof ready on day one.

BORIS for SOLIDWORKS adds blockchain timestamps and certificates of ownership to your CAD files, right inside SOLIDWORKS.

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FAQ: trade secret injunctions and design data

What did the court decide in Daikin Applied Americas v. Russo?

On 14 October 2026, the Massachusetts Supreme Judicial Court unanimously held that a company seeking a preliminary injunction for trade secret misappropriation must show actual irreparable harm. Irreparable harm is not presumed, even when the company is likely to win on its claim.

Were CAD files involved in the Daikin case?

No. The information described in reports was customer contacts, pricing and cost information, internal service bulletins and equipment passwords. The rule, however, applies to trade secrets in general, including drawings and 3D models.

Does this ruling apply outside Massachusetts?

It binds Massachusetts state courts. Other states, federal courts and other countries apply their own tests, so ask a lawyer where your employees and your dispute are based.

Did the former Daikin employees win the case?

Not yet. The ruling only refused the urgent one-year customer ban. Daikin's trade secret claims continue, and the former employees agreed to return its information and not to use it.

What counts as irreparable harm?

Harm that a later money award cannot repair. Lost sales that can be calculated usually do not count. Claims of lost goodwill need real evidence, such as affidavits, not general statements.

What should an engineering company do when a designer leaves?

Revoke access on the last day, collect devices, ask for written confirmation that files were returned and deleted, review recent PDM downloads and exports, and talk to a lawyer quickly if anything looks wrong.

How can I prove which designs were mine and when?

Keep PDM history, access logs and independent dated records. BORIS for SOLIDWORKS registers CAD files with a blockchain timestamp and gives you a certificate of ownership for each registered version.