IP Law Daily, TRADE SECRETS—N.D. Cal.: Preliminary injunction issued to protect marketing company’s software and systems, (May 29, 2026)

By Brian Craig, J.D.

The court found “ample support” for misappropriation of trade secrets by a former employee that included copying at least 46 files.

The federal district court in San Franisco, California has entered a preliminary injunction in favor of a search marketing company, of Capconvert, LLC, against a former employee for alleged misappropriation of trade secrets and confidential information for use in a competing business venture. The court found “ample support” for misappropriation of trade secrets by the former employee that included copying at least 46 files, downloading a client list, and sharing nine files. In granting the preliminary injunction, the court found that Capconvert demonstrated that it is likely to suffer irreparable harm absent injunctive relief, that the balance of equities tips in its favor, and that an injunction serves the public interest (Capconvert, LLC v. Brown, No. 3:26-cv-02149-CRB (N.D. Cal. May 26, 2026)).

Capconvert, LLC is a search marketing company that helps businesses rank at the top of Google, AI search engines, and paid media channels. Capconvert provides businesses with search engine optimization, generative engine optimization, answer engine optimization, and paid ad management services. Capconvert hired an employee, Benjamin Brown, in July 2025 as a partner for creating new processes and improving systems. The former employee had full access without restriction to everything in Capconvert’s systems. Brown began working on a new venture, named Signyl, in early February 2026. Brown then resigned or was terminated on February 22, 2026, by Capconvert. An audit revealed that the former employee made copies of at least 46 files on the marketing company Google Drive’s account and copied other files. Capconvert filed suit against the former employee and his company, Signyl LLC, in the federal district court in California. The complaint alleges misappropriation of trade secrets in violation of the Defend Trade Secrets Act as well as violations of the Lanham Act, California’s Uniform Trade Secrets Act, and California’s False Advertising Law. The court held a hearing and granted a temporary restraining order. Capconvert then moved for a preliminary injunction. The court issued a reacted opinion protecting certain trade secrets in the public version.

Likelihood of success. The court found that Capconvert sufficiently demonstrated that the former employee misappropriated trade secrets and that Capconvert would likely succeed on the misappropriation of trade secrets claims. The court found “ample” evidence that the former employee acquired trade secrets by improper means when he copied and shared trade secrets from Capconvert’s Google Drive to his Signyl account without authorization in the weeks before he resigned. The former employee made copies of and changed the permissions on at least 46 Capconvert files to include his Signyl email address before he left. Two days before he resigned, the former employee shared nine documents created by a Capconvert employee. The former employee also downloaded Capconvert’s client list. Capconvert further alleges that the former employee used the company’s trade secrets without consent when he used them as AI training inputs to develop Signyl’s products. The court also found that Capconvert is likely to succeed on the false advertising claims.

Irreparable harm. Next, the court found that Capconvert is likely to suffer irreparable harm without an injunction. Capconvert demonstrated that it is likely to face an existential threat to its continued operation and existence in the absence of an injunction. Signyl has only been operational for a couple of months. The court found that even though Signyl has not yet poached any business from Capconvert using Capconvert’s trade secrets and confidential or proprietary information, or by misrepresenting itself on its website, that did not mean that Signyl is not likely to cause harm going forward.

Balance of hardships. In addition, the court concluded that the balance of equities favors granting an injunction. Any harm in having to stop using Capconvert’s materials and in having to stop misrepresenting themselves is self-inflicted harm, the court found. Signyl has only been operational for a couple of months; that it has not yet poached any business from Capconvert using Capconvert’s trade secrets and confidential/proprietary information or by misrepresenting itself on its website did not mean that Signyl is not likely to cause harm going forward.

Public interest. Finally, the court concluded that the public interest favors granting the preliminary injunction. The public interest is served when a defendant is asked to do no more than abide by trade laws. The public also has a strong interest in protecting intellectual property, according to the court.

Therefore, the court granted the motion for a preliminary injunction.

The Case is No. 3:26-cv-02149-CRB.

Judge: Breyer, C.

Attorneys: Seth Kalela Kugler (Grellas Shah LLP) for Capconvert, LLC. Andrew C. Palmer (Adibi IP Group, PC) for Benjamin Brown.

Companies: Capconvert, LLC

Cases: TradeSecrets CaliforniaNews TechnologyInternet