Background
Revenue Management Solutions, LLC licensed its healthcare revenue management software to Commerce Bank under a white-label agreement. Commerce later developed its own competing software, RemitConnect 2.0, which RMS alleged was a reverse-engineered copy. RMS moved for a preliminary injunction, claiming breach of contract and misappropriation of trade secrets, arguing that Commerce’s actions would cause irreparable harm to its reputation and market share. The district court denied the motion, finding RMS failed to prove irreparable harm.
The court’s reasoning
The Eighth Circuit reviewed the district court’s denial for abuse of discretion. The court reiterated that irreparable harm must be certain, great, and imminent, and non-compensable by money damages. The court found that RMS’s claims of lost revenues and market share were purely economic and calculable, thus not irreparable. Claims of reputational harm were deemed too speculative given the white-label nature of the original product. Although RMS raised trade secret misappropriation, it framed the harm primarily as lost profits, allowing the district court to treat it as compensable. The court also rejected the argument that a contractual stipulation for injunctive relief was dispositive, noting that federal courts cannot be contracted into granting equitable relief.
A preliminary injunction is an extraordinary equitable remedy that is never awarded as of right.
Starbucks Corp. v. McKinney, 602 U.S. 339, 345 (2024)
What it means going forward
The decision reinforces that parties seeking preliminary injunctions must provide concrete evidence of irreparable harm beyond general assertions of financial loss or reputational damage. It clarifies that contractual clauses cannot override the equitable requirement to prove irreparable harm, and that speculative economic arguments are insufficient to justify extraordinary equitable relief.