Preliminary Injunction – Antitrust

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7^th Circuit Court of Appeals

Case Name: Authenticom, Inc., v. CDK Global, LLC, et al.

Case No.: 17-2540 & 17-2541

Officials: WOOD, Chief Judge, and EASTERBROOK and ROVNER, Circuit Judges.

Focus: Preliminary Injunction – Antitrust

Authenticom’s case centers on agreements—actual and alleged—between Reynolds and CDK. The actual agreements are the ones signed in 2015; the alleged agreement is one described by Authenticom’s CEO, Cottrell, when he said that executives at Reynolds and CDK confessed that they were determined to block Authenticom from their systems.  The proper remedy for a section 1 violation based on an agreement to restrain trade is to set the offending agreement aside. From the standpoint of preliminary injunctive relief, that would mean ordering Reynolds and CDK not to implement their 2015 agreements or any alleged agreement collectively to bar Authenticom from their data management systems. Authenticom also contends that Reynolds and CDK have agreed to tie their data management systems to data integration.

We appreciate the district court’s concern to ensure that a potentially sound antitrust case should not disappear before its eyes because the plaintiff runs a high risk of going out of business while the litigation drags on. That does not, however, justify a preliminary injunction that goes so far beyond a measure that restores what the market would look like in the absence of the alleged violation. After trial, the court will be better able to assess the competitive significance of CDK and Reynolds’s business models, of the 2015 agreements, and of any other agreement Authenticom is able to prove. In the meantime, however, the court must vacate the preliminary injunction that it entered on July 28, 2017. The preliminary injunction is VACATED and the case is REMANDED to the district court for further proceedings consistent with this opinion.

Vacated and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.