Creative Information Technology, Inc. v. WellSpan Health and Triyam, Inc. — Settlement Releasing One Defendant from a Stipulated Injunction Does Not Compel Release of the Other

Background

Creative Information Technology, Inc. (CITI) licenses a medical database product, the Data Retention and Interoperability Solution (DRIS), which it alleges embodies trade secrets about its own design and operation. CITI licensed WellSpan Health to use DRIS beginning in September 2016 through an on-premises server, under a non-transferable, internal-use-only agreement that barred access to the database's proprietary structure and design. In 2025 WellSpan began migrating to Triyam, Inc.; CITI learned that WellSpan had given roughly 18 Triyam users access to DRIS, which CITI believed exceeded what data archiving required and exposed trade secrets, including information that could let Triyam replicate DRIS.

CITI sued in August 2025, alleging trade secret misappropriation against both defendants and breach of contract against WellSpan, and sought a preliminary injunction. Before the court ruled, the parties stipulated to facts and entered a stipulated preliminary injunction (SPI) requiring Triyam to delete certain data and cooperate on a new arrangement, barring WellSpan from reinstating Triyam's access or granting similar access to others, and keeping the SPI in effect "until this lawsuit and the arbitration have been resolved."

About seven months later, CITI and Triyam settled on terms requiring CITI to abandon the trade secret claims against all parties, not just Triyam. CITI moved to release Triyam from the SPI, to dismiss Triyam with prejudice, and to file a new amended complaint under seal. WellSpan opposed the modification and filed its own motion to dissolve the injunction as applied to it, arguing the SPI dealt only with trade secrets and no trade secret claims remained.

The Court’s Holding

The court granted CITI's motion to dissolve the SPI as to Triyam with prejudice. Because all claims against Triyam had been voluntarily dismissed with prejudice, holding a nonparty to the injunction presented circumstances that would have prevented the injunction's entry in the first place under the Rule 62(c) changed-circumstances framework of Favia v. Indiana University of Pennsylvania. The court rejected WellSpan's contention that modifying the injunction for one defendant necessarily required modifying it for the other, noting WellSpan cited no authority for that proposition.

The court denied WellSpan's motion to dissolve the injunction against it, without prejudice. The SPI's only durational language—restraining the parties until the lawsuit and arbitration were resolved—was all but dispositive that the injunction related to all claims, and because the injunction was stipulated rather than litigated, the court could judge its purpose only within its four corners. Although the SPI plainly related to trade secrets, the surviving breach-of-contract claim alleged that WellSpan breached the contract by allowing a competitor to access trade secrets, so WellSpan remained enjoined from essentially the same conduct at issue in the contract claim. WellSpan therefore failed to show the injunction's predicate had clearly been eliminated or that its persistence was inequitable.

The court denied CITI's motion to file the amended complaint under seal but granted leave to file a third amended complaint omitting information CITI considered too sensitive for the public docket. Applying the Third Circuit's seven-factor Arnold v. Pennsylvania Department of Transportation test, the court found CITI's sealing argument too generalized: the challenged information described practices or the product only at levels of generality that did not risk exposing trade secrets, or had already been disclosed in the first unsealed complaint. The privacy factor weighed toward denying the seal, the legitimate-purpose factor weighed very slightly toward sealing, and the public-interest factor weighed slightly against sealing.

Key Takeaways

• A stipulated injunction is interpreted by its plain text, and a party seeking dissolution bears the burden of showing changed circumstances that make continued enforcement inequitable.
• Voluntary dismissal with prejudice of all claims against a defendant is a straightforward changed circumstance justifying dissolution of a stipulated preliminary injunction as to that defendant.
• Releasing one defendant from a multi-party stipulated injunction does not automatically release a codefendant; no authority requires such parity.
• Where a breach-of-contract claim is premised on the same conduct enjoined by a stipulated injunction, dismissal of related trade secret claims does not necessarily eliminate the injunction's predicate.
• Generalized assertions that a complaint references trade secrets are insufficient to justify sealing; a party must specifically show that disclosure would meaningfully impugn its secrets.

Why It Matters

The decision illustrates the drafting risks of stipulated injunctions: because the court never articulated reasons for the SPI, its scope had to be discerned from the stipulation's text alone, and the broad durational language tying the injunction to resolution of the entire lawsuit and arbitration controlled. Parties who stipulate to injunctive relief without defining its scope may find the restraint persists even after the claims that motivated it are gone.

The ruling also offers practical guidance on sealing in trade secret cases. Even where a plaintiff genuinely possesses trade secrets, a court applying the Arnold factors will deny sealing absent specific showings, and may instead invite the party to omit sensitive allegations through an amended pleading—preserving public access while accommodating legitimate confidentiality concerns.