A Milwaukee County Circuit Court judge has denied Deluxe Data Corp. a preliminary injunction against Visa U.S.A. and seven Deluxe employees hired by Visa.
The judge also severely weakened a temporary restraining order that had been in place since Jan. 24.
Milwaukee-based Deluxe accused Visa and its former employees of stealing trade secrets related to Deluxe's Advantage software, which has been licensed by Visa since 1995 to support the card association's check card program.
The temporary restraining order had prohibited the seven from working at Visa on Advantage software. It had also prohibited them from working to develop a comparable system.
The modified restraining order, issued at the end of February, lets the former Deluxe Data employees resume work at Visa but still forbids their working on the Advantage software application.
However, the judge ruled that the employees may develop a comparable software system.
Deluxe Data, a subsidiary of check printing giant Deluxe Corp., said it is considering whether to appeal.
The restraining order is to expire March 18.
Intellectual property lawyers said Deluxe would prefer a permanent injunction over a monetary settlement since an injunction would do a better job of limiting damages to Deluxe's proprietary software.
"The issue is: Are they irreparably harmed and how do you measure the damages?" said Anita Boomstein, a partner in Hughes, Hubbard & Reed. Refusal of the preliminary injunction "could be a setback for Deluxe," she said.
Another lawyer, who refused to be identified, said the dispute between Visa and Deluxe is common to intellectual property law.
Temporary restraining orders are frequently granted on "a meager record" until more complete evidence is presented, the lawyer said. "The real leverage is to get an injunction in place. The trial may not happen for a year or so."
In a statement, Visa said it had been vindicated with respect to Deluxe's claim that "any trade secrets of Deluxe would be misappropriated through Visa's hiring of the seven individual defendants."
"The terms of the injunction (sought by Deluxe) were very broad," said Douglas R. Young, a Visa attorney working on the case. "Visa was able to persuade the judge about the restraint on a comparable product" because the restraining order was "too vague to know what could and could not be done."