UPDATE: A New Top 10 Disclosed Trade Secret Settlement

A new trade secrets settlement has shaken up our top 10 disclosed settlements of all time.  Business Logic, a Chicago-based developer of financial software, reports that the investment firm Morningstar, Inc. has agreed to pay it $61 million to settle a trade secrets action.

According to Business Logic’s press release, the company alleged that Morningstar and its subsidiary, Ibbotson Associates, violated a contract and took Business Logic’s intellectual property in a case involving software for managing 401(k) retirement accounts. Read More

Of Documents and Dumpsters: The Sixth Circuit Affirms Convictions for Theft of Hybrid Car Secrets from GM

Last month, the Sixth Circuit affirmed the convictions of co-conspirator couple Yu Qin and Shanshan Du, who were convicted in 2012 of trade secrets theft.  A jury in the Eastern District of Michigan had found that Du absconded with GM’s proprietary documents, passing them to Qin, who then used them to start his own business.

The trade secrets comprised the specially engineered and highly complex “motor control source code” of a hybrid car—the program that directs how and when the electric motor of a hybrid car runs.  The jury bought the government’s argument that the hybrid car secrets were on their way to China via Qin and Du, both engineers. Read More

DONATE, DON’T TELL? The Red Cross says it has trade secrets, upsetting activists

Can a non-profit charity have trade secrets?  The Red Cross thinks so.  Its claim to trade secret protection over information related to Hurricane Sandy relief efforts made headlines and left some journalists and activists feeling, well, cross.  But is the Red Cross’s trade secrets claim really so unusual?  And what can other non-profits learn from it?

The Red Cross’s trade secrets claim grew out of a letter from the New York State Attorney General’s office seeking information on how the Red Cross spent Hurricane Sandy relief donations Read More

Hedge Fund Hack Results in Trade Secret Loss, and Raises SEC Reporting Issues

Data breaches may be nothing new, but they are certainly evolving into bigger and more notorious infractions. While the data breaches of yesterday may have involved accidental disclosure or disgruntled former employees, the data breaches of today are often carried out by outsiders and highly organized and sophisticated criminal groups. And hackers aren’t just after credit card information, they are often seeking proprietary information. In short: trade secrets, watch out. Read More

FOURTH OF JULY EDITION [FROM THE ARCHIVES]: Family Fireworks: Plot to Steal Client Lists Goes Up in Smoke

As Americans head for the beach or the barbecue to celebrate the Fourth of July (many with a bolstered sense of patriotism following the United States’ valiant World Cup efforts), Trade Secrets Watch marks this Independence Day by pulling an explosive story from its archives.

Pyro Spectaculars North, Inc. v. Souza is a case that’s full of fireworks—literal and figurative—as a family pyrotechnics business broke apart, with one member starting a rival company, apparently armed with a USB and a hard drive of purloined client lists and other company files. You can read our full post below the jump.

We wish all our readers and safe and happy holiday weekend. We’ll return to our regular blogging and tweeting schedules on Monday. Read More

ANOTHER WIN FOR ALEYNIKOV: Judge Tosses Evidence in Ex-Programmer’s Latest Case

Sergey Aleynikov fought the law, and the law lost—again.

Judge Ronald A. Zweibel of the New York Supreme Court has thrown out a raft of evidence originally gathered by the FBI for federal prosecution and later offered by state authorities attempting to prosecute Aleynikov for trade secrets theft. Finding no probable cause for Aleynikov’s original arrest, the court also faulted the feds for turning evidence over to the Manhattan district attorney instead of giving it back to Aleynikov. Read More

North Carolina Enacts Criminal Penalties for Disclosure of Fracking Trade Secrets

North Carolina is officially open for fracking, after lifting a ban on the practice—and enacting criminal penalties for spilling trade secrets associated with it. With passage of the Energy Modernization Act, North Carolina joins the growing ranks of states that have legislated to protect confidential fracking information.

North Carolina’s new law prompted us to update our chart summarizing the key provisions of similar legislation in other states. It can be seen hereRead More

Plaintiff’s Trade Secret Lawsuit Backfires!

We recently reported on good things (big verdicts) coming to trade secret plaintiffs that endure lengthy lawsuits.  But good things don’t always come to those who wait.  One trade secrets plaintiff received a starkly less favorable result after battling for ten years over misappropriation of its alleged trade secrets and related claims.  On June 18, Eaton Corporation and Triumph Group announced they settled their decade-long dispute arising from Eaton’s claims that its former employees stole trade secrets and used them at competitor Frisby Aerospace (later acquired by Triumph). Though the exact terms of the settlement are confidential, Eaton will reportedly pay about $135 million to Triumph and $12 million to be split among its former employees. Read More

DEAR JUSTICE THOMAS: A Court Seal Cannot Protect My Trade Secrets, Pleads Florida Political Consultant

Florida may be the Sunshine State but there has been too little illumination into the Florida Legislature’s congressional redistricting process, according to the League of Women Voters of Florida.  In 2010, voters amended the state’s constitution to end gerrymandering in advance of the 2012 decennial redistricting.  Nevertheless, the day after the Governor approved the Legislature’s 2012 redistricting plan, the League and others challenged the redistricting process as intentionally (and therefore unconstitutionally) favoring the Republican party and incumbents and diluting the voting power of African-American and Hispanic voters. Read More