Trade Secret Plaintiff Goes Three Rounds, Takes a Beating

Last week, New York attorney Douglas R. Dollinger asked the Honorable Vince Chhabria of the Northern District of California to reconsider an order sanctioning Dollinger and his client to the tune of $93,365.92 in monetary sanctions and dismissing all of the client’s claims with prejudice as terminating sanctions. The Court’s sanctions, and Dollinger’s request for reconsideration, are the result of a series of attempts by Plaintiff to manufacture standing for a company that didn’t exist. Plaintiff tried on numerous occasions to identify a company with standing, but was repeatedly countered by Defendants and eventually pounded with both monetary and terminating sanctions. Read More

To Sue for Theft of Your Trade Secrets in California, You May First Have to Give Them Away

California trade secret litigators likely know all about California Code of Civil Procedure Section 2019.210.  Those that don’t, should.

Section 2019.210 provides that before commencing discovery in a trade secret litigation, the party alleging trade secret misappropriation must identify the allegedly stolen trade secret “with reasonable particularity.”

For plaintiffs, this rule is no joke.  It has sent many a plaintiff back to the drawing board trying, again and again, to adequately identify their stolen “special sauce.” It can be supremely frustrating. Read More

Flash Boy’s Luck Runs Out: Aleynikov Takes His Legal Fees Battle Back to Trial Court

The last time TSW readers heard from Sergey “Flash Boy” Aleynikov, the underdog high-frequency trading guru had fought the law to a rare win: the New York State Supreme Court had tossed a raft of evidence in his second criminal case, finding that the feds’ original arrest was tainted by a lack of probable cause.

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Bigger in Texas? High Court to Decide Scope of Protection for Third Party Trade Secrets in Civil Discovery

On August 22, 2014, the Texas Supreme Court ordered oral argument in In re: Magnum Hunter Resources Corp., a case concerning the discoverability of third-party trade secrets documents in civil cases. When should such documents be produced? And who gets to see them?

A simple summary of the facts of Magnum Hunter are as follows:

Party A hires Law Firm to help it negotiate a contract with Party B regarding an oil and natural gas venture. Party A and Party B ultimately reach an agreement on the venture and enter into a contract that says that Party B will provide to Party A all reports related to the venture upon request, provided that Party A agrees to treat such reports as confidential information.

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We Have Your Data. Pay Up or Else…

You wake on a Tuesday morning expecting to have an average day at work.  You are skimming through the emails that came in while you were asleep, when you notice an email from one of your employees.  He is not only giving his resignation, but is also, more importantly, demanding a ransom in exchange for not disclosing company trade secrets and other highly confidential information.  What do you do?
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Ex-Citadel Employee Pleads Guilty To Wire Fraud And Theft Of Trade Secrets; Accomplice Left To Fight Trial Alone

Yihao “Ben” Pu is probably coming to grips with the phrases “crime doesn’t pay…” and “don’t do the crime unless you’re willing to do the time….”  In federal court in Chicago, on Thursday, August 7, 2014, Pu, a former quantitative engineer for Citadel LLC, plead guilty to stealing trade secrets and other private information from an unnamed “Company A” located in Red Bank, New Jersey, and financial firm Citadel, related to their high-frequency trading platforms. (See United States of America v. Yihao Pu et al., Case No. 1:11-cr-00699 (N.D. Ill.))

Company A developed “high-performance technology and computer source code” to support rapid stock trading—known as “high frequency trading” or “HFT.” Read More

The House Introduces Another Trade Secrets Bill: Is It Really Any Better Than Before?

The Trade Secrets Act of 2014 (H.R. 5233) was introduced in the House by Congressman George Holding on July 29, 2014.  Representatives Steve Chabot (R-OH), Howard Coble (R-NC), John Conyers (D-MI), Hakeem Jeffries (D-NY), and Jerrold Nadler (D-NY), are cosponsors of the bill.

While the House Bill is very similar to the Bill introduced in the Senate on April 29, 2014 Defend Trade Secrets Act of 2014 (DTSA) (S. 2267), there are some major differences between the two.  Specifically, the House Bill is much more protective of defendants facing ex parte seizure orders. Read More

Roses Are Red, Violets Are Blue, Giving Someone Trade Secrets Injures the Owner, and Using Them Does Too

How do two companies end up liable for nearly $50 million in damages relating to confidential, trade secret materials?  Like many romances gone awry, this tale arose from actions taken under cover of secrecy that did not look as good in the clear light of day.

The sordid affair involved the greeting card company Hallmark, the consulting company Monitor Company Group, L.P. (“Monitor”), and a related private equity firm called Monitor Clipper Equity Partners (“Clipper”). Read More

Federal District Court in San Francisco Sentences More Defendants in Trade Secret Cases

The U.S. District Court in San Francisco was busy this month sentencing defendants in two of the year’s biggest trade secrets cases.

First, on July 10, U.S. District Court Judge Jeffrey S. White sentenced Walter Lian-Heen Liew to serve 15 years in prison, to forfeit $27.8 million, and to pay $511,667 in restitution for stealing trade secrets from E.I. du Pont de Nemours & Company and then selling them to a state-owned Chinese company. Liew had been convicted in March of this year on more than 20 criminal counts, including conspiracy to commit economic espionage and trade secret theft.

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