RELEASED ON (VERY LITTLE) BOND: Suspect Accused of Preparing to Flee U.S. with Gore Trade Secrets is Released on Nominal Bond

A federal magistrate judge has released on bond the accused trade-secrets larcenist and former W. L. Gore & Associates, Inc. employee Kwang Seoung Jeon, who was arrested as he allegedly tried to flee the United States for his home country of South Korea.

Jeon had notified the company—maker of Gore-Tex fabrics—that he was leaving the company to return to South Korea as a consultant after being told he would not receive a raise.  In a fact pattern becoming all too familiar in trade secrets theft prosecutions, Jeon then allegedly printed book-size documents from his work computer relating to the company’s camouflage technology, in violation of the Economic Espionage Act.  According to the criminal complaint, Jeon also attached three USB devices and two external hard drives to his work computer before leaving Gore, thereby accessing more than 800 company documents. Read More

IN DA (TRADE SECRETS THEFT) CLUB: $15 Million Judgment Against Rapper 50 Cent

The rapper known as “50 Cent” stole trade secrets to the tune of $15 million, an arbitrator found.

A filing in the U.S. District Court for the Southern District of Florida earlier this month disclosed the final award for theft of trade secrets relating to a headphone design from an audio company 50 Cent had helped finance.

While the decision grabbed mainstream news media headlines, the arbitrator’s legal findings are also newsworthy to the avid trade secrets practitioner:  The arbitrator relied on the inevitable disclosure doctrine and the similarity of products as evidence of liability. Read More

U.S. v. Yeh Illustrates the Challenges in International Trade Secrets Cases

On March 14, 2014, a Texas jury acquitted former Texas Instruments (“TI”) employee Ellen Chen Yeh on all counts brought against her arising from her admitted downloading of Texas Instruments proprietary information before leaving the company for a China-based semiconductor manufacturer.  The Yeh trial illustrates a number of important issues related to government trade secrets enforcement in the increasingly global knowledge economy.

Defendant Ellen Chen Yeh worked as a design engineer at TI’s Dallas headquarters from September 20, 1993 to March 11, 2005.  In her role at TI, Ms. Yeh had access to a significant amount of confidential manufacturing process information concerning certain TI semiconductor chip products.  Several weeks after her employment ended, Yeh and her husband planned to move to Shanghai, China, where both Yeh and her husband had obtained employment with a Taiwan-based semiconductor design company.  In the weeks leading up to her departure from TI, Ms. Yeh admittedly downloaded proprietary information from TI and burned some of it onto CDs. Read More

UPDATE: Money, Money, Money: Top 10 Trade Secret Verdicts (With Our Runner-Up Overturned)

Big IP verdicts aren’t limited to patent cases. Trade secrets can mean big money, too. Really big. As in multi-, multi-million dollar verdicts. And the trend is up with more than half of the top ten verdicts coming out in just the past two years.
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Trials are expensive. They’re also unpredictable. So when a plaintiff seeking damages in a trade secret case decides to take the case all the way through trial, it’s hoping for a jackpot. Otherwise the costs and risks of trial likely wouldn’t make it worth gambling the result on a jury.

For the parties below, the gamble paid off.

Trade Secrets Watch reviewed trade secret misappropriation cases over the past decade and dug up the largest verdicts on record. We also noted any post-verdict information to the extent it was available. Read More

Fourth Circuit Blows Away Nearly $1 Billion Kevlar Trade Secrets Award

The Fourth Circuit has thrown out the second-largest trade secret jury verdict on record, an award of nearly $1 billion, on the grounds that the district court improperly excluded evidence relevant to the defense.

We have covered this case extensively, tracing its history of allegations of double agents, bribery, top-secret industrial facilities, and its (apparent) culmination with an enormous jury award.  Now, it seems, this epic legal saga will start anew.  On April 3,  the Fourth Circuit unanimously vacated the jury award and ordered a new trial. Read More

Pyrrhic Victory For Parties Seeking Fracking Fluid Disclosures

Parties advocating public disclosure of the chemical makeup of fracking fluids may have won a recent battle in Wyoming, but are they losing the war?  On March 12, 2014, the Wyoming Supreme Court in Powder River Basin Resource Council v. Wyoming Oil and Gas Conservation Commission reversed a district court’s order exempting fracking fluid information from public disclosure.  The court made two key findings.  First, the court clarified that parties seeking disclosure in Wyoming are entitled to de novo district court review of administrative decisions exempting fracking fluid information from disclosure as trade secrets.  Second, it held that the “narrow” definition of trade secrets under FOIA applies to exemption claims. Read More

Ex-SanDisk Employee Arrested in Japan, Civil Suits Filed in the Wake of Alleged Flash Memory Trade Secrets Misappropriation

Technology firms SanDisk and Toshiba recently filed trade secrets lawsuits on opposite sides of the Pacific, each alleging misappropriation by a third party stemming from the two companies’ joint venture.

SanDisk filed in California (seeking damages and injunctive relief) and Toshiba in Japan for alleged misappropriation of trade secrets from SanDisk and a SanDisk-Toshiba joint venture. In Japan, the alleged perpetrator was arrested.  Engineer Yoshitaka Sugita, his former employer, SK Hynix, and two wholly-owned North American subsidiaries stand accused of misappropriation.  SK Hynix is accused in both the California and Japan actions. Read More

UNMASKING BLOGGERS: Hedge Fund’s Bid to Unveil Blogger’s Identity Highlights First Amendment, Trade Secrets Clash

America’s reverence for anonymous speech is as old as the republic itself, tracing its roots to Thomas Payne’s pamphlet “Common Sense” and the Federalist Papers.  But the right to speak namelessly has limits, and hedge fund billionaire David Einhorn recently demanded that a court unmask a blogger who anonymously disclosed confidential investment information.

Early last month, Greenlight Capital, Inc., Einhorn’s hedge fund, filed suit in New York state court against Seeking Alpha, Inc., a popular stock market blogging website.  In the suit, Greenlight asked the court to order Seeking Alpha to identify a blogger who anonymously exposed Greenlight’s stake in Micron Technology before Greenlight revealed it. Read More

Stop and Smell the Trade Secrets

What do Britney Spears, Jennifer Lopez, and Celine Dion all have in common?  Until recently, their own unique perfumes produced by Givaudan Fragrances Corporation, the largest flavor and fragrance manufacturer in the world.  They still have perfumes, but unique?  Maybe; maybe not.  For the last five years, Givaudan has been in litigation against its former vice president and his new employer over alleged misappropriation of Givaudan’s secret fragrance formulas.  Last month, following a five-week trial, that litigation finally came to an end, with a New Jersey federal court jury unanimously holding defendants James Krivda and Mane USA, Inc. not liable. Read More

Tattletales Beware: Whistleblowing May Result In Trade Secret Misappropriation Liability

In the Brady Bunch episode “Stop Tattling,” Mike Brady (the father) gives Cindy (youngest of the clan) a stern warning after her tattling lands Alice (the Brady caretaker) in hot water with Sam (the Brady’s butcher and Alice’s date to the dance).  Mike Brady explains the pitfalls of tattling during this scolding and warns: “You have to learn when to keep quiet.”

The case of J-M Manufacturing Co., Inc. v. Phillips & Cohen LLP, et al., Case No. L79214 (Superior Court of New Jersey, Middlesex County, filed Feb. 10), highlights the “when to keep quiet” dilemma facing modern-day tattletales—i.e., whistleblowers.  These individuals must decide whether to keep quiet about suspected corporate malfeasance or to come clean, disclose potential trade secrets in the name of public welfare, and face potential liability for doing so.  Last month, J-M sued John Hendrix, a former J-M engineer, and the law firm of Phillips & Cohen LLP (“P&C”), alleging trade secret misappropriation, breach of fiduciary duty, breach of contract, computer-related offenses, conspiracy, and racketeering stemming from Hendrix’s 2005 whistleblower False Claims Act lawsuit against J-M in a federal court in California. Read More