“It’s a Free Country, Right?” Court Declines to Enjoin Ex-Free Country Ltd. Employees From Contacting Customers on Purloined Contact List

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Within days of each other, your clothing company―Free Country Ltd.―loses two employees who decamp to a rival to set up a competing apparel line.  You discover that just before leaving, they transferred some 50,000 documents to a personal account—customer orders, your master contact list, and product design information.  Incensed, you file a trade secrets lawsuit and seek an injunction prohibiting the thieves from soliciting your customers.  Their defense amounts to, “so what if we took the documents―it’s a free country!”  Easy win, right?  Wrong.  These are the facts of a recent trade secrets lawsuit in the Southern District of New York, in which the court denied the plaintiff’s request that its former employee defendants be prohibited from soliciting plaintiff’s customers. READ MORE

DTSA Immunity: A Plaintiff’s Dream Or A Burdensome Nightmare?

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If you are a regular reader of TSW, you know we have been monitoring developments relating to the Defend Trade Secrets Act of 2016 (DTSA). While the Northern District of California was the first court to enter a written opinion under the DTSA, case law is continuing to develop across the country, including in the First Circuit. READ MORE

Baring It All: Judge Orders Swingers’ Club to Produce Email Distribution List

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A recent case in the Southern District of Florida serves as a reminder that even trade secrets may be subject to production to opposing counsel. Magistrate Judge Jonathan Goodman recently ordered a defendant “swingers’” club to produce its email distribution list to plaintiffs in Edmonson v. Velvet Lifestyles, LLC (S.D. Fla. Dec. 5, 2016). READ MORE

Wake Forest Leaks Scandal May Offer “Playbook” For Businesses Seeking Trade Secret Protection

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After a long political season that took many twists and turns due in part to revelations from WikiLeaks, the holiday season finally arrived. For many, that meant family traditions, time away from work, and massive amounts of college football, thanks to the current litany of televised bowl games.

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Password Sharing Is Not a Crime, Ninth Circuit Reassures in Denial of Nosal’s Request for Rehearing

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Since the early days of this blog, we’ve been covering the ongoing legal battle involving ex-Korn Ferry recruiter David Nosal as it winds its way through the courts. The latest chapter in this saga came on December 8, 2016, when a Ninth Circuit panel clarified that the Computer Fraud and Abuse Act (CFAA) does not criminalize innocent password sharing, in a published opinion denying Nosal’s request for a rehearing en banc. READ MORE

Diamonds Are Forever, but Joint Ventures Are Not: Court Finds Claims Preempted by CUTSA in Business Deal Gone Bad

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The holiday season is officially upon us: peppermint mochas have popped up on coffee shop menus, carols ring from department store speakers, and you can’t turn on the television without seeing at least three diamond commercials. But it’s not all yuletide and merriment for those in the diamond business. As one diamond importer and wholesaler recently learned, sometimes instead of a gem you get a lump of coal—in this case, from the Northern District of California, which tossed out certain claims against a former business partner on the grounds those claims were preempted by the California Uniform Trade Secrets Act. READ MORE

Court Order to U-Haul: Haul Your Non-Compete Clauses Out of California

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A California appellate court recently upheld a permanent injunction in Robinson v. U-Haul Company of California barring U-Haul from enforcing its non-compete covenants in California. U-Haul also was required to pay over $800,000 in attorney’s fees to its former dealer. READ MORE

Supreme Court May Consider ITC’s Authority Over Trade Secret Matters

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Here at TSW, we continue to watch closely developments in the Sino Legend v. ITC case. In September, Sino Legend petitioned the Supreme Court for a writ of certiorari to review whether Section 337 of the Tariff Act of 1930 allows the ITC to adjudicate cases involving allegations of trade secret misappropriation occurring entirely in a foreign country. This week, we summarize the relevant law, background, and the legal basis of Sino Legend’s petition. READ MORE

Posted in ITC

THANKSGIVING EDITION [FROM THE ARCHIVES]: Court Protects Quizno’s Franchise Turkey Trade Secrets

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This Thanksgiving, Trade Secrets Watch is serving a delicious tale about protecting trade secrets in a franchising relationship.

In 1994, Quizno’s entered into a franchise agreement with Robert Kampendahl, an enterprising fellow who wanted to open up a Quizno’s sandwich shop in St. Charles, Illinois. Unfortunately, Kampendahl didn’t keep his food equipment clean, used unapproved foods, and had safety and sanitation problems, so Quizno’s terminated the franchise agreement. Upon termination, Kampendahl was subject to a covenant not to compete that prohibited him from opening a competing sandwich shop within five miles. READ MORE

HALLOWEEN TREAT: Judge’s October 31 Order Adds $21 Million to Jury’s $70 Million Award for Trade Secret Theft

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On October 31st of this year, a district judge in Massachusetts granted a motion for enhanced damages in a theft of trade secrets case, adding an additional $21 million to a $70 million jury award.

The theft of trade secrets case pitted CardiAQ Valve Technologies, Inc., a Delaware corporation and a unit of Edwards Lifesciences Corp., against Neovasc Inc., a Canadian medical device company. In June 2009, CardiAQ hired Neovasc to manufacture part of an experimental heart valve that CardiAQ was developing – a trans-catheter mitral valve (TMVI), a replacement heart valve that can be implanted using a catheter rather than by open-heart surgery. The parties signed a non-disclosure agreement. READ MORE