Sergey Aleynikov’s six-year odyssey through the U.S. judicial systems—both federal and state—continues. Last week, Aleynikov stepped into a New York State courtroom to defend himself at trial against a pair of criminal charges stemming from his 2009 arrest for allegedly stealing source code for one of Goldman Sachs high-frequency trading platforms. If convicted on the two counts – unlawful use of secret scientific material and unlawful duplication of computer-related material – Aleynikov could face a return trip to prison for up to eight years. Read More
The best way to protect trade secrets is to prevent them from being misappropriated in the first place, but when trade secret misappropriation occurs, a trade secret holder will likely want to obtain adequate damages through litigation. The methods of calculating damages for trade secret misappropriation are thus crucial, since remedies available to the trade secret holder are determined by these methods. Although China lacks formal remedies for trade secret misappropriation, it has a body of trade secret law that flows from various statutes. Read More
Businesses that compete globally are once again reminded of the need to avoid overreaching when requiring employees to sign non-compete agreements. Earlier this year, the Court of Appeals for the Eighth Circuit affirmed a ruling that a non-compete agreement was unreasonable on its face and thus enforceable because it imposed a blanket prohibition on the employee’s ability to seek employment of any kind with a competitor worldwide. While the Eighth Circuit recognized that non-compete agreements had been upheld in the past despite containing no geographic limitations, the court distinguished those agreements on the basis that they contained narrowly circumscribed prohibitions. The Eighth Circuit’s analysis provides a valuable “lesson learned” for businesses crafting or considering an effective non-compete. Read More
For those of us who revel in this time of year as amateur “bracketologists,” last year’s promise of the billion dollar bracket brought an added lottery-like level of fun to the NCAA basketball tournament. Even though the odds of winning were (as stated by the rules) 1 in 9 quintillion, people believed that there COULD be that one winning bracket – that is, until Memphis beat George Washington University and everyone’s perfect bracket hopes died. Read More
Declaring cybercrime a “national emergency,” President Obama today empowered Treasury to freeze assets that are the fruits of cybercrime, according to an Executive Order issued this afternoon. The agency can block money or property in the United States or in the control of any United States person determined to have engaged in “cyber-enabled activities” originating or directed from outside the United States. Targeted activities include harming computer networks in critical infrastructure sectors; significantly disrupting a computer network; or causing significant misappropriation of trade secrets and other protected information. The EO also enables seizure of money or property of any persons involved in misappropriating trade secrets by “cyber-enabled means” that impact the national security, foreign policy, or economic health or financial stability of the United States.
TSW is tracking the EO and will report further developments.
Tensions recently escalated in the United States and China’s ongoing exchange over online security and technology policies, as China adopted the first in a series of policies it previously approved at the end of last year. Among other things, the newly adopted regulations require foreign technology companies that sell computer equipment to Chinese banks to submit to obtrusive audits, set up research and development centers in the country, build “back doors” into their hardware and software, and, perhaps most disconcerting, disclose intellectual property to the Chinese government, including proprietary source code. Read More
This marks the inaugural “Five Minutes With” feature that Trade Secrets Watch will run occasionally. These will be question-and-answers with notable figures in the trade secrets world.
TSW got a chance to sit down with UC Hastings College of the Law professor and Liberty, Security & Technology Clinic founder Ahmed Ghappour. He had a lot to say about trade secrets, cybersecurity, and encrypting “all the things.”
TSW: Ahmed, TSW is dying to know what you’ve been up to lately in the world of economic espionage. What’s the inside scoop? Read More
Although it appears that the U.S. and Iran are moving closer to a deal regarding Iran’s nuclear program, Iran’s allies appear to remain committed to acquiring military-grade technology from U.S. companies by way of engineers sympathetic to Iran.
According to an FBI press release, a former Pratt & Whitney engineer, Mr. Mozaffar Khazaee of Connecticut, pleaded guilty to violating the Arms Export Control Act by attempting to send to Iran export-controlled trade secrets (such as technical manuals, specification sheets, etc.) relating to jet engines used in the U.S. Air Force’s F35 Joint Strike Fighter program and F-22 Raptor program. He now faces a possible 20 years in prison. The investigation revealed that Mr. Khazaee misappropriated the materials from at least three different defense contractors where he has worked since 2009. Mr. Khazaee is a dual citizen of the U.S. and Iran. Read More
We have written before about business collaborations gone sour that lead to trade secret misappropriation lawsuits. In a recent example, The Weather Channel convinced a court to wash away claims that its use of data from a former licensor violated trade secret laws. We can take away some useful lessons from how both parties approached this relationship and the treatment of sensitive data. Read More