Christopher Hughes worked for Age Industries, Ltd. (“AI”) for nearly 20 years. He was the general manager of one of AI’s branch facilities and a limited partner of the company. In this role, Hughes had access to much of AI’s proprietary and trade secret information, including specialized customer pricing information, financial reports, and business strategies. After leaving AI, Hughes became the operations manager of a new competitor in the corrugated packing materials market—Diamondback Corrugated Container, LLC. READ MORE
Posts by: James McQuade
Non-compete agreements have long been used by employers as an effective tool to protect their valuable trade secrets and confidential information. However, employers’ overuse of non-compete agreements and employers’ practice of requiring all of their employees to sign non-compete agreements recently has come under significant attack by federal and state governments. In July, Trade Secrets Watch discussed some of those recent attacks. Since July, there have been a number of additional efforts by government to prohibit the overuse of non-compete agreements. READ MORE
It is no secret that the European Union’s (“EU”) Directive on Trade Secrets was a long time in the making. The Directive was first proposed in November 2013. After roughly two years of debate and revision, the revised Directive was published in December 2015. On April 14, 2016, the debate ended, and the European Parliament voted to adopt the Directive with no further amendments. The resolution approving the Directive passed by 503 votes to 131 votes with 18 abstentions. This morning, the EU Council unanimously adopted the Directive on Trade Secrets. READ MORE
Companies seeking protection under the California Uniform Trade Secrets Act (“CUTSA”) should consider the effects of CUTSA preemption on their litigation strategy. Under the well-known Silvaco Data System v. Intel Corporation case and its progeny, CUTSA provides the exclusive civil remedy for trade secret misappropriation and supersedes other tort claims based on the same nucleus of facts as any trade secret claims that are or could be pled. READ MORE
It is one of those magical times during the year when sports fanatics can enjoy three major American sports all at the same time: the MLB playoffs are in full swing; the NFL season has finally kicked off; and the NHL saw the puck drop for the first regular season game a couple weeks ago. But between the throngs of fans cheering (or booing) their teams, we at TSW wanted to take a moment to reflect on the sophisticated trade secrets disputes that are at the heart of the sports and entertainment industry. READ MORE
The United States Court of Appeals for the Fifth Circuit recently revisited the issue of the Copyright Law preemption of trade secrets claims in Spear Marketing, Inc. v. Bancorpsouth Bank. The decision not only resolved the scope of Copyright Law preemption in the Fifth Circuit, but also made clear that the Fifth Circuit “join[s] the majority position” to hold that state law claims based on ideas fixed in tangible media are preempted by §301(a). The decision creates greater clarity and uniformity in Copyright Law preemption and should help litigants avoid wasting resources by filing actions based on state law claims that are preempted. READ MORE
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 start of a new year is a perfect opportunity to set lofty goals of self-improvement. While the odds of completing a New Year’s resolution aren’t exactly inspiring (over half are expected to fail within six months) studies still show that people who make specific resolutions are more likely to achieve their goals than those who don’t. The payout for making a specific plan (particularly when it comes to protecting trade secrets) can be quite rewarding. READ MORE
The U.S. District Court for the Southern District of New York recently cleared the way for a Michigan watchmaker to pursue claims for trade secret misappropriation, among other things, against two former employees who left to work with a competitor, but not without first dismissing claims based on tortious interference with contract.
For companies whose business model depends on a key contract (e.g., with a licensor, vendor, or supplier), the biggest worry with departing employees might not be the theft of intellectual property or trade secrets—but rather the loss of the contract or business relationship.
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.