The Defend Trade Secrets Act of 2016 was signed into law by President Obama on May 11, 2016. While the DTSA has been on the books for over a year, relatively few courts have addressed the ex parte seizure provision and even fewer have actually granted a seizure under the DTSA. This is likely due to the DTSA’s requirement that courts order property seizures only in extraordinary circumstances. In other words, courts are hesitant to grant DTSA ex parte seizure requests unless it is clear that the alleged misappropriator would disobey a TRO or preliminary injunction, or otherwise destroy, move, or hide trade secrets. Courts continue to favor FRCP 65 TROs and preliminary injunctions to protect trade secrets from disclosure or destruction. Under FRCP 65, courts can issue TROs and preliminary injunctions, but cannot order U.S. Marshalls to seize property from a defendant without notice. The following cases are illustrative.
Robert Shwarts, a partner in the San Francisco office, is the Chair of Orrick's Global Trade Secrets Practice Group. Rob is an experienced trial lawyer, having successfully litigated more than 30 trials and arbitrations in commercial litigation, employment and intellectual property matters.
He has extensive experience representing plaintiffs and defendants in complex trade secret misappropriation cases in state and federal court, and he has conducted numerous TRO and preliminary injunction hearings in aid of these cases.
Rob has broad experience in commercial litigation, having successfully litigated claims of securities fraud, lender liability, breach of contract, breach of fiduciary duty, breach of warranties, claims arising from securitization transactions and other business fraud.
Rob's experience in employment-related litigation includes defending claims of discrimination, wrongful discharge, retaliation, sexual harassment and breach of contract. His practice also includes counseling relating to trade secret misappropriation and non-compete/non-solicitation agreements.
He regularly represents U.S. and international clients with significant California presence, including numerous financial services companies. His experience includes jury and non-jury trials, as well as AAA, JAMS and FINRA (formerly NASD and NYSE) arbitration hearings.
Rob serves as the chair of the Firm’s Practice Management Committee, and is a member of the firm’s Risk Management Committee. Rob previously served as head of the San Francisco office. Rob contributes pro bono hours to the Humane Society and Point Blue Conservation Science each year.
The following are some of Rob's notable matters:
- 10X Genomics. Successfully represented the founders of 10X in a multi-week arbitration brought by Bio-Rad Laboratories seeking to enjoin the founders from working for 10X, including receiving a full award of attorneys’ fees.
- Scopely, Inc. Successfully defeated an application for a TRO and preliminary injunction under the Defend Trade Secrets Act ("DTSA") in an action brought by Zynga, Inc.
- AllCells, LLC. Obtained a preliminary injunction under the DTSA on behalf of a biomedical company barring its competitor from using misappropriated material used to start the competing business.
- State of Oregon v. Oracle USA. Represented Oracle in a high stakes litigation brought by Oregon relating to Oracle’s work on the States’ health care exchange.
- Hewlett-Packard v. Oracle USA and Mark Hurd. Represented Oracle and Hurd in a high profile trade secret litigation arising from Mr. Hurd’s move to Oracle in September 2010.
- Hewlett-Packard v. Adrian Jones. Represented Mr. Jones, Oracle’s SVP for Hardware Sales in Asia. High profile and heavily litigated case of trade secret misappropriation.
- Cornucopia Products v. Dyson Inc. Successfully defended Dyson in a complex patent and antitrust matter, including obtaining a preliminary injunction against Cornucopia competing products.
- Rhodes v. Dyson Inc. Obtained a complete defense verdict against claims of disability discrimination and failure to accommodate in a two-week jury trial.
- Mattel v. MGA. Part of the trial team defending MGA.
- Specialized Bicycle Components v. Volagi LLC. Represented SBC as plaintiff in a trade secret / breach of contract case against former employees who started a rival company.
- Intel Corporation. Successfully defended Intel in a heavily litigated case involving claims of trade secret misappropriation.
- Citigroup Global Markets Inc. (Salomon Smith Barney). Successfully defended SSB in several matters, including (a) a one-week FINRA arbitration against claims of gender discrimination, in which a former financial consultant was seeking several million dollars in lost commissions and other incentive compensation; (b) a FINRA arbitration where two former financial consultants sought several million dollars each for alleged fraud; and (c) a five-plaintiff FINRA arbitration which included claims of race and gender discrimination.
- Eastman Kodak Company. Successfully prosecuted a three-week arbitration for Kodak in which Kodak sought an accounting and damages from a former joint venture partner. The arbitrator dissolved the joint venture and awarded Kodak significant damages and attorneys’ fees. He subsequently successfully conducted a bench trial in federal court to amend the judgment to include alter ego defendants.
- Wyndham Worldwide. Successfully defended Wyndham in numerous matters, including obtaining a jury verdict for Wyndham following a month-long trial on claims of disability and medical leave discrimination.
Posts by: Rob Shwarts
Virgin Galactic expanded and continued its attack on its former VP of Propulsion, Thomas Markusic, and his new company, Firefly Space Systems, this month. Markusic co-founded Firefly around the time he left Virgin Galactic, and the two companies compete in the market for rockets capable of launching small and medium sized satellites into lower earth orbit. As the demand for services from such satellites increases steadily; the race to provide a more cost effective method for delivering those satellites into space is also growing and becoming more competitive. READ MORE
As many loyal TSW readers know, we’ve been watching the ongoing saga involving ex-Korn Ferry recruiter David Nosal wind its way through the courts since the early days of this blog. And last month, the highly anticipated Ninth Circuit opinion in United States v. Nosal was issued on July 5, 2016 (“Nosal II”). This was the second time the Ninth Circuit had issued a ruling in the case relating to charges under the Computer Fraud and Abuse Act (the “CFAA”). In April 2012, an en banc panel dismissed five of the eight CFAA counts against Nosal (“Nosal I”). A jury subsequently convicted Nosal of the remaining three CFAA counts, as well as two Economic Espionage Act (“EEA”) counts in April 2013 and Nosal was sentenced to 366 days in prison, three years supervised release, community service, $60,000 in fines, and restitution. READ MORE
Relief may soon be coming for trade secrets plaintiffs longing for federal court. Last year we covered the introduction of the Defend Trade Secrets Act (DTSA), compared it to the Uniform Trade Secrets Act (UTSA), and questioned whether federal court under this new law would be a preferable venue to plaintiffs. Since then, the bill, like the many that came before it, died in Congress. READ MORE
“For a competition to be friendly, it should be scrupulously fair.” The Formula One world was recently jolted by allegations that a former Mercedes-Benz AMG engineer took highly-confidential information in anticipation of joining Mercedes’ chief competitor Ferrari. Mercedes recently filed suit in the High Court of Justice in the United Kingdom. To many in the Formula One world, the recent news is reminiscent of 2007’s “Spygate” controversy involving confidential technical data misappropriated from Ferrari. Nearly a decade later, the recent allegations underscore an important facet of Formula One: Formula One teams go to extraordinary lengths to protect their design secrets created at a cost of hundreds of millions of dollars. READ MORE
We have previously reported about protecting trade secrets from disclosure after a FOIA request here and here. There is something to be said for immediate action and intervening to protect your trade secrets, but sometimes that just isn’t enough.
Space: The final frontier. For millennia, people have wanted to explore the great unknown of outer space, and series like Star Trek and Star Wars continue to our fuel our fantasies about what lies beyond our stratosphere. This fascination, as well as countries’ desires to maintain their military prowess, led to the First Space Race after World War II. Today, while NASA’s dominance may have fizzled out, private companies have embarked on a commercialized space race to gain market dominance from their designs. Indeed, the House of Representatives recently passed the SPACE Act to enable commercial space mining activities. READ MORE
On Christmas, Santa and his elves have their work cut out for them and sometimes even they can use help to get their jobs done. During the holiday season, a variety of businesses assist Santa & Co. to import and distribute Christmas merchandise and other seasonal goods to retail stores in time for the holidays. Unfortunately, those companies can be as susceptible to a trade secrets dispute as anyone else, and one year just such a dispute threatened to put a damper on Christmas. READ MORE
Can a non-profit charity have trade secrets? The Red Cross thinks so. Its claim to trade secret protection over information related to Hurricane Sandy relief efforts made headlines and left some journalists and activists feeling, well, cross. But is the Red Cross’s trade secrets claim really so unusual? And what can other non-profits learn from it?
The Red Cross’s trade secrets claim grew out of a letter from the New York State Attorney General’s office seeking information on how the Red Cross spent Hurricane Sandy relief donations READ MORE
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.
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