USPTO’s Second Trade Secrets Symposium Looks Back on First Year of DTSA and Ahead Toward Challenges of International Trade Secrets Protection

On May 8, 2017, the United States Patent and Trademark Office hosted its second event on trade secrets. When we covered the USPTO’s inaugural trade secrets symposium held in January 2015, there was a palpable sense among DC insiders that, at long last, federal trade secrets legislation was imminent.

Readers of this blog of course know the rest of that story: obviously the biggest change in the landscape since the last event was the passage of the Defend Trade Secrets Act of 2016.  In fact, the USPTO intentionally timed this event to fall near the one-year anniversary of the DTSA’s passage.

What else had changed in the last two years? To answer that question, I once again traveled to USPTO headquarters in Alexandria, VA to attend the symposium and provide TSW readers with the following report. READ MORE

The Saga Continues: New York’s Highest Court Will Weigh in on Aleynikov’s Fate

On April 20, 2017, the New York Court of Appeals issued a brief order continuing former Goldman Sachs programmer Sergey Aleynikov’s eight-year voyage through the state’s and country’s legal systems.  Here’s the issue:  does making a digital copy of misappropriated source code instead of physical copy constitute a “tangible reproduction or representation” of the source code?   READ MORE

Nice Try: Federal Circuit Denies Uber Engineer’s Writ, Affirming the District Court

In trade secret cases, it is often the case that a defendant company and employee accused of trade secret misappropriation enter into a joint defense agreement.  Often under such JDAs, facts, strategies and documents are shared with the understanding that they will remain confidential. READ MORE

Pooley’s Corner: When Taking Trade Secrets Becomes a Crime

In the recent lawsuit filed against Uber by Waymo for hiring the head of its driverless car project, what would have been a normal discovery dispute over access to a report suddenly became a lot more complicated when the former Waymo executive asserted the fifth amendment, claiming that forcing disclosure of the document could incriminate him.

Trade secret litigation between companies is common, but criminal charges—or the threat of them—isn’t. So how is it that commercial disputes become criminal?

The answer usually is that the trade secret holder believes it has very strong evidence of theft and decides to approach the authorities. If you are located in a state with criminal trade secret laws, you have a choice of reporting to the county prosecutor or going to the FBI or Department of Justice, who operate under the authority of the Economic Espionage Act. In a number of states, and in each of the 93 federal districts, there will be prosecutors and investigators trained in handling technology cases. If yours seems sufficiently serious, they may agree to take it on.

But would you want them to? The answer may not be obvious. READ MORE

SOUR GRAPES: Fig Spread Verdict Under DTSA Doesn’t Stick, Argue Jam Company Defendants

In a dispute over ripped off recipes, counsel for victorious plaintiff Dalmatia Import Group hailed the jury verdict as the first of its kind under the Defend Trade Secrets Act, as we previously reported.  Not so fast, sulked the defendants, Dalmatia’s erstwhile manufacturer Lancaster Fine Foods and distributor FoodMatch, in a filing this month.  While acknowledging their defeat under the Pennsylvania Uniform Trade Secrets Act, the defendants nevertheless urged  the court not to enter judgment under the DTSA.

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A Bump in the Road: An Update on the Waymo v. Uber Litigation

The Waymo v. Uber trade secrets litigation has been underway for less than two months but the case has already hit quite few speed bumps with multiple discovery battles, Waymo’s efforts to obtain a preliminary injunction from Judge William Alsup of Northern District of California, a fight over arbitration, assertions of 5th Amendment rights, and now an appeal to the Federal Circuit that has temporarily halted a portion of the district court proceedings.

As a quick recap of how we got here, Waymo alleges that one of its former key managers in charge of Waymo’s driverless car business, Anthony Levandowski, downloaded more than 14,000 files to start a competing company—Otto—that Uber later purchased.  The key technology relates to a LiDAR system, which is mounted on top of the car and gives the driverless car the ability to “see” other cars and obstacles.  Waymo is seeking a preliminary injunction enjoining Uber from using or disclosing any of Waymo’s trade secrets and from selling any devices based on Waymo’s patents.  In aid of the PI hearing on May 3, 2017, the parties are engaging in expedited discovery. Since this case started, the docket has been quite active and full of interesting, thorny legal issues. READ MORE

It’s Positioning That Matters: Texas Court of Appeals Holds Proof Of Actual Use Not Required At The Temporary Injunction Phase

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

(Alleged) Spammer Squares Off With (Alleged) Hacker, Highlighting Risk of Cyber Threats

What’s in a name?  Obviously a lot, as businesses in all industries invest significant time and money to protect their reputations.  But, in some sectors, the line between positive and pejorative can be quite thin.

Take email marketing and cybersecurity, for example:  What exactly distinguishes a successful high-volume email marketer from a spammer?  And how can we distinguish a well-intentioned security analyst exposing vulnerabilities from a nefarious hacker?  (Those familiar with techspeak will surely recall the familiar “white hat” and “black hat” dichotomy, but even that, as Wired has observed, is subject to gray areas of its own.) READ MORE

Pooley’s Corner: Losing Secrets to Foreign Companies: How to Reduce the Risk

During a recent seminar I was asked, “What can companies do to stop the loss of trade secrets to places like China?” The questioner seemed stressed and a bit angry, perhaps reflecting a certain frustration that there may not really be an answer. Although there is no way to entirely eliminate information security risks when doing business overseas, we certainly can reduce them.

The modern commercial environment is inescapably digital and global. Long supply chains and open innovation strategies require sharing valuable information with actors in countries where legal protection systems are not robust. Companies increasingly employ foreign nationals, both in the United States and in installations abroad, and just like any other employees with knowledge of your secrets, they tend to move about. READ MORE

DTSA’s First Verdict “Fig”-ure: Jam’n to the Tune of $500,000

In little under a year after its enactment, a Federal Court jury in the Eastern District of Pennsylvania issued the first verdict under the Defend Trade Secrets Act in favor of the Plaintiff Dalmatia Import Group, Inc. The jury awarded Dalmatia $2.5 Million in total damages for all claims, with $500,000 attributed to its DTSA and Pennsylvania Uniform Trade Secrets Act claim. Just this week, Dalmatia filed a motion for judgement on the verdict,  seeking treble damages for its related trademark and counterfeiting claims.  If the court awards treble damages, total damages could exceed $5 Million.

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