(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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Thinly Pled Allegations of Trade Secret Misappropriation under DTSA Are Vulnerable to Dismissal

A dismissal with prejudice is a plaintiff’s worst fear realized. When it comes to alleging a proper claim for trade secret misappropriation, the Western District of Kentucky recently reminded plaintiffs just how critical it is to “kick the tires.” In Raben Tire Co., LLC v. McFarland, Case No. 5:16-cv-00141 (W.D. Ken.), plaintiff Raben Tire Co., LLC, alleged misappropriation of trade secrets against two former employees under the Defend Trade Secrets Act of 2016 (“DTSA”), 18 U.S.C. § 1831 et seq., and the Kentucky Uniform Trade Secrets Act (“KUTSA”), Ky. Rev. Stat. § 365.880 et seq., along with a handful of additional common-law claims. READ MORE

Full* Disclosure: A Middle Road in Fracking Fluid Law

Many oil and gas companies operate within incredibly tight margins and subject to ever-volatile commodity market prices. In such a competitive sector, the ability to innovate with improved extraction and transmission techniques can be make-or-break.  As we have previously written, one way to gain an advantage in the process of hydraulic fracturing is to use specially chosen or designed chemical additives that can make a frack job more successful than it otherwise may be. Oil and gas companies often rely on trade secrecy to protect these special fracking fluid compositions.  As can be expected, many environmental groups express concern that these chemicals could contaminate groundwater and, in turn, argue that landowners and the public have a right to know if potentially harmful chemicals are being injected into the ground. READ MORE

Pooley’s Corner: How to Recruit and Hire While Avoiding Data Contamination

When we think about trade secrets, we usually focus on keeping our own data safe. But an even bigger risk comes from hiring employees who can infect our systems with confidential information from a competitor. Companies often learn this the hard way. Boeing’s hiring several managers from Lockheed led to a $615 million fine and indictments of the individuals. Hilton poached two Starwood executives to create a competing hotel brand, but they came with thousands of documents and prompted a lawsuit that killed the project and cost $150 million to settle. Recently, a similar situation at Zillow required a $130 million settlement. READ MORE

Trade Secret Misappropriation in the World of Driverless Cars: Google versus Uber

On Thursday, Waymo LLC sued Uber Technologies and Ottomotto LLC in federal court in the Northern District of California for: (1) violation of the federal Defend Trade Secrets Act; (2) violation of California’s Uniform Trade Secrets Act; (3) Patent Infringement; and (4) Violation of Section 17200 of California’s Business and Professions Code. Waymo is a subsidiary of Alphabet Inc. that specializes in self-driving cars.

According to Waymo’s complaint, one of its former managers, Anthony Levandowski, downloaded more than 14,000 highly confidential and proprietary files shortly before his resignation in January 2016.  Those files allegedly related, among other things, to Waymo’s proprietary LiDAR system, which, when mounted on a vehicle, “enable[s] a vehicle to ‘see’ its surroundings and thereby allow[s] a self-driving vehicle to detect traffic, pedestrians, bicyclists, and any other obstacles a vehicle must be able to see to drive safely.”

Waymo claims that it caught wind of the alleged misappropriation recently when one of its LiDAR component vendors inadvertently copied Waymo on an email depicting Uber’s LiDAR circuit board. According to Waymo, Uber’s LiDAR circuit board “bears a striking resemblance to Waymo’s own highly confidential and proprietary design and reflects Waymo trade secrets.”

Given the technology at issue and the players, this is a case that will be fascinating to watch. We’ll keep you posted.

Don’t Friend My Friends: Nonsolicitation Agreements Should Account for Social Media Strategies

As social media becomes an important part of many companies’ sales and branding strategies, issues relating to companies’ ability to protect their investments in such strategies are emerging. Indeed, this blog has previously covered whether LinkedIn contacts can qualify as trade secrets (answer: maybe). Another such issue, recently addressed in a district court in Idaho, is whether and to what extent a nonsolicitation agreement can restrict a former employee’s Facebook interactions with the former employer’s customers. READ MORE

Misappropriation Versus the Copyright Act: Round 2 in the Fifth Circuit

A few months ago, Trade Secrets Watch covered the GlobeRanger Corp. case in which the Fifth Circuit joined 10 other circuits in determining that the Copyright Act does not preempt state trade secret misappropriation claims. The court used a two-prong test in its analysis, establishing that the Copyright Act could preempt a state law claim if two conditions are met: (1) if the work at issue fell within the subject matter of copyright; and (2) if the right that the litigant sought to protect was equivalent to any of the exclusive rights within the general scope of copyright. READ MORE

Causing a Brouhaha: Trade Secrets Disputes in the Craft Beer Industry

In recent years, the craft beer craze has taken ahold of the country and has resulted in an explosion of new microbreweries and enthusiasts. Several websites, like BeerSmith, allow users to share recipes with others; other websites, like BrewCraft, sell their recipes for home brewing.  In fact, some craft beer aficionados have even created beer trading exchanges to secure their hard-to-find favorites.  Even when a popular beer is discontinued, other microbrewers look to fill the void left on everyone’s taste buds with beers of their own.  For instance, when Russian River’s legendary craft brew Pliny the Elder was pulled from certain markets, craft brew fans raced to find similarly tasting alternatives to quench their thirst.

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