Trade Secret Misappropriation by Ex-Employees in China: How to Confront “Inside Theft”

Article 123 of the General Provisions of the Civil Law of the People’s Republic of China (effective Oct. 1, 2017) confirmed that trade secrets are intellectual property, signifying China’s recognition of the importance of trade secret protection.  Nevertheless, trade secret misappropriation remains rampant in the country.  READ MORE

Nosal Reply Brief Sets Stage for SCOTUS Cert Decision

The U.S. Supreme Court, which just began a new term on Monday with a full complement of nine justices, is expected to soon decide whether it will hear the appeal of David Nosal, the former Korn Ferry executive whose conviction under the Computer Fraud and Abuse Act was upheld in a controversial and closely-watched Ninth Circuit decision last year.  Nosal submitted his reply brief in support of certiorari on September 19, 2017, responding to the Department of Justice’s opposition submitted two weeks earlier.

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Accounts Frozen: DOJ Alleges Seven Defendants Conspired To Misappropriate Trade Secrets

Competition from Chinese companies shows no signs of slowing. Likewise, allegations of trade secret theft against Chinese companies are increasingly common. In this case, the U.S. Department of Justice linked allegations of trade secret theft with wire transfers from a Chinese company in order to freeze bank accounts and real property held by several defendants charged with conspiracy to steal trade secrets. READ MORE

New Measures to Combat Chinese Trade Secrets Theft: Will They Work?

For trade secret owners, international IP theft is of particular concern because of the difficulty in catching and enforcing remedies against the thieves.  For many U.S. companies with a global reach, an overriding concern has been how to combat economic espionage from Chinese state-owned companies or individuals.  During his campaign, President Trump certainly had China on his mind. READ MORE

EU Study: Trade Secrets Top Patents in European Union

Just as the U.S. Patent and Trademark Office has shown a keen interest in better understanding policy concerns and the needs of business stakeholders in the area of trade secrets (see our coverage of both USPTO symposia here and here) against the backdrop of a new federal law, the EU’s IP office is also stepping up its focus on trade secrets following the EU Trade Secrets Directive in 2016 (our coverage here).  READ MORE

TOTAL ECLIPSE EDITION: Trade Secret Disputes That Are Out of This World

Take off your eclipse glasses, close that NASA photo gallery, and stop thinking about how “path of totality” would make an awesome band name: it’s time to get back to work. As the country recovers from Eclipse Mania 2017, we take a look at some space-related trade secrets cases.

Turn Around…

Someone might be stealing your trade secrets behind your back! A federal court found that’s what happened to Pacific Aerospace & Electronic, Inc. (PAE), a company that designs components for electronic circuitry in the aerospace and space exploration industries and whose products are used on the Hubble Telescope and the International Space Shuttle.  According to PAE, the specialized nature of its business makes the identity of its customers—who are relatively few in number—critical to its business success.  That’s why it was a problem when two PAE employees who had access to proprietary information about PAE’s technologies and customers left for a rival company, RAAD Technologies, Inc.  One of the former employees allegedly copied backup tapes of design information weeks before leaving, and both employees allegedly compiled a list of prospective customers after leaving which they gave to RAAD’s sales representative for use in soliciting business.  PAE brought a claim for misappropriation of trade secrets (among others) against these former employees and RAAD in the Western District of Washington, and moved for a preliminary injunction.  The court ruled that PAE’s detailed customer information was a protectable trade secret, and that PAE risked irreparable harm in the absence of an injunction and would likely prevail on the merits of its misappropriation claim.  However, the court limited the scope of injunctive relief only to future misuse of the trade secret customer list, rather than ongoing misuse—i.e., continued sales to wrongfully-acquired customers—as PAE had requested.  The court reasoned that given the importance of PAE’s (and later RAAD’s) customers, public interest concerns favored permitting these ongoing business relationships and remedying any harm by an award of monetary damages.

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Excess Cargo? Shipping Common Law Claims Out of a Trade Secret Complaint

AFS, a company specializing in streamlining shipping costs and logistics, had its eight count amended complaint streamlined to only one—its Tennessee Uniform Trade Secrets Act (“TUSTA”) claim—primarily due to preemption and AFS’s lack of specificity as to its common law claims.

AFS filed suit in December 2016 against two prior employees, Christopher Cochran and Alessandro Rustioni, and their new competing company, Freightwise LLC.  AFS’s complaint set forth the classic case of defecting employee trade secret theft.  Among other things, AFS alleged that Cochran and Rustioni founded Freightwise in 2014 while still employed for AFS.  Both continued to work for AFS in sales leadership positions until late 2015 and early 2016.  And, they allegedly conspired to and secretly organized Freightwise by soliciting one of AFS’s major clients and maliciously interfering with its high-value contracts. READ MORE

EVEN BAMBI IS A TRADE SECRET: Eastern District Of Texas Finds That Lineage and Genetic Information of Deer Are Trade Secrets, Grants Preliminary Injunction

As surprising as it may be to city dwellers, the deer farming industry generates $3 billion per year for the U.S. economy. According to the North American Deer Farmers Association, “deer farming is one of the fastest growing industries in rural America.”  The corollary of the deer farming industry is a burgeoning deer breeding industry. As a court in the Eastern District of Texas recently noted, the “deer breeding industry is a potentially lucrative industry with single straws of buck semen selling for $5,000 to $20,000 on average, and ranging all the way up to $1 million to purchase the entire buck.” READ MORE

PILLOW TALK: A Threat to Trade Secrets?

It turns out that, even in romantic relationships, some things are best kept secret.  On July 7, 2017, Teva Pharmaceuticals USA, Inc. filed a complaint in the Eastern District of Pennsylvania alleging that a former executive disclosed confidential information to a romantic partner who happens to be an executive of one of Teva’s direct competitors. READ MORE