Employee non-compete agreements have long played an important role in employers’ ability to protect confidential and trade secret information. However, recognizing the distinct advantage employers often enjoy in negotiating such agreements, there has been a well-documented trend in recent years toward greater scrutiny of—and even hostility toward—employee non-competes.
Trial and Error Under the China Initiative
If you have seen any of our prior articles concerning the China Initiative, you know the U.S. Department of Justice (“DOJ”) is still focused on actively investigating individuals with ties to China who are suspected of trade secrets theft. However, the failure of recent China Initiative prosecutions raises an issue as to which companies involved in academic and scientific research may be targeted going forward.
Replacing the Words “Trade Secrets” with “Confidential Information” Does Not Allow a Party to Bypass Its Obligations Under California Code of Civil Procedure Section 2019.210
In a recent discovery dispute before the Northern District of California, Plaintiff Monolithic Power Systems, Inc. (“Monolithic”) unsuccessfully attempted to bypass California Code of Civil Procedure section 2019.210 which requires the party making a claim of trade secret misappropriation under the California Uniform Trade Secrets Act (“CUTSA”) to identify the trade secret “with reasonable particularity” before “commencing discovery relating to the trade secret.”
Supreme Court Narrows Scope of the Computer Fraud and Abuse Act
The U.S. Supreme Court recently resolved a circuit split regarding the federal Computer Fraud and Abuse Act (CFAA), specifically weighing in on the “exceeds authorized access” provision of the statute. The CFAA subjects to criminal liability anyone who “intentionally accesses a computer without authorization or exceeds authorized access.” READ MORE
Trial of Ex-Coca-Cola Principal Engineer Accused of Espionage and Stealing Trade Secrets Begins.
The trial of Xiaorang You (aka “Shannon You”)—the principal research engineer accused of stealing trade secrets from several companies, including Coca-Cola—began on April 6, 2021 in the Eastern District of Tennessee at Greeneville. Ms. You was indicted by a grand jury on February 12, 2019 for theft of trade secrets, conspiracy to commit theft of trade secrets, and wire fraud. The trade secrets were valued at more than $119 million. In August 2020, a superseding indictment added additional charges related to economic espionage.
Court of Appeals Cites “Rule of Reason” Standard for Evaluation of Non-compete Restrictions in Commercial Agreements
Last year, the California Supreme Court held in Ixchel Pharma, LLC v. Biogen, Inc., that restraints in contracts between businesses should be evaluated using the same “rule of reason” standard that courts use to analyze antitrust violations under the Cartwright Act. Our previous article analyzing the Ixchel decision can be found here.
Recently, in Quidel Corporation v. The Superior Court of San Diego County, the California Court of Appeals for the Fourth District (“Court of Appeals”) applied Ixchel to overturn a decision of the San Diego Superior Court (the “Superior Court”). READ MORE
Preliminary Injunction Challenge: Showing Irreparable Harm Even When the Defendant Proactively Takes Steps to Remediate
A preliminary injunction motion recently filed in the Eastern District of Virginia paints a fascinating story of alleged trade secret theft by a direct competitor in the ultra-competitive field of gas turbines, and the fallout that ensued. READ MORE
FRE 404(b) and Trade Secrets Disputes: To Admit or Deny?
In a recent decision, an Eastern District of Texas court conducted an analysis under Federal Rule of Evidence Rule 404(b) outside the criminal context to allow evidence of “other acts” in a trade secrets litigation. The decision appears to be the first application of Rule 404(b) to a trade secrets dispute by a court in the Fifth Circuit. READ MORE
Profiting off Public Panic – Abbott Laboratories et al v. Brown
The COVID-19 pandemic has led to a rise in fraud by wrongdoers seeking to profit off public panic and strained resources. One such example is asserted in the lawsuit filed by global health care company Abbott Laboratories (“Abbott”) against its former employee Justin Brown in the United States District Court for the Northern District of Illinois. In the Complaint, Abbott alleges that Brown stole Abbott’s customer information and fraudulently represented that he was selling Abbott’s COVID-19 diagnostic products. READ MORE
The Interplay of Patents and Trade Secrets in Protecting IP
Often companies are faced with a dilemma in protecting their IP—should the company disclose its IP to the world and seek a patent that will protect its IP for a set number of years? Or, should the company keep the IP a secret perpetually and protect it through state and federal trade secret laws? The answer is typically not one or the other; but, instead, a complex combination of the two. This article outlines a few thorny issues that can come up when balancing these two types of IP protections: READ MORE