The Freedom of Information Act (“FOIA”) grants the public a powerful right of access to records in the possession of federal agencies. However, this right of access is subject to nine distinct exemptions. As demonstrated by D.C. District Court Judge Trevor N. McFadden’s opinion in Story of Stuff Project v. United States Forest Service, it is relatively easy for the federal government to withhold records under Exemption 4 which protects “trade secrets and commercial or financial information obtained from a person” which are “privileged or confidential.” 5 U.S.C. § 552(b)(4). READ MORE
Posts by: Editorial Board
When Congress enacted the DTSA on May 11, 2016, it left open the issue of whether the DTSA would apply to misappropriation that occurred prior. As we previously reported, many federal district courts have since found that it does apply if there were continuing acts of misappropriation after enactment of the statute. Now, the 10th Circuit Court of Appeals has weighed in, upholding a district court’s dismissal of a DTSA claim where the plaintiff failed to allege a continued act of misappropriation after the date of enactment. READ MORE
On September 13, the Ninth Circuit heard oral arguments on an issue of first impression in Anheuser-Busch Cos. v. James Clark, No. 17-15591 (9th Cir. 2015).
Anheuser-Busch filed a complaint in the Eastern District of California against former employee James Clark, alleging that he violated California’s Uniform Trade Secrets Act (CUTSA) by unlawfully disseminating a document containing its beer recipe for use in a separate class action suit. To support its allegations, the company submitted a declaration stating that the leaked document contained “confidential information related to Plaintiffs’ brewing processes, including but not limited to, information regarding a variety of analytical characteristics for each of [Plaintiffs’] products.” READ MORE
As widely reported, on April 20, the Democratic National Committee (“DNC”) kicked off a twelve count lawsuit against a number of entities and individuals, including the Russian Federation, General Staff of the Armed Forces of the Russian Federation (“GRU”), WikiLeaks, Julian Assange, Donald J. Trump, Jr., and other political foes. Amongst the wide swath of allegations, which include everything from computer fraud to RICO conspiracy, are allegations that the defendants misappropriated trade secrets in violation of both the DTSA and the Washington D.C. Uniform Trade Secrets Act. READ MORE
In January of this year, Chinese wind turbine manufacturer Sinovel Wind Group Co. Ltd. was convicted of stealing trade secrets from U.S. company AMSC Inc. The theft caused AMSC, more than $800 million in losses and forced the company to lay off more than half its global work force. Sinovel’s sentencing—which could include fines exceeding $1 billion and a multiyear probationary period—is scheduled for June 2018. READ MORE
The lawsuit between Swarmify and Cloudflare recently produced an Order in which U.S. District Court Judge William Alsup denied Swarmify’s motion for a preliminary injunction, and also offers a cautionary tale about what activities might result in bloggers being hauled into Court.
In 2016, Swarmify, a start-up focused on affordable video streaming, and Cloudflare, a corporation that uses a network of data centers for content delivery, entered into confidential negotiations regarding Cloudflare’s potential acquisition of Swarmify. During these discussions, Swarmify disclosed to Cloudflare some confidential information about the company’s proprietary streaming method, including a pending unpublished patent application, but notably did not disclose any computer code. While the discussions were ongoing, Cloudflare offered employment to Swarmify’s CEO and the senior developer of Swarmify’s proprietary streaming method. Both individuals declined, and informed Cloudflare any movement on their part would have to come through Cloudflare’s acquisition of their company. The companies ended negotiations and parted ways, but not for long. READ MORE
As our United States readers prepare for the holiday weekend, we look back to a post from the archives where we dished about franchise relationships gone awry and a trade secrets dispute over turkey sandwiches. The takeaway: Savvy franchisors should consider revisiting their agreements with an eye toward gaining admissions from franchisees that certain materials constitute trade secrets.
And while our readers in the rest of the world wrap up the work week, companies in the United Kingdom may have a reason to be thankful. As our colleagues over at the Employment Law and Litigation blog discuss, a recent High Court decision granted an order allowing an employer to image a departing employee’s computer to see if it contained confidential information.
This post is a good read not only for those in the UK but for any company interested in protecting its trade secrets and confidential information. For example, the post includes this tip, which has fairly broad impact: You will be more likely to persuade a court to rule in your favor if you offer limitations and controls in the carrying out of a forensic search of a computer or other device.
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
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
(Editors’ note: Thanks to Orrick summer associate, Ruben Sindahl, for his help with this blog post.)
Just four years after the Lone Star State ended its holdout by becoming the 48th State to adopt the Uniform Trade Secrets Act, Texas passed a bill to amend its enactment. The bill was signed by Texas Governor Greg Abbott on May 19, 2017, and will take effect on September 1, 2017.