Posts by: Editorial Board

RELEASED ON (VERY LITTLE) BOND: Suspect Accused of Preparing to Flee U.S. with Gore Trade Secrets is Released on Nominal Bond

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A federal magistrate judge has released on bond the accused trade-secrets larcenist and former W. L. Gore & Associates, Inc. employee Kwang Seoung Jeon, who was arrested as he allegedly tried to flee the United States for his home country of South Korea.

Jeon had notified the company—maker of Gore-Tex fabrics—that he was leaving the company to return to South Korea as a consultant after being told he would not receive a raise.  In a fact pattern becoming all too familiar in trade secrets theft prosecutions, Jeon then allegedly printed book-size documents from his work computer relating to the company’s camouflage technology, in violation of the Economic Espionage Act.  According to the criminal complaint, Jeon also attached three USB devices and two external hard drives to his work computer before leaving Gore, thereby accessing more than 800 company documents. READ MORE →

Fourth Circuit Blows Away Nearly $1 Billion Kevlar Trade Secrets Award

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The Fourth Circuit has thrown out the second-largest trade secret jury verdict on record, an award of nearly $1 billion, on the grounds that the district court improperly excluded evidence relevant to the defense.

We have covered this case extensively, tracing its history of allegations of double agents, bribery, top-secret industrial facilities, and its (apparent) culmination with an enormous jury award.  Now, it seems, this epic legal saga will start anew.  On April 3,  the Fourth Circuit unanimously vacated the jury award and ordered a new trial. READ MORE →

Ex-SanDisk Employee Arrested in Japan, Civil Suits Filed in the Wake of Alleged Flash Memory Trade Secrets Misappropriation

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Technology firms SanDisk and Toshiba recently filed trade secrets lawsuits on opposite sides of the Pacific, each alleging misappropriation by a third party stemming from the two companies’ joint venture.

SanDisk filed in California (seeking damages and injunctive relief) and Toshiba in Japan for alleged misappropriation of trade secrets from SanDisk and a SanDisk-Toshiba joint venture. In Japan, the alleged perpetrator was arrested.  Engineer Yoshitaka Sugita, his former employer, SK Hynix, and two wholly-owned North American subsidiaries stand accused of misappropriation.  SK Hynix is accused in both the California and Japan actions. READ MORE →

Ninth Circuit Upholds $5K Sanctions Award Against Attorney Based on Factual Misrepresentations in Trade Secrets Dispute

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Earlier this week, the Ninth Circuit approved a district court order from the Northern District of California imposing $5,000 in sanctions against a plaintiff’s attorney for factual misrepresentations made in an underlying trade secret case lawsuit brought by a toy inventor.

According to the complaint, California toy designer Jason Heller wanted to get a price quote for a prototype of a robotic hamster toy he had designed.  He entered into NDAs with two Hong Kong toy companies and handed over information about his hamster toy idea.  READ MORE →

U.S. v. LIEW: Opening Statements and FBI Testimony Kick Off Seven-Week Industrial Espionage Trial

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A prosecutor opened the economic espionage trial of Walter Liew on Wednesday by waving at jurors a key that he alleged opened Liew’s safe deposit box containing industrial secrets stolen from DuPont.

Assistant U.S. Attorney John Hemann led jurors through an almost cinematic scene that culminated with FBI agents confronting Liew and his wife, Christina, with the key found during a search of their Orinda, California home. Liew sat at the defense table during opening statements in San Francisco, as did co-defendant Robert Maegerle, a former DuPont employee. READ MORE →

U.S. v. LIEW: Jury Selection Focuses on Anti-China Bias in Industrial Espionage Case

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A federal judge questioned prospective jurors closely Tuesday for signs of anti-China bias in the industrial espionage trial of a U.S. citizen who prosecutors say fed secrets to a Chinese company.

Prosecutors allege that Walter Liew, who is of Malaysian descent, stole manufacturing secrets from E. I. du Pont de Nemours and Company and sold them to a company the Chinese government purportedly controlled.  His lawyers say there was little secret about DuPont’s techniques for making titanium dioxide, a white pigment used in painting paper and plastic, and that the Chinese government did not orchestrate Liew’s activities or that of a Chinese company, the Panang Group, at the center of the case.  (We previously commented on the government’s inability to serve the foreign-based company.) READ MORE →

LEGISLATIVE UPDATE: Senator Proposes New Bill to Create Civil Cause of Action for Foreign Theft of Trade Secrets

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Just before the Thanksgiving holiday last week, Senator Jeff Flake (R-Ariz.) introduced the Future of American Innovation and Research Act, a new trade secrets bill that would allow American trade secrets owners to sue entities who misappropriate trade secrets outside the United States, or who misappropriate trade secrets on behalf of foreign entities.  The bill tracks the Uniform Trade Secret Act’s definitions of “trade secret” and “misappropriation,” and includes standard remedies of damages and injunctive relief.  One interesting addition is that it would READ MORE →

THANKSGIVING POST: Court Protects Quizno’s Franchise Turkey Trade Secrets

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This Thanksgiving, Trade Secrets Watch is serving a delicious tale about protecting trade secrets in a franchising relationship.

In 1994, Quizno’s entered into a franchise agreement with Robert Kampendahl, an enterprising fellow who wanted to open up a Quizno’s sandwich shop in St. Charles, Illinois.  Unfortunately, Kampendahl didn’t keep his food equipment clean, used unapproved foods, and had safety and sanitation problems, so Quizno’s terminated the franchise agreement. Upon termination, Kampendahl was subject to a covenant not to compete that prohibited him from opening a competing sandwich shop within five miles. READ MORE →

Uniform Protection of Trade Secrets in the EU? Hooray! Ole! Hourra!

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European Union officials have just issued a draft set of rules that would impose uniform trade secret guidelines across the EU, motivated by trade pact negotiations with the United States and concerns about state-sponsored spying, according to The New York Times.  Although the leaders of the European Commission have yet to sign off on the proposed rules, they plan to adopt them tentatively on November 27.  The rules are then subject to a long legislative negotiating process before they come into force. READ MORE →

The Role of Alleged Trade Secret Forensic Evidence in the Amanda Knox Murder Case

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Last week, Sen. Maria Cantwell and Rep. Adam Smith, both Washington Democrats, convened a Congressional briefing to discuss the ongoing murder case against Amanda Knox, the 26-year-old University of Washington foreign exchange student who was convicted in Italy of brutally murdering her 21-year-old British roommate, Meredith Kercher. The highly publicized and polarizing story of Kercher’s gruesome murder is stomach-churning and heartbreaking, especially for trade secret lawyers who are more accustomed to discussing source code and customer lists. Yet there is a trade secret component to this case. Boise State University, the employer of one of Knox’s consulting technical experts, is holding back relevant DNA analysis research on the grounds that it is a trade secret. READ MORE →