Posts by: Editorial Board

Trade Secrets and Third Parties: Litigation Traps To Avoid

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Orrick’s Chris Ottenweller and Derek Knerr recently took to Law360 to review recent cases involving theories of third-party liability for trade secret misappropriation.  New employees are one obvious source of potential liability if they bring to the job information obtained from their prior employer. But in recent years companies have also increasingly faced suits based on relationships with contractors and vendors. Chris and Derek offer some practical considerations to help companies mitigate potential liability in the first place.

CONTINENTAL SHIFT: EU Advances Legal Regime Protecting Trade Secrets

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The European Union appears poised to enact a sweeping new legal regime that would harmonize trade secrets law across all member states.

It’s been a year since we wrote about a new EU proposal to regulate trade secret protection. Then, at the end of November 2013, the EU published its first draft proposal for a Directive on the protection of trade secrets.In May of this year, the Council of the European Union agreed on a revised draft Directive. (In contrast to European Regulations, European Directives do not apply directly as member states’ law, but only give objectives that the Member States must achieve within a specified time limit in order to harmonize their various national rules. This means that, in fact, trade secrets rules will not be “unified” but rather “similar” across the Continent.)

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Justice Hammers International Trade Secrets Hackers

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A recent Justice Department reorganization of its National Security Division concentrates resources on fighting state-sponsored economic espionage and corporate theft of trade secrets. These strategic changes focus on Justice’s ability to target and prosecute hackers and others who seek to damage national assets by means including economic espionage, proliferation, and cyber-based national security threats.
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New Strings Attached: LinkedIn Contacts Are Now Trade Secrets?

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From a birds-eye view, Cellular Accessories For Less, Inc. v. Trinitas, LLC appears to be a typical dispute between an employer and its former employee. However, a closer look reveals an issue new to the world of trade secrets—specifically, do LinkedIn contacts qualify as trade secrets? For now, they may: a federal judge in the Central District of California denied defendants’ motion for summary judgment last month, finding there were triable issues of material fact surrounding the question whether LinkedIn contacts were protectable trade secrets. READ MORE →

WORLD SERIES EDITION: These Trade Secrets Are Going, Going, Gone

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Ah, October: the time of crisp fall air, brightly colored leaves, and pumpkin spice-flavored everything. And, of course, the World Series quest that can unite a city—or, in the case of Orrick’s San Francisco and Washington, D.C. offices, give rise to a friendly wager (sorry, D.C.!). In honor of the baseball playoffs, we take a look at some trade secret issues related to our national pastime.
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To Sue for Theft of Your Trade Secrets in California, You May First Have to Give Them Away

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California trade secret litigators likely know all about California Code of Civil Procedure Section 2019.210.  Those that don’t, should.

Section 2019.210 provides that before commencing discovery in a trade secret litigation, the party alleging trade secret misappropriation must identify the allegedly stolen trade secret “with reasonable particularity.”

For plaintiffs, this rule is no joke.  It has sent many a plaintiff back to the drawing board trying, again and again, to adequately identify their stolen “special sauce.” It can be supremely frustrating. READ MORE →

Of Documents and Dumpsters: The Sixth Circuit Affirms Convictions for Theft of Hybrid Car Secrets from GM

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Last month, the Sixth Circuit affirmed the convictions of co-conspirator couple Yu Qin and Shanshan Du, who were convicted in 2012 of trade secrets theft.  A jury in the Eastern District of Michigan had found that Du absconded with GM’s proprietary documents, passing them to Qin, who then used them to start his own business.

The trade secrets comprised the specially engineered and highly complex “motor control source code” of a hybrid car—the program that directs how and when the electric motor of a hybrid car runs.  The jury bought the government’s argument that the hybrid car secrets were on their way to China via Qin and Du, both engineers. READ MORE →

FOURTH OF JULY EDITION [FROM THE ARCHIVES]: Family Fireworks: Plot to Steal Client Lists Goes Up in Smoke

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As Americans head for the beach or the barbecue to celebrate the Fourth of July (many with a bolstered sense of patriotism following the United States’ valiant World Cup efforts), Trade Secrets Watch marks this Independence Day by pulling an explosive story from its archives.

Pyro Spectaculars North, Inc. v. Souza is a case that’s full of fireworks—literal and figurative—as a family pyrotechnics business broke apart, with one member starting a rival company, apparently armed with a USB and a hard drive of purloined client lists and other company files. You can read our full post below the jump.

We wish all our readers and safe and happy holiday weekend. We’ll return to our regular blogging and tweeting schedules on Monday. READ MORE →

ANOTHER WIN FOR ALEYNIKOV: Judge Tosses Evidence in Ex-Programmer’s Latest Case

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Sergey Aleynikov fought the law, and the law lost—again.

Judge Ronald A. Zweibel of the New York Supreme Court has thrown out a raft of evidence originally gathered by the FBI for federal prosecution and later offered by state authorities attempting to prosecute Aleynikov for trade secrets theft. Finding no probable cause for Aleynikov’s original arrest, the court also faulted the feds for turning evidence over to the Manhattan district attorney instead of giving it back to Aleynikov. READ MORE →

North Carolina Enacts Criminal Penalties for Disclosure of Fracking Trade Secrets

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North Carolina is officially open for fracking, after lifting a ban on the practice—and enacting criminal penalties for spilling trade secrets associated with it. With passage of the Energy Modernization Act, North Carolina joins the growing ranks of states that have legislated to protect confidential fracking information.

North Carolina’s new law prompted us to update our chart summarizing the key provisions of similar legislation in other states. It can be seen here.  READ MORE →