Our readers have seen enough of our blog posts to be familiar with the classic ex-employee trade secrets theft scenario: employee downloads confidential files to his personal computer; employee attempts to cover his tracks with deletions of those files; employee resigns from the company to work for a competitor. When such a classic case results in litigation, the plaintiff company typically succeeds in obtaining injunctive relief against the ex-employee. We posted about one successful preliminary injunction motion last year. A recent district court decision out of the District of Nevada, however, shows that a motion for TRO on seemingly slam-dunk facts is never guaranteed. This decision highlights two important takeaways for litigators: (1) if your client is facing imminent business harm, seek an injunction immediately; and (2) in the Ninth Circuit, there is no presumption of irreparable harm, even if the evidence shows trade secret misappropriation or a breach of the employee’s confidentiality agreement. READ MORE
Posts by: Michael Weil
Social media today connects people more than ever. It can be a means to bring together long-lost friends, new acquaintances, and love interests, or the public with celebrities, sports teams, new products, and companies—to name just a few. It can be an effective way to market images and products, as it has the potential to reach thousands instantly with the click of a button. With such public uses and goals, social media seems like an odd candidate for trade secret protection. Yet, that is precisely what BH Media Inc. is seeking to protect in its complaint, filed with the Western District of Virginia on August 6, 2018 against a former employee, Andy Bitter. READ MORE
In some cases, there may be a severe cost – even a monetary cost – for plaintiffs who seek to materially amend their trade secrets disclosure following discovery. This is what happened to the plaintiff, Swarmify, in its lawsuit against Cloudflare, now pending in the U.S. District Court for the Northern District of California.
As we reported previously, on February 27, 2018, the court in this case denied Swarmify’s motion for a preliminary injunction for failure to show irreparable harm. At that time, the court commented that Swarmify’s trade secrets disclosure, produced pursuant to California Code of Civil Procedure Section 2019.210, was severely overbroad and “ever-shifting,” which the court characterized as a “blatant abuse of the system.” READ MORE
On Tuesday, April 3, the California Supreme Court will hear arguments in Hassel v. Bird. Case No. S235968. While seemingly a defamation case, it has direct implications on trade secrets owners and the rights of internet publishers.
In that case, a lawyer, Dawn Hassell, sued her former client, Ava Bird, for defamation in California state court because of a negative Yelp review. 247 Cal. App. 4th 1336 (2016). Bird never responded to the lawsuit, so the trial court entered a default judgment in Hassell’s favor. The court ordered Bird and Yelp to remove her the reviews, even though Yelp was not a party to the lawsuit. Yelp appealed on numerous grounds, including that (1) the court denied Yelp due process because Yelp wasn’t a party; (2) the order was an improper prior restraint; and (3) Yelp had immunity under the Communications Decency Act. The court of appeal rejected all of these arguments.
This fight between the rights of internet publishers and those allegedly aggrieved by third parties who post information or statements on the publishers’ websites is an ongoing battle. While often fought in the defamation space, many of these disputes involve trade secrets owners who claim others, including former employees, posted trade secrets on an internet publisher’s site. See, e.g., Glassdoor, Inc. v. Superior Court, 9 Cal. App. 5th 623 (2017). The Hassell case will have direct impact on this ongoing battle. If upheld, it will create a potential roadmap for trade secrets owners to take down offending content published on the internet. For the internet publishers, it creates a serious headache because it allows plaintiffs to sidestep the publisher’s right to defend against an injunction.
Trade Secrets Watch will monitor the oral argument and report back.
In every trade secrets case, the plaintiff faces the same fundamental dilemma: In order to enforce their rights in court, they must identify (at least to some degree) the trade secrets at issue. Although California has adopted a reasonable particularity requirement by statute, how much detail plaintiffs must provide when identifying their trade secrets in litigation continues to vary state-by-state. The answer is no clearer under federal law, as the Defend Trade Secrets Act is silent as to this issue.
Notwithstanding, the level of particularity required is an ongoing issue that courts continue to grapple with. For example, Texas’s highest court may weigh in for the first time on the degree of specificity plaintiffs must provide when identifying trade secrets allegedly misappropriated under the Texas Uniform Trade Secrets Act (TUTSA). READ MORE
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
This afternoon, as anticipated, President Barack Obama signed the Defend Trade Secrets Act into law, wrapping up a lengthy bipartisan effort to bring trade secrets under federal system law. Some observed that the fact that President Obama chose to sign the bill into law publicly indicates the importance of the new law to the administration. READ MORE
On August 28, 2015, TSW continued its coverage of the 2015 Defend Trade Secrets Act (“2015 DTSA”), introduced in both the House and Senate on July 28, 2015, with its comparison of the 2015 DTSA to last year’s failed 2014 House Bill. In today’s post, TSW continues with its extensive coverage of the 2015 DTSA, detailing both the criticisms it is facing and the progress it has made in Congress. READ MORE
Congress is getting into the non-compete business. Citing the use of non-compete agreements by companies such as Jimmy John’s sandwich shops, Senate Democrats recently introduced a bill—called the Mobility and Opportunity for Vulnerable Employees (MOVE) Act—that would amend the Fair Labor Standards Act (FLSA) to prohibit the use of non-compete agreements for low-wage employees. READ MORE