Appeal

Are State Governments Immune From Suit For Misappropriation Of Trade Secrets?

You are a state-government contractor. You respond to an RFP issued by a state-government entity. In your bid proposal, you submit documents that contain your trade secrets. You do not get the contract, but you later learn that the state-government entity gave your trade secret information to your direct competitor who did get the contract. Do you have any options under federal or state trade secret laws to sue the state? READ MORE

Third Circuit: Spying on Former Employee’s Social Media Account Does Not Constitute “Unclean Hands” to Bar Trade Secret Misappropriation Claim

Consider this: a former employee has just left his or her employer and may have taken trade secrets to a competitor.  Can the employer log in to that former employee’s personal social media account to search for potentially incriminating evidence?  For most employers, the answer may be “no,” as doing so may be unlawful or at a minimum, may constitute “unclean hands” (a doctrine barring equitable relief when the party seeking the relief has committed misconduct related to the claims at issue) possibly jeopardizing the employer’s trade secret misappropriation (and other claims) against the former employee. READ MORE

Trade Secret Sparks Beer Brawl in the Ninth Circuit: When is Your Word Enough?

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

Federal Circuit Illuminates Right to Disgorgement as Remedy for Trade Secret Misappropriation

The Federal Circuit recently issued an opinion, Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc., that addressed several interesting issues impacting the calculation of damages in trade secret actions.  Perhaps the Court of Appeals’ ruling of greatest consequence involved its determination that there is no Seventh Amendment right to a jury decision on disgorgement of profits – a remedy also often commonly described as “unjust enrichment.”  The Federal Circuit instead ruled that the calculation of disgorgement damages is for the trial court to decide after making findings of fact and conclusions of law.  If the decision is extended by other federal courts, it could have wide-reaching implications for claims under the Defend Trade Secrets Act, which allows for unjust enrichment damages as a remedy for misappropriation of trade secrets. READ MORE

New York Court Takes Saved Cost Damages off the Table

Plaintiffs in New York state trade secret actions face a new limitation on their damages claims, according to a May 3, 2018 decision from the state’s Court of Appeals.  The 4-3 opinion settles a split in New York state case law.  Going forward, compensatory damages for trade secrets misappropriation are limited to the amount actually lost by the plaintiff, and cannot extend to the “hypothetical” amount saved by the alleged infringer on research or development. READ MORE

Law360 Publishes Mike Weil Expert Analysis on Trade Secrets and Anonymous Speech Online

Earlier this month, the California Supreme Court heard oral arguments in Hassel v. Bird, a case we’ve discussed previously because it involves critical issues related to anonymous online speech and trade secrets protection. As promised, we’ll have more coverage once the court renders its decision.

In the meantime, take a look at this recent Law360 Expert Analysis (subscription required). In it, TSW co-editor-in-chief Mike Weil reports that the arguments in Hassel took place before a “hot bench” and provides an in-depth analysis of the case law in this area.

California Supreme Court Will Hear Arguments This Week in Defamation Case With Implications for Online Publishers, Trade Secrets Owners

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.

Defining Trade Secrets: Texas Supreme Court May Soon Decide How Particular Trade Secrets Owners Must Be in Court

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

David Nosal Raises Unusual Fairness Argument in Yet Another Attempt to Avoid 366-Day Prison Sentence

Just over four years ago, in January 2014, a court sentenced former Korn/Ferry regional director David Nosal to one year and one day in prison for violations of the federal Computer Fraud and Abuse Act and the Espionage Act.  Nosal appealed the sentence, but his appeals ultimately failed: the U.S. Court of Appeals for the Ninth Circuit upheld Nosal’s sentence, and the U.S. Supreme Court denied review of the case.  Luckily for Nosal, his 2014 motion for release pending appeal was granted, so he has not served any time during the four years of appeals. READ MORE

Nice Try: Federal Circuit Denies Uber Engineer’s Writ, Affirming the District Court

In trade secret cases, it is often the case that a defendant company and employee accused of trade secret misappropriation enter into a joint defense agreement.  Often under such JDAs, facts, strategies and documents are shared with the understanding that they will remain confidential. READ MORE