Attorney General Enforcement

RIGHT IN THE BREADBASKET: Lessons From Early Cases at the Intersection of Noncompetes and the DTSA

As many TSW readers are aware, 2016 has been a big year for trade secret law, with both the United States and the European Union expanding trade secrets protections and increasing the uniformity of their laws. But as good as this year has been for trade secrets protection, it’s been every bit as bad for noncompete agreements.
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TRO LLC – GET IT? Sprung from Prison, Hacker Creates Hedge Fund That Shorts Stocks of Companies with Security Vulnerabilities

Self-proclaimed Internet troll and hacker Andrew “weev” Auernheimer has big plans now that he’s been sprung from prison.

We identified Auernheimer’s imprisonment and appeal as one of the top trade secret stories of 2013: A member of “Goatse Security,” Auernheimer discovered a vulnerability in AT&T’s website associated with 3G service for the iPad in June 2010.  He and an associate figured out that if they sent a HTTP request with a valid ICC-ID (data found on an iPad’s sim card), they could retrieve the email address associated with that ID from the AT&T website.  Fellow hacker and associate Daniel Spitler wrote a script that “slurped” the email addresses of 114,000 users (the script was called the “iPad 3G Account Slurper”).  Weev shopped the addresses and news of the breach to Gawker, which took the bait.  The FBI got wind of the exploit, however, and their investigation led to a criminal complaint in 2011 and a 2013 conviction on cybercrime charges that carried a 41-month prison sentence.  Nevertheless, Auernheimer claimed to have used only industry-standard practices and that he and his associates “tried to be the good guys.” READ MORE

AGs to the Front Lines: State Attorneys General Begin Wielding Unfair Competition Laws against Foreign IP Thieves

Companies victimized by intellectual property theft may have a new weapon: asking state attorneys general for civil prosecution under unfair competition laws.  Three states have used this tactic already—each time directed at foreign entities.

shutterstock_135611783Massachusetts Attorney General Martha Coakley brought the first action in 2012.  The case alleged that Narong Seafood, a Thai seafood-processing company operating worldwide, was using unlicensed software programs, giving Narong an unfair advantage over local businesses.  In response to this action, Narong signed an “Assurance of Discontinuance,” paid a $10,000 penalty to the Commonwealth of Massachusetts, and agreed to comply with the Massachusetts unfair competition statute.

shutterstock_112353011California joined Massachusetts in early 2013, when Attorney General Kamala Harris sued two foreign apparel manufacturers — one Indian and one Chinese — under the state’s unfair competition statute.  The complaints allege that the companies use pirated computer software programs as part of their manufacturing process, and that this piracy allows the foreign companies to save costs and gain a substantial and unfair advantage over competitors in California who pay for the software they use.  READ MORE