Collaborator Misappropriation

TOTAL ECLIPSE EDITION: Trade Secret Disputes That Are Out of This World

Take off your eclipse glasses, close that NASA photo gallery, and stop thinking about how “path of totality” would make an awesome band name: it’s time to get back to work. As the country recovers from Eclipse Mania 2017, we take a look at some space-related trade secrets cases.

Turn Around…

Someone might be stealing your trade secrets behind your back! A federal court found that’s what happened to Pacific Aerospace & Electronic, Inc. (PAE), a company that designs components for electronic circuitry in the aerospace and space exploration industries and whose products are used on the Hubble Telescope and the International Space Shuttle.  According to PAE, the specialized nature of its business makes the identity of its customers—who are relatively few in number—critical to its business success.  That’s why it was a problem when two PAE employees who had access to proprietary information about PAE’s technologies and customers left for a rival company, RAAD Technologies, Inc.  One of the former employees allegedly copied backup tapes of design information weeks before leaving, and both employees allegedly compiled a list of prospective customers after leaving which they gave to RAAD’s sales representative for use in soliciting business.  PAE brought a claim for misappropriation of trade secrets (among others) against these former employees and RAAD in the Western District of Washington, and moved for a preliminary injunction.  The court ruled that PAE’s detailed customer information was a protectable trade secret, and that PAE risked irreparable harm in the absence of an injunction and would likely prevail on the merits of its misappropriation claim.  However, the court limited the scope of injunctive relief only to future misuse of the trade secret customer list, rather than ongoing misuse—i.e., continued sales to wrongfully-acquired customers—as PAE had requested.  The court reasoned that given the importance of PAE’s (and later RAAD’s) customers, public interest concerns favored permitting these ongoing business relationships and remedying any harm by an award of monetary damages.


SOUR GRAPES: Fig Spread Verdict Under DTSA Doesn’t Stick, Argue Jam Company Defendants

In a dispute over ripped off recipes, counsel for victorious plaintiff Dalmatia Import Group hailed the jury verdict as the first of its kind under the Defend Trade Secrets Act, as we previously reported.  Not so fast, sulked the defendants, Dalmatia’s erstwhile manufacturer Lancaster Fine Foods and distributor FoodMatch, in a filing this month.  While acknowledging their defeat under the Pennsylvania Uniform Trade Secrets Act, the defendants nevertheless urged  the court not to enter judgment under the DTSA.


Wake Forest Leaks Scandal May Offer “Playbook” For Businesses Seeking Trade Secret Protection

After a long political season that took many twists and turns due in part to revelations from WikiLeaks, the holiday season finally arrived. For many, that meant family traditions, time away from work, and massive amounts of college football, thanks to the current litany of televised bowl games.


Diamonds Are Forever, but Joint Ventures Are Not: Court Finds Claims Preempted by CUTSA in Business Deal Gone Bad

The holiday season is officially upon us: peppermint mochas have popped up on coffee shop menus, carols ring from department store speakers, and you can’t turn on the television without seeing at least three diamond commercials. But it’s not all yuletide and merriment for those in the diamond business. As one diamond importer and wholesaler recently learned, sometimes instead of a gem you get a lump of coal—in this case, from the Northern District of California, which tossed out certain claims against a former business partner on the grounds those claims were preempted by the California Uniform Trade Secrets Act. READ MORE

The Location of Old McDonald’s Beehives Are Trade Secrets: Database Showing “Realistically” Ascertainable Locations Entitled to Protection

To qualify as a trade secret under either the UTSA or the DTSA, the information in question must not be “readily ascertainable” through “proper means.” But what does “readily ascertainable” mean?  If information is ascertainable by the public, but it would take some work to compile it, does that qualify as “readily ascertainable”? READ MORE

No Explicit Efforts to Maintain Secrecy? No Problem, Suggests the Ninth Circuit

In Direct Technologies, LLC v. Electronic Arts, Inc., the Ninth Circuit set forth an interesting take on what is sufficient to demonstrate reasonable efforts to maintain secrecy under the California Uniform Trade Secrets Act (“CUTSA”). In the case, plaintiff Direct Technologies, LLC asserted a trade secret misappropriation claim against defendant Electronic Arts regarding the disclosure of its usb drive prototype for Electronic Arts to a third-party. The district court granted summary judgment for Electronic Arts, finding that no reasonable jury could find that Direct Technologies had taken reasonable efforts to maintain the confidentiality of its prototype. READ MORE

The Gloves Are Off: Competing Biopics Battle For Hollywood Purse

Hollywood’s heavy-hitters often enter the ring over unauthorized biographies. Elizabeth Taylor famously invoked her rights of publicity and privacy in an attempt to shut down an unofficial docudrama about her life; Clint Eastwood sued the author and publisher of his unsanctioned biography for libel; and a film production company brought claims for copyright and trademark infringement against the producers of the biopic Lovelace starring Amanda Seyfried. Hollywood’s newest matchup involves misappropriation of trade secrets, a growing concern in the entertainment industry, especially after the recent Sony hack. READ MORE

Throwback Thursday: Why Trade Secret Theft Isn’t Just a Digital Problem And What Businesses Can Do About It

With stories of cyberattacks and data breaches on a seemingly endless loop, businesses and governments have been doubling down on their efforts to protect digital information and assets.  But, in some industries, the greatest threat might still be a pair of quick hands.  For instance, in the restaurant industry, opening the kitchen doors to a new employee creates real risks.  As we’ve discussed, sometimes the decision whether to print or download can have major legal ramifications.  And with computer forensics technology growing in leaps and bounds, sometimes an old-school paper trail might be more enticing to would-be perps than a digital one.  That said, the FBI has a track record of turning up bags of shredded documents in grocery store dumpsters. READ MORE

Filer Beware! E-Filing Error Can Destroy Trade Secret Status

First rule of thumb in trade secrets litigation? A trade secret must be kept secret. It is painfully obvious, but modern practitioners must not grow complacent due to the convenience of electronic filing. Although trade secrets law does not command absolute secrecy, a recent e-filing snafu in HMS Holdings Corp. v. Arendt offers a cautionary tale from New York on how one botched upload could jeopardize a client’s most prized possession. READ MORE

The New Space Race: Protecting Trade Secrets on the Final Frontier

Space: The final frontier.  For millennia, people have wanted to explore the great unknown of outer space, and series like Star Trek and Star Wars continue to our fuel our fantasies about what lies beyond our stratosphere.  This fascination, as well as countries’ desires to maintain their military prowess, led to the First Space Race after World War II.  Today, while NASA’s dominance may have fizzled out, private companies have embarked on a commercialized space race to gain market dominance from their designs. Indeed, the House of Representatives recently passed the SPACE Act to enable commercial space mining activities. READ MORE