Competitor Misappropriation

Fishing for ESI

When National Fish and Seafood’s (NFS) head of research left for a new opportunity at Tampa Bay Fisheries, she may not have taken just her talents to the competition.  According to NFS’ lawsuit, the former employee transferred thousands of files containing confidential and proprietary information prior to her departure from the company.  NFS also alleges that the CEO of Tampa Bay Fisheries conspired with NFS’s former employee to steal trade secrets involving its proprietary clam production process.

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Don’t Rock the Boat: Eleventh Circuit Sinks Boatmaker’s Trade Secrets Claims Against Rival

On August 7, 2018, the Eleventh Circuit affirmed summary judgment in favor of defendant in Yellowfin Yachts v. Barker Boatworks, LLC. Sending the rival high-end boatmakers back to shore after a two-year dispute, the Eleventh Circuit concluded, among other things, that plaintiff had not done enough to maintain the secrecy of its alleged trade secret information. READ MORE

In Hawaii, “Aloha” May Mean Both Hello and Goodbye, But When Employees Leave, Who Owns the Customer Relationships?

As we’ve observed over the years, when addressing trade secrets claims based on customer lists, courts have landed all over the place. These cases involve difficult questions such as when an employee develops relationships on behalf of Company A but then leaves for Company B, who “owns” those relationships?

A recent federal district court decision from the District of Hawaii, WHIC LLC dba Aloha Toxicology v. Nextgen Labs, Inc., offers an example of how the severity of the alleged misconduct may enable the employer to prevail, even if it can make only a marginal showing on the existence of a trade secret. On September 17, 2018, the court granted the plaintiff drug testing company’s request for a preliminary injunction, requiring, among other things, its competitor to stop servicing certain former clients of the plaintiff. READ MORE

Failing to Prepare Is Preparing to Fail

A recent case from the Federal Circuit upholding a jury’s finding in favor of defendant offers lessons to both defendants and plaintiffs on preparing for trade secrets misappropriation actions. Both plaintiff, Raytheon, and defendant, Indigo, are companies in the infrared imaging equipment business. Of the four Indigo founders, three of them were former Raytheon employees, causing Raytheon to accuse Indigo of misappropriating its trade secrets. Specifically, Raytheon accused Indigo of using Raytheon’s sequential vacuum bake recipes and in situ solder seal package assembly process taken by the former Raytheon employees to develop Indigo’s recipes and processes. READ MORE

When Friend Turns Foe: The Risks of Sharing Trade Secrets during M&A Negotiations

In the world of election politics, arms-length dealing with political adversaries is a delicate dance.  Recently, TargetSmart, a Democratic data firm learned how risky even negotiating with those on the same side of the aisle can be.  On June 28, 2018, TargetSmart filed a complaint in the District Court of Massachusetts against GHP, a Boston-based investment firm, and Catalist, TargetSmart’s competitor in the Democratic consulting space, seeking damages and permanent injunctive relief for misappropriation of trade secrets, breach of contract, and other claims arising from a merger negotiation gone-wrong. 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

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

Automation of Our Auto Nation: New Tech Requires a New Look at Trade Secret Laws

Self-driving cars—once a thing of the future—are now becoming a reality. And, as with any new technology, there is a learning curve. Once consumers are able to test out new products, they adapt, preferences change, and what once seemed absurd or over-the-top becomes commonplace. Manufacturers then face perhaps an even steeper learning curve, trying to stay one step ahead of what the public will demand—and two steps ahead of the competition. READ MORE

Pushing the Envelope: Eight Circuit Seals the Fate of Envelope Company’s Trade Secret Claims

On December 8, 2017, the Eighth Circuit rejected trade secrets and other claims related to allegedly stolen customer lists.  Applying Missouri state law, the federal appellate court continued the Show-Me State’s tradition of looking at customer list trade secrets with a jaundiced eye. READ MORE

Juicing Up Your Policies: How To Protect Your Trade Secrets

Recently, popular Southern California juice and aguas frescas chain Green Crush filed suit against up-and-coming rival juice bar Paradise Splash and several individuals. The lawsuit, filed in the U.S. District Court for the Central District of California, alleges 16 claims including misappropriation of trade secrets, trademark infringement, and breach of contract.

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