Last week, the United States Senate Judiciary Committee announced the creation of a new subcommittee on intellectual property. The IP subcommittee will address a range of IP issues, including theft by state actors such as China. The announcement of the subcommittee comes in the wake of increasing tension over trade with China and shortly after the Department of Justice announced criminal charges against China’s Huawei Technologies for alleged trade secrets theft. READ MORE
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
The strange contraption in this photo is at the heart of a recent decision regarding the pleading standard for DTSA claims. On June 15, Eastern District of Pennsylvania Judge Juan Sanchez denied a motion to dismiss counts of trade secret misappropriation against Joshua Andrew Adams, a former project engineer for PDC Machines, Inc. who left the company and later joined Nel Hydrogen A/S. PDC and Nel collaborated in 2008 to develop high-pressure hydrogen gas diaphragm compressors and signed a nondisclosure agreement (NDA) barring Nel from replicating or reverse engineering the technology. Adams was also subject to an NDA that prohibited him from using any of PDC’s confidential information and trade secrets without written permission. In the complaint, PDC asserts that Adams now works for Nel, and that Nel has filed at least one patent application listing Adams as the inventor for a high-pressure diaphragm hydrogen compressor that is nearly identical to PDC’s version. READ MORE
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.
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.
On April 20, 2017, the New York Court of Appeals issued a brief order continuing former Goldman Sachs programmer Sergey Aleynikov’s eight-year voyage through the state’s and country’s legal systems. Here’s the issue: does making a digital copy of misappropriated source code instead of physical copy constitute a “tangible reproduction or representation” of the source code? READ MORE
What happens when trade secret protections collide with laws granting public access to government records? This question took center stage in a recent case involving the Seattle Police Department (“SPD”). A federal district court enjoined the SPD from disclosing a software vendor’s allegedly trade secret information in response to a reporter’s public records act request. Besides serving as a reminder of the precautions that companies should take when disclosing intellectual property to public agencies, the case also raises interesting questions and strategic considerations. READ MORE
In a tale of alleged betrayal and misappropriation of trade secrets in a courtroom (not) far, far away, a pioneering company in the area of special effects has sued its former employees and a vendor, claiming that they conspired to recreate the company’s primary business under a new name, erasing the evidence on the way out. The alleged tale is an illustration of how vulnerable a company and its trade secrets can be in times of ownership and business transition, especially when the company relies mostly on a single customer. READ MORE
This week, TSW revisits some cases that taught us valuable lessons in the complex and ever-changing trade secrets arena. As our readers know, trade secrets law keeps evolving due to new case law and the near certainty of a new federal cause of action, which will provide for federal jurisdiction where there was none, consistency throughout the country on enforcement of these claims, and a couple of new remedies. The risks to trade secret protection also continue to grow due to cybersecurity and social media considerations. In short, a business must balance several factors when determining how to best protect trade secrets, but it is sometimes the simple missteps that can sink a company’s efforts to enforce its trade secrets. Here are some key takeaways learned over the years. READ MORE
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
In a case more notable for the fact that it reached Idaho’s Supreme Court than the final decision, the lower court’s dismissal of the plaintiff waste disposal company’s misappropriation of trade secrets claim was affirmed.
In July of 2012, the defendant County of Idaho (“the County”) solicited proposals for a contract to provide waste disposal services to part of the county that was being served by the plaintiff Walco, Inc. (“Walco”). Both Walco and the other defendant, Simmons Sanitation Service, Inc. (“Simmons”), submitted envelopes containing their respective proposals. READ MORE