Confidentiality Agreements

UNMASKING BLOGGERS: Hedge Fund’s Bid to Unveil Blogger’s Identity Highlights First Amendment, Trade Secrets Clash

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America’s reverence for anonymous speech is as old as the republic itself, tracing its roots to Thomas Payne’s pamphlet “Common Sense” and the Federalist Papers.  But the right to speak namelessly has limits, and hedge fund billionaire David Einhorn recently demanded that a court unmask a blogger who anonymously disclosed confidential investment information.

Early last month, Greenlight Capital, Inc., Einhorn’s hedge fund, filed suit in New York state court against Seeking Alpha, Inc., a popular stock market blogging website.  In the suit, Greenlight asked the court to order Seeking Alpha to identify a blogger who anonymously exposed Greenlight’s stake in Micron Technology before Greenlight revealed it. READ MORE →

Ninth Circuit Upholds $5K Sanctions Award Against Attorney Based on Factual Misrepresentations in Trade Secrets Dispute

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Earlier this week, the Ninth Circuit approved a district court order from the Northern District of California imposing $5,000 in sanctions against a plaintiff’s attorney for factual misrepresentations made in an underlying trade secret case lawsuit brought by a toy inventor.

According to the complaint, California toy designer Jason Heller wanted to get a price quote for a prototype of a robotic hamster toy he had designed.  He entered into NDAs with two Hong Kong toy companies and handed over information about his hamster toy idea.  READ MORE →

Former Employee Allegedly Coughs up Cold Remedy Formula: Broad Non-Disclosure Agreement Largely Ineffective

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A New Jersey appellate court’s decision last week in UCB Mfg., Inc. v. Tris Pharma, Inc., serves as a cautionary tale for employers when drafting confidentiality agreements to protect their trade secrets and confidential information.  In UCB, the court found that the confidentiality provision in a pharmaceutical company’s employment agreement with one of its former employees was unenforceable because it was overly broad in time and scope, did not further a legitimate business interest, was contrary to public policy, and was unduly burdensome on the employee.

The case emerged when plaintiff pharmaceutical company UCB alleged that its former lead cough syrup formulator, Yu-Hsing Tu, disclosed confidential information about one of its cough syrup formulas after leaving UCB and joining the company’s competitor, Tris.  After Tu’s arrival, Tris became the first company to produce a generic form of one of UCB’s profitable cough syrups.  UCB sued Tu and Tris for misappropriation of trade secrets, breach of Tu’s confidentiality agreement with UCB, and unfair competition.  UCB later dropped its trade secrets claim after failing to secure a preliminary injunction.

While working for UCB, Tu had signed a confidentiality agreement which stated Tu would not disclose “secret or confidential information” without UCB’s consent.  The agreement specified that “secret or confidential information” included READ MORE →