Developments in technology have led to advanced ways of protecting trade secrets. In an age where passwords, metadata, and paper trails are often the stories told to demonstrate misappropriation, it may seem that trade secrets must be reduced to a tangible form to be protected. However, a recent Oregon Court of Appeals opinion reminds us that this is not the case—if information is maintained as a trade secret it is equally protected regardless of form. READ MORE
Spring Cleaning: Tidying Up Your “Reasonable Efforts” to Maintain Trade Secrets
It’s among an in-house counsel’s worst nightmares. A former business partner, ex-employee, consultant, or competitor has stolen your company’s trade secret information. Company management demands swift action. You hire outside counsel who, after reviewing your company policies and interviewing stakeholders, tells you that he or she is concerned about being able to establish that your company took “reasonable efforts” to protect the information. Listening to the feedback, you realize with a sinking feeling that these were steps that you, as in-house counsel, may have been able to implement if you had only thought about the issue sooner. READ MORE
Bad Artists Copy. Good Artists Steal: Trade Secrets in the Art World
“Bad Artists Copy. Good Artists Steal” – Pablo Picasso
In the small world of exclusive and upscale art sales, competing galleries inevitably form and maintain relationships with one another. This is the case for Lévy Gorvey gallery partner Dominque Lévy, and Lehmann Maupin Group co-founder Rachel Lehmann, who have known each other for over 20 years. Now, Lehmann Maupin is involved in a trade secrets fight with their former sales director, Bona Yoo, who is currently employed by Lévy Gorvey. In this tightknit artist’s community, the news of a trade secrets lawsuit against a former employee is admittedly more shocking than the typical Silicon Valley trade secret theft story, where employees leave for competitor companies as frequently as they come. But it should not be surprising that trade secrets in the art industry are just as valuable to their owners as they are to tech industry leaders—because in both worlds, client relationships are key. READ MORE
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
#SecretTweets: Protecting Social Media as a Trade Secret?
Social media today connects people more than ever. It can be a means to bring together long-lost friends, new acquaintances, and love interests, or the public with celebrities, sports teams, new products, and companies—to name just a few. It can be an effective way to market images and products, as it has the potential to reach thousands instantly with the click of a button. With such public uses and goals, social media seems like an odd candidate for trade secret protection. Yet, that is precisely what BH Media Inc. is seeking to protect in its complaint, filed with the Western District of Virginia on August 6, 2018 against a former employee, Andy Bitter. 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
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.
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.
Above the Clouds: Jeweler’s Trade Secret Spat Highlights Risk of Employee-Controlled Cloud Storage
We have discussed before the importance of maintaining internal policies and procedures to protect the security and integrity of cloud-based repositories. A recent case in the U.S. District Court for the District of Maryland illustrates that this continues to be an important issue—particularly for companies who store their crown jewels on the cloud.
Causing a Brouhaha: Trade Secrets Disputes in the Craft Beer Industry
In recent years, the craft beer craze has taken ahold of the country and has resulted in an explosion of new microbreweries and enthusiasts. Several websites, like BeerSmith, allow users to share recipes with others; other websites, like BrewCraft, sell their recipes for home brewing. In fact, some craft beer aficionados have even created beer trading exchanges to secure their hard-to-find favorites. Even when a popular beer is discontinued, other microbrewers look to fill the void left on everyone’s taste buds with beers of their own. For instance, when Russian River’s legendary craft brew Pliny the Elder was pulled from certain markets, craft brew fans raced to find similarly tasting alternatives to quench their thirst.
“It’s a Free Country, Right?” Court Declines to Enjoin Ex-Free Country Ltd. Employees From Contacting Customers on Purloined Contact List
Within days of each other, your clothing company―Free Country Ltd.―loses two employees who decamp to a rival to set up a competing apparel line. You discover that just before leaving, they transferred some 50,000 documents to a personal account—customer orders, your master contact list, and product design information. Incensed, you file a trade secrets lawsuit and seek an injunction prohibiting the thieves from soliciting your customers. Their defense amounts to, “so what if we took the documents―it’s a free country!” Easy win, right? Wrong. These are the facts of a recent trade secrets lawsuit in the Southern District of New York, in which the court denied the plaintiff’s request that its former employee defendants be prohibited from soliciting plaintiff’s customers. READ MORE