DTSA

Defend TS Act

PILLOW TALK: A Threat to Trade Secrets?

It turns out that, even in romantic relationships, some things are best kept secret.  On July 7, 2017, Teva Pharmaceuticals USA, Inc. filed a complaint in the Eastern District of Pennsylvania alleging that a former executive disclosed confidential information to a romantic partner who happens to be an executive of one of Teva’s direct competitors. READ MORE

Amendments to Texas UTSA Bring it Closer in Line with DTSA, but Differences Remain

American and Texas state flags flying on the dome of the Texas State Capitol building in Austin Amendments to Texas UTSA Bring it Closer in Line with DTSA, but Differences Remain

(Editors’ note: Thanks to Orrick summer associate, Ruben Sindahl, for his help with this blog post.)

Just four years after the Lone Star State ended its holdout by becoming the 48th State to adopt the Uniform Trade Secrets Act, Texas passed a bill to amend its enactment. The bill was signed by Texas Governor Greg Abbott on May 19, 2017, and will take effect on September 1, 2017.

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Courts Still Heavily Favor Rule 65 TROs Over DTSA Ex Parte Seizures

Temporary Restraining Order acronoym in front of gavel image Courts Still Heavily Favor Rule 65 TROs Over DTSA Ex Parte Seizures

The Defend Trade Secrets Act of 2016 was signed into law by President Obama on May 11, 2016. While the DTSA has been on the books for over a year, relatively few courts have addressed the ex parte seizure provision and even fewer have actually granted a seizure under the DTSA.  This is likely due to the DTSA’s requirement that courts order property seizures only in extraordinary circumstances.  In other words, courts are hesitant to grant DTSA ex parte seizure requests unless it is clear that the alleged misappropriator would disobey a TRO or preliminary injunction, or otherwise destroy, move, or hide trade secrets.  Courts continue to favor FRCP 65 TROs and preliminary injunctions to protect trade secrets from disclosure or destruction.  Under FRCP 65, courts can issue TROs and preliminary injunctions, but cannot order U.S. Marshalls to seize property from a defendant without notice.  The following cases are illustrative.

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USPTO’s Second Trade Secrets Symposium Looks Back on First Year of DTSA and Ahead Toward Challenges of International Trade Secrets Protection

On May 8, 2017, the United States Patent and Trademark Office hosted its second event on trade secrets. When we covered the USPTO’s inaugural trade secrets symposium held in January 2015, there was a palpable sense among DC insiders that, at long last, federal trade secrets legislation was imminent.

Readers of this blog of course know the rest of that story: obviously the biggest change in the landscape since the last event was the passage of the Defend Trade Secrets Act of 2016.  In fact, the USPTO intentionally timed this event to fall near the one-year anniversary of the DTSA’s passage.

What else had changed in the last two years? To answer that question, I once again traveled to USPTO headquarters in Alexandria, VA to attend the symposium and provide TSW readers with the following report. READ MORE

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.

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DTSA’s First Verdict “Fig”-ure: Jam’n to the Tune of $500,000

In little under a year after its enactment, a Federal Court jury in the Eastern District of Pennsylvania issued the first verdict under the Defend Trade Secrets Act in favor of the Plaintiff Dalmatia Import Group, Inc. The jury awarded Dalmatia $2.5 Million in total damages for all claims, with $500,000 attributed to its DTSA and Pennsylvania Uniform Trade Secrets Act claim. Just this week, Dalmatia filed a motion for judgement on the verdict,  seeking treble damages for its related trademark and counterfeiting claims.  If the court awards treble damages, total damages could exceed $5 Million.

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Thinly Pled Allegations of Trade Secret Misappropriation under DTSA Are Vulnerable to Dismissal

A dismissal with prejudice is a plaintiff’s worst fear realized. When it comes to alleging a proper claim for trade secret misappropriation, the Western District of Kentucky recently reminded plaintiffs just how critical it is to “kick the tires.” In Raben Tire Co., LLC v. McFarland, Case No. 5:16-cv-00141 (W.D. Ken.), plaintiff Raben Tire Co., LLC, alleged misappropriation of trade secrets against two former employees under the Defend Trade Secrets Act of 2016 (“DTSA”), 18 U.S.C. § 1831 et seq., and the Kentucky Uniform Trade Secrets Act (“KUTSA”), Ky. Rev. Stat. § 365.880 et seq., along with a handful of additional common-law claims. READ MORE

“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

DTSA Immunity: A Plaintiff’s Dream Or A Burdensome Nightmare?

If you are a regular reader of TSW, you know we have been monitoring developments relating to the Defend Trade Secrets Act of 2016 (DTSA). While the Northern District of California was the first court to enter a written opinion under the DTSA, case law is continuing to develop across the country, including in the First Circuit. READ MORE

PUT YOUR DOCS WHERE I CAN SEE THEM: Seattle Police Enjoined From Disclosing Software Secrets in Public Records Act Dispute

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