DTSA

Defend TS Act

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

Campaigning for Protection of Political Trade Secrets

As widely reported, on April 20, the Democratic National Committee (“DNC”) kicked off a twelve count lawsuit against a number of entities and individuals, including the Russian Federation, General Staff of the Armed Forces of the Russian Federation (“GRU”), WikiLeaks, Julian Assange, Donald J. Trump, Jr., and other political foes.  Amongst the wide swath of allegations, which include everything from computer fraud to RICO conspiracy, are allegations that the defendants misappropriated trade secrets in violation of both the DTSA and the Washington D.C. Uniform Trade Secrets Act. READ MORE

That’s a Cut: “Textbook Reparable Harm” was “Showstopper” to Video-Streamers’ Preliminary Injunction Request

The lawsuit between Swarmify and Cloudflare recently produced an Order in which U.S. District Court Judge William Alsup denied Swarmify’s motion for a preliminary injunction, and also offers a cautionary tale about what activities might result in bloggers being hauled into Court.

In 2016, Swarmify, a start-up focused on affordable video streaming, and Cloudflare, a corporation that uses a network of data centers for content delivery, entered into confidential negotiations regarding Cloudflare’s potential acquisition of Swarmify. During these discussions, Swarmify disclosed to Cloudflare some confidential information about the company’s proprietary streaming method, including a pending unpublished patent application, but notably did not disclose any computer code. While the discussions were ongoing, Cloudflare offered employment to Swarmify’s CEO and the senior developer of Swarmify’s proprietary streaming method.  Both individuals declined, and informed Cloudflare any movement on their part would have to come through Cloudflare’s acquisition of their company. The companies ended negotiations and parted ways, but not for long. 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

Making a Federal Case Out of It: What Does the DTSA’s “Interstate Commerce” Limitation Mean?

We’ve blogged a lot about the Defend Trade Secrets Act in the roughly year-and-a-half period since the law was enacted.  Our coverage has run the gamut:  from the first jury verdict under the DTSA, to the U.S. Patent and Trademark Office’s emerging interest in trade secrets, to the once-controversial ex parte seizure provision that, so far, has been used very little in practice. READ MORE

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