An ongoing, headline-grabbing trade secret theft prosecution against a Chinese spy is also quietly presenting a, say, disquieting attempt by prosecutors to stretch the law on what it is required to plead and prove. On the civil side, when a plaintiff sues for trade secret theft, there’s almost always a hotly contested point of proof on whether the alleged stolen material is really a trade secret. It’s well-established, though, that when the government charges a defendant criminally with the inchoate forms of trade secret theft—attempt or conspiracy being the two spelled out under the Economic Espionage Act—the government has no burden to prove that the underlying information was actually a trade secret. (Loyal readers will recall our recent post on United States v. O’Rourke, where the defendant tried to argue otherwise at sentencing.) Now, in a brief filed just last week, the government seems to be taking this one step further and arguing that it has no duty even to identify the trade secrets at issue. READ MORE
In 2013, U.S. Customs and Border Protection agents caught researchers attempting to smuggle a $75 million trade secret from the United States to China. Unlike the trade secrets we usually discuss, the trade secrets in tow were rice seeds. But not just any rice seeds: these valuable seeds were genetically modified to create proteins used to treat gastrointestinal disease, antibiotic-associated diarrhea, hepatic disease, osteoporosis and inflammatory bowel disease. READ MORE
In January of this year, Chinese wind turbine manufacturer Sinovel Wind Group Co. Ltd. was convicted of stealing trade secrets from U.S. company AMSC Inc. The theft caused AMSC, more than $800 million in losses and forced the company to lay off more than half its global work force. Sinovel’s sentencing—which could include fines exceeding $1 billion and a multiyear probationary period—is scheduled for June 2018. READ MORE
Just over four years ago, in January 2014, a court sentenced former Korn/Ferry regional director David Nosal to one year and one day in prison for violations of the federal Computer Fraud and Abuse Act and the Espionage Act. Nosal appealed the sentence, but his appeals ultimately failed: the U.S. Court of Appeals for the Ninth Circuit upheld Nosal’s sentence, and the U.S. Supreme Court denied review of the case. Luckily for Nosal, his 2014 motion for release pending appeal was granted, so he has not served any time during the four years of appeals. READ MORE
The U.S. Supreme Court, which just began a new term on Monday with a full complement of nine justices, is expected to soon decide whether it will hear the appeal of David Nosal, the former Korn Ferry executive whose conviction under the Computer Fraud and Abuse Act was upheld in a controversial and closely-watched Ninth Circuit decision last year. Nosal submitted his reply brief in support of certiorari on September 19, 2017, responding to the Department of Justice’s opposition submitted two weeks earlier.
How can you protect your trade secrets from a vast and well-concealed international effort to steal those secrets? What constitutes a “reasonable” effort to protect that information where at least one competitor may already have the information? The Ninth Circuit recently opined on these matters in the ongoing saga of U.S. v. Liew.
In 2014, Walter Liew and his company, USA Performance Technology, Inc., were convicted of multiple offenses, including claims under the Economic Espionage Act and conveying misappropriated trade secrets to a third party. The trade secrets related to DuPont’s technology for producing titanium dioxide, which is used in a wide range of products such as paint and Oreo cookies. READ MORE
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
Since the early days of this blog, we’ve been covering the ongoing legal battle involving ex-Korn Ferry recruiter David Nosal as it winds its way through the courts. The latest chapter in this saga came on December 8, 2016, when a Ninth Circuit panel clarified that the Computer Fraud and Abuse Act (CFAA) does not criminalize innocent password sharing, in a published opinion denying Nosal’s request for a rehearing en banc. READ MORE
Much attention, including here at Trade Secrets Watch, has been focused in recent weeks on the Defend Trade Secret Act (“DTSA”), which overwhelmingly passed both houses of Congress in April and was signed into law by President Obama on May 11th. The DTSA gives companies new tools for combatting alleged trade secret theft, including a direct path to federal court via the addition of a private right of action to the Economic Espionage Act (EEA) and the ability to apply for ex parte seizure orders to prevent propagation or dissemination of stolen trade secrets. READ MORE
The Obama Administration’s focus on criminal trade secret prosecutions under the Economic Espionage Act (EEA) highlights the legal complexities at the murky intersection between criminal and civil jurisprudence in trade secrets cases. As we previously discussed, when it comes time for sentencing, determining the “value” of the stolen trade secrets is often difficult—and courts have applied different valuation models. READ MORE