Economic Espionage

Password Sharing Is Not a Crime, Ninth Circuit Reassures in Denial of Nosal’s Request for Rehearing

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

Amendment to Federal Criminal Procedural Rule Could Impact Trade Secret Cases

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

Proving “Loss” Under the Economic Espionage Act – Not Always Straightforward

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

Money Is Time: A Note on Valuation and Sentencing in Criminal Trade Secrets Cases

Criminal trade secrets prosecutions tend to make national headlines, and for good reason. With fact patterns that often involve international intrigue, high technology, and millions of dollars in play, these cases can read like a James Bond flick. But while astronomical monetary figures make good copy, they also present vexing legal questions that can have drastic impacts on sentencing. READ MORE

Aviation Contractor Glides Away From Liability After Receiving Unsolicited Email Containing Trade Secrets

If a third party sends you someone’s trade secrets, and you delete them as soon as you know they’re trade secrets, you’re off the hook for misappropriation.

That, in a nutshell, is what a Florida federal judge held on January 14, when he dismissed Dyncorp International LLC’s allegations that rival contractor AAR Airlift Group, Inc. stole trade secrets to gain an unfair advantage in securing a multibillion-dollar government contract. The contract, which Dyncorp had performed for more than 20 years, was to provide aviation support to the U.S. State Department for its counter-narcotics operations. READ MORE

Ninth Circuit Hears Oral Arguments in United States v. Nosal, Part II

On October 20, 2015, a three judge panel of the Ninth Circuit heard oral arguments in Round II of United States v. David Nosal.  Both sides generally stuck with arguments from their briefs, with Nosal’s counsel arguing that upholding Nosal’s  conviction under the Computer Fraud and Abuse Act (the “CFAA”) would lead to criminalization of relatively minor misappropriations of information, and the government arguing that the precedent would only apply in the employment context. READ MORE

Throwback Thursday: Why Trade Secret Theft Isn’t Just a Digital Problem And What Businesses Can Do About It

With stories of cyberattacks and data breaches on a seemingly endless loop, businesses and governments have been doubling down on their efforts to protect digital information and assets.  But, in some industries, the greatest threat might still be a pair of quick hands.  For instance, in the restaurant industry, opening the kitchen doors to a new employee creates real risks.  As we’ve discussed, sometimes the decision whether to print or download can have major legal ramifications.  And with computer forensics technology growing in leaps and bounds, sometimes an old-school paper trail might be more enticing to would-be perps than a digital one.  That said, the FBI has a track record of turning up bags of shredded documents in grocery store dumpsters. READ MORE

A Preview of the CFAA Arguments in United States v. Nosal, Part II: Could “Phishing” be a Factor?

Oral arguments for the next round in United States v. Nosal have been set for October 20, 2015 at the Ninth Circuit in San Francisco.  So we figured it may be a good time to review both sides’ arguments related to the Computer Fraud and Abuse Act. After doing so, it seems to us that one topic not given any consideration in the briefs, but that may play a role during oral argument is the phenomenon known as phishing schemes, and how such schemes might be compared and contrasted with the scheme alleged in this case. READ MORE

Once More, With Feeling! Congress Swings for the Fences with the Defend Trade Secrets Act of 2015

On July 28, broad bipartisan support ushered the “Defend Trade Secrets Act of 2015” onto the floor of both the House and Senate. This DTSA treads the well-worn path of many similar (and, to date, hapless) bills that fruitlessly preceded it. TSW has exhaustively covered prior attempts, aptly titling our first post “Pols Gone Wild: Congress Discovers Trade Secret Theft and Cybersecurity Are Problems; We Sort Through the Explosion of Legislation”—chart and all. READ MORE

500,000 Lines of Source Code: The New “Intangible Property”

Sergey Aleynikov’s six-year trade secret odyssey through all possible configurations of litigation, civil and criminal, federal and state, may at long last have come to an end after the New York Supreme Court recently overturned his only surviving criminal conviction for unlawful use of secret scientific material. We here at Trade Secrets Watch have closely tracked Aleynikov’s journey, recently reporting on his newest victory, and previously covering his convoluted trials and tribulations. In particular, prior to the recent New York Supreme Court decision, the Second Circuit overturned Aleynikov’s convictions under the Economic Espionage Act (EEA) and the National Stolen Property Act (NSPA), which also led to a change in the EEA legislation. READ MORE