Employee Mobility

All Bets Are Off: Kentucky Downs Trade Secrets Case Presents Novel Question Under Kentucky’s Uniform Trade Secrets Act

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Earlier this month, AmTote International, Inc. sued the famed Kentucky Downs racetrack, three high-ranking Kentucky Downs employees, and Encore Gaming, LLC in federal court alleging misappropriation of trade secrets related to horse racing betting machines.  AmTote’s lawsuit presents the interesting question of whether the “inevitable disclosure” doctrine applies under Kentucky law. READ MORE →

New Opposition to the EU Trade Secrets Directive

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Not everyone is happy about the proposed EU Trade Secrets Directive.  When we last touched on this topic a couple of months ago, the European Union looked poised to enact a sweeping new legal regime that would harmonize trade secrets law across all member states.  The new framework was supposed to be a single, clear, and coherent legal regime for the protection of trade secrets.   And it was aimed at making it easier for national courts to deal with the misappropriation of confidential business information, remove trade-secret-infringing products from market, and facilitate compensation for illegal actions. READ MORE →

Running Interference: S.D.N.Y. Lays Out Standards for Tortious Interference in Dispute Between Watchmaker and Former Employees

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The U.S. District Court for the Southern District of New York recently cleared the way for a Michigan watchmaker to pursue claims for trade secret misappropriation, among other things, against two former employees who left to work with a competitor, but not without first dismissing claims based on tortious interference with contract.

For companies whose business model depends on a key contract (e.g., with a licensor, vendor, or supplier), the biggest worry with departing employees might not be the theft of intellectual property or trade secrets—but rather the loss of the contract or business relationship.
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FOURTH OF JULY EDITION [FROM THE ARCHIVES]: Family Fireworks: Plot to Steal Client Lists Goes Up in Smoke

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As Americans head for the beach or the barbecue to celebrate the Fourth of July (many with a bolstered sense of patriotism following the United States’ valiant World Cup efforts), Trade Secrets Watch marks this Independence Day by pulling an explosive story from its archives.

Pyro Spectaculars North, Inc. v. Souza is a case that’s full of fireworks—literal and figurative—as a family pyrotechnics business broke apart, with one member starting a rival company, apparently armed with a USB and a hard drive of purloined client lists and other company files. You can read our full post below the jump.

We wish all our readers and safe and happy holiday weekend. We’ll return to our regular blogging and tweeting schedules on Monday. READ MORE →

NEW MASSACHUSETTS BILL: Promoting “Growth and Opportunity” or Poisoning the Business Environment?

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On April 10, 2014, Massachusetts Governor Deval Patrick proposed a bill entitled “An Act to Promote Growth and Opportunity.”  Under this lengthy bill, Massachusetts would finally adopt the Uniform Trade Secrets Act, to which only it and New York currently do not adhere.  But the provisions of the bill relating to non-competition agreements are what have received the most attention from the businesses community.

Under the proposed legislation, with the aim of increasing mobility of labor, non-competition agreements between Massachusetts employers and employees or independent contractors would be impermissible and void: READ MORE →

RELEASED ON (VERY LITTLE) BOND: Suspect Accused of Preparing to Flee U.S. with Gore Trade Secrets is Released on Nominal Bond

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A federal magistrate judge has released on bond the accused trade-secrets larcenist and former W. L. Gore & Associates, Inc. employee Kwang Seoung Jeon, who was arrested as he allegedly tried to flee the United States for his home country of South Korea.

Jeon had notified the company—maker of Gore-Tex fabrics—that he was leaving the company to return to South Korea as a consultant after being told he would not receive a raise.  In a fact pattern becoming all too familiar in trade secrets theft prosecutions, Jeon then allegedly printed book-size documents from his work computer relating to the company’s camouflage technology, in violation of the Economic Espionage Act.  According to the criminal complaint, Jeon also attached three USB devices and two external hard drives to his work computer before leaving Gore, thereby accessing more than 800 company documents. READ MORE →

IN DA (TRADE SECRETS THEFT) CLUB: $15 Million Judgment Against Rapper 50 Cent

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The rapper known as “50 Cent” stole trade secrets to the tune of $15 million, an arbitrator found.

A filing in the U.S. District Court for the Southern District of Florida earlier this month disclosed the final award for theft of trade secrets relating to a headphone design from an audio company 50 Cent had helped finance.

While the decision grabbed mainstream news media headlines, the arbitrator’s legal findings are also newsworthy to the avid trade secrets practitioner:  The arbitrator relied on the inevitable disclosure doctrine and the similarity of products as evidence of liability. READ MORE →

FOURTH OF JULY EDITION: Family Fireworks: Plot to Steal Client Lists Goes up in Smoke

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fireworks220For many, Fourth of July festivities wouldn’t be complete without a baseball game, a family barbecue, and of course, fireworks.  But for one family-operated fireworks company in California, its members had an unhappy reunion in court when a great-grandson’s decision to leave the family business exploded into a dazzling dispute over trade secrets.

According to court papers, Manuel de Sousa and his family immigrated to the San Francisco Bay Area from Portugal in the early 1900s and set up a fireworks business for local Portuguese community celebrations.  Manuel eventually passed the family business to his son Alfred, who then passed it on to his grandson Bob.

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