The Council of Ministers announced that the Luxembourg presidency had reached a “provisional agreement” with the European Parliament representatives regarding a new Trade Secret Directive (“Provisional Directive”) on December 15, 2015. READ MORE
“For a competition to be friendly, it should be scrupulously fair.” The Formula One world was recently jolted by allegations that a former Mercedes-Benz AMG engineer took highly-confidential information in anticipation of joining Mercedes’ chief competitor Ferrari. Mercedes recently filed suit in the High Court of Justice in the United Kingdom. To many in the Formula One world, the recent news is reminiscent of 2007’s “Spygate” controversy involving confidential technical data misappropriated from Ferrari. Nearly a decade later, the recent allegations underscore an important facet of Formula One: Formula One teams go to extraordinary lengths to protect their design secrets created at a cost of hundreds of millions of dollars. READ MORE
Companies get anxious when key employees leave to start new ventures. A company may try to shield itself from the risk of losing confidential information by seeking an injunction preventing its former employees and their new company from using or disclosing trade secrets. However, without sufficient evidence of actual misappropriation or threat of imminent harm, a company may face sanctions for bringing a misappropriation claim in bad faith, as Trade Secrets Watch has previously discussed. Filing or maintaining a premature misappropriation action carries other risks. Currently before the California Supreme Court is a malicious prosecution claim against a law firm for pursuing a meritless misappropriation suit. Parrish v. Latham & Watkins, LLP, No. S228277 (Cal. petition for review granted Oct. 14, 2015). READ MORE
First rule of thumb in trade secrets litigation? A trade secret must be kept secret. It is painfully obvious, but modern practitioners must not grow complacent due to the convenience of electronic filing. Although trade secrets law does not command absolute secrecy, a recent e-filing snafu in HMS Holdings Corp. v. Arendt offers a cautionary tale from New York on how one botched upload could jeopardize a client’s most prized possession. READ MORE
As Trade Secrets Watch has previously reported, new rules regarding the protection of trade secrets are on the horizon for the European Union. In November 2013, the European Commission announced a proposed Directive on trade secrets and confidential information. Around six months later, in May 2014, the Council of the European Union agreed on a revised draft Directive. Reception of the Trade Secrets Directive has been mixed. READ MORE
Congress is getting into the non-compete business. Citing the use of non-compete agreements by companies such as Jimmy John’s sandwich shops, Senate Democrats recently introduced a bill—called the Mobility and Opportunity for Vulnerable Employees (MOVE) Act—that would amend the Fair Labor Standards Act (FLSA) to prohibit the use of non-compete agreements for low-wage employees. READ MORE
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
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
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.
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.