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
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
Take off your eclipse glasses, close that NASA photo gallery, and stop thinking about how “path of totality” would make an awesome band name: it’s time to get back to work. As the country recovers from Eclipse Mania 2017, we take a look at some space-related trade secrets cases.
Someone might be stealing your trade secrets behind your back! A federal court found that’s what happened to Pacific Aerospace & Electronic, Inc. (PAE), a company that designs components for electronic circuitry in the aerospace and space exploration industries and whose products are used on the Hubble Telescope and the International Space Shuttle. According to PAE, the specialized nature of its business makes the identity of its customers—who are relatively few in number—critical to its business success. That’s why it was a problem when two PAE employees who had access to proprietary information about PAE’s technologies and customers left for a rival company, RAAD Technologies, Inc. One of the former employees allegedly copied backup tapes of design information weeks before leaving, and both employees allegedly compiled a list of prospective customers after leaving which they gave to RAAD’s sales representative for use in soliciting business. PAE brought a claim for misappropriation of trade secrets (among others) against these former employees and RAAD in the Western District of Washington, and moved for a preliminary injunction. The court ruled that PAE’s detailed customer information was a protectable trade secret, and that PAE risked irreparable harm in the absence of an injunction and would likely prevail on the merits of its misappropriation claim. However, the court limited the scope of injunctive relief only to future misuse of the trade secret customer list, rather than ongoing misuse—i.e., continued sales to wrongfully-acquired customers—as PAE had requested. The court reasoned that given the importance of PAE’s (and later RAAD’s) customers, public interest concerns favored permitting these ongoing business relationships and remedying any harm by an award of monetary damages.
The Waymo v. Uber trade secrets litigation has been underway for less than two months but the case has already hit quite few speed bumps with multiple discovery battles, Waymo’s efforts to obtain a preliminary injunction from Judge William Alsup of Northern District of California, a fight over arbitration, assertions of 5th Amendment rights, and now an appeal to the Federal Circuit that has temporarily halted a portion of the district court proceedings.
As a quick recap of how we got here, Waymo alleges that one of its former key managers in charge of Waymo’s driverless car business, Anthony Levandowski, downloaded more than 14,000 files to start a competing company—Otto—that Uber later purchased. The key technology relates to a LiDAR system, which is mounted on top of the car and gives the driverless car the ability to “see” other cars and obstacles. Waymo is seeking a preliminary injunction enjoining Uber from using or disclosing any of Waymo’s trade secrets and from selling any devices based on Waymo’s patents. In aid of the PI hearing on May 3, 2017, the parties are engaging in expedited discovery. Since this case started, the docket has been quite active and full of interesting, thorny legal issues. READ MORE
Christopher Hughes worked for Age Industries, Ltd. (“AI”) for nearly 20 years. He was the general manager of one of AI’s branch facilities and a limited partner of the company. In this role, Hughes had access to much of AI’s proprietary and trade secret information, including specialized customer pricing information, financial reports, and business strategies. After leaving AI, Hughes became the operations manager of a new competitor in the corrugated packing materials market—Diamondback Corrugated Container, LLC. READ MORE
On Thursday, Waymo LLC sued Uber Technologies and Ottomotto LLC in federal court in the Northern District of California for: (1) violation of the federal Defend Trade Secrets Act; (2) violation of California’s Uniform Trade Secrets Act; (3) Patent Infringement; and (4) Violation of Section 17200 of California’s Business and Professions Code. Waymo is a subsidiary of Alphabet Inc. that specializes in self-driving cars.
According to Waymo’s complaint, one of its former managers, Anthony Levandowski, downloaded more than 14,000 highly confidential and proprietary files shortly before his resignation in January 2016. Those files allegedly related, among other things, to Waymo’s proprietary LiDAR system, which, when mounted on a vehicle, “enable[s] a vehicle to ‘see’ its surroundings and thereby allow[s] a self-driving vehicle to detect traffic, pedestrians, bicyclists, and any other obstacles a vehicle must be able to see to drive safely.”
Waymo claims that it caught wind of the alleged misappropriation recently when one of its LiDAR component vendors inadvertently copied Waymo on an email depicting Uber’s LiDAR circuit board. According to Waymo, Uber’s LiDAR circuit board “bears a striking resemblance to Waymo’s own highly confidential and proprietary design and reflects Waymo trade secrets.”
Given the technology at issue and the players, this is a case that will be fascinating to watch. We’ll keep you posted.
In recent years, the craft beer craze has taken ahold of the country and has resulted in an explosion of new microbreweries and enthusiasts. Several websites, like BeerSmith, allow users to share recipes with others; other websites, like BrewCraft, sell their recipes for home brewing. In fact, some craft beer aficionados have even created beer trading exchanges to secure their hard-to-find favorites. Even when a popular beer is discontinued, other microbrewers look to fill the void left on everyone’s taste buds with beers of their own. For instance, when Russian River’s legendary craft brew Pliny the Elder was pulled from certain markets, craft brew fans raced to find similarly tasting alternatives to quench their thirst.
Within days of each other, your clothing company―Free Country Ltd.―loses two employees who decamp to a rival to set up a competing apparel line. You discover that just before leaving, they transferred some 50,000 documents to a personal account—customer orders, your master contact list, and product design information. Incensed, you file a trade secrets lawsuit and seek an injunction prohibiting the thieves from soliciting your customers. Their defense amounts to, “so what if we took the documents―it’s a free country!” Easy win, right? Wrong. These are the facts of a recent trade secrets lawsuit in the Southern District of New York, in which the court denied the plaintiff’s request that its former employee defendants be prohibited from soliciting plaintiff’s customers. READ MORE
On November 17, 2015, the Sixth Circuit held in an unpublished opinion that “confidential” information that does not otherwise qualify as a trade secret may nevertheless be protected contractually in nondisclosure or non-compete agreements under Texas contract law. READ MORE
It is one of those magical times during the year when sports fanatics can enjoy three major American sports all at the same time: the MLB playoffs are in full swing; the NFL season has finally kicked off; and the NHL saw the puck drop for the first regular season game a couple weeks ago. But between the throngs of fans cheering (or booing) their teams, we at TSW wanted to take a moment to reflect on the sophisticated trade secrets disputes that are at the heart of the sports and entertainment industry. READ MORE