Ex-Employee Misappropriation

New Strings Attached: LinkedIn Contacts Are Now Trade Secrets?

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From a birds-eye view, Cellular Accessories For Less, Inc. v. Trinitas, LLC appears to be a typical dispute between an employer and its former employee. However, a closer look reveals an issue new to the world of trade secrets—specifically, do LinkedIn contacts qualify as trade secrets? For now, they may: a federal judge in the Central District of California denied defendants’ motion for summary judgment last month, finding there were triable issues of material fact surrounding the question whether LinkedIn contacts were protectable trade secrets. READ MORE →

WORLD SERIES EDITION: These Trade Secrets Are Going, Going, Gone

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Ah, October: the time of crisp fall air, brightly colored leaves, and pumpkin spice-flavored everything. And, of course, the World Series quest that can unite a city—or, in the case of Orrick’s San Francisco and Washington, D.C. offices, give rise to a friendly wager (sorry, D.C.!). In honor of the baseball playoffs, we take a look at some trade secret issues related to our national pastime.
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Of Documents and Dumpsters: The Sixth Circuit Affirms Convictions for Theft of Hybrid Car Secrets from GM

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Last month, the Sixth Circuit affirmed the convictions of co-conspirator couple Yu Qin and Shanshan Du, who were convicted in 2012 of trade secrets theft.  A jury in the Eastern District of Michigan had found that Du absconded with GM’s proprietary documents, passing them to Qin, who then used them to start his own business.

The trade secrets comprised the specially engineered and highly complex “motor control source code” of a hybrid car—the program that directs how and when the electric motor of a hybrid car runs.  The jury bought the government’s argument that the hybrid car secrets were on their way to China via Qin and Du, both engineers. READ MORE →

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 →

Plaintiff’s Trade Secret Lawsuit Backfires!

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We recently reported on good things (big verdicts) coming to trade secret plaintiffs that endure lengthy lawsuits.  But good things don’t always come to those who wait.  One trade secrets plaintiff received a starkly less favorable result after battling for ten years over misappropriation of its alleged trade secrets and related claims.  On June 18, Eaton Corporation and Triumph Group announced they settled their decade-long dispute arising from Eaton’s claims that its former employees stole trade secrets and used them at competitor Frisby Aerospace (later acquired by Triumph). Though the exact terms of the settlement are confidential, Eaton will reportedly pay about $135 million to Triumph and $12 million to be split among its former employees. READ MORE →

CAR JACKING: Former Nissan Employees in Japan Arrested for Suspected Trade Secret Theft

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On May 13, 2014, a former employee of Nissan in Japan was arrested by the Economic Affairs Division of the Kanagawa Prefectural Police on suspicion of trade secret theft.  The arrest was made under the trade secret provisions of Japan’s Unfair Competition Prevention Act (“UCPA”).

The former employee, identified as Kenichi Okamura, a Japanese national, worked at the Nissan Technical Center in Atsugi, Japan until he resigned in July 2013.  Before his resignation, he allegedly copied, on four different occasions, approximately five thousand electronic files pertaining to sales and marketing plans for Nissan’s popular “X-TRAIL” SUV.  He allegedly copied the files from Nissan servers to a private storage device that he took with him when he left the company.  READ MORE →

THINGS TO AVOID WHEN YOU LEAVE YOUR JOB: Using drone trade secrets to blackmail your former employer

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Trade secrets cases in the employment context usually provide valuable lessons on what not to do when leaving a job.  The recent conviction of Stephen Marty Ward by a Washington federal jury imparts one such lesson:  when you are terminated after working on a project for the Navy involving drones, don’t threaten to blackmail your former employer with trade secret disclosure.

Mr. Ward learned this lesson the hard way.  He worked as a contract employee for a Boeing subsidiary (Insitu, Inc. in Bingen, Washington) that contracted with the U.S. Navy to develop unmanned aircraft systems, or drones.  Mr. Ward worked as a technical writer preparing maintenance manuals for one of the drones. 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 Circuit Blows Away Nearly $1 Billion Kevlar Trade Secrets Award

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The Fourth Circuit has thrown out the second-largest trade secret jury verdict on record, an award of nearly $1 billion, on the grounds that the district court improperly excluded evidence relevant to the defense.

We have covered this case extensively, tracing its history of allegations of double agents, bribery, top-secret industrial facilities, and its (apparent) culmination with an enormous jury award.  Now, it seems, this epic legal saga will start anew.  On April 3,  the Fourth Circuit unanimously vacated the jury award and ordered a new trial. READ MORE →