Former Employee

Race to the Finish: Autonomous Vehicle Technology at the Forefront of Alleged Trade Secrets Theft

The stakes couldn’t be higher in the race amongst Silicon Valley self-driving companies vying to be the first to bring the industry-changing technology to market.  With competition so steep, and the potential value counted in the trillions, the efforts to protect this technology have given rise to frequent trade secrets theft disputes.

In the most recent instance of alleged autonomous vehicle technology trade secret theft, a federal district court judge ordered the former director of hardware of WeRide Corp., Kun Huang, to return all files he allegedly downloaded from WeRide before his departure in 2018.  WeRide formerly credited Huang with its success in becoming the fastest autonomous vehicle company to complete its first public road test.  Now, WeRide alleges Huang copied confidential information from a company shared-laptop, deleted files from the laptop, cleared its web browsing history, and then erased the hard drive on his WeRide-issued personal MacBook.  Shortly thereafter, Huang began working at Zhong Zhi Xing Technology Co., Ltd. (ZZX), another defendant in the case, which WeRide alleges was founded by its former CEO, Jing Wang, also named as a defendant.

Based on these allegations, the Court granted WeRide a preliminary injunction against Huang and his new companies, ZZX and a related entity AllRide.AI, Inc., barring these parties from using or sharing WeRide’s trade secrets and requiring them to return all WeRide materials within four days of the order.

This case is but one of many recent trade secret disputes amongst Silicon Valley autonomous vehicle technology companies.  And with autonomous vehicle employee turnover high and trillions of dollars at stake, we expect to see many more trade secret disputes arise.

Third Circuit: Spying on Former Employee’s Social Media Account Does Not Constitute “Unclean Hands” to Bar Trade Secret Misappropriation Claim

Consider this: a former employee has just left his or her employer and may have taken trade secrets to a competitor.  Can the employer log in to that former employee’s personal social media account to search for potentially incriminating evidence?  For most employers, the answer may be “no,” as doing so may be unlawful or at a minimum, may constitute “unclean hands” (a doctrine barring equitable relief when the party seeking the relief has committed misconduct related to the claims at issue) possibly jeopardizing the employer’s trade secret misappropriation (and other claims) against the former employee. READ MORE

Senate Judiciary Committee Creates IP Subcommittee to Combat IP Theft

Last week, the United States Senate Judiciary Committee announced the creation of a new subcommittee on intellectual property.  The IP subcommittee will address a range of IP issues, including theft by state actors such as China.  The announcement of the subcommittee comes in the wake of increasing tension over trade with China and shortly after the Department of Justice announced criminal charges against China’s Huawei Technologies for alleged trade secrets theft. READ MORE

Bad Artists Copy. Good Artists Steal: Trade Secrets in the Art World

“Bad Artists Copy. Good Artists Steal” – Pablo Picasso

In the small world of exclusive and upscale art sales, competing galleries inevitably form and maintain relationships with one another.  This is the case for Lévy Gorvey gallery partner Dominque Lévy, and Lehmann Maupin Group co-founder Rachel Lehmann, who have known each other for over 20 years.  Now, Lehmann Maupin is involved in a trade secrets fight with their former sales director, Bona Yoo, who is currently employed by Lévy Gorvey.  In this tightknit artist’s community, the news of a trade secrets lawsuit against a former employee is admittedly more shocking than the typical Silicon Valley trade secret theft story, where employees leave for competitor companies as frequently as they come.  But it should not be surprising that trade secrets in the art industry are just as valuable to their owners as they are to tech industry leaders—because in both worlds, client relationships are key. READ MORE

Intent to Use is Sticking “Pointe” In Denial of Preliminary Injunction

On October 25, the U.S. District Court for the District of Massachusetts denied motions for injunctive relief in a case involving trade secrets allegedly stolen by a departing consultant using his personal computer to sync with the company’s Dropbox.  This case established (1) Massachusetts’ newly enacted Uniform Trade Secrets Act (“UTSA”) does not apply retroactively even if the violation is continuing; and (2) intent to use a trade secret is a hurdle which Plaintiffs can struggle to show where there is not evidence of actual use and the defendant takes steps at remediation. READ MORE

T-R-NO: Nevada District Court Denies Motion for TRO Despite Evidence of Mass Download of Company Files and Steps Taken to Cover Tracks

Our readers have seen enough of our blog posts to be familiar with the classic ex-employee trade secrets theft scenario:  employee downloads confidential files to his personal computer; employee attempts to cover his tracks with deletions of those files; employee resigns from the company to work for a competitor. When such a classic case results in litigation, the plaintiff company typically succeeds in obtaining injunctive relief against the ex-employee. We posted about one successful preliminary injunction motion last year. A recent district court decision out of the District of Nevada, however, shows that a motion for TRO on seemingly slam-dunk facts is never guaranteed. This decision highlights two important takeaways for litigators: (1) if your client is facing imminent business harm, seek an injunction immediately; and (2) in the Ninth Circuit, there is no presumption of irreparable harm, even if the evidence shows trade secret misappropriation or a breach of the employee’s confidentiality agreement. READ MORE

Fishing for ESI

When National Fish and Seafood’s (NFS) head of research left for a new opportunity at Tampa Bay Fisheries, she may not have taken just her talents to the competition.  According to NFS’ lawsuit, the former employee transferred thousands of files containing confidential and proprietary information prior to her departure from the company.  NFS also alleges that the CEO of Tampa Bay Fisheries conspired with NFS’s former employee to steal trade secrets involving its proprietary clam production process.

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#SecretTweets: Protecting Social Media as a Trade Secret?

Social media today connects people more than ever. It can be a means to bring together long-lost friends, new acquaintances, and love interests, or the public with celebrities, sports teams, new products, and companies—to name just a few. It can be an effective way to market images and products, as it has the potential to reach thousands instantly with the click of a button. With such public uses and goals, social media seems like an odd candidate for trade secret protection. Yet, that is precisely what BH Media Inc. is seeking to protect in its complaint, filed with the Western District of Virginia on August 6, 2018 against a former employee, Andy Bitter. READ MORE

Failing to Prepare Is Preparing to Fail

A recent case from the Federal Circuit upholding a jury’s finding in favor of defendant offers lessons to both defendants and plaintiffs on preparing for trade secrets misappropriation actions. Both plaintiff, Raytheon, and defendant, Indigo, are companies in the infrared imaging equipment business. Of the four Indigo founders, three of them were former Raytheon employees, causing Raytheon to accuse Indigo of misappropriating its trade secrets. Specifically, Raytheon accused Indigo of using Raytheon’s sequential vacuum bake recipes and in situ solder seal package assembly process taken by the former Raytheon employees to develop Indigo’s recipes and processes. READ MORE