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” – 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.
That’s why Lehmann Maupin Group is not taking lightly their suspicion that their former sales director destroyed company trade secrets and stole client information upon her departure to a competing gallery. According to the complaint, when Bona Yoo left Lehmann Maupin to join Lévy Gorvey last fall, she copied files containing valuable trade secrets and “maliciously corrupted” or deleted other files. Lehmann Maupin alleges that Ms. Yoo did so to gain a competitive advantage in the industry, while simultaneously impeding Lehmann Maupin’s business. The complaint “claims damages from the violation of the Defend Trade Secrets Act, the Stored Communication Act, confidentiality agreements, and New York law.”
Dominque Lévy of the Lévy Gorvey gallery has come to Ms. Yoo’s defense, publicly stating that she is “tremendously saddened” by the allegations against Ms. Yoo, and adding that the art world “is not the place for this aggressive behavior.” Lévy Gorvey gallery is not named as a defendant in this litigation. Ms. Yoo’s response is due January 29.
This case brings to light some interesting issues that permeate across much larger, more publicized industries. The first is that no industry is immune from trade secrets litigation. When key employees bring invaluable and irreplaceable knowledge to the table, they often become embroiled in trade secrets litigation with their former employers. Regardless of whether Ms. Yoo is liable for the allegations leveled against her in this case, it remains the case that departing employees are often unaware of their obligations with respect to protecting their former employees’ trade secrets. It is important to counsel individuals on the laws surrounding trade secrets theft prior to their exit from one company to a competitor company—whether they work for an art gallery or a tech-industry giant.
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
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
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.
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
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