International

Trade Secrets in the Fast Lane – Formula One and the Importance of Trade Secret Protection

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

A “Big Deal”: Latest U.S.-China Talks Signal Progress for Protection of Trade Secrets

Expectations didn’t appear high for the latest round of China-U.S. talks about a variety of economic issues including trade secret protection. As previously discussed at TSW, China had not signed onto the Trans-Pacific Partnership Agreement, and earlier this summer, the U.S. had threatened economic sanctions against China for lax cybersecurity enforcement.  READ MORE

June 29, 2015 Amendments to Article 183 of the Russian Criminal Code: Increased Liability for Disclosure of Trade Secrets in Russia

While Russia has long protected trade secrets through the Federal Law on Information, Information Technologies and Information Protection and the Trade Secret Law, amendments to the Russian Criminal Code on June 29, 2015 now substantially increase liability for disclosure of trade secrets. Illegal disclosure of trade secrets may now result in more serious consequences, including increased fines equal to as much as three years’ wages for disclosure. READ MORE

A Voice from China: Unraveling the Different Standards for Civil and Criminal Misappropriation of Trade Secrets

In China, victims of trade secret misappropriation suffering losses over RMB 500,000 are entitled to file a civil action and may also report the case to public security authorities to initiate a criminal investigation. (For more of our coverage about trade secrets protection in China, click here). When both criminal and civil actions are pending, a Chinese criminal court tends to use the civil decision, if available, as the basis of proving the crime of trade secret misappropriation as long as the damages requirement is met. In Maige Kunci Co., Ltd. v. Suzhou Ruitai New Metal Co., Ltd. (regarded as one of the top 10 Chinese IP cases in 2014) READ MORE

One Step Closer: European Parliament Legal Affairs Committee Approves Trade Secret Directive

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

First Foreign Hacker Is Convicted In The United States Of Hacking Crimes Involving Theft Of Trade Secrets From American Companies

A 22-year-old Canadian hacker has been sentenced to federal prison by a Delaware court for engaging in a conspiracy to break into the computer networks of several large gaming companies, to steal trade secret and other information related to unreleased products, and to commit criminal copyright infringement.  According to the Government’s Sentencing Memorandum, David Pokora of Ontario, sentenced last Thursday was “a leading member in an international computer hacking ring . . . that committed numerous unlawful intrusions into the computer networks of various technology companies involved in the $22 billion-dollar video gaming industry.”  The conspiracy’s victims included Microsoft, Epic Games (which develops the highly popular “Gears of War” series), and Activision Blizzard (which published, among many other successful games, “Call of Duty: Modern Warfare 3”). READ MORE

How Much Damages Can You Realistically Expect for Trade Secrets Misappropriation in China

The best way to protect trade secrets is to prevent them from being misappropriated in the first place, but when trade secret misappropriation occurs, a trade secret holder will likely want to obtain adequate damages through litigation. The methods of calculating damages for trade secret misappropriation are thus crucial, since remedies available to the trade secret holder are determined by these methods. Although China lacks formal remedies for trade secret misappropriation, it has a body of trade secret law that flows from various statutes. READ MORE

Navigating Non-Competes When a Worldwide Presence Is the New Norm

Businesses that compete globally are once again reminded of the need to avoid overreaching when requiring employees to sign non-compete agreements.  Earlier this year, the Court of Appeals for the Eighth Circuit affirmed a ruling that a non-compete agreement was unreasonable on its face and thus enforceable because it imposed a blanket prohibition on the employee’s ability to seek employment of any kind with a competitor worldwide.  While the Eighth Circuit recognized that non-compete agreements had been upheld in the past despite containing no geographic limitations, the court distinguished those agreements on the basis that they contained narrowly circumscribed prohibitions.  The Eighth Circuit’s analysis provides a valuable “lesson learned” for businesses crafting or considering an effective non-compete. READ MORE

POTUS Declares Cybercrime a National Emergency, Announces New Penalties for Trade Secrets Theft

Declaring cybercrime a “national emergency,” President Obama today empowered Treasury to freeze assets that are the fruits of cybercrime, according to an Executive Order issued this afternoon. The agency can block money or property in the United States or in the control of any United States person determined to have engaged in “cyber-enabled activities” originating or directed from outside the United States. Targeted activities include harming computer networks in critical infrastructure sectors; significantly disrupting a computer network; or causing significant misappropriation of trade secrets and other protected information. The EO also enables seizure of money or property of any persons involved in misappropriating trade secrets by “cyber-enabled means” that impact the national security, foreign policy, or economic health or financial stability of the United States.

TSW is tracking the EO and will report further developments.