The latest development in the Department of Justice’s “China Initiative” occurred earlier this month, as the DOJ unsealed an 11-count indictment charging two Chinese nationals with stealing hundreds of millions of dollars’ worth of “trade secrets, intellectual property, and other valuable business information”— including potential COVID-19 research. The two Chinese hackers allegedly worked for their own benefit and together with the Ministry of State Security, China’s intelligence and security agency, to infiltrate the electronic networks of a number of targets including several American biotech firms “publicly known for work on COVID-19 vaccines, treatments, and testing technology.” READ MORE
Can defendants use anti-SLAPP statutes to dismiss meritorious trade secrets misappropriation lawsuits? A recent decision by the Fifth District Court of Appeals in Dallas suggests not.
Numerous states have passed some form of anti-SLAPP legislation to prevent parties from using litigation as a tool to silence individuals from exercising their First Amendment rights. Texas, in particular, enacted the Texas Citizens Participation Act (“TCPA”) back in 2011 to “protect citizens from retaliatory lawsuits that seek to silence or intimidate them for exercising their rights in connection with matters of public concern.” The TCPA provides an avenue for individuals to summarily dispose of such lawsuits designed to chill their First Amendment rights. READ MORE
This May was the fourth anniversary of the Defend Trade Secrets Act (DTSA), signed into law by President Obama on May 11, 2016. The DTSA does not preempt state laws and plaintiffs can still bring cases under their state’s trade secrets law, but the DTSA has played a big role in the increased number of trade secret cases in recent years. According to Lex Machina’s Trade Secret Litigation report, which covered federal district court data from 2010 to 2019, the DTSA caused a 30% increase in trade secret case filings between 2015 and 2017 and those numbers have remained steady. READ MORE
Last week, we examined the recent Third Circuit decision in Advanced Fluid Systems, which held that a trade secrets plaintiff did not need to be an owner or a licensee of the alleged trade secrets to bring a state law misappropriation claim under Pennsylvania’s UTSA—all that was required was that the plaintiff had “lawful possession” of the trade secrets. In so holding, the Third Circuit added to the weight of the Fourth Circuit’s similar analysis of Maryland’s UTSA in DTM Research, L.L.C. v. AT&T Corp., 245 F.3d 327 (4th Cir. 2001).
The Defend Trade Secrets Act (“DTSA”) went into effect in May 2016. Since then, federal courts have largely adhered to existing law in their respective states to determine whether the inevitable disclosure doctrine applies to DTSA claims. This article provides a sampling of existing opinions that have either permitted or rejected the inevitable disclosure doctrine under DTSA claims, broken down by state. READ MORE
Loyal readers are familiar with the DOJ’s “China Initiative,” launched in November 2018 to prosecute the theft of U.S. trade secrets by or for Chinese interests. Attorney General Barr reaffirmed the DOJ’s commitment “to combat the threat posed by theft directed and encouraged by the PRC” in an address at the China Initiative Conference last month. The DOJ’s campaign recently intensified with two new, gripping indictments. READ MORE
In January of this year, the DOJ indicted the Chinese telecom giant Huawei on counts of theft of trade secrets conspiracy, attempted theft of trade secrets, wire fraud, and obstruction of justice. On August 1, Huawei moved to dismiss the indictment for “selective prosecution.” Huawei contends that it is the “target of the politically motivated decision, at the highest levels of the U.S. government, to pursue the selective prosecution of Chinese companies and nationals for the alleged misappropriation of intellectual property.” In essence, it argues that the DOJ unconstitutionally seeks to punish Huawei because it is a large, successful Chinese company, not because of illegal behavior by the company or its agents. READ MORE
Hiring external contractors is common practice in the fast-paced tech-industry where talent is scarce and in high-demand, but such a practice can expose a company’s most valuable IP to the confidentiality measures, or lack thereof, of those external contractors. This type of common business model is an area ripe for trade secret theft. University Accounting Services (“UAS”) alleges that this is exactly what happened when their point person at ScholarChip, an external tech company hired by UAS to design and maintain their tuition collection software “eUAS,” left ScholarChip and formed a product in direct competition with UAS. UAS filed suit in Oregon against ScholarChip and its former employee, and both filed a motion for summary judgement. The court denied the motion and held that there were genuine disputes of material fact surrounding the breach of contract and misappropriation of trade secrets claims, among others. READ MORE
You are a state-government contractor. You respond to an RFP issued by a state-government entity. In your bid proposal, you submit documents that contain your trade secrets. You do not get the contract, but you later learn that the state-government entity gave your trade secret information to your direct competitor who did get the contract. Do you have any options under federal or state trade secret laws to sue the state? READ MORE
Developments in technology have led to advanced ways of protecting trade secrets. In an age where passwords, metadata, and paper trails are often the stories told to demonstrate misappropriation, it may seem that trade secrets must be reduced to a tangible form to be protected. However, a recent Oregon Court of Appeals opinion reminds us that this is not the case—if information is maintained as a trade secret it is equally protected regardless of form. READ MORE