Policy

Will We See Federal Trade Secret Legislation Passed This Year?

In January of this year, we noted that trade secret protection has lately been on the minds of lawmakers in Washington, and that federal trade secret legislation was very close to being enacted.  While nothing is pending at the moment, we can expect renewed efforts similar to two bills that were introduced in Congress last year – one each in the Senate and House.  In anticipation of such efforts, we thought it would be useful to review what happened in 2014. READ MORE

Snowden Strikes Back: Mass Collection of Telephony Metadata Struck Down By the Second Circuit

As post-Snowden America well knows, for some years now the National Security Agency (NSA) has been collecting bulk telephone metadata under the authority of Section 215 of the PATRIOT Act and aggregating it into data banks subject to government query. Under the “business records” provision of this law, the NSA has been collecting all kinds of information about the numbers you dial, how often you dial them, and how long your conversations are—and it’s been doing so for years. 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.

China’s New Cybersecurity Policies: Is the Price of Compliance Worth the Risk of Disclosure?

Tensions recently escalated in the United States and China’s ongoing exchange over online security and technology policies, as China adopted the first in a series of policies it previously approved at the end of last year.  Among other things, the newly adopted regulations require foreign technology companies that sell computer equipment to Chinese banks to submit to obtrusive audits, set up research and development centers in the country, build “back doors” into their hardware and software, and, perhaps most disconcerting, disclose intellectual property to the Chinese government, including proprietary source code. READ MORE

Five Minutes With … National Security and Cybercrime Professor Ahmed Ghappour

This marks the inaugural “Five Minutes With” feature that Trade Secrets Watch will run occasionally.  These will be question-and-answers with notable figures in the trade secrets world.

TSW got a chance to sit down with UC Hastings College of the Law professor and Liberty, Security & Technology Clinic founder Ahmed Ghappour.  He had a lot to say about trade secrets, cybersecurity, and encrypting “all the things.”
 
TSW:  Ahmed, TSW is dying to know what you’ve been up to lately in the world of economic espionage.  What’s the inside scoop? READ MORE

Former Aerospace Engineer Pleads Guilty to Misappropriation of Trade Secrets Intended for Iran

Although it appears that the U.S. and Iran are moving closer to a deal regarding Iran’s nuclear program, Iran’s allies appear to remain committed to acquiring military-grade technology from U.S. companies by way of engineers sympathetic to Iran.

According to an FBI press release, a former Pratt & Whitney engineer, Mr. Mozaffar Khazaee of Connecticut, pleaded guilty to violating the Arms Export Control Act by attempting to send to Iran export-controlled trade secrets (such as technical manuals, specification sheets, etc.) relating to jet engines used in the U.S. Air Force’s F35 Joint Strike Fighter program and F-22 Raptor program. He now faces a possible 20 years in prison. The investigation revealed that Mr. Khazaee misappropriated the materials from at least three different defense contractors where he has worked since 2009. Mr. Khazaee is a dual citizen of the U.S. and Iran. READ MORE

White House Proposal: Beef Up Anti-Hacking Laws and Resolve a Circuit Split

President Obama wants to go where the Supreme Court refused to tread.  As part of his cybersecurity and privacy initiatives, which we discussed last week, the President would strengthen the federal anti-hacking provisions of the Computer Fraud and Abuse Act (CFAA), including an expansion of activity covered by the statutory phrase “exceeds authorized access.”  In so doing, the President would resolve a circuit split between the First, Fifth, Eighth, Seventh, and Eleventh Circuits, on the one hand, and the Ninth and Fourth Circuits, on the other.  His reason?  “No foreign nation, no hacker, should be able to shut down our networks, steal our trade secrets, or invade the privacy of American families.” READ MORE

Nosal Returns to the Ninth Circuit Posing the Question: Is a Password a Sufficient “Technological Access Barrier” Under the CFAA?

Observers following the legal issues surrounding the prosecution of David Nosal will be watching closely in 2015 as the former Korn Ferry executive returns to the Ninth Circuit to appeal his 2013 conviction on three counts of violating the Computer Fraud and Abuse Act. READ MORE

Justice Hammers International Trade Secrets Hackers

A recent Justice Department reorganization of its National Security Division concentrates resources on fighting state-sponsored economic espionage and corporate theft of trade secrets. These strategic changes focus on Justice’s ability to target and prosecute hackers and others who seek to damage national assets by means including economic espionage, proliferation, and cyber-based national security threats.
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Bigger in Texas? High Court to Decide Scope of Protection for Third Party Trade Secrets in Civil Discovery

On August 22, 2014, the Texas Supreme Court ordered oral argument in In re: Magnum Hunter Resources Corp., a case concerning the discoverability of third-party trade secrets documents in civil cases. When should such documents be produced? And who gets to see them?

A simple summary of the facts of Magnum Hunter are as follows:

Party A hires Law Firm to help it negotiate a contract with Party B regarding an oil and natural gas venture. Party A and Party B ultimately reach an agreement on the venture and enter into a contract that says that Party B will provide to Party A all reports related to the venture upon request, provided that Party A agrees to treat such reports as confidential information.

READ MORE