Practical Tips

One Step Away from Uniform: Taking a Closer Look at Massachusetts’ New Trade Secrets Law

As we reported in August, Massachusetts became the penultimate state to enact the Uniform Trade Secrets Act (UTSA), leaving New York as the sole remaining holdout. Massachusetts’ new law, which took effect October 1, 2018, significantly expanded the state’s existing trade secrets law by broadening protections for trade secret owners and narrowing the scope of noncompete agreements. As we reported earlier this month, the new law does not apply retroactively even if the violation is ongoing in nature.

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Massachusetts Enacts New Reforms on Noncompetes, Becomes 49th State to Enact UTSA

Just two days after TSW’s inaugural post, we brought you news of Texas becoming the 48th state to enact some form of the Uniform Trade Secrets Act (UTSA).

Now, roughly five years and one federal trade secrets statute later, Massachusetts has become the 49th state, leaving New York as the lone holdout.  The new law, which takes effect on October 1, 2018, is part of an amendment to a $1.1 billion economic development bill that Massachusetts Governor Charlie Baker signed into law on August 10, 2018.  With the enactment of the UTSA, Massachusetts courts will have newfound power to enter injunctions against actual or threatened misappropriation of trade secrets.

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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

A New Month, a New Compliance Deadline in the European Union: What Businesses Need to Know About the EU Trade Secrets Directive

Just days after the European Union’s widely-discussed new data privacy regulations, the General Data Protection Regulation (“GDPR”), took effect on May 25, 2018, another EU-wide legal change quietly occurred.  (And if you’re still puzzling through GDPR compliance, fear not:  We have plenty of resources for you here.)

But on to the less familiar date:  June 9, 2018, was the deadline for EU member states to comply with the new Directive on the Protection of Trade Secrets.  As we’ve reported before, the European Parliament adopted the Directive in 2016 to harmonize national laws regarding trade secrets protection.  Under the Directive, trade secrets owners across Europe should enjoy increased protection and uniformity—welcome news, given that the laws have historically differed significantly from country to country.

Federal Circuit Illuminates Right to Disgorgement as Remedy for Trade Secret Misappropriation

The Federal Circuit recently issued an opinion, Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc., that addressed several interesting issues impacting the calculation of damages in trade secret actions.  Perhaps the Court of Appeals’ ruling of greatest consequence involved its determination that there is no Seventh Amendment right to a jury decision on disgorgement of profits – a remedy also often commonly described as “unjust enrichment.”  The Federal Circuit instead ruled that the calculation of disgorgement damages is for the trial court to decide after making findings of fact and conclusions of law.  If the decision is extended by other federal courts, it could have wide-reaching implications for claims under the Defend Trade Secrets Act, which allows for unjust enrichment damages as a remedy for misappropriation of trade secrets. READ MORE

In the Ninth Circuit, Your Fate (and Documents) May Not Be Sealed

Judge Vince Chhabria of the Northern District of California handed down a strongly worded order denying a motion to seal alleged trade secret information, and sanctioning counsel for defendant for the frivolous request. The order is a stern reminder to the sanctioned attorneys and to trade secret litigants in federal court generally that federal litigation is traditionally a public process, and that parties seeking to remove documents from the public’s access often face an uphill battle in order to do so. READ MORE

Mine Your Own Business: Multinational Mining Company Seeks Protection of Alleged Trade Secrets During Discovery

Last week, multinational mining giant Rio Tinto asked a federal court in Manhattan to shield its document disclosures to the Securities and Exchange Commission (SEC) from the public eye. Unlike the typical cases we discuss involving former employees working for competitors, Rio Tinto is defending against fraud claims brought by the SEC that implicated the company and two of its former top executives. READ MORE

Blockchain: Not Just a Platform for Cryptocurrency but a Potential Method for Protecting Trade Secrets and Other IP

Cryptocurrency has dominated the attention of the financial world for most of the past 12 months as Bitcoin’s value (as well as other cryptocurrencies’) soared over 1,500% in 2017 (though it has experienced some recent volatility).  While investors are happy to see their wallets growing, companies should be excited about the technology underlying most cryptocurrencies – blockchain – which has the potential to create a competitive advantage in trade secrets protection.

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Upon Reflection, Some Trade Secrets May Be Less Secret Than They Appear

A recent case in Florida is a reminder that when dealing with government entities, trade secrets may be disclosed to the public, especially if that information has been aggregated.  The District Court of Appeal of Florida affirmed a circuit court’s ruling ordering Broward County to produce information that Uber claimed were trade secrets.  Uber and Broward County had entered into an agreement governing Uber’s services at the airport and Port Everglades.  Part of the agreement required that Uber provide Broward County with monthly self-reports.  These reports contained both aggregated data and granular data.  The aggregated data was comprised of the total number of pickups and drop-offs at the airport and seaport, multiplied by the fee in each of those zones.  The granular data included a time stamp, longitude and latitude of pick-ups or drop-offs, and the first three characters of the driver’s license plate.  Per the agreement, Uber marked these monthly reports as containing trade secrets exempt from Florida’s Public Records Act, which Broward County was required to keep confidential. READ MORE

Worse Than a Toothache: Dental Executive Alleged to Have Misappropriated Proprietary Business Leads

Earlier this month, a Nashville, Tennessee company filed a federal lawsuit against its former employee alleging trade secrets misappropriation under the Defend Trade Secrets Act, among other claims.  The plaintiff, Marquee Dental Partners, LLC, operates dental offices in Tennessee, Alabama, and Kentucky.  Marquee purchases existing dental practices and provides administrative services to those practices allowing the doctors and support staff to focus on clinic services and patient care.  In a particularly strongly-worded introductory sentence, the complaint reads: “This case shows what it means to be a faithless corporate executive.”  READ MORE