Preemption

Diamonds Are Forever, but Joint Ventures Are Not: Court Finds Claims Preempted by CUTSA in Business Deal Gone Bad

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The holiday season is officially upon us: peppermint mochas have popped up on coffee shop menus, carols ring from department store speakers, and you can’t turn on the television without seeing at least three diamond commercials. But it’s not all yuletide and merriment for those in the diamond business. As one diamond importer and wholesaler recently learned, sometimes instead of a gem you get a lump of coal—in this case, from the Northern District of California, which tossed out certain claims against a former business partner on the grounds those claims were preempted by the California Uniform Trade Secrets Act. READ MORE →

“Gist of Action” Doctrine: Don’t Contract Away Your Misappropriation Claim

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The “gist of action” doctrine. Heard of it? Well, if you are dealing with Pennsylvania law, you need to know it. The “gist of action” doctrine asks whether the “gist” of a suit sounds in tort or contract. When applied to a claim of trade secret misappropriation, the doctrine questions whether the wrongful acts constitute a tort or a breach of contract. If the wrongful acts constitute a breach of contract, Pennsylvania law bars any trade secret claim. As evidenced by the case Wiggins v. Physiologic Assessment Services, LLC, whether a claim can be brought as a trade secret claim or a breach of contract claim can turn on the wording of the contract at issue. READ MORE →

REDUCING RISKS: Court Finds Copyright Act Does Not Preempt State Trade Secret Claim

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Over the years, it has proven difficult to fit software in any one category of IP protection. And while software’s ability to seemingly transcend patents, copyright, and trade secrets provides software developers and technology companies with options, it also makes it challenging to decide which will provide the best way to enforce those rights. There are obviously risks and benefits to each form of protection. However, the courts have reduced at least one risk: preemption of state trade secret laws by the Copyright Act. READ MORE →

Virtual Learning: The Scope of Preemption Under the California Uniform Trade Secrets Act

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Companies seeking protection under the California Uniform Trade Secrets Act (“CUTSA”) should consider the effects of CUTSA preemption on their litigation strategy. Under the well-known Silvaco Data System v. Intel Corporation case and its progeny, CUTSA provides the exclusive civil remedy for trade secret misappropriation and supersedes other tort claims based on the same nucleus of facts as any trade secret claims that are or could be pled. READ MORE →