Over the last few weeks, TSW has reported extensively on the first few cases brought under the new Defend Trade Secrets Act. But, given our recent celebration of our nation’s birthday and the day Will Smith saved the planet from alien attack, TSW takes a brief look back at the foundation and birth of trade secret law in the United States. READ MORE
Here at TSW, we continue to watch closely the case law developing under the new Defend Trade Secrets Act of 2016 (DTSA), which attempts to harmonize divergent state laws by creating a single federal framework for trade secrets misappropriation lawsuits. The Northern District of California appears to have won the race to be the first federal court to enter a written decision under the DTSA. The early rulings in this case already give us some food for thought when it comes to litigating trade secret claims under the DTSA. READ MORE
(Editorial Note: This is the second in our two-part series exploring recent litigation under the newly-enacted Defend Trade Secrets Act.)
We’ve been tracking the development of the Defend Trade Secrets Act (“DTSA”) for a while on TSW. It was only last month that President Obama signed the dotted line, and the DTSA became law. Now, Space Data has filed suit against Google for patent infringement, misappropriation of trade secrets under the DTSA, misappropriation of trade secrets under the California Uniform Trade Secrets Act, and breach of contract. We’ll be watching closely to see how the Northern District Court of California handles one of the first cases under the DTSA. READ MORE
(Editorial Note: This is our first of a two-part series exploring recent litigation under the newly-enacted Defend Trade Secrets Act.)
In late May 2016, Magic Leap, Inc. became a pioneer in trade secrets litigation when it became one of the first to venture into the uncharted waters of the Defend Trade Secrets Act. Magic Leap—a developer of technologies used for 3D renderings in augmented reality—sued two of its former employees for trade secret misappropriation under the DTSA in federal court in the Northern District of California. As we recently reported, President Obama signed into law what some consider the “most significant” intellectual properly legislation since the Lanham Act. READ MORE
This week, TSW revisits some cases that taught us valuable lessons in the complex and ever-changing trade secrets arena. As our readers know, trade secrets law keeps evolving due to new case law and the near certainty of a new federal cause of action, which will provide for federal jurisdiction where there was none, consistency throughout the country on enforcement of these claims, and a couple of new remedies. The risks to trade secret protection also continue to grow due to cybersecurity and social media considerations. In short, a business must balance several factors when determining how to best protect trade secrets, but it is sometimes the simple missteps that can sink a company’s efforts to enforce its trade secrets. Here are some key takeaways learned over the years. READ MORE
On July 28, broad bipartisan support ushered the “Defend Trade Secrets Act of 2015” onto the floor of both the House and Senate. This DTSA treads the well-worn path of many similar (and, to date, hapless) bills that fruitlessly preceded it. TSW has exhaustively covered prior attempts, aptly titling our first post “Pols Gone Wild: Congress Discovers Trade Secret Theft and Cybersecurity Are Problems; We Sort Through the Explosion of Legislation”—chart and all. READ MORE
One hundred and fifty-four years ago this month, New York marble marker Egbert Deming sued Ezra Chapman, seeking to prevent him from disclosing a secret method for making artificial marble. Chapman had agreed in writing not to disclose the secret, but sought to get out of his promise.
Although marble has been used in sculpture for millennia, it appears that the method of making artificial marble in question was, at that time, relatively new. The court observed that, at least according to the defendant, “the art of making artificial marble” was invented by “a person of the name of Hardinge” (possibly Benjamin Hardinge), who, in 1850, communicated the secret method to Williams, who later communicated that method to Deming.
The case is interesting because it shows how courts initially grappled with some fundamental questions that are now more routinely addressed in trade secret cases: READ MORE
One hundred and sixty-five years ago in New York, Albert Bagley filed one of the first trade secret cases in modern times (if Lexis is to be believed) against his former employee Charles Peddie. In Bagley v. Peddie, 16 N.Y. 469 (1857), Bagley claimed that Peddie had breached an agreement not to disclose Bagley’s secrets for making gold pens.
The trial court dismissed Bagley’s case for failing to prove special damages, but New York’s high court reversed. The court held that Bagley’s failure to prove damages wasn’t the end of the story, because Peddie had agreed to pay $3,000 in liquidated damages if he breached the agreement. The court found the provision enforceable because it was otherwise impossible to determine what damages Bagley sustained from entrusting his trade secrets to an employee who subsequently leaves, reveals the secrets to others, or embezzles his materials. READ MORE
On this day in 1979, the National Conference of Commissioners on Uniform State Laws approved the Uniform Trade Secrets Act (UTSA) and recommended it for enactment in all states. The act was amended once, nearly six years to the day later, on August 8, 1985.
The law’s Prefatory Note gives some context for how it came about:
“Notwithstanding the commercial importance of state trade secret law to interstate business, this law has not developed satisfactorily. In the first place, its development is uneven. Although there typically are a substantial number of reported decisions in states that are commercial centers, this is not the case in less populous and more agricultural jurisdictions. Secondly, even in states in which there has been significant litigation, there is undue uncertainty concerning the parameters of trade secret protection, and the appropriate remedies for misappropriation of a trade secret….
The Uniform Act codifies the basic principles of common law trade secret protection, preserving its essential distinctions from patent law….
On this day in 1922, the New York appellate division granted magician Horace Goldin an injunction against Clarion Photoplays, Inc., preventing it from disclosing in a motion picture his trade secret for “Sawing a Woman in Half.”
The trial court record included an affidavit by Harry Houdini, who testified that this trick did indeed originate with Goldin:
“Harry Houdini, a producer of magical feats and illusions since 1882, and president of the Society of American Magicians and of the Magicians’ Club of London, states that, so far back as his memory and records go, he is positive that he never witnessed a production of the illusion ‘Sawing a Woman in Half’ by any one other than the plaintiff.”
The appellate court credited this and other affidavits, and rejected the defense that this trick actually originated in ancient Egypt: READ MORE
