Trade Secrets

From Corn-Gate to You-Stole-My-Trade-Secrets-Gate (Maybe): Defendant Beer Maker Moves to Add a Counterclaim for Trade Secrets Misappropriation in False Advertisement Litigation

MillerCoors (beer maker of Coors Light and Miller Lite) and Anheuser-Busch (“AB”) (competing beer maker of Bud Light) have been embroiled in a contentious federal district court litigation in the W.D. of Wisconsin since March 2019. MillerCoors filed a lawsuit against AB for false advertising and trademark dilution shortly after AB aired an ad during Super Bowl LIII saying that MillerCoors uses corn syrup during brewing. MillerCoors’ lawsuit alleges that this ad was part of a “false and misleading advertising campaign” designed to deceive consumers into thinking they will consume corn syrup if they drink Coors Light and Miller Lite, which MillerCoors denies. READ MORE

Court Upholds One Year in Prison for Theft of non-Trade Secrets

A federal district court judge in Chicago sentenced Robert O’Rourke, a former employee of iron bar manufacturer Dura-Bar, to one year and one day in prison last week for stealing trade secrets.  Well, not quite.  O’Rourke was convicted on February 25 of seven counts of stealing and attempting to steal trade secrets, but moved for a new trial.  In her October 11 order, Judge Andrea Wood denied the motion, holding that the trial evidence demonstrated O’Rourke’s intent to steal and use trade secrets—even if some of the proprietary information stolen did not actually constitute a trade secret. READ MORE

Pleading “Sufficient Particularity”: Technical Trade Secrets Require More

It’s common sense that, to protect a trade secret, the information must remain secret. However, when trade secret misappropriation claims arise and litigation ensues, the court and the parties involved need to understand at least the broad confines of the alleged trade secret. While the Federal pleading standard for a plaintiff’s complaint is the same regardless of what the trade secret may be—namely, that the plaintiff include sufficient particularity of the trade secret’s subject matter—what constitutes “sufficient particularity” will depend on the type of information alleged to be a trade secret. AlterG, Inc. v. Boost Treadmills LLC, a recent decision in the Northern District of California, highlighted this fact when the court found the plaintiff had adequately pleaded facts to describe one trade secret, but failed to do so for another. READ MORE

Huawei Alleges “Selective Prosecution” by the DOJ

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

The DOJ’s China Initiative—Protecting Your Assets

As anticipated in May, rising trade tensions between the U.S. and China have led to a series of escalating measures including tariffs and trade investigations.  In July 2019 testimony to the Senate Judiciary Committee, FBI Director Christopher Wray noted that more than 1,000 active investigations on intellectual property theft “lead[] back to China.”  Against the backdrop of these issues, the Department of Justice announced the “China Initiative” on November 1, 2018.  The DOJ explained that the Initiative was launched against the background of prior findings by the Administration regarding China’s trade practices.  One of the China Initiative’s key goals is to “[i]dentify priority trade secret cases, ensure that investigations are adequately resourced; and work to bring them to fruition in a timely manner and according to the facts and applicable law.” READ MORE

Worried About Trade Secret Poaching? Check in With Your Third-party Service Providers

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

Are State Governments Immune From Suit For Misappropriation Of Trade Secrets?

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

Making Memories: Trade Secrets Need Not Be in Tangible Form to Be Protectable

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

Tariff Chess Match Escalates Between China and the United States

Trade Secrets Watch has been covering the escalating economic tension between China and the U.S., including the U.S. Trade Representative’s investigation on China’s alleged IP theft under Section 301 of the Trade Act of 1974, dueling imposition of tariffs in March 2018, and the USTR announcement of products against which it proposed to impose 25 percent import duties. READ MORE

Race to the Finish: Autonomous Vehicle Technology at the Forefront of Alleged Trade Secrets Theft

The stakes couldn’t be higher in the race amongst Silicon Valley self-driving companies vying to be the first to bring the industry-changing technology to market.  With competition so steep, and the potential value counted in the trillions, the efforts to protect this technology have given rise to frequent trade secrets theft disputes.

In the most recent instance of alleged autonomous vehicle technology trade secret theft, a federal district court judge ordered the former director of hardware of WeRide Corp., Kun Huang, to return all files he allegedly downloaded from WeRide before his departure in 2018.  WeRide formerly credited Huang with its success in becoming the fastest autonomous vehicle company to complete its first public road test.  Now, WeRide alleges Huang copied confidential information from a company shared-laptop, deleted files from the laptop, cleared its web browsing history, and then erased the hard drive on his WeRide-issued personal MacBook.  Shortly thereafter, Huang began working at Zhong Zhi Xing Technology Co., Ltd. (ZZX), another defendant in the case, which WeRide alleges was founded by its former CEO, Jing Wang, also named as a defendant.

Based on these allegations, the Court granted WeRide a preliminary injunction against Huang and his new companies, ZZX and a related entity AllRide.AI, Inc., barring these parties from using or sharing WeRide’s trade secrets and requiring them to return all WeRide materials within four days of the order.

This case is but one of many recent trade secret disputes amongst Silicon Valley autonomous vehicle technology companies.  And with autonomous vehicle employee turnover high and trillions of dollars at stake, we expect to see many more trade secret disputes arise.