Trade Secrets

Protecting IP in a COVID-19 Remote-Work-World

Even before the COVID-19 pandemic, many employers offered remote work options. Now employers all over the world are encouraging or requiring their employees to work remote from home. This means employees are accessing, maintaining, and sharing proprietary information outside of the office more frequently than ever before, thereby increasing the risk of employee and third-party IP theft. READ MORE

In Pursuit of Chinese Trade Secret Theft: Fresh Allegations Against Huawei and Chinese Military Grabs 145 Million SSNs

Loyal readers are familiar with the DOJ’s “China Initiative,” launched in November 2018 to prosecute the theft of U.S. trade secrets by or for Chinese interests. Attorney General Barr reaffirmed the DOJ’s commitment “to combat the threat posed by theft directed and encouraged by the PRC” in an address at the China Initiative Conference last month. The DOJ’s campaign recently intensified with two new, gripping indictments. READ MORE

In a Blockbuster Economic Espionage Act Prosecution, an Attempt by the Government to Hide the Ball?

An ongoing, headline-grabbing trade secret theft prosecution against a Chinese spy is also quietly presenting a, say, disquieting attempt by prosecutors to stretch the law on what it is required to plead and prove.  On the civil side, when a plaintiff sues for trade secret theft, there’s almost always a hotly contested point of proof on whether the alleged stolen material is really a trade secret.  It’s well-established, though, that when the government charges a defendant criminally with the inchoate forms of trade secret theft—attempt or conspiracy being the two spelled out under the Economic Espionage Act—the government has no burden to prove that the underlying information was actually a trade secret.  (Loyal readers will recall our recent post on United States v. O’Rourke, where the defendant tried to argue otherwise at sentencing.)  Now, in a brief filed just last week, the government seems to be taking this one step further and arguing that it has no duty even to identify the trade secrets at issue. READ MORE

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