In August 2019, federal prosecutors indicted Feng Tao, a Chinese scientist conducting research at the University of Kansas, on fraud charges. The indictment may not appear notable at first glance. But when viewed against the backdrop of the Trump administration’s escalating trade war and the Department of Justice’s “China Initiative,” the facts underlying this prosecution may tell a deeper story.
As part of its China Initiative—a program announced in November 2018 to combat state-sponsored intellectual property theft—the DOJ set out to develop an enforcement strategy concerning universities and research laboratories. These institutions are considered particularly vulnerable targets of Chinese espionage because of their status as recruiters of foreign talent and incubators of state-of-the-art technology. The FBI has since begun scrutinizing universities’ ties to China, reaching out to schools around the country to curb the threat of technology and trade secret theft posed by researchers tapped by the Chinese government. READ MORE
On Wednesday, a federal jury in the Eastern District of Texas declined to award any damages to Huawei Technologies Co., the world’s largest telecommunications company, stemming from its allegations of trade secret theft, employee poaching, and restrictive covenant violations against former employee Yiren Ronnie Huang (“Huang”) and startup CNEX Labs, Inc. (“CNEX”). Huang and CNEX, in turn, asserted counterclaims of trade secret theft against Huawei. Although the jury found Huang violated his post-employment obligations to Huawei and that Huawei misappropriated CNEX’s trade secrets, the jury did not award damages to either party. The verdict came after a contentious three-week trial before Judge Amos Mazzant on the parties’ dueling trade secret claims.
On May 8, 2017, the United States Patent and Trademark Office hosted its second event on trade secrets. When we covered the USPTO’s inaugural trade secrets symposium held in January 2015, there was a palpable sense among DC insiders that, at long last, federal trade secrets legislation was imminent.
Readers of this blog of course know the rest of that story: obviously the biggest change in the landscape since the last event was the passage of the Defend Trade Secrets Act of 2016. In fact, the USPTO intentionally timed this event to fall near the one-year anniversary of the DTSA’s passage.
What else had changed in the last two years? To answer that question, I once again traveled to USPTO headquarters in Alexandria, VA to attend the symposium and provide TSW readers with the following report. READ MORE
If you are a regular reader of TSW, you know we have been monitoring developments relating to the Defend Trade Secrets Act of 2016 (DTSA). While the Northern District of California was the first court to enter a written opinion under the DTSA, case law is continuing to develop across the country, including in the First Circuit. READ MORE
As many loyal TSW readers know, we’ve been watching the ongoing saga involving ex-Korn Ferry recruiter David Nosal wind its way through the courts since the early days of this blog. And last month, the highly anticipated Ninth Circuit opinion in United States v. Nosal was issued on July 5, 2016 (“Nosal II”). This was the second time the Ninth Circuit had issued a ruling in the case relating to charges under the Computer Fraud and Abuse Act (the “CFAA”). In April 2012, an en banc panel dismissed five of the eight CFAA counts against Nosal (“Nosal I”). A jury subsequently convicted Nosal of the remaining three CFAA counts, as well as two Economic Espionage Act (“EEA”) counts in April 2013 and Nosal was sentenced to 366 days in prison, three years supervised release, community service, $60,000 in fines, and restitution. READ MORE
One year ago today, Trade Secrets Watch went live with a story on Chinese cyberhacking. In the year since, with our readers’ support, we have written about all things trade secret—from foodies to fracking, trials to top 10 lists, computer fraud to confidentiality agreements, industrial espionage to international law. Trade secrets law endlessly fascinates us, and we thank you for sharing our passion by reading and following us on Twitter.
If you are not already, please follow us (@TS_Watch) and sign up for our weekly email newsletter.
Thank you again for making our first year a success. We look forward to sharing the ride with you in the next year and beyond!
-The editors and contributors of Trade Secrets Watch
The primary laws governing Russian trade secrets are the Federal Law on Information, Information Technologies and Information Protection and the Trade Secret Law. The Civil Code, the Labor Code, the Criminal Code, and the Code of Administrative Offenses provide additional statutory protection for trade secrets.
The Information Law defines trade secrets as “information to which access is limited.” Under the Trade Secret Law a trade secret is “any information (production, technical, economic, organizational, information, etc.) which has an actual or potential commercial value because it is unknown to third parties and because third parties do not have free access to it by legitimate means, and with respect to which the holder of such information has implemented a trade secrecy system.” Not all information may constitute a trade secret: the Trade Secret Law expressly lists categories of information that may not be a trade secret (e.g., information on the environment, population, or violations of law).
Thanks to you, readers, less than three months after its launch, Trade Secrets Watch drew the notice of California’s leading legal weekly. The Recorder put us on Page One as an exemplar of the growing trend of law firm-written blogs that take an engaging but journalistically serious approach to legal issues. You can see a web version of the article here. We’ve also copied it below: READ MORE
Readers, we need your help! Our Top 10 Trade Secret Verdicts list was such a hit that we decided to follow up with a list of the Top 10 Trade Secret Settlements.
Do you know of a public, multi-million dollar trade secret settlement that might rank among the top 10 biggest? Write to us, including sources and/or citations if possible.
Trade secrets were first introduced into China law through the Article 10 of the “Anti-Unfair Competition Law of China” (effective Dec. 1, 1993). This defines a “trade secret” as technological or business information that (a) is unavailable to the public; (b) creates economic benefits for its owner and is of practical utility; and (c) is subject to measures taken by its owner to maintain its secrecy. And it defines “misappropriation” as taking place when:
- a party acquires the owner’s trade secret by improper means such as theft, economic inducement, or coercion;
- a party discloses, uses, or allows other parties to use the trade secret acquired by these means;
- a party discloses, uses, or allows other parties to use the trade secret in violation of an agreement with, or requirement by, the owner to protect the trade secret; or
- a third party acquires, uses, or discloses other parties’ trade secrets with the actual or presumed knowledge of the above-mentioned illegal acts.