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.
With the holidays behind us and our calendars flipped over to 2019, we’re taking a look back at some key trade secrets developments of the past year. Here are some of the big cases and legislative developments from 2018. READ MORE
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
The Waymo v. Uber trade secrets litigation has been underway for less than two months but the case has already hit quite few speed bumps with multiple discovery battles, Waymo’s efforts to obtain a preliminary injunction from Judge William Alsup of Northern District of California, a fight over arbitration, assertions of 5th Amendment rights, and now an appeal to the Federal Circuit that has temporarily halted a portion of the district court proceedings.
As a quick recap of how we got here, Waymo alleges that one of its former key managers in charge of Waymo’s driverless car business, Anthony Levandowski, downloaded more than 14,000 files to start a competing company—Otto—that Uber later purchased. The key technology relates to a LiDAR system, which is mounted on top of the car and gives the driverless car the ability to “see” other cars and obstacles. Waymo is seeking a preliminary injunction enjoining Uber from using or disclosing any of Waymo’s trade secrets and from selling any devices based on Waymo’s patents. In aid of the PI hearing on May 3, 2017, the parties are engaging in expedited discovery. Since this case started, the docket has been quite active and full of interesting, thorny legal issues. READ MORE
In little under a year after its enactment, a Federal Court jury in the Eastern District of Pennsylvania issued the first verdict under the Defend Trade Secrets Act in favor of the Plaintiff Dalmatia Import Group, Inc. The jury awarded Dalmatia $2.5 Million in total damages for all claims, with $500,000 attributed to its DTSA and Pennsylvania Uniform Trade Secrets Act claim. Just this week, Dalmatia filed a motion for judgement on the verdict, seeking treble damages for its related trademark and counterfeiting claims. If the court awards treble damages, total damages could exceed $5 Million.
Within days of each other, your clothing company―Free Country Ltd.―loses two employees who decamp to a rival to set up a competing apparel line. You discover that just before leaving, they transferred some 50,000 documents to a personal account—customer orders, your master contact list, and product design information. Incensed, you file a trade secrets lawsuit and seek an injunction prohibiting the thieves from soliciting your customers. Their defense amounts to, “so what if we took the documents―it’s a free country!” Easy win, right? Wrong. These are the facts of a recent trade secrets lawsuit in the Southern District of New York, in which the court denied the plaintiff’s request that its former employee defendants be prohibited from soliciting plaintiff’s customers. 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
After more than a decade of successive incremental statutory and regulatory changes aimed at strengthening trade secret protection of in Japan, Japan really rolled up its sleeves in 2015 and made significant changes to protect Japanese companies from the perceived threat posed by its Asian neighbors to its crown technological jewels.
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.
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