Verdicts

Fourth Circuit Blows Away Nearly $1 Billion Kevlar Trade Secrets Award

Editorial BoardPosted on April 4, 2014

The Fourth Circuit has thrown out the second-largest trade secret jury verdict on record, an award of nearly $1 billion, on the grounds that the district court improperly excluded evidence relevant to the defense.

We have covered this case extensively, tracing its history of allegations of double agents, bribery, top-secret industrial facilities, and its (apparent) culmination with an enormous jury award. Now, it seems, this epic legal saga will start anew. On April 3, the Fourth Circuit unanimously vacated the jury award and ordered a new trial. READ MORE →

BREAKING: David Nosal Sentenced to Prison on CFAA Computer Intrusion and Trade Secret Charges

Editorial BoardPosted on January 8, 2014

Former Korn/Ferry recruiter David Nosal was sentenced to one year and one day in prison on Wednesday for violating the federal Computer Fraud and Abuse Act and the Economic Espionage Act.

In April, a federal jury in San Francisco convicted Nosal of conspiring to gain unauthorized access to the computer system of his former employer, the executive search firm Korn/Ferry International, and to illegally obtain trade secrets. Prosecutors said Nosal entered into an agreement with other Korn/Ferry employees in 2004 to take confidential materials from Korn/Ferry’s computer system to be used in a new business that Nosal intended to establish after he left Korn/Ferry. READ MORE →

Trade Secrets Watch 2013 Year-in-Review

Robert L. UriartePosted on December 19, 2013

It’s been a hot year in the trade secrets field, with some huge verdicts and settlements, a renewed spotlight on cyberattacks, and an unusual flurry of trade secrets legislation. Trade Secrets Watch’s 2013 Year-in-Review highlights the notable trade secrets activity from the past year. READ MORE →

PULLING BACK THE VEIL: Top 10 Disclosed Trade Secret Settlements

Cam PhanPosted on October 16, 2013

Litigation settlements can often be shrouded in secrecy, and trade secret litigation settlements are no different. Parties are often sworn to confidentiality, and court dockets are typically silent on the amount of settlements (or even on their existence). Undaunted, Trade Secrets Watch tried to pull back the curtain, hunting for the biggest trade secrets settlements we could find. Although these settlements generally run smaller than the top 10 trade secret verdicts we brought you earlier, they are still quite substantial and confirm that trade secret cases can mean big money:

Printing Hard Copies of Stolen Source Code: The Difference Between Freedom and Incarceration in the Second Circuit

Editorial BoardPosted on August 13, 2013

Whenever an appeals court kicks off a 65-page opinion by describing you (or your client) as a thief, and posits that the question before it is whether you’ve been properly convicted of thievery, you know you’re in trouble. That’s what defendant Samarth Agrawal must have thought when the Second Circuit issued its decision last week upholding his conviction under the Economic Espionage Act and the National Stolen Property Act for theft of his employer’s source code.

The other emotion Agrawal probably felt was shock: just 15 months earlier, the Second Circuit reached the opposite conclusion in a case involving almost the same law and facts. In United States v. Aleynikov, the court overturned the defendant’s conviction and set him free.

What gives? Both cases involved employees who stole proprietary source code used in the financial industry to execute high frequency trades. Both employees peddled those secrets to their employers’ competitors in the hopes of landing a higher-paying, lucrative job. Both were charged under the same federal statutes that criminalize misappropriation of trade secrets. READ MORE →

UPDATE: Money, Money, Money: Top 10 Trade Secret Verdicts (Plus One Jumbo Arbitration Award)

Rob Shwarts and Cam PhanPosted on July 23, 2013

Revised post available here.

Big IP verdicts aren’t limited to patent cases. Trade secrets can mean big money, too. Really big. As in multi-, multi-million dollar verdicts. And the trend is up with more than half of the top ten verdicts coming out in just the past two years.

Trials are expensive. They’re also unpredictable. So when a plaintiff seeking damages in a trade secret case decides to take the case all the way through trial, it’s hoping for a jackpot. Otherwise the costs and risks of trial likely wouldn’t make it worth gambling the result on a jury.

For the parties below, the gamble paid off.

Trade Secrets Watch reviewed trade secret misappropriation cases over the past decade and dug up the largest verdicts on record. We also noted any post-verdict information to the extent it was available.

(Editor’s note: After we posted our Top 10 list, below, a Minnesota state appeals court affirmed a $630 million arbitration award against Western Digital Corp. over allegations of trade secret misappropriation. See Seagate Tech. LLC v. Western Digital Corp., No. A12-1944, Minn. Ct. App. (St. Paul) (July 22, 2013). This would have ranked at No. 3 on our list, had a jury made the award. Regardless, this case confirms that the era of massive trade secret awards has arrived.)
READ MORE →

Money, Money, Money: Top 10 Trade Secret Verdicts

Rob Shwarts and Cam PhanPosted on July 10, 2013

Revised post available here.

For the parties below, the gamble paid off.

Bulletproofing a Billion-Dollar Verdict: In a Case of High Intrigue, DuPont Tries to Defend its Kevlar Trade Secrets Win on Appeal

Editorial BoardPosted on June 5, 2013

Double agents. Bribery. Top-secret industrial facilities. Code words. An undercover FBI operation, complete with a wire. The DuPont v. Kolon Industries trade secrets trial had all the elements of a spy novel—and it ended with the legal equivalent of a nuclear bomb: a nearly $1 billion jury verdict:

and a worldwide injunction:

These two parties slugged it out at trial, then stepped back into the ring for another battle royale at the Fourth Circuit. READ MORE →