Senate Judiciary Committee Creates IP Subcommittee to Combat IP Theft

Last week, the United States Senate Judiciary Committee announced the creation of a new subcommittee on intellectual property.  The IP subcommittee will address a range of IP issues, including theft by state actors such as China.  The announcement of the subcommittee comes in the wake of increasing tension over trade with China and shortly after the Department of Justice announced criminal charges against China’s Huawei Technologies for alleged trade secrets theft. READ MORE

Possession is not 9/10ths of the Law in Continuing Use Misappropriation Under DTSA

When Congress enacted the DTSA on May 11, 2016, it left open the issue of whether the DTSA would apply to misappropriation that occurred prior.  As we previously reported, many federal district courts have since found that it does apply if there were continuing acts of misappropriation after enactment of the statute.  Now, the 10th Circuit Court of Appeals has weighed in, upholding a district court’s dismissal of a DTSA claim where the plaintiff failed to allege a continued act of misappropriation after the date of enactment. READ MORE

Trade Secret Sparks Beer Brawl in the Ninth Circuit: When is Your Word Enough?

On September 13, the Ninth Circuit heard oral arguments on an issue of first impression in Anheuser-Busch Cos. v. James Clark, No. 17-15591 (9th Cir. 2015).

Anheuser-Busch filed a complaint in the Eastern District of California against former employee James Clark, alleging that he violated California’s Uniform Trade Secrets Act (CUTSA) by unlawfully disseminating a document containing its beer recipe for use in a separate class action suit. To support its allegations, the company submitted a declaration stating that the leaked document contained “confidential information related to Plaintiffs’ brewing processes, including but not limited to, information regarding a variety of analytical characteristics for each of [Plaintiffs’] products.” READ MORE

Kittens, Stephen Curry, and Cryptocurrency: This Trade Secrets Case Has It All.

What do kittens, three-time NBA Finals champion Stephen Curry, and cryptocurrency have in common?

On May 7, 2018, a subsidiary of Launch Labs, a Canadian corporation doing business as Axiom Zen, released cryptocollectibles called “CurryKittens.”  Cryptocollectibles are unique, digital tokens created using blockchain technology.  The CurryKittens, a type of Cryptocollectible, were virtual kittens with the likeness of NBA star Stephen Curry.  The CurryKittens were three of many virtual cats that could be securely bought, sold, traded, and bred on the multimillion dollar- generating CryptoKitties platform.  (An image of the now suspended “CurryKittens” can be found here.) READ MORE

Failing to Prepare Is Preparing to Fail

A recent case from the Federal Circuit upholding a jury’s finding in favor of defendant offers lessons to both defendants and plaintiffs on preparing for trade secrets misappropriation actions. Both plaintiff, Raytheon, and defendant, Indigo, are companies in the infrared imaging equipment business. Of the four Indigo founders, three of them were former Raytheon employees, causing Raytheon to accuse Indigo of misappropriating its trade secrets. Specifically, Raytheon accused Indigo of using Raytheon’s sequential vacuum bake recipes and in situ solder seal package assembly process taken by the former Raytheon employees to develop Indigo’s recipes and processes. READ MORE

UPDATE: Home Remedies Remain Best Medicine for Politically Charged IP Theft

In July 2018, a federal judge in Wisconsin imposed a $1.5 million penaltythe maximum statutory fine—against Chinese wind turbine manufacturer, Sinovel Wind Group Co. Ltd., for stealing trade secrets from Massachusetts-based technology company, AMSC Inc. In addition to the fine, Sinovel was sentenced to 1 year probation and ordered to pay $57.5 million in restitution to AMSC, an amount the companies had settled on prior to the ruling. Sinovel also agreed to pay $850,000 to Massachusetts wind turbine operators. READ MORE

Engineering a DTSA Claim: District Court Allows Broad Allegations to Survive Motion to Dismiss

The strange contraption in this photo is at the heart of a recent decision regarding the pleading standard for DTSA claims.  On June 15, Eastern District of Pennsylvania Judge Juan Sanchez denied a motion to dismiss counts of trade secret misappropriation against Joshua Andrew Adams, a former project engineer for PDC Machines, Inc. who left the company and later joined Nel Hydrogen A/S.  PDC and Nel collaborated in 2008 to develop high-pressure hydrogen gas diaphragm compressors and signed a nondisclosure agreement (NDA) barring Nel from replicating or reverse engineering the technology.  Adams was also subject to an NDA that prohibited him from using any of PDC’s confidential information and trade secrets without written permission.  In the complaint, PDC asserts that Adams now works for Nel, and that Nel has filed at least one patent application listing Adams as the inventor for a high-pressure diaphragm hydrogen compressor that is nearly identical to PDC’s version. READ MORE

A New Month, a New Compliance Deadline in the European Union: What Businesses Need to Know About the EU Trade Secrets Directive

Just days after the European Union’s widely-discussed new data privacy regulations, the General Data Protection Regulation (“GDPR”), took effect on May 25, 2018, another EU-wide legal change quietly occurred.  (And if you’re still puzzling through GDPR compliance, fear not:  We have plenty of resources for you here.)

But on to the less familiar date:  June 9, 2018, was the deadline for EU member states to comply with the new Directive on the Protection of Trade Secrets.  As we’ve reported before, the European Parliament adopted the Directive in 2016 to harmonize national laws regarding trade secrets protection.  Under the Directive, trade secrets owners across Europe should enjoy increased protection and uniformity—welcome news, given that the laws have historically differed significantly from country to country.

To Be Or Not To Be: NY High Court Rules that Data Copied to a Server is a Tangible Reproduction under the New York Penal Code

On May 3, 2018, the New York Court of Appeals held that data copied onto a server constitutes a tangible reproduction for purposes of liability under the New York Penal Code, marking the end of Sergey Aleynikov’s nine year battle with federal and state prosecutors.  Trade Secrets Watch has kept you up to date with the seemingly never-ending saga – most recently here, here, and here.

As a refresher, Programmer Sergey Aleynikov was accused of copying thousands of lines of code from his former employer, Goldman Sachs Group Inc. in July 2009.  The Second Circuit upheld Aleynikov’s conviction under the National Stolen Property Act (NSPA) and the Economic Espionage Act (EEA), but later prompted legislative changes when it reversed, finding that Aleynikov had not stolen a “good” as defined by the NSPA, nor a trade secret intended for use in interstate or international commerce, as required by the EEA. READ MORE

Campaigning for Protection of Political Trade Secrets

As widely reported, on April 20, the Democratic National Committee (“DNC”) kicked off a twelve count lawsuit against a number of entities and individuals, including the Russian Federation, General Staff of the Armed Forces of the Russian Federation (“GRU”), WikiLeaks, Julian Assange, Donald J. Trump, Jr., and other political foes.  Amongst the wide swath of allegations, which include everything from computer fraud to RICO conspiracy, are allegations that the defendants misappropriated trade secrets in violation of both the DTSA and the Washington D.C. Uniform Trade Secrets Act. READ MORE