Securing your Network: Claiming Contacts as Trade Secrets

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The paradigmatic trade secret is something that is obviously technical, such as source code or the formula for Coke.  Though trade secrets protection is not limited to technical trade secrets, it can sometimes be tricky to claim trade secrecy over non-technical trade secrets, such as customer or employee contact lists, that are commercially valuable yet may seem more accessible and therefore less secret.  California Code of Civil Procedure Section 2019.210 compounds the issue by requiring a plaintiff to make a detailed disclosure of trade secrets as a precondition to frame the discovery to come.  Section 2019.210 therefore immediately places an often-challenging decision upon the plaintiff—selecting what it should claim as trade secrets in litigation. READ MORE →

Fighting Back: Identifying Risks Posed by an Angry Current or Former Employee

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Something lost is always in the last place you look (by definition).  It can also sometimes be in the first.

Although technology has made it possible for outsiders to manipulate and infiltrate your company’s systems and obtain confidential and trade secret information in novel and subtle ways, a lingering, persistent threat to a company’s confidential information and trade secret comes from unhappy employees, both during the time of their employ and after separation. READ MORE →

Will Your Cyber Insurance Respond When You Need It Most?

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As many companies are considering purchasing cyber insurance, they often wonder: “Will my insurer be there when I have a data breach?”  Cyber insurers have generally been good in paying claims. But the recent lawsuit featured in this Orrick Client Alert demonstrates that as the landscape evolves, insurers may refuse to cover breach costs by arguing that insureds failed to meet “minimum requirements” for cybersecurity. Tending to cybersecurity policies and procedures before breaches occur is more important than ever. READ MORE →

Snowden Strikes Back: Mass Collection of Telephony Metadata Struck Down By the Second Circuit

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As post-Snowden America well knows, for some years now the National Security Agency (NSA) has been collecting bulk telephone metadata under the authority of Section 215 of the PATRIOT Act and aggregating it into data banks subject to government query. Under the “business records” provision of this law, the NSA has been collecting all kinds of information about the numbers you dial, how often you dial them, and how long your conversations are—and it’s been doing so for years. READ MORE →

Things to Think About Before You Leave to Work for a Competitor

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An employee who leaves a company to work for a competitor can run into a hornet’s nest of legal problems.  The latest example of this classic fact pattern involves William Georgelis, a sales manager for building material manufacturer CPG International LLC.  After more than 10 years at the company, Georgelis pursued an opportunity at CPG’s competitor Snavely Forest Products.  In his job transition, Georgelis did some things that were potentially problematic: READ MORE →

First Foreign Hacker Is Convicted In The United States Of Hacking Crimes Involving Theft Of Trade Secrets From American Companies

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A 22-year-old Canadian hacker has been sentenced to federal prison by a Delaware court for engaging in a conspiracy to break into the computer networks of several large gaming companies, to steal trade secret and other information related to unreleased products, and to commit criminal copyright infringement.  According to the Government’s Sentencing Memorandum, David Pokora of Ontario, sentenced last Thursday was “a leading member in an international computer hacking ring . . . that committed numerous unlawful intrusions into the computer networks of various technology companies involved in the $22 billion-dollar video gaming industry.”  The conspiracy’s victims included Microsoft, Epic Games (which develops the highly popular “Gears of War” series), and Activision Blizzard (which published, among many other successful games, “Call of Duty: Modern Warfare 3”). READ MORE →

All Bets Are Off: Kentucky Downs Trade Secrets Case Presents Novel Question Under Kentucky’s Uniform Trade Secrets Act

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Earlier this month, AmTote International, Inc. sued the famed Kentucky Downs racetrack, three high-ranking Kentucky Downs employees, and Encore Gaming, LLC in federal court alleging misappropriation of trade secrets related to horse racing betting machines.  AmTote’s lawsuit presents the interesting question of whether the “inevitable disclosure” doctrine applies under Kentucky law. READ MORE →

Back in a Flash: Sergey “Flash Boy” Aleynikov Returns to Court for New Trial

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Sergey Aleynikov’s six-year odyssey through the U.S. judicial systems—both federal and state—continues.  Last week, Aleynikov stepped into a New York State courtroom to defend himself at trial against a pair of criminal charges stemming from his 2009 arrest for allegedly stealing source code for one of Goldman Sachs  high-frequency trading platforms.  If convicted on the two counts – unlawful use of secret scientific material and unlawful duplication of computer-related material – Aleynikov could face a return trip to prison for up to eight years. READ MORE →

How Much Damages Can You Realistically Expect for Trade Secrets Misappropriation in China

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The best way to protect trade secrets is to prevent them from being misappropriated in the first place, but when trade secret misappropriation occurs, a trade secret holder will likely want to obtain adequate damages through litigation. The methods of calculating damages for trade secret misappropriation are thus crucial, since remedies available to the trade secret holder are determined by these methods. Although China lacks formal remedies for trade secret misappropriation, it has a body of trade secret law that flows from various statutes. READ MORE →