This May was the fourth anniversary of the Defend Trade Secrets Act (DTSA), signed into law by President Obama on May 11, 2016. The DTSA does not preempt state laws and plaintiffs can still bring cases under their state’s trade secrets law, but the DTSA has played a big role in the increased number of trade secret cases in recent years. According to Lex Machina’s Trade Secret Litigation report, which covered federal district court data from 2010 to 2019, the DTSA caused a 30% increase in trade secret case filings between 2015 and 2017 and those numbers have remained steady. READ MORE
If trade secrets misappropriation claims can be brought by non-owners, what should companies do to manage risk?
Last week, we examined the recent Third Circuit decision in Advanced Fluid Systems, which held that a trade secrets plaintiff did not need to be an owner or a licensee of the alleged trade secrets to bring a state law misappropriation claim under Pennsylvania’s UTSA—all that was required was that the plaintiff had “lawful possession” of the trade secrets. In so holding, the Third Circuit added to the weight of the Fourth Circuit’s similar analysis of Maryland’s UTSA in DTM Research, L.L.C. v. AT&T Corp., 245 F.3d 327 (4th Cir. 2001).
Are State Governments Immune From Suit For Misappropriation Of Trade Secrets?
You are a state-government contractor. You respond to an RFP issued by a state-government entity. In your bid proposal, you submit documents that contain your trade secrets. You do not get the contract, but you later learn that the state-government entity gave your trade secret information to your direct competitor who did get the contract. Do you have any options under federal or state trade secret laws to sue the state? READ MORE
Two Wrongs Don’t Make a Right – Trade Secrets Saga Concludes With No Damages Awarded
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.
DTSA’s First Verdict “Fig”-ure: Jam’n to the Tune of $500,000
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.