Practical Tips

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).

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Ajaxo v. E*Trade: How (Not) to Prove a Reasonable Royalty for Trade Secret Misappropriation

The latest appellate decision in the nearly 20-year legal battle between Ajaxo and E*Trade highlights the importance of expert discovery and a well-developed trial court record for a plaintiff attempting to claim reasonable royalties for trade secret misappropriation.

The saga between Ajaxo and E*Trade began back in the late 1990s, with Ajaxo, a six-person company, approaching E*Trade, seeking to support its wireless access and trading business.  In response, E*Trade asked Ajaxo for a technical paper and live demonstrations, during which E*Trade’s engineers peppered Ajaxo with questions.  One E*Trade senior engineer, Dan Baca, made a copy of Ajaxo’s technical binder.  After E*Trade sent Ajaxo a draft letter of intent—with everything but the dollar amount filled in—E*Trade had a change of heart and told Ajaxo it was simply too small to be an E*Trade partner.  Instead, E*Trade acquired these services a short time later from Everypath, a company that it had been meeting with simultaneously, and where Dan Baca started to work shortly after attending the Ajaxo meetings. READ MORE

Joint Ventures & COVID-19: How to Protect Trade Secrets when Partnering with Competitors to Meet PPE and Ventilator Demand

COVID-19 has presented countless challenges, among them, the extraordinary need—and conversely, extreme shortages—of basic protective gear, ventilators, and personal protective equipment (“PPEs”) for healthcare professionals and essential businesses.  With these challenges come a myriad of opportunities for companies to develop, engineer, and deploy novel ways to address the shortage.  Possible solutions have included the federal government ordering, under the Defense Production Act, manufacturers to prioritize the manufacturing of essential medical products. As a result of high demand and a compelling need, manufacturers are stepping outside their established businesses and joining with new partners to quickly manufacture necessary products. READ MORE