Trade Secrets

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Following the Seventh Circuit’s recent decision in Motorola Solutions Inc. v. Hytera Communications Corp. Ltd., the United States may become a destination venue for resolution of global trade secret disputes. The Seventh Circuit held that U.S. trade secret law applies extraterritorially—reaching the theft of trade secrets outside the United States—so long as “an act in furtherance” of the offense was committed in the United States. The court held, for example, that marketing products in the United States qualified as an “act in furtherance” if the products were made using stolen trade secrets. Once an “act in furtherance” is identified, damages can be based on a company’s global sales. Motorola, for example, resulted in an award of $135.8 million in compensatory damages based on Hytera’s worldwide sales. Similar to the global impact of U.S. antitrust and anti-bribery laws, the Seventh Circuit’s decision highlights the critical importance to companies of considering U.S. trade secret laws. For example, if a company suffers the theft of its trade secrets anywhere in the world, it should consider the United States as a possible venue for bringing a legal claim. Conversely, companies should take measures to train employees and ensure compliance with U.S. trade secret laws even if the employees are located outside of the United States.Continue Reading Companies Should Take Notice of the Extraterritorial Reach of U.S. Trade Secret Law

Here, we provide a cautionary tale of what can happen to a business that fails to preserve documents that are potentially relevant evidence to pending or threatened trade secrets litigation, and offer some takeaways for businesses that would like to avoid such dire straits.[1]
Continue Reading A Cautionary Trade Secrets Tale: Failure To Preserve Potentially Relevant Evidence

For the first time, the Supreme Court has agreed to review the Computer Fraud and Abuse Act (CFAA). The Court’s initial review of the CFAA comes in the wake of a federal circuit split as to whether the statute can only be deployed against hackers and unauthorized users of electronic systems, or also against authorized users who use the information for unauthorized purposes. The Court’s decision may significantly affect not only how law enforcement uses the CFAA, but also whether civil litigants, such as employers, may use the CFAA to defend against unauthorized employee activities.
Continue Reading U.S. Supreme Court Case Preview—Van Buren v. United States: Does Use of a Computer for an “Improper Purpose” Violate the Computer Fraud and Abuse Act?

Companies routinely use Non-Disclosure Agreements (NDAs) to protect confidential information shared with potential acquirers, consultants, and other third parties.  But companies cannot merely rely on stock NDAs to protect that information.  They should understand each NDA’s procedures for designating information as “Confidential” (and ensure compliance with them), and grasp the interplay between NDAs and state trade secret laws in terms of imputing duties of confidentiality.
Continue Reading 4 Steps to More Effectively Use NDAs to Protect Confidential Information

Social media contact lists have become an increasingly important part of a business’s customer lists.  While courts are still grappling with who legally “owns” the data that the employee acquired on the employer’s dime—such as LinkedIn customer connections or access to a list of Twitter-feed recipients[1]—employers can still take steps to bolster the company’s claim of ownership.
Continue Reading Protecting Social Media Contact Lists as Trade Secrets

In response to the COVID-19 outbreak, many businesses (particularly those in states or cities under “stay home” orders) have implemented a work-from-home (“WFH”) directive for employees.  It is important for businesses to address the security of their trade secrets in this new environment in order to reduce the risk of misappropriation.  It is also important to reduce the risk that the trade secret status of information will be lost based on a failure to take reasonable steps to protect its secrecy.  This article addresses some steps your business can consider taking to protect trade secrets accessible by employees who are now working at home.  Even if your business had a WFH policy before the COVID-19 outbreak, it should be re-visited in light of the current circumstances flowing from a pandemic during which all or most of your workforce may be operating on a WFH basis.  For example, what was once a “no trade secrets may be taken home” policy may be impossible in the current climate.
Continue Reading COVID-19 and Trade Secrets: Is Your Business Prepared to Protect its Trade Secrets While Your Employees Work From Home?

PART 1: IP ISSUES CURRENTLY PENDING BEFORE THE SUPREME COURT

In the first part of our series, we briefly summarize the intellectual property issues that the Supreme Court has already agreed to address in 2020. In particular, we provide a brief overview and key takeaways for the Supreme Court’s consideration of:

  • Whether adding “.com” to a generic mark creates a protectable trademark;
  • The scope of appeals from IPR proceedings;
  • The ability to copyright software interfaces;
  • Requirements for recovering an infringer’s profits in trademark cases;
  • State sovereign immunity from copyright infringement claims; and
  • Copyright protection for state law annotations.

Continue Reading Intellectual Property Outlook: Cases and Trends to Follow in 2020 – PART1

This post originally appeared as an article in Cannabis Business Executive on December 5, 2019.

A cannabis product business is no simple venture. Cannabusinesses have to innovate to remain competitive just like any other company, but in an industry plagued by complex and changing federal and state regulations of marijuana (aka cannabis). At the heart of every innovation lies potentially protectible intellectual property (IP) rights and that is no different in the cannabis industry. In our two-part article, we provide cannabis entrepreneurs with an overview of the IP protections available to them for their innovations. In Part I, we discuss trade secret protection. In Part II, we will cover patent protection. In both parts, we will address choosing between trade secret and patent protection.
Continue Reading Intellectual Property in the Cannabis Industry – Protecting Innovations And Products, Part I (Trade Secrets)

Preservation of electronically stored evidence (ESI) may be critical in trade secret cases. When a dispute revolves around whether a defendant accessed and/or transmitted the plaintiff’s trade secret material maintained in an electronic file, the file’s metadata can have evidentiary importance. Similarly, the defendant may have an interest in the plaintiff’s own disclosures of the alleged trade secret because such disclosures may negate its status as a trade secret (e.g., by showing the plaintiff did not take reasonable steps to keep it secret). The defendant may also want to focus on preserving documents that show that it independently developed the alleged trade secret information.
Continue Reading 3 Steps in Furtherance of Avoiding Devastating Spoliation Sanctions in Trade Secret Misappropriation Litigation

In the race to get new products to market, food and beverage businesses sometimes neglect their critically important intangible assets — their valuable trade secrets. Through advance planning and diligence, businesses in that industry can avoid losing the competitive advantage afforded to them by their proprietary information. In our last post we discussed the 7 potential areas of trade secrets in this industry. In this post, we discuss how to protect the secrecy of your proprietary information, which is required to enforce information as trade secrets.
Continue Reading Don’t Spill Your Trade Secrets: Protecting Your Competitive Advantage in the Food and Beverage Industry (Part 2 of 2)

In the race to get new products to market, food and beverage businesses sometimes neglect their critically important intangible assets — their valuable trade secrets. Through advance planning and diligence, businesses in that industry can avoid losing the competitive advantage afforded to them by this proprietary information.

Famous Food & Beverage Trade Secrets. Some food and beverage companies have been very successful in protecting their trade secrets and capitalizing on them. One of the most valuable trade secrets in history is the formula for Coca-Cola. The drink was invented in 1886 and the recipe was passed down by word of mouth until 1919, when it was first written down. At that time, a group of investors took out a loan to purchase the company and the formula was provided as collateral. The written formula was locked in a bank until it was moved into a purpose-built vault, with a palm scanner, a numerical code pad and enormous steel door. According to Coca-Cola, only two senior executives, bound by non-disclosure agreements (NDAs), know the formula at any given time. Neither these executives’ names nor positions have ever been released. Over the years, some have claimed to have cracked the original formula. However, none have been confirmed as the official formula and Coca-Cola’s formula remains a well-guarded and valued trade secret.
Continue Reading Don’t Spill Your Trade Secrets: Protecting Your Competitive Advantage in the Food and Beverage Industry (Part 1 of 2)