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?

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

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

As a matter of course, we automatically Google someone, something, anything, in search of more information. In courtrooms, the attorneys choosing a jury are going beyond the information provided in the courtroom. One judge tried to stop the practice, and a court of appeal held that there was nothing wrong with it.Continue Reading Information Sharing On The Internet May Mean Fewer Confidential Trade Secrets

Silvaco Data Systems v. Intel Corp., 184 Cal.App.4th 210 (April 29, 2010)

In a recent case, Silvaco Data Systems v. Intel Corp., 184 Cal.App.4th 210 (April 29, 2010), the California Court of Appeal clarified what constitutes use of a trade secret in the software context. At issue in Silvaco was whether defendant, Intel, was liable for trade secret misappropriation based on its use of software it had purchased from a third party, that was derived from plaintiff’s trade secret source code, which in turn, had been misappropriated by a third party.Continue Reading California Court of Appeal Clarifies What Constitutes “Use” of a Trade Secret

A recent decision by a California Court of Appeal should give employers pause before they use California’s trade secret laws to try to stifle competition in violation of California law.

In the case of FLIR Systems, Inc. v. Parrish, the Court of Appeal affirmed a decision by the trial court awarding $1,641,216.78 in attorneys’ fees and costs to two former employees who successfully defended a trade secret action brought by their former employer. The Court agreed with the trial court that the action was filed and maintained in bad faith within the meaning of the California Uniform Trade Secrets Act.Continue Reading Employers Should Carefully Consider Whether To Sue Former Employees For Threatened Trade Secret Misappropriation Based On Recent California Court of Appeal Decision Awarding Over $1.6 Million To Former Employees

In Edwards v. Arthur Andersen, the California Supreme Court reaffirmed California’s strong public policy against covenants not to compete. The primary issue in Edwards was whether the Ninth Circuit’s "narrow restraint" exception was a proper interpretation of California law. Under the narrow restraint exception, employers could enforce noncompetition agreements that did not "entirely preclude" an employee from practicing his or her trade, such as an agreement not to solicit specified customers for a specified period of time after employment. The agreement in Edwards was drafted to fall under this judicially-created exception. The Court rejected the "narrow restraint" exception, expressed a stark disapproval for judicially created exceptions to California Business and Professions Code Section 16600, and held that any time an agreement restricts an employee’s "ability to practice his [] profession" in any way not explicitly excepted by the statute, it is void.Continue Reading Does Edwards v. Arthur Anderson Bar The Use of Employee Confidentiality Agreements?