The Defend Trade Secrets Act (DTSA) was enacted in 2016. The DTSA allows an owner of a trade secret to sue in federal court when seeking relief for trade secret misappropriation related to a product or service in interstate or foreign commerce, and does not preempt any state law. A goal of the DTSA is to “provide a single, national standard for trade secret misappropriation with clear rules and predictability for everyone involved.” S. Rep. No. 114-220, at 14 (2016). For the majority of the time, this goal is upheld. Aside from establishing a relation to a product or service in interstate or foreign commerce, state trade secret laws are typically almost identical to the DTSA. However, if states trade secret laws do differ from the DTSA, they are usually in regard to remedy.

Continue Reading The Defend Trade Secrets Act and How it Differs from State Trade Secret Laws

NBA star Zion Williamson has more to celebrate than his recently announced five-year maximum rookie contract extension with the New Orleans Pelicans, worth up to $239 million. Williamson was also victorious in a lawsuit he filed against his former agent Gina Ford, and her agency Prime Sports Marketing LLC (“Prime Sports”). The case is Williamson v. Prime Sports Marketing LLC et al. in the District Court for the Middle District of North Carolina, No. 1:19-cv-00593.

Williamson entered into a marketing agreement with Ford and Prime Sports when he was just a freshman at Duke University. He brought suit in 2019, seeking to void the marketing agreement on the grounds that it violated North Carolina’s Uniform Athlete Agent Act (“UAAA”), by failing to include a “conspicuous” warning to the student athlete that execution of the contract would result in a loss of intercollegiate eligibility. In January 2021, the court ruled in favor of Williamson, holding that Williamson’s agreement with Ford and Prime Sports failed to contain the required warning, and also failed to meet the UAAA’s requirements in several other respects. The court thus deemed the marketing agreement void and unenforceable.

Continue Reading NBA Star Zion Williamson Secures Wins on the Basketball Court and in the Courtroom, After Defeating Claims of Trade Secret Misappropriation

Every year since 2009, the United State Department of Justice (“DOJ”) has published a report that details actions the DOJ has taken to implement Title IV of the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (“PRO IP Act”). The PRO IP Act reports also summarize efforts, activities, and resources that the DOJ has allocated to intellectual property enforcement. There are now a dozen PRO IP Act reports available on the DOJ’s website, and they offer useful insights into how the DOJ prioritizes the enforcement of intellectual property rights and the prosecution of those violating IP rights domestically and abroad.

Under the PRO IP Act, the Office of Justice Programs can grant awards to state and local IP law enforcement task forces. The awards are designed to provide national support through training and technical assistance and improve the capacity of state and local criminal justice systems to address criminal IP enforcement, including prosecution, prevention, training, and technical assistance.

Continue Reading What the DOJ Annual Reports Reveal About Federal Trade Secret and IP Protection Efforts

Restrictive covenants and non-compete agreements have been a frequent topic of this blog in recent months, and rightfully so. Non-competes are generally thought to be effective tools to help firms protect trade secrets and competitive advantages. However, these agreements are falling out of favor across the country – the DOJ recently file a Statement of Interest in a state court case taking the position that non-competes may violate the Sherman Antitrust Act. Further, states continue to pass laws limiting or banning the use of noncompete agreements, including Illinois, Oregon, Nevada, D.C., and Colorado

But one Texas court seems to buck this trend. Last month, Fort Bend County District Judge J. Christian Becerra granted a temporary restraining order (“TRO”) in a trade secret misappropriation case, forcing multiple former employees to stop work for a competing business, and limiting one particular employee from engaging in any competing work for any competitor. The catch? Not a single employee had a non-compete agreement.

Continue Reading No Non-Compete? No Problem. Texas Court Grants TRO Forcing Former Employees to Stop Working for Competing Business.

To continue our series on trade secret employee contract clauses, we’ve surveyed the First Circuit for updates to the law relating to restrictive covenants. Such covenants remain predominantly governed by statutes in Maine, Massachusetts, New Hampshire, and Rhode Island, while Puerto Rico continues to govern them by common law. And with no significant updates since 2020, restrictive covenants remain disfavored and under increased scrutiny in the First Circuit. Generally, these courts will only enforce noncompete agreements that are reasonable, no broader than necessary to protect an employer’s legitimate business interests, properly noticed, and in line with public policy. The applicable law for each state is set forth below. Continue Reading Restrictive Covenants in the First Circuit

A recent decision by the Second Circuit reminds litigants that a party asserting a trade secret misappropriation claim under the federal Defend Trade Secrets Act (DTSA), or New York law, must detail in a pleading “the “reasonable measures” employed to maintain the secrecy of the alleged trade secret. In Turret Labs USA, Inc. v. CargoSprint, LLC, No. 21-952, Dkt. No 106-1 (2nd Cir. Mar. 9, 2022), the Second Circuit affirmed the District Court’s grant of a motion to dismiss, concluding that plaintiff Turret Labs failed to adequately allege that reasonable measures were taken because, although there was an agreement giving the plaintiff’s customer exclusive access to the alleged trade secret, this agreement (as well as all surrounding security policy documents) failed to contractually obligate the customer to maintain confidentiality of the alleged secret.

Continue Reading Second Circuit Reminds Practitioners That A Plausible Claim for Trade Secret Misappropriation Must Detail the Reasonable Measures Used to Protect the Alleged Secret

Restrictive covenants not to compete, or non-compete agreements, are one of a variety of tools companies use to protect their trade secrets and competitive advantage. However, whether a court will enforce a restrictive covenant varies widely across jurisdictions, including across states within the Fifth Circuit. For example, the Louisiana statute governing restrictive covenants applies a two-year durational limit, while Mississippi common law applies a more general ‘reasonable and specific’ standard to the duration and geographic scope of a restrictive covenant. In addition, Mississippi courts must balance the rights of the employer, the employee, and the public when enforcing restrictive covenants. Bus. Commc’ns, Inc. v. Banks, 91 So. 3d 1, 11 (Miss. Ct. App. 2011), aff’d, 90 So. 3d 1221 (Miss. 2012). 

Continue Reading Restrictive Covenants in the Fifth Circuit

The California Office of the Attorney General issued its first opinion interpreting the California Consumer Privacy Act (CCPA) on March 10, 2022, addressing the issue of whether a consumer has a right to know the inferences that a business holds about the consumer. The AG concluded that, unless a statutory exception applies, internally generated inferences that a business holds about the consumer are personal information within the meaning of the CCPA and must be disclosed to the consumer, upon request. The consumer has the right to know about the inferences, regardless of whether the inferences were generated internally by the business or obtained by the business from another source. Further, while the CCPA does not require a business to disclose its trade secrets in response to consumers’ requests for information, the business cannot withhold inferences about the consumer by merely asserting that they constitute a “trade secret.”

Continue Reading California AG Interprets “Inferences” Under CCPA

New Jersey joins a growing list of states seeking to limit employers’ use of non-compete and non-solicitation agreements, adding to the patchwork of legislation in this area.

The New Jersey State Legislature proposed a bill on May 2, 2022 that would regulate and severely limit an employer’s use of non-compete agreements. Specifically, under A3715, all no-poach agreements would be void and non-compete agreements never enforceable against certain types of workers, including interns, apprentices, independent contractors, minors, low-wage employees, or employees who will be employed for less than one year. Outside of this population, restrictive covenants would only be enforced if the employer first discloses the terms of the agreement in writing 30 days before a prospective employee’s offer or, for current employees, 30 days before the agreement would be effective. Post-employment restrictions could only last for 12-months and employees must provide 10 days’ notice of their intent to enforce a post-employment agreement.

Continue Reading Non-Compete Agreements a Non-Starter? New Jersey Proposes Sweeping Non-Compete Legislation

For companies that rely heavily on R&D, such as those in the biotechnology, pharmaceutical, and associated manufacturing industries, IP forms some of their core assets. Protecting these assets is critical, and choosing between patents and trade secrets is not always straightforward.

This decision involves flexibility, understanding, and factoring in the ever-changing case law interpretations, which can take place years or even decades after the initial decision has been made. When weighing these factors, IP practitioners may decide that shifting from patent to trade secret protection is more favorable. But, with information so easily accessible and shareable, it is increasingly difficult to maintain trade secrets in confidence. While there is no one-size- fits-all answer, there are guidelines available for IP practitioners in these specialized fields where R&D is a key company asset and of paramount importance to protect.

This article originally appeared in Life Science Leader magazine. Read the full article below:

Article Link: https://www.lifescienceleader.com/doc/patents-or-trade-secrets-how-to-choose-the-best-ip-safeguard-for-r-d-assets-0001