It’s the time of year again when we are taking a look at 2021’s top ten most read posts. This year, we witnessed an increased risk of trade secret theft due to the Great Resignation, proposed trade secret misappropriation penalties as a result of Chinese government trade secret espionage, and the expansion of ITC involvement in trade secret misappropriation. Take a look at our top ten posts that highlight these key developments.

Continue Reading The Year’s Most Popular Posts

In October, we published a blog post describing how trade secret claims filed by AbbVie were dismissed by the Northern District of Illinois for lack of personal jurisdiction over AbbVie’s former employee in Singapore and the competitor that poached him, Alvotech of Iceland. At that time, we thought AbbVie might replead to keep its trade secret claims in Federal District Court. AbbVie chose instead to appeal the District Court’s dismissal to the Seventh Circuit.

In addition, AbbVie has now pursued a second route—one that is becoming more and more common for global corporations claiming injury from trade secret misappropriation: AbbVie has also filed a Section 337 Complaint to the International Trade Commission (“ITC”), seeking to block imports of Alvotech’s biosimilar of AbbVie’s Humira arthritis treatment. Unlike the Federal Court action, the Section 337 Complaint is against both Alvotech and Teva (Israel) as a commercialization partner. Continue Reading AbbVie Turns Next to the U.S. International Trade Commission in Biosimilar Trade Secret Row

On October 29, 2021, the District of Delaware allowed Park Lawn Corporation to continue with its trade secret claims against fellow cemetery management competitor, PlotBox, Inc., holding that the competitor only needed to have a “reason to know” improper means were used to access alleged trade secrets, based on the position of the individual feeding them the secrets.

Both Park Lawn and PlotBox develop technological solutions to manage cemetery plot placement methods, using software to facilitate mapping of gravestones electronically. This software helps automate cemetery design plans and expedites managerial tasks. The lawsuit also states that Park Lawn planned to license the trade secrets in the software to others in the industry. This plan was eventually disrupted by the Chief Executive Officer of Park Lawn, who was allegedly feeding the trade secret information to PlotBox, which also tried to hire on Park Lawn’s Chief Technology Officer. Park Lawn sued under the Defend Trade Secrets Act (“DTSA”). Continue Reading Cemetery Company’s Trade Secret Claims Survive Motion to Dismiss by Reasonable Interference of Misappropriation after CEO Fed Competitor Information

On November 23rd, Pfizer filed a complaint against former employee Chun Xiao “Sherry” Li in a California federal court alleging that Li pilfered over 12,000 files worth of critical documents and trade secrets. U.S. District Judge Cathy Ann Bencivengo granted Pfizer’s motion for a temporary restraining order barring Li from using, disclosing or transmitting any confidential information or trade secrets owned by Pfizer, destroying or altering any of that information or destroying any devices storing the information. Li also must return any hard copy documents containing Pfizer’s confidential information or trade secrets, Judge Bencivengo said.

Hired as associate director of statistics in Pfizer’s global product development group at Pfizer’s facility in La Jolla, California in 2006, Li sought greener pastures at Xencor Inc. in 2021. Perhaps in the spirit of the upcoming holiday season, Li treated herself to a parting gift of what Pfizer calls its clinical “playbook.” Its complaint also cited misappropriation of documents containing operational goals, goals for various drugs including cancer drugs, clinical development plans and clinical trial techniques. Continue Reading Bad Medicine: Pfizer Files Complaint to Halt Potential COVID-Related Trade Secret Misappropriation

As we have previously posted, proper trade secret identification is often a key issue for parties bringing or defending against trade secret misappropriation claims. The precise standard of identification varies across jurisdictions and continues to evolve, but trade secret identification often functions as a gating issue early in a case. A recent decision from the Third Circuit serves as reminder that failure to properly identify purported trade secrets may not just be fatal to a party’s claim, but may render a preliminary injunction unenforceable. Continue Reading Half-Baked Trade Secret Identification Leads Third Circuit to Vacate Preliminary Injunction

The 11th Circuit upheld a decision to unseal “embarrassing internal communications” between members of the United Network for Organ Sharing (“UNOS”) relating to its new policy directing liver transplants to go to the sickest patients within a certain radius of the donor.

The Court opened its opinion with a powerful question: “Organ donation saves lives—but whose?” Decades ago, Congress enacted the National Organ Transplant Act which authorized UNOS to create policies to facilitate the equitable distribution of organs among potential recipients. UNOS recently approved the Acuity Circles Policy, claiming its intent is to provide more liver transplants to patients in the greatest need, even if they are farther away from donors. Several hospitals and transplant centers who oppose the policy (and filed this lawsuit to prevent implementation of the policy), argue that it will make it more difficult for those outside of urban areas – and in particular those in socioeconomically disadvantaged areas – to access organs. Continue Reading Who Spilled the (Kidney) Beans? 11th Circuit Unseals Private Emails in Organ Transplant Dispute

In a case pitting Wasco County, Oregon residents and a newspaper against the City of Dalles, Oregon, a court will decide whether a public interest exception in a state law will mandate the disclosure of potential trade secrets. After a reporter from The Oregonian inquired into Google’s water use, the City of Dalles (“Dalles”) filed a Complaint against both the reporter and the newspaper (the “Defendants”) seeking declaratory relief, requesting that the court declare Google’s water use a trade secret under Oregon’s Public Records Law, ORS 192.311 et seq, and the Oregon Uniform Trade Secrets Act, ORS 646.461 et seq. As described below, the issue is whether Google’s water use is a trade secret, and if so, if the public interest exception, which may permit public disclosure of trade secrets, applies. Continue Reading City Claims Google’s Water Use Is A Trade Secret and Exempt from Oregon’s Public Records Laws

The Ninth Circuit recently issued an opinion that serves as a reminder of the importance of developing robust affirmative evidence of damages suffered as a consequence of trade secret misappropriation, including the causation of those damages. In Joshua David Mellberg LLC v. Will, the plaintiffs filed an action against its former employees and their new company for misappropriation of trade secrets and unjust enrichment. The district court granted summary judgment to defendants and the Ninth Circuit affirmed. Continue Reading Ninth Circuit Reminds Plaintiffs That Trade Secret Misappropriation Damages Without Adequate Proof of Causation Are Not Enough

A recent case from the Sixth Circuit, addressing a source code agreement, highlights the importance of carefully specifying what happens to source code (and the trade secrets therein) after breach of the agreement.  In Epazz, Inc. v. National Quality Assurance USA, Inc.,[1] the Sixth Circuit affirmed the district court’s decision that a software licensee did not misappropriate a trade secret of the licensor when the licensee acquired the source code from an escrow agent, because the plain terms of the license agreement between the two authorized the release if the licensor breached. Further, the licensee did not commit misappropriation by hiring another provider to maintain and further develop the source code, where the license provided “the right . . . to use the . . . Material” upon breach of the agreement. Continue Reading Untangling a Messy Dispute: No Misappropriation for Trade Secret Use Authorized by Agreement

Illinois employers planning to protect confidential and proprietary trade secret information through the use of non-compete agreements or non-solicitation agreements need to be aware of amendments to the Illinois Freedom to Work Act that will take effect on January 1, 2022.  These changes will institute a number of new requirements designed to restrict the use of non-compete and non-solicitation agreements.

Illinois law currently prohibits employers from requiring that workers earning less than $13 per hour sign non-compete agreements.  That threshold is about to change.  The law will instead prohibit the use of non-competes with workers earning less than $75,000 annually, and the minimum threshold will increase at various pre-determined dates.  The minimum amount will rise to $80,00 per year on January 1, 2027, $85,000 per year on January 1, 2032, and $90,000 per year on January 1, 2037. Continue Reading Illinois Amends Requirements for Non-Compete Agreements