In a recent decision, the District Court for the Southern District of California held that despite not having direct evidence of misappropriation, a company’s lack of experience in the particular industry coupled with its behavior during business negotiations were sufficient to state a claim that a competing product misappropriated trade secrets under the Defend Trade Secrets Act (DTSA) and to defeat a motion to dismiss. Applied Biological Laboratories (ABL), a biotechnology company that researches, develops, manufacturers, and distributes healthcare products, developed an antiviral nasal technology using immunoglobulin G, a common antibody in body fluids. ABL’s antiviral nasal spray is effective against rhinoviruses and novel respiratory pathogens, such as COVID-19. With an application to the mouth and nose, the antiviral spray aids in naturally flushing pathogens and foreign particles in the digestive tract.

Continue Reading Curiosity Killed A Motion to Dismiss: A Biotech Company’s Business Negotiations Turn into a Trade Secrets Fight

As the sci-fi dream of commercialized flying cars seems close to landing in reality, the electronic vertical takeoff and landing (“eVTOL”) industry is heating up, spurring new bouts over trade secrets.

Wisk Aero LLC (“Wisk”) is a veteran eVTOL company, and has been developing the technology for over a decade. The aircraft they manufacture are often described as “air taxis” or “flying cars.”  The technology behind these aircraft is now at a sufficiently sophisticated stage that commercialized versions are imminent.

Continue Reading Flying Car Trade Secrets Dispute to Be Heard on the Merits

Following a national trend that we previously posted about, Illinois recently passed legislation to further restrict the use of non-compete agreements against low-wage workers.  Under the previous version of the Illinois Freedom to Work Act, employers were prohibited from entering into non-compete agreements with employees making less than $13 per hour.  The new version expands this restriction to include employees earning $75,000 or less and defines “earnings” to include salary, bonus, and other forms of taxable income.  In addition, the amendment prohibits employers from entering into non-solicitation agreements with employees making $45,000 or less annually.

Continue Reading Illinois Law Imposes New Restrictions on Non-Compete Agreements

Nonprofit organizations rely heavily on funding from donations, gifts, and the like to make an impact in the communities they serve.  Such resources are relatively scarce, and fundraising in the nonprofit world is a highly competitive endeavor.  Accordingly, carefully guarded donor and participant lists may be considered trade secrets.  N. Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 44 (2d Cir. 1999).  Under the Uniform Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836 et seq., a trade secret is information that derives economic value from not being generally known that is subject to reasonable measures of secrecy by its owners.  But how does a nonprofit charitable organization sufficiently plead the economic value of its donor and participant lists? Continue Reading The Economic Value of Nonprofits—Donor and Participant Lists

On June 8, 2021, the Third Circuit clarified the requirements for making a trade secret misappropriation claim under the Defend Trade Secrets Act (“DTSA”) in a decision vacating the District of New Jersey’s dismissal of a trade secret misappropriation lawsuit against a former employee and his current employer. In short, the Third Circuit’s decision took a more relaxed view than the District Court, finding that a trade-secret plaintiff need not “spell out the details of its trade secret” or have direct allegations of misappropriation and harm to avoid dismissal.

Continue Reading The Third Circuit Clarifies DTSA Pleading Requirements, While Vacating Dismissal

The following review of Qatar’s trade secrets laws continues the series of trade secrets law reviews for the Middle East and North Africa (“MENA”). Qatar has a comprehensive legal regime in place for the protection of trade secrets, perhaps more so than its GCC counterparts. First and foremost, it has enacted a law to specifically address the protection of trade secrets (Law No. 5 of 2005 on Trade Secrets) (the “Trade Secrets Law”).  However, Qatar also offers additional safeguards under its labour, intellectual property, criminal and commercial laws, as summarized below.[1] It is also worth noting that despite the protection already conferred by law, it is common practice in Qatar to address trade secrets and other confidential information by contract.

Continue Reading MENA Trade Secrets Law Review: Qatar

The U.S. Food and Drug Administration (“FDA”) is strongly encouraging cannabis producers to share information regarding their clinical studies with the FDA, so it, in turn, can better understand the effects of chronic use of cannabis. This will then help the FDA develop sound science-based policies and regulations relating to cannabis and cannabis derived products. But cannabis producers also understandably want to protect their trade secret information in this rapidly growing industry. The FDA’s DMF process may be the solution where everybody can win.

Continue Reading High-ly Sensitive Information: Use of FDA’s DMF Process to Protect Cannabis Trade Secrets

A recent decision from the Fifth Circuit showcased the usefulness of the “discovery rule” for trade secret plaintiffs facing statute of limitations issues.  The court reversed the dismissal of a claim for misappropriation of trade secrets because the plaintiff could not have discovered the misappropriation using reasonable diligence within the applicable statute of limitations period.

Continue Reading Fifth Circuit Rules Delayed Discovery of Misappropriation Not A Bar To Suit

While California law is clear regarding the elements required to establish a misappropriation of trade secrets claim, the law has remained unsettled on the elements required to maintain an action for threatened misappropriation of trade secrets. However, in the case of Beauty Barrage LLC, et al. v. Dermaceutical Laboratories LLC, et al., San Francisco Superior Court Judge Anne-Christine Massullo shed some light on the question.

Continue Reading Addressing Wrinkles in California’s Threatened Misappropriation of Trade Secrets Law

Located in the heart of Europe, Belgium is a true hub of logistics and innovation. It is for example home to one of Europe’s largest sea ports (with all the warehousing infrastructure that one would expect). Belgium also hosts several, globally leading biotech and life sciences clusters. It is no coincidence for example that pharma giant Pfizer has one of its largest production and packaging sites in Puurs, a small Belgian town, where it produces its Covid-19 vaccine. A few miles north, Jansen Pharmaceuticals has its HQ.

Such hubs are not just rich in talented human resources, but also in cutting edge and highly valuable know-how. A high concentration of know-how, combined with the increased mobility of employees, means a high(er) risk of misappropriation of this valuable information by unauthorized (third) parties. When a (foreign) company suspects its know-how has been misappropriated in Belgium, it will need evidence to substantiate this allegation in court. If the know-how is (also) covered by an intellectual property (IP) right, the holder of the know-how has access to a very efficient means of collecting evidence: the descriptive counterfeit seizure whereby discovery-like evidentiary measures will be granted ex parte. When the misappropriated know-how is only protected as a trade secret, no similar measures are provided for under EU law. The Belgian judges have therefore in the past not been very eager to grant trade secret holders access to ex parte evidence-gathering. With a recent judgment, however, the Brussels Court of Appeal has left the door behind which discovery-like measures are stored for holders of trade secrets open.

Continue Reading Gathering evidence of trade secret infringement in Belgium: towards discovery-like measures?