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As a part of our series on trade secret employee contract clauses, we have surveyed the Seventh Circuit for updates on  the law pertaining to Restrictive Covenants. Each state’s laws are set forth below. But generally in the Seventh Circuit, states focus on reasonableness, geographic, and income restraints in restrictive covenant agreements. Indiana applies a reasonableness-standard common law approach to enforcing covenants, strictly construed against the employer. Wisconsin’s restrictive covenant statute also focuses on reasonableness restraints, and will void all parts of the covenant even if remaining portions are reasonable. Illinois recently passed a restrictive covenant statute in 2021, the Illinois Freedom to Work Act, which codifies the state’s longstanding common law, adding provisions restricting covenants against certain incomes and professions.
Continue Reading Restrictive Covenants in the Seventh Circuit

Crowell & Moring presented a webinar discussing the most influential trade secret cases from 2021 along with new legal developments, including non-compete legislation and trade secret maintenance.

Partner Astor Heaven and Counsel Raija Horstman kicked off the conversation to discuss modern trade secret protection under the DTSA and the biggest damages from jury verdicts in 2021. Counsel Christine Hawes gave an overview of recent federal and state non-compete legislation, and Associate Dalton Hughes wrapped up the webinar by covering new legal implications for maintaining and identifying trade secrets.
Continue Reading Crowell & Moring Webinar Recap: “2021 Trade Secrets Year in Review and What Lies Ahead”

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

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

The Supreme Court recently denied a petition for certiorari by Monib Zirvi and others, in which petitioners sought Supreme Court intervention regarding the notice required to trigger the statute of limitations clock for trade secret misappropriation claims. The case is Zirvi et al. v. Flatley et al. (Case No. 20-1612). You can review the petition here. The case arises out of a 2018 lawsuit, in which four self-described inventors of DNA Arrays brought suit against Illumina, a “multibillion-dollar, global player in genetic analysis,” alleging that Illumina and its associates conspired to steal Petitioner’s trade secrets and covertly conceal the information in patent applications. According to Petitioners, the DNA Arrays at issue are now used in the detection of cancer, inherited genetic defects, and viral infections such as COVID-19.
Continue Reading Supreme Court Declines to Weigh in on Notice Required to Trigger Statute of Limitations for Trade Secret Misappropriation Claims

The District Court for the Southern District of California held that despite not alleging direct evidence of misappropriation, a complaint’s allegations about a company’s lack of experience in the particular industry coupled with its purported behavior during business negotiations were sufficient to state a claim that an allegedly competing product misappropriated trade secrets under the Defend Trade Secrets Act (DTSA) and to defeat a motion to dismiss. According to the Complaint, 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 allegedly effective against rhinoviruses and novel respiratory pathogens, such as COVID-19. With an application to the mouth and nose, the antiviral spray allegedly 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

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

The Massachusetts Supreme Judicial Court (“SJC”) recently found that trade secret misappropriation by employees who then use the trade secrets to compete is actionable under Massachusetts’ Unfair and Deceptive Trade Practices Law.  The SJC’s ruling in Governo Law Firm v. Bergeron means that Unfair and Deceptive Trade Practices Statute, Massachusetts General Laws Chapter 93A Section 11 (“Chapter 93A”), now applies to trade secret disputes in the employer-employer context.  Previously, such cases were considered an “internal matter” and therefore not actionable.
Continue Reading Massachusetts Supreme Judicial Court Rules that Employees May be Held Liable to Their Employer Under Massachusetts’ Unfair and Deceptive Trade Practices Law

On March 13, 2021, borrowing from California Code of Civil Procedure § 2019.210 (which requires a plaintiff to “identify. . . trade secret[s] with reasonable particularity” before it can obtain discovery on those trade secrets), a Northern District of California judge narrowed trade secret claims asserted under the Defend Trade Secrets Act (“DTSA”) due to the plaintiff’s failure to specifically identify most of its asserted trade secrets prior to discovery.  Although not an explicit requirement under federal law, the Court reasoned that the disclosure requirement served to prevent plaintiffs from getting discovery and then using that discovery to “cleverly specify whatever happens to be there as having been trade secrets stolen from plaintiff.”  The decision could be significant for trade secret litigants going forward.

Continue Reading Federal Court Imports California Trade Secret Disclosure Rule and Narrows DTSA Claim