Last month, Panera, the sandwich company perhaps best known for its “You-Pick-Two”® soup-salad-sandwich offering, brought suit under the Defend Trade Secrets Act (DTSA) against Michael Nettles, a former Panera executive who left the bread bowl purveyor for employment with Papa Johns. In its suit, Panera alleges that Nettles breached his employment agreement (which specifically identified

Tort claims of trade secret theft, fraud, unfair competition, tortious interference with contract, and civil conspiracy can fall within the scope of an overly broad arbitration clause. Medversant Technologies, LLC v Leverage Health Solutions, LLC, et al., 114 F. Supp. 3d 290 (E.D. Pa. 2015). In this case, the district court looked “not to the labels or legal theories attached to the claims,” but rather “focused on the factual underpinnings of the claim” when assessing whether these claims fell within the scope of the arbitration clause of a business development and marketing consulting agreement.  Id. (citing CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165 , 173 (3d Cir.2014)).

In this case, the plaintiff (“Medversant”) hired the defendant (“Leverage”) to provide
Continue Reading Beware of a Broad Arbitration Clause

Late last month, the U.S. Attorney’s Office for the Eastern District of Pennsylvania announced the indictments of GlaxoSmithKline (GSK) scientists Yu Xue and Lucy Xi, as well as three of their associates for trade secrets theft, wire fraud, and conspiracies to commit both crimes. The indictment accuses the scientists of transmitting proprietary GSK data to their associates and co-conspirators at a Chinese startup called Renopharma, a firm that focuses on providing products and services to support drug discovery programs.

The allegedly misappropriated data relates to research into monoclonal antibody treatment for cancer which, if brought to market, “should represent [a] ‘bio-better and bio-superior’ system in comparison to existing competitors,” according to GSK documents cited in the indictment. The government alleges that Ms. Xue, Ms. Xi, and their associates hoped to profit from the data by virtue of their ownership interests in Renopharma. Ms. Xue is quoted in the indictment via email, stating that she “ha[s] absolute control of [the] company” with ownership of “the highest stock share which is 30%.”

The charges against Ms. Xue and Ms. Xi come on the heels of an earlier high profile case investigated by the same FBI agent and brought by the same Philadelphia U.S. Attorney’s Office against a Chinese naturalized American. In that case, the U.S. Attorney charged Dr. Xi Xiaoxing
Continue Reading Chinese Scientists Accused of Trade Secret Theft in Recent DOJ Indictment

USChinaFlags
[via Flickr user CDC Global]

This past Friday, President Barack Obama and Chinese President Xi Jinping announced that the United States and China had reached a “common understanding” to fight state-sponsored, corporate cyber espionage between the countries.

During a joint press conference, President Obama said that “neither the U.S. nor the Chinese government will conduct or knowingly support cyber theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.”  President Jinping added that “both governments will not engage in or support online theft of intellectual property.”Continue Reading U.S. and China Agree on Joint Efforts Against Theft of Corporate IP

Sergey Aleynikov, the ex-Goldman Sachs computer programmer convicted of stealing high-frequency trading source code, has once again succeeded in reversing a criminal conviction related to his infamous code-copying acts. Federal prosecutors had previously charged, tried, and won a conviction of Aleynikov for violations of the federal National Stolen Property Act (NSPA) (18 USC § 2314) and Economic Espionage Act (18 USC § 1832). However, in 2012, the Second Circuit reversed both convictions. See United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012). That in turn prompted Congress to amend the Economic Espionage Act to close the loophole that allowed Aleynikov to walk.
Continue Reading Twice Convicted, Twice Reversed: Another Aleynikov Code Theft Conviction Overturned