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Julia Milewski

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Changing Patent Protections

U.S. and foreign patent systems have suffered legislative and judicial reverses as
to subject matter eligibility for patenting, a rising bar of obviousness due to increasing skill of the art, insights aided by artificial intelligence (AI) tools, procedural artifacts for no-risk post grant invalidation by granting agencies, and awakening of once dormant…

Recent confirmations of the U.S. Department of Justice’s (“DOJ’s”) senior leadership and enforcement actions coupled with the continued tough stance that the Biden administration is taking towards China signal that the DOJ’s China Initiative will likely remain a strategic priority. Announced in 2018, the China Initiative, led by the DOJ’s National Security Division, seeks to counter national security threats presented by the government of China by investigating and prosecuting economic espionage, trade secret theft, hacking, and other economic crimes. The China Initiative also focuses on protecting the nation’s critical infrastructure against external threats through foreign direct investment and supply chain compromises, as well as combatting covert efforts to influence the American public and policymakers without proper transparency. According to DOJ, “[a]bout 80 percent of all economic espionage prosecutions brought by the U.S. Department of Justice (DOJ) allege conduct that would benefit the Chinese state, and there is at least some nexus to China in around 60 percent of all trade secret theft cases.”
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Continue Reading DOJ Appointments at the Top and Recent Enforcement Actions Signal That Its China Initiative Will Likely Remain Intact

What does it take to sufficiently plead trade secret claims under the New Jersey Trade Secrets Act?

In Lard-Vid, LLC and Visual Image Display UK, Ltd. v. Ground Support Labs LLC et al., 2021 N.J. Super. Unpub. LEXIS 323, at *15 (N.J. Sup. Ct. Feb. 26, 2021), the Court addressed exactly this issue and dismissed plaintiffs’ trade secret claims for failure to allege facts sufficient to satisfy the elements of the New Jersey Trade Secrets Act.…

Continue Reading New Jersey Superior Court Tosses Trade Secret Claims for Failure to Plead with Sufficient Specificity Under New Jersey Trade Secrets Act

The First Circuit’s decision in TLS Mgmt. & Mktg. Servs., LLC v. Rodriguez-Toledo, 966 F.3d 46 (1st Cir. 2020) is an important reminder that trade secret owners must take great care to understand the nature of their trade secrets, how they satisfy the legal definition of trade secrets, and how they differ from other forms of intellectual property as early as possible in a case in order to create the factual record required for full enforcement and recovery.
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Continue Reading First Circuit Reversal Highlights Importance of Satisfying Trade Secret Definition

A fundamental question in every trade secret misappropriation case is: what are the alleged trade secrets that are the subject of the claim?  To assist parties and courts in answering this question, the Sedona Conference recently published Commentary on the Proper Identification of Asserted Trade Secrets in Misappropriation Cases (“Commentary”) which is available for download here.

The Commentary provides four guiding principles for identifying different types of asserted trade secrets:

  1. the identification of an asserted trade secrets during a lawsuit is not an adjudication of the merits or a substitute for discovery;
  2. the party claiming trade secret misappropriation should identify in writing the asserted trade secret at an early stage of the case;
  3. the party claiming the existence of a trade secret must identify the asserted trade secret at a level of particularity that is reasonable under the circumstances; and
  4. the identification of an asserted trade secret may be amended as the case proceeds.

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Continue Reading Sedona Conference Publishes Commentary on Proper Trade Secret Identification

Given the value of trade secrets in the global economy, businesses should always be on high alert for signs of misappropriation of trade secrets or other confidential information. COVID-19 has only increased the importance of doing so given employee mobility and a growing remote work force, which not surprisingly has spurred litigation by businesses attempting to protect trade secrets.

One recent example, CourtAlert.com (“CourtAlert”), a company offering case monitoring software for the legal industry, brought suit against a former employee and its competitor American LegalNet, Inc. (“ALN”) alleging trade secret misappropriation, unfair competition, and unjust enrichment among other claims.  See CourtAlert.com, Inc. v. American LegalNet, Inc., No. 1:20-cv-07739 (S.D.N.Y.).
Continue Reading Trade Secret Battle Waged in Legal Services Market

On September 14, 2020, China’s highest court, the Supreme People’s Court of the People’s Republic of China, released the “Opinions on Increasing Enforcement Against Intellectual Property Infringement According to Law” (关于依法加大知识产权侵权行为惩治力度的意见) (“Opinions”).

The Opinions cover four main areas: (1) Evidence Preservation, (2) Injunctions, (3) Monetary Relief, and (4) Criminal Enforcement

  • Evidence Preservation
    • Articles 1-4 cover evidence preservation.  Evidence preservation is a measure taken by Chinese courts to investigate, collect, and preserve evidence when it may be destroyed or difficult to collect in the future.  Article 2 directs courts to promptly review and decide an application for an injunction and an application for evidence preservation when a party applies for both.  Article 4 allows courts to make inferences in favor of an intellectual property rights holder when the alleged infringer damages or transfers evidence subject to an evidence preservation order.

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Continue Reading China Increases Focus on Protecting Against Intellectual Property Infringement

In Epic Systems Corp. v. Tata Consultancy Services Ltd., Epic Systems Corp. (“Epic”) filed a case in the U.S. District Court for the Western District of Wisconsin accusing Tata Consultancy Services Ltd. (“TCS”) of stealing documents and confidential information related to software applications performing billing, insurance benefits management, and referral services for health care companies.

In 2016, a federal jury ruled in Epic’s favor on all claims, ordered TCS to pay $140 million for uses of the comparative analysis, $100 million for uses of “other” confidential information, and $700 million in punitive damages. We reported on the jury verdict here and permanent injunction here. The district court later struck the compensatory award for “other uses” and reduced the punitive damages award from $700 million to $280 million because of a Wisconsin statute capping punitive damages at two times compensatory damages. See Wis. Stat. § 895.043(6).

Shortly thereafter, both TCS and Epic appealed the verdict – TCS challenged the punitive damages decision and Epic appealed the decision to vacate the $100 million award relating to uses of “other” confidential information. On August 20, 2020, the Seventh Circuit issued an opinion which reduced the punitive damages amount, but upheld the jury’s $140 million verdict. The Seventh Circuit held that TCS gained an advantage in its development and competition from its use of the comparative analysis and stolen information and that “the jury would have a sufficient basis to award Epic $140 million in compensatory damages” based on TCS’s use of Epic’s information to make a comparative analysis. In addition, the Seventh Circuit concluded that Epic did not provide “more than a mere scintilla of evidence in support of its theory that TCS used any other confidential information” such that the $100 million award could not stand.
Continue Reading Seventh Circuit Upholds $140 Million Compensatory Damages Award and Caps Punitive Damages at $140 Million in Trade Secret Case

It’s no secret that trade secret litigation can be expensive. Whether you are bringing a lawsuit to protect your crown jewels or defending against alleged trade secret misappropriation, we offer some useful strategies for managing and mitigating costs in trade secret litigation:

  1. Get Ready, Go! Identifying trade secret misappropriation is only the beginning of the story.  Well before filing a trade secret lawsuit, plaintiffs must work to locate relevant documents, interview witnesses with knowledge, identify the trade secrets at issue, and explore strategic considerations including the appropriate venue, the applicable law, and legal claims including related breach of contract and common law claims. Defending against a trade secret case requires getting up to speed quickly, identifying key defenses, and often rapidly preparing oppositions to requests for injunctive relief or expedited discovery.
  2. Budget Wisely. Trade secret litigation can move quickly from complaint to emergency injunctive relief or stretch on for years when mired in contentious discovery disputes or debates over the nature and contour of often technical or complex trade secrets.  Budgeting clearly from the start ensures that litigation goals are met and cost expectations are understood.  Proposed budgets should include breakdowns of (1) staffing, including level, location, years of experience, expected work, hourly rate, and projected hours for each team member; (2) forecasting fees and costs at each phase and expected milestone throughout the life of a trade secrets litigation, (3) regular interim updates in addition to year-to-date or matter-to-date costs and fees, and (4) assumptions or limitations built into the budget.  Electronic task management systems can collect data on billing unique to each phase of the litigation or milestones such as resolution of initial injunctive relief or preparing trade secret identification to stay on track with budgeted goals.  Planning for unexpected budget excesses, which may occur due to early disputes over trade secret identification or early expedited discovery, help manage expectations and avoid rejection of invoices. We provide tips for creating and maintaining a budget in Crowell’s Legal Project Management Guidebook.
  3. Don’t Lose Sight of Discovery Costs. Discovery can be the single most expensive phase of any litigation so keeping a close eye on these costs can lead to big savings.

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Continue Reading Trade Secret Litigation Strategies: Tools for Managing Costs

The U.S. Department of Justice has secured yet another conviction against a Chinese national for trade secret theft which is part of a larger push to protect valuable intellectual property.

Li Chen, a long time biotech researcher in a medical lab at Nationwide Children’s Hospital Research Institute in Ohio, pled guilty to conspiracy to misappropriate trade secrets and conspiracy to commit wire fraud.  Chen, and her husband Yu Zhou, a fellow biotech researcher, were indicted in September 2019 following an extensive investigation. The indictment and plea agreement details their efforts to steal trade secrets related to exosome isolation technology, which represents a critical development in the diagnosis and treatment of pediatric diseases, including liver cancer and a condition found in premature babies.
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Continue Reading Chinese Biotech Researcher Pleads Guilty to Trade Secret Misappropriation