Why litigate a case for months or years, only to arrive at a settlement that would have been possible before the case began? In many cases, neither litigant would choose this approach, but it happens quite often nonetheless. According to Lex Machina data, about 60% of trade secret cases filed in federal court in the last decade ended in either a voluntary (8%) or stipulated (52%) dismissal. Of course, many of these settlements were likely informed by discovery and the arguments made by the parties in court. But in other cases, resolutions probably could have been reached before both parties incurred unnecessary litigation expenses.
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Crowell & Moring Presents Webinar on The U.S. Response to China’s Theft and Acquisition of Trade Secrets
Not surprisingly given the hundreds of billions of dollars of American intellectual property lost to China each year, trade secret theft and China is a hot topic for the public and private sector alike.
On September 29, 2020 2:00 -3:00 pm EDT, Caroline Brown and Jim Stronski will share their thoughts on the latest developments
Trade Secret Protection During the COVID-19 Pandemic
The COVID-19 pandemic presents unique and unprecedented challenges to the ongoing need to protect confidential information and trade secrets. The massive business disruptions that enterprises of all kinds now face include (1) entire workforces forced to work remotely, accessing and using confidential information and trade secrets from home; (2) exigent circumstances created by the cessation or substantial slowing of commercial activity that may result in the disclosure of confidential information or trade secrets to third parties outside normal procedures; and (3) the off-boarding of remote employees who are accessing confidential information and trade secrets remotely.
Trade secret protection may not be the immediate priority of a business facing massive business disruptions, but taking reasonable steps now to protect the security of trade secrets and confidential information is critical to the preservation of these valuable assets when this crisis is over. Trade secret law – both federal and state – requires that a trade secret holder take reasonable measures under the circumstances to protect trade secrets.1 Reasonable measures relate not only to prevention of unauthorized disclosures, but also the minimization of the impact of any such disclosures after they occur, and these measures must be reasonable now under the current exigent circumstances.
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Not So Fast: Ex-Goldman Sachs Employee’s Conviction For Stealing Source Code Reinstated
Yesterday, an intermediate New York State appellate court, the First Department of the Appellate Division of the New York Supreme Court, reinstated the conviction of an Ex-Goldman Sachs programmer, Sergey Aleynikov. At issue here are allegations that Mr. Aleynikov violated the New York penal code by copying source code for a proprietary high frequency trading system at Goldman Sachs before he left to join a competitor. This case is noteworthy for the twists and turns it has taken through the federal and state criminal justice systems and how it evidences the trade secret protection challenges faced by employers on Wall Street and in other industries.
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When Customer Information Isn’t a Trade Secret – McCormack Auction Company, Inc. v. Hanks
A California appeals court recently reversed a trial verdict that had found trade secrets in an auction house’s customer information. The case is notable because it demonstrates when customer information falls short of warranting trade-secret protection.
Background
The case McCormack Auction Company, Inc. v. Hanks involved a now-defunct auction house known as the McCormack Auction Company. Operating in southern California, McCormack handled large-scale auctions, both online and in person. It had acquired several repeat customers during its 30-plus years of operation, including bankruptcy trustees, community colleges, and public utilities. McCormack maintained its customer information in electronic databases on its computers. As an advertising tactic, McCormack identified on its website some satisfied customers that it had served in the past, but it did not display the customers’ contact information.
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Utah’s Supreme Court Applies Rebuttable Presumption of Harm In Trade Secret Case
The Supreme Court of Utah, in InnoSys, Inc. v. Mercer, held earlier this week that an employer making a prima facie case of trade secret misappropriation is entitled to a legal presumption of harm that, if unrebutted, supports a claim for trade secret misappropriation and at least injunctive relief. This August 31, 2015 decision interprets Utah’s Uniform Trade Secret Act and represents a useful precedent for companies relying on trade secret protection. It notably held that the presumption of harm attaches regardless of whether the record supports a threat of future disclosure or use of the stolen trade secrets.
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