On April 23, 2024, the Federal Trade Commission (“FTC” or “the Agency”) voted 3-2 along partisan lines in a special public meeting to adopt the “Non-Compete Clause Rule” (the “Final Rule”), which will prohibit most employee non-competes with retroactive effect, except existing non-compete provisions of “senior executives.” The Final Rule will also
California AG Interprets “Inferences” Under CCPA
The California Office of the Attorney General issued its first opinion interpreting the California Consumer Privacy Act (CCPA) on March 10, 2022, addressing the issue of whether a consumer has a right to know the inferences that a business holds about the consumer. The AG concluded that, unless a statutory exception applies, internally generated inferences that a business holds about the consumer are personal information within the meaning of the CCPA and must be disclosed to the consumer, upon request. The consumer has the right to know about the inferences, regardless of whether the inferences were generated internally by the business or obtained by the business from another source. Further, while the CCPA does not require a business to disclose its trade secrets in response to consumers’ requests for information, the business cannot withhold inferences about the consumer by merely asserting that they constitute a “trade secret.”Continue Reading California AG Interprets “Inferences” Under CCPA
The Economic Value of Nonprofits—Donor and Participant Lists
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?
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Senator Lindsey Graham’s Proposed Legislation Seeks to Combat “Chinese Purloining” of U.S. Trade Secrets
On April 20th, U.S. Senator Lindsey Graham, R-S.C. introduced Senate bill S. 1245, “The Combating Chinese Purloining (CCP) of Trade Secrets Act.” The full text of the bill is not yet available, but a press release announcing the legislation highlighted key features of the CCP, including:
- increasing the maximum penalty from 5 to 20 years of imprisonment for individuals who use “communication interception devices” to aid a foreign government;
- expanding trade secret misappropriation penalties for foreign persons, including by: the U.S. Customs and Border Protection imposing import restrictions, the U.S. Department of Commerce denying export licenses, the U.S. Patent and Trademark Office rejecting applications for patent protection, and the U.S. Department of State denying visas;
- creating grounds for inadmissibility and deportability for individuals that seek to enter, or remain in, the U.S. to engage in espionage and intellectual property theft; and
- prohibiting the issuance of visas to Chinese nationals who present a national security risk and to prevent their pursuit of graduate-level coursework in sensitive fields.
Bunch O’ Balloons Trade Secret Dispute Results in Bunch O’ Appeals
In an opinion first issued in June 2020 and modified in October 2020, the Fifth Court of Appeals in Texas granted summary judgment in a trade secret dispute based on plaintiff’s failure to present any facts that defendants had access or exposure to plaintiff’s claimed trade secrets. Josh Malone designed a device that fills and seals water balloons. Kendall Harter did the same. Mr. Malone filed a patent. Mr. Harter accused Mr. Malone of stealing his water balloon filling design. According to Mr. Harter and KBIDC Investments, the company that acquired Mr. Harter’s company, Mr. Malone came up with his patented product by stealing the trade secrets belonging to Mr. Harter and then KBIDC Investments. So, KBDIC Investments sued Mr. Malone and Zuru Toys, which acquired an interest in Mr. Malone’s “Bunch O’ Balloons” product for trade secret misappropriation.
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Florida Lawmakers Seek to Address Corporate Espionage in Proposed Legislation
On March 1st, Florida Governor Ron DeSantis, along with GOP members of the state’s House of Representatives and Senate, announced legislation to address corporate espionage and foreign influence in Florida. In public remarks about the proposed legislation, Florida House Speaker Chris Sprowls expressed concern about the threat of China’s influence on local governments and university systems, stating “that there are no limits to the depths to which other countries, especially China, will go to steal our science and technology.”
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ITC Finds Trade Secret Misappropriation and Bars Electric Vehicle Batteries from SK Innovation—With Exceptions
On February 10, the U.S. International Trade Commission (“ITC”) issued a final determination finding South Korean lithium-ion electric vehicle battery maker SK Innovation misappropriated the trade secrets of its Korean competitor LG Chem in violation of Section 337 of the Tariff Act of 1930. The ITC issued a 10-year exclusion order blocking SK’s imports into the U.S. of lithium-ion batteries and related products, but with substantial exceptions: SK is permitted to continue importing these products specifically for Ford Motor Co.’s EV F-150 program for four years, for Volkswagen of America’s modular electric drive line for two years, and for the repair and replacement of EV batteries for Kia vehicles sold to U.S. customers. President Biden and his U.S. Trade Representative—Katherine Tai has been nominated but not yet confirmed—now have 60 days to review the ITC’s electric vehicle battery exclusion order, an order that could be seen as in tension with the new administration’s promotion of green energy.
Continue Reading ITC Finds Trade Secret Misappropriation and Bars Electric Vehicle Batteries from SK Innovation—With Exceptions
Final ITC Ruling in Botox Rival Case Creates More Head-Lines
On January 13, the U.S. International Trade Commission (“ITC”) issued the long-awaited public version of its final opinion in the Matter of Botulinum Products (Inv. No. 337-TA-1145), otherwise known as the “Botox case.” As previewed in the ITC’s earlier notice of decision, the ITC’s final opinion affirmed the Administrative Law Judge’s issuance of a 21-month ban on imports and sale of Respondents’ lower-cost alternative to Botox for misappropriation of trade secret manufacturing processes and reversed the finding that Complainant Medytox’s specific strain of botulinum toxin bacteria is a protectable trade secret.
As we previously reported, South Korean company Daewoong Pharmaceutical and its U.S.-based licensee Evolus had been facing a potential 10-year ban of the import and sale of its product, Juveau; however, because the ITC reversed the ALJ’s finding and instead held that the bacterial strain at issue was not a protectable trade secret, the Respondents could not be liable for trade secret misappropriation of the bacterial strain itself. The ITC thus reduced the length of the ban from 10 years to 21 months, accounting for the ITC’s finding that Respondents were liable for theft of trade secrets related to Medytox’s manufacturing process.Continue Reading Final ITC Ruling in Botox Rival Case Creates More Head-Lines
ITC Decision Adds New Wrinkle to Ban of Botox Competitor in Trade Secret Misappropriation Case
On December 16, the U.S. International Trade Commission (“ITC”) affirmed in part and reversed in part Administrative Law Judge David P. Shaw’s final initial determination from July against a South Korean manufacturer of an anti-wrinkle beauty treatment made from the botulinum toxin bacteria called Jeuveau. The ITC affirmed the ALJ’s findings with respect to the manufacturing process trade secrets but overturned the ALJ’s finding that Complainants Medytox and Allergan had any protectable interest in the bacterial strain itself. As a result, the ITC rejected the ALJ’s recommendation that a 10-year ban be imposed and concluded that Respondents Daewoong and Evolus should be barred from importing Jeuveau for 21 months instead. The ITC’s decision also issued a cease and desist order to prevent Evolus from selling any products previously imported unless it posts a bond equal to $441 for each 100-unit vial of Jeuveau. A full opinion on the ITC’s decision will be available roughly two weeks from now.
Continue Reading ITC Decision Adds New Wrinkle to Ban of Botox Competitor in Trade Secret Misappropriation Case
Court Denies TRO in “The Lost Lincoln” Misappropriation Case
On October 2, 2020, a federal judge for the Central District of California denied a motion for a temporary restraining order (“TRO”) to enjoin the Discovery Channel from airing “The Lost Lincoln,” a documentary about an allegedly long-lost photograph of Abraham Lincoln on his deathbed. Only 130 photographs of Lincoln are known to exist.
Plaintiffs Jerry Spolar and Terry Williamson own the photograph, known as an ambrotype, and spent years researching and authenticating it. In 2018, they partnered with Whitny and James Braun to make a documentary about the photo and shared the details of their authentication efforts with the Brauns pursuant to non-disclosure agreements. The project fell through at first, but late last month, Plaintiffs learned that their former partners had created a documentary about the photograph for the Discovery Channel.
Continue Reading Court Denies TRO in “The Lost Lincoln” Misappropriation Case