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Wei-Chih Hsu

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Use of an algorithm disclosed in a textbook in a different field may warrant trade secret protection according to a recent Federal Circuit decision in Masimo Corp. v. True Wearables, Inc., No. 2021-2146, 2022 WL 205485 (Fed. Cir. Jan. 24, 2022). In this case, the Federal Circuit upheld a preliminary injunction to prevent an optimization algorithm from being released even though the defendants presented that the equivalent of the algorithm had been published in a conference paper cited more than 1,200 times and in statistic textbooks since 1960s.

Masimo and Cercacor filed a suit against True Wearables and Dr. Lamego and requested for a preliminary injunction to prevent the plaintiff’s trade secret from being released to the public. The purported trade secret is an optimization algorithm used by the plaintiff on medical devices for measuring blood characteristics. Dr. Lamego is a former employee of Cercacor, who developed the purported trade secret for Cercacor and left Cercacor to found True Wearables (TW). Masimo’s preliminary injunction requested to bar TW’s patent application, which bears Masimo’s trade secret of the optimization algorithm as alleged by Masimo, from issuing. …
Continue Reading Trade Secrets Not So Secret: Conventional Technique, New Application

A recent case from the Sixth Circuit, addressing a source code agreement, highlights the importance of carefully specifying what happens to source code (and the trade secrets therein) after breach of the agreement.  In Epazz, Inc. v. National Quality Assurance USA, Inc.,[1] the Sixth Circuit affirmed the district court’s decision that a software licensee did not misappropriate a trade secret of the licensor when the licensee acquired the source code from an escrow agent, because the plain terms of the license agreement between the two authorized the release if the licensor breached. Further, the licensee did not commit misappropriation by hiring another provider to maintain and further develop the source code, where the license provided “the right . . . to use the . . . Material” upon breach of the agreement.
Continue Reading Untangling a Messy Dispute: No Misappropriation for Trade Secret Use Authorized by Agreement