On August 13, 2020, a Delaware District Court judge granted Defendant Azstrazeneca Pharmaceuticals LP’s motion to dismiss, finding that Plaintiff Lithero, LLC failed to plead a plausible trade secret misappropriation claim under the federal Defend Trade Secrets Act (“DTSA”).

Lithero’s complaint alleged that Azstrazeneca misappropriated Lithero’s confidential and proprietary information regarding Lithero’s Automated Regulatory Assistant (“LARA”), including information regarding how it is trained and the process by which it learns, as well as “years of past research and development, the current capabilities of LARA coming as a result of that research and development, and detailed plans for future areas of growth.” But none of these allegations were sufficient to survive dismissal at the pleadings stage.


Continue Reading Too Much or Never Enough? Another Trade Secret Misappropriation Claim Dismissed

This week, the U.S. government continued its enforcement activity against Chinese government-sponsored trade secret theft, indicting two Chinese hackers for allegedly stealing data from 25 domestic and international companies, including targeting those now researching COVID-19 testing, vaccines, and treatment. The two defendants had allegedly acquired hundreds of millions of dollars worth of trade secrets and other valuable business information across a span of nearly eleven years. This announcement follows in the wake of the indictment of Dr. Charles Lieber, a former Harvard professor, who allegedly lied about his participation in China’s “Thousand Talents Plan,” a program that has been accused of facilitating the stealing of American trade secrets. Our coverage of that indictment is here.

On Tuesday, July 21, 2020, the U.S. Department of Justice (“DOJ”) announced charges against Li Xiaoyu and Dong Jiazhi in the Eastern District of Washington, alleging that they hacked the computer networks of 13 United States and 12 international companies in industries ranging from high tech manufacturing and medical device engineering to solar energy and pharmaceuticals, all between September 2009 and July 2020.
Continue Reading DOJ Targets Chinese Hackers for Stealing United States Trade Secrets

During these unprecedented times, some people are itching to get back to “normal.” As evidenced by the excitement over the recent re-opening of some states and cities, there is an obvious desire to return to the way of life we remember. However, this likely won’t be fully possible without the development of a vaccine, which, along with health-treatment drugs, is understandably the subject of intensive development efforts.

There are lurking intellectual property (“IP”) law issues in this rush to develop a vaccine. Most notable are the potential issues surrounding possible patent infringement, and sharing (or misappropriation) of trade secrets. Drug manufacturers are racing to find treatment drugs that they can mass-produce and make a sizable profit on. But, should these manufacturers rely on patents or trade secrets to protect their drugs and vaccines? Considerations to be weighed include:
Continue Reading IP and the Novel Coronavirus: Developing a Vaccine

The COVID-19 crisis has presented an array of novel issues for companies, including new and unexpected cybersecurity threats. In addition to the now well-known security limitations of video platforms such as Zoom, we are seeing cyber-attacks in the form of COVID-19 related phishing attempts and ransomware attacks. In at least some of these attempted hacks, cybercriminals are hoping to steal trade secrets.

  • Cybercriminals are taking advantage of the novel at-home working environment and the increased fear and uncertainty surrounding the pandemic to launch malware and phishing attacks related to COVID-19.
  • Employees may be more likely to click a link or open an attachment, even though they would never consider doing so in a normal situation at work.
  • Therefore, malware may pose more of a danger than it did when employees primarily accessed their email over their employers’ traditionally more protected systems.
  • Companies should consider putting employees on notice about the COVID-19 related phishing attempts and provide examples of common scams.


Continue Reading COVID-19 and the Unique Opportunity for Phishing

The COVID-19 pandemic is shining a new light on the risk of trade secret theft to businesses worldwide from greater employee mobility associated with rising unemployment and a looming recession, cyberattacks by opportunistic hackers, and a growing remote workforce with technological threats from increased use of smart devices that may leave little to no data trail.

Companies should not only consider what to do to safeguard their trade secrets now, as explored in our earlier post on Trade Secret Protection During the COVID-19 Pandemic, but how best to create and communicate the plan for responding to any discovery of trade secret misappropriation.
Continue Reading Are You Ready to Respond to Trade Secret Theft in the COVID-19 Age?

Are non-competes still enforceable in middle of the unprecedented economic disruption caused by COVID-19? Many employers have reacted to the business impact of COVID-19 by downsizing and laying off employees, some of whom signed non-compete agreements or restrictive covenants to protect the employer’s legitimate business interests, including its trade secrets and confidential information. Those same businesses now are left wondering whether those non-compete agreements are enforceable in the wake of massive unemployment triggered by the pandemic.

The answer to this question is complex, and depends on state law, public policy, and the terms of the specific agreements. Each state scrutinizes non-competes and restrictive covenants differently and, therefore, the answer may be different depending on where the business and employee are located or the agreement’s choice of law provision.
Continue Reading Non-Compete Agreements and Restrictive Covenants During COVID-19

In addition to reshaping how business is being done, COVID-19 has presented companies with unprecedented challenges and an increasingly remote work force and has made it more important than ever for businesses to evaluate the security and protection of their trade secrets and confidential information.

Crowell & Moring attorneys Jim Stronski, Anne Li,

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.
Continue Reading Trade Secret Protection During the COVID-19 Pandemic