Less than two weeks after Indian outsourcing giant Tata Consultancy Services got hit with a $940 million jury verdict, U.S. District Court Judge William Conley of the Western District of Wisconsin has now entered a world-wide permanent injunction against Tata. The jury award and injunctive relief are due to the Court and jury finding that
$940 Million Jury Verdict in Trade Secret Case, for Now
In an eye popping damages award that appears destined for review, a Wisconsin jury returned a verdict of $940 million against Tata Consultancy Services in a case trade secret misappropriation case brought by competitor Epic Systems.
Indian outsourcing behemoth Tata was sued by Epic Systems, a privately held Wisconsin-based medical software company in Wisconsin federal court. Therein Epic asserted that Tata unlawfully accessed Epic’s UserWeb to download over one thousand unique files containing confidential information to develop a competing product. According to the Complaint, Tata gained this access through a third-party that had licensed Epic’s software and had customer-level access to the UserWeb. Epic learned of the misappropriation through a whistleblower at Tata.
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Best Practices for Responding to Potential Trade Secret Theft
Companies sometimes discover warning signs or clear activity of trade secret theft but do not know how to deal with the issue right away. Whether it is a current employee who remotely accesses company trade secret information while on vacation, or a departing employee who conveniently failed to return a company laptop, that company may be heading toward eventual trade secret litigation. But the immediate path forward seems unclear and presents so many options of what to do. Because the hours and days after discovery of a potential trade secret theft are extremely important, we suggest a simple set of best practices for responding to that potential trade secret theft: 1) understand the issue, 2) contain the issue, 3) exhaust the issue, and 4) consider bringing the issue to court.
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Keeping Up with Cybercriminals: House Passes Bill to Formally Establish National Computer Forensics Institute
On Monday November 30, the House demonstrated its resolve to fight high-tech crime such as trade secret theft by passing the Strengthening State and Local Cyber Crime Fighting Act (H.R. 3490). The Act formally establishes the National Computer Forensics Institute, which is located in Hoover, Alabama and has been operating since 2008. Under the Act, the Institute will:
- Educate law enforcement officers, prosecutors, and judges on (i) cyber and electronic crimes; (ii) methods for investigating such crimes, including forensically examining computers and mobile devices; and (iii) prosecutorial and judicial challenges related to such crimes and forensic examinations; and
- Train law enforcement officers to (i) investigate cyber and electronic crimes; (ii) forensically examine computers and mobile devices; and (iii) respond to network intrusions.
U.S. and China Agree on Joint Efforts Against Theft of Corporate IP
This past Friday, President Barack Obama and Chinese President Xi Jinping announced that the United States and China had reached a “common understanding” to fight state-sponsored, corporate cyber espionage between the countries.
During a joint press conference, President Obama said that “neither the U.S. nor the Chinese government will conduct or knowingly support cyber theft of intellectual property, including trade secrets or other confidential business information for commercial advantage.” President Jinping added that “both governments will not engage in or support online theft of intellectual property.”Continue Reading U.S. and China Agree on Joint Efforts Against Theft of Corporate IP
Twice Convicted, Twice Reversed: Another Aleynikov Code Theft Conviction Overturned
Sergey Aleynikov, the ex-Goldman Sachs computer programmer convicted of stealing high-frequency trading source code, has once again succeeded in reversing a criminal conviction related to his infamous code-copying acts. Federal prosecutors had previously charged, tried, and won a conviction of Aleynikov for violations of the federal National Stolen Property Act (NSPA) (18 USC § 2314) and Economic Espionage Act (18 USC § 1832). However, in 2012, the Second Circuit reversed both convictions. See United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012). That in turn prompted Congress to amend the Economic Espionage Act to close the loophole that allowed Aleynikov to walk.
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Top 10 Trade Secrets Decisions of 2013
With the ability to move large volumes of information electronically very quickly, the threats from cyber intrusions, joint development partners, and rogue employees are more significant every day. Dollars lost due to trade secret theft tally in the tens if not hundreds of millions annually. President Obama in his State of the Union address warned
Second Circuit Affirms Conviction For Theft of Computer Code Under Federal Criminal Trade Secrets Statutes
In United States v. Agrawal, the Second Circuit upheld a jury’s 2010 conviction of a former Société Générale trader under the Economic Espionage Act (EEA) and the National Stolen Property Act (NSPA). The three-judge panel unanimously affirmed the NSPA conviction, but split on whether the EEA conviction could stand in light of the Second
Federal Trade Secret Reform Continues With Two New Attempts to Improve Protection
Congress continues to show interest in refining federal trade secret law to meet the challenges of the internet age. Two bills potentially impacting a company’s ability to protect its trade secrets have been introduced. The first, “Aaron’s Law Act of 2013,” seeks to resolve the Circuit split under the Computer Fraud and Abuse Act (CFAA)
Second Circuit Holds That Employee’s Misuse of Information on a Computer Server Alone Satisfies Minimum Contacts Test for Personal Jurisdiction in That State
The Second Circuit Court of Appeals has given employers more flexibility in pursuing trade secret claims that are based on an employee’s theft of a company’s computer files. In MacDermid, Inc. v. Deiter, No. 11-5388-cv (2d Cir., Dec. 26, 2012), the court found that misappropriation from a computer server located in one state is