Following the high-profile trade secrets litigation and settlement between Waymo and Uber in February 2018, covered previously in this blog, a defamation claim was filed by four Uber employees against Uber’s former global intelligence manager, Richard Jacobs. The case alleges that Jacobs defamed the four plaintiffs by accusing them — initially in an intra-office email, which was later broadcast to the world as part of the now-settled Waymo v. Uber case — of wiretapping, trade secret theft, and hacking.

The plaintiffs filed a motion earlier this month asking the federal judge hearing the matter to relate the defamation suit to the initial trade secret case, arguing that Jacobs’ statements received substantial attention in that matter. Jacobs responded by filing an opposition to this motion last week, arguing that there was no reason for the plaintiffs to have waited several months to file the motion, that the cases involve different facts, and that relating the cases would unnecessarily complicate matters. Whether the court agrees remains to be seen.

Fig cookiesThe Criminal Court of Mechelen (Belgium) ruled in favor of Bofin Biscuits against a former production assistant accused of having stolen the assistant director of the cookie baker’s laptop. The laptop allegedly contained the secret recipes of all the cookies produced by Bofin Biscuits. This case is interesting because of the nature of the secrets and also when compared to that of the “fig spread”-case discussed here two weeks ago. It also confirms that trade secret misappropriation cases do not necessary only involve complex matters on state of the art technology owned by large multinationals.

The facts of the case are rather straight-forward. On November 12, 2013 the assistant-director of Bofin Biscuits noticed that his laptop had gone missing during his absence from November 6 to November 11. Images from the surveillance video system of Bofin Biscuits showed that the actual taking of the laptop had not been filmed. The camera hanging outside the assistant-director’s office did show a production assistant walking down the hallway where the office was located, entering it and leaving with something clearly hidden under his coat. During the trial the production-assistant did not contradict that he was the person that had been filmed, but he denied that he had taken the laptop. When asked what he then was hiding under his coat, he claimed not to recall anything.

For the public prosecutor this was a clear cut case and he requested the court to sentence the former production assistant to a six month effective prison sentence and a 4.800 EUR fine. Bofin Biscuits, who had joined the proceedings by suing its now ex-employee for civil injury, requested 1.500 EUR for the still missing laptop, 2.500 EUR for the time spent on recovering the information stored on the laptop, 500 EUR moral damages and a provisional damages amount of 25.000 EUR for having stolen the secret cookie recipes.

Continue Reading Employee Who Stole the Cookie Recipe From the Cookie Jar Fined €1 (Yes, that’s one single Euro)

On Friday, September 9, the U.S. Chamber of Commerce urged the Obama Administration to take more action against the theft of trade secrets and other intellectual property.  The Chamber did so in response to a Request for Information issued by the National Institute of Standards and Technology (NIST), seeking industry input regarding various cybersecurity issues, including the economic consequences of hacking.

The Chamber explained that “IP-related industries generate 35 percent of America’s economic output and are responsible for two-thirds of all exports and more than 40 million jobs” and that the “threat of trade secrets theft is of increasing concern to U.S. economic well-being and job creation.”  Noting that it had previously called on Congress to pass federal civil legislation, it praised the passage of the Defend Trade Secrets Act as a step in the right direction.

Underlying the Chamber’s emphasis on trade secrets protection was its broader goal of establishing norms and deterrence to “heighten the costs on sophisticated attackers that would willfully hack America’s private sector for illicit purposes.”  This was one of only three “top” cybersecurity issues that the Chamber chose to address, along with standards and information sharing, and that it urged the executive branch to prioritize.

These and other comments submitted will help inform the new Commission on Enhancing National Cybersecurity, which President Obama recently convened.  The Commission will then craft recommendations to the President for improving cybersecurity – and possibly trade secrets protection – across the public and private sectors.

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 Tata misappropriated trade secrets belonging to a Wisconsin-based competitor, Epic Systems. We reported on the jury verdict here.

The injunction prohibits Tata from using Epic’s trade secrets and confidential information anywhere in the world for a period of four years. The injunction also prohibits any Tata employee who had access to such information to work on the development of certain related products over that time period, world-wide. The Court will also appoint an independent expert to monitor Tata’s development activities for a period of two years to ensure that it does violate the terms of the injunction.

Tata, which did not oppose the entry of an injunction, did argue that the monitor was not necessary given the scant evidence of actual use of the trade secrets at trial. As we previously reported, this lack of evidence may put the damages award on shaky grounds. This battle is far from over.

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. Continue Reading $940 Million Jury Verdict in Trade Secret Case, for Now

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.

Continue Reading Best Practices for Responding to Potential Trade Secret Theft

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[via Flickr user Glyn Lowe Photoworks]
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.

Continue Reading Keeping Up with Cybercriminals: House Passes Bill to Formally Establish National Computer Forensics Institute

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[via Flickr user CDC Global]

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

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.

Continue Reading Twice Convicted, Twice Reversed: Another Aleynikov Code Theft Conviction Overturned

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 of the growing threat from cyber-attacks, especially corporate theft from foreign countries and companies. As a result, trade secrets are an increasingly important form of intellectual property protection. Corporate IP and litigation counsel should also be aware of key case developments in this fast moving area of law. With that in mind, we offer our Top 10 Trade Secret Decisions of 2013 …

Click here to read this full alert on Crowell.com.