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The Defend Trade Secrets Act (DTSA) was enacted in 2016. The DTSA allows an owner of a trade secret to sue in federal court when seeking relief for trade secret misappropriation related to a product or service in interstate or foreign commerce, and does not preempt any state law. A goal of the DTSA is to “provide a single, national standard for trade secret misappropriation with clear rules and predictability for everyone involved.” S. Rep. No. 114-220, at 14 (2016). For the majority of the time, this goal is upheld. Aside from establishing a relation to a product or service in interstate or foreign commerce, state trade secret laws are typically almost identical to the DTSA. However, if states trade secret laws do differ from the DTSA, they are usually in regard to remedy.Continue Reading The Defend Trade Secrets Act and How it Differs from State Trade Secret Laws

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Earlier this week, a Virginia jury awarded software company Appian Corp. more than $2 billion in damages after finding that competitor software company Pegasystems Inc. had misappropriated its trade secrets. The complaint alleged that Pegasystems engaged in corporate espionage and trade secrets theft in an effort to better compete with Appian. Pegasystems hired Youyong Zou, an employee of a government contractor and former developer for Appian. In exchange for payment, Zou provided Pegasystems with copies of Appian’s confidential software and documentation in violation of confidentiality restrictions that barred him from sharing Appian’s trade secrets. In 2020, Appian filed suit against both Pegasystems and Zou.
Continue Reading $2B Jury Verdict in Trade Secrets Suit

We have reported on various aspects of the EU Trade Secrets Directive on this blog. The legal requirements for something to qualify as a trade secret, the misappropriation of trade secrets and the remedies that exist to rectify such misappropriation, as well as the protection of trade secrets during court proceedings have all been discussed. However, in order to be properly prepared for trade secrets litigation and enforcement – both in Belgium and across the EU – you also need to know what damages are potentially available for trade secrets misappropriation and more importantly what evidence will have to be shown to the court.
Continue Reading Enforcement of trade secrets in the EU: compensation and damages for trade secret misappropriation

The Eleventh Circuit recently struck down an award of $4.5 million in damages after a jury determined that a manufacturer had misappropriated a shared trade secret.  AcryliCon USA, LLC (“AcryliCon”) and Silikal GmbH (“Silikal”) had a business relationship in which Silikal manufactured and AcryliCon distributed a proprietary flooring resin of superior compressive strength (1061 SW), and each claimed ownership of the 1061 SW formula trade secret to the exclusion of the other. While ownership of a trade secret is a critical issue in trade secret misappropriation claims, the Court did not address whether AcryliCon owned the trade secret because it determined that Silikal did not misappropriate the formula as a matter of law.
Continue Reading Trade Secret Misappropriation or Breach of Contract? It can be a costly distinction.

A recent case is a helpful reminder to companies with valuable intellectual property to be diligent in protecting trade secrets and monitoring compliance by employees with access to this confidential information.

On June 15, 2020, Ryan, LLC (“Ryan”) filed a lawsuit in Texas state court against S.K. Thakkar (“Thakkar”), who was employed by a company acquired by Ryan, and Ernst & Young, LLP (“Ernst & Young”), his new employer, seeking a temporary restraining order and permanent injunction based on alleged (1) trade secret misappropriation, (2) tortious interference with contract, and (3) breach of contract.
Continue Reading Misappropriation Claims Brought Over Tax Trade Secrets

The legal saga between L’Oreal USA Inc. and Olaplex LLC (“Olaplex”) over a hair-coloring product continues. In August 2019, a Delaware federal jury found that L’Oreal misappropriated Olaplex’s trade secrets, willfully infringed two Olaplex patents, and breached a nondisclosure agreement. The jury awarded Olaplex $22.3 million for willful infringement of trade secrets, $22.3 million for breach of contract, and $47 million for patent infringement. On March 24, 2020, the court entered a $66.2 million final judgment including attorneys’ fees and prejudgment interest.

Earlier this month, L’Oreal appealed and asked the Federal Circuit to reverse this judgment based on purported errors by the district court in (1) improperly excluding two witnesses and (2) improperly granting summary judgment on patent infringement.
Continue Reading L’Oreal Appeals $66 Million Trade Secret Judgment

On November 5, 2019, Black Knight Inc. brought suit in Florida state court against PennyMac Loan Services LLC (“PennyMac”) alleging breach of contract and trade secret misappropriation under the Florida Uniform Trade Secrets Act. PennyMac allegedly used its access to Black Knight’s trade secrets and other confidential information relating to its proprietary mortgage servicing software…

On Monday, August 12, a Delaware federal jury found that L’Oreal USA Inc. misappropriated Olaplex LLC’s trade secrets, breached a nondisclosure agreement, and willfully infringed on two of Olaplex’s patents related to a hair-coloring product. The patents in question related to a three-step system that protects hair from damage during bleaching.

The jury deliberated for…

On April 23rd, 2019, China’s Standing Committee on the National People’s Congress adopted amendments to the Anti-Unfair Competition Law, significantly strengthening China’s protection of trade secrets. The bolstering of intellectual property safeguards in China comes in advance of important trade negotiations between China and the international community, including the United States. The changes to the…