Data Protection

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The Sedona Conference, Working Group 12 on Trade Secrets, has released for public comment its guidance on the governance and management of trade secrets. This valuable Commentary outlines the inherent challenges in developing a trade secret protection program that aligns with a business’s goals and measurable objectives.

The Commentary recommends businesses focus on the following factors to evaluate trade secret protection programs:

  • The size, maturity, industry, and location of the business;
  • The nature and value of a business’s trade secrets;
  • How the business can leverage its trade secrets to commercialize new services and extract additional value, maintain its competitive advantage, and incentivize innovation;
  • The different measures available to protect the business’s trade secrets and their varying effectiveness; and
  • The extent and cost of measures taken and the rationale for measures not taken.

In the end, the Commentary advocates an “integrated enterprise” approach to trade secret governance in order to accommodate multiple and potentially conflicting corporate interests. This approach requires several steps:
Continue Reading The Sedona Conference Solicits Public Comment on its Commentary on the Governance and Management of Trade Secrets

In 2004, 19-year-old college sophomore Elizabeth Holmes dropped out of Stanford University to create a company that would change the world. Theranos, Inc. was going to revolutionize medicine with its proprietary blood testing devices that could detect high cholesterol, cancer, and other medical conditions with a single finger pinprick. In 2014, the company’s valuation peaked at over $9 billion, making Holmes the youngest self-made female billionaire in the world with a net worth of about $4.5 billion. Four years later, in June 2018, Holmes was indicted on eleven counts of fraud. On January 3, 2022, Holmes was convicted on one count of conspiracy to defraud investors and three counts of wire fraud. She faces a maximum sentence of twenty years in prison, and a fine of $250,000, plus restitution, for each count.

Hulu’s new limited series, The Dropout, chronicles the rise and fall of Theranos through the lens of its CEO, played by Amanda Seyfried. Episode 7, Heroes, touches on Holmes’s well-documented preoccupation with trade secrets. During its first decade, Theranos operated in stealth mode – no media communications, no public disclosures, and no product releases.
Continue Reading The Dropout: Trade Secrets in Pop Culture

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Tangibly launched in February as a solution for companies to manage their trade secrets. Tangibly offers two distinct products: (1) a cloud-based platform that provides a dashboard where users can manage their assets and associated people and (2) a platform designed to make it easy for companies to execute and track NDAs.

Tangibly’s founder and CEO Tom Londergan said that Tangibly is architected around five questions companies should be able to answer regarding their trade secrets:
Continue Reading New Platform Launches to Manage a Company’s Trade Secrets

The U.S. Food and Drug Administration (“FDA”) is strongly encouraging cannabis producers to share information regarding their clinical studies with the FDA, so it, in turn, can better understand the effects of chronic use of cannabis. This will then help the FDA develop sound science-based policies and regulations relating to cannabis and cannabis derived products. But cannabis producers also understandably want to protect their trade secret information in this rapidly growing industry. The FDA’s DMF process may be the solution where everybody can win.
Continue Reading High-ly Sensitive Information: Use of FDA’s DMF Process to Protect Cannabis Trade Secrets

Recent United States Department of Justice (“DOJ”) indictments of Chinese hackers provide a reminder that trade secrets and other intellectual property stored on databases are attractive targets to bad actors. The DOJ announced that seven international defendants were charged in connection with computer intrusion campaigns impacting more than 100 victims in the United States and abroad.

The victims of the cyberattacks included software development companies, computer hardware manufacturers, telecommunications providers, social media companies, video game companies, non-profit organizations, universities, think tanks, and foreign governments. The hacking facilitated the theft of source code, software code signing certificates, customer account data, and other valuable business information. These cyberattacks also enabled the defendants’ other criminal schemes, including ransomware attacks and “crypto-jacking” schemes, which involve the unauthorized use of victim computers to “mine” cryptocurrency.Continue Reading DOJ Indictment of Chinese Hackers for Break-Ins at 100 Companies Reinforces The Importance of Protecting Trade Secrets and Implementing Security Protections

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

Crowell & Moring invites you to attend the fifth installment of our Trade Secrets Webinar Series – The Revolving Door of Autonomous Vehicle Talent: Managing Employee Access to Trade Secrets & Facilitating Robust Investigation of Safety Issues, taking place on Tuesday, May 12th at 02:00 pm (EDT).

Autonomous Vehicle (“AV”) developers have been aggressively working to safeguard their vital design documents and data, and have increasingly relied on lawsuits to protect their proprietary information and to prevent such information from reaching their competitors as human talent continues to revolve through the AV industry. Given the increasing popularity of self-driving technology, AV developers should remain vigilant in protecting the trade secrets governing their autonomous vehicle programs and should be sure to implement sound policies for retrieving data upon employee departure.

Join Crowell & Moring attorneys Cheryl Falvey, Rukiya Mohamed, and Paul Mathis for a live discussion on trade secret and liability issues unique to AV developers as well as best practices.

To register, please click here.
Continue Reading Please Join Us for the Fifth Installment of our 2020 Webinar Series: The Revolving Door of Autonomous Vehicle Talent

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

Companies and other organizations increasingly must face serious and complex threats to their business and infrastructure.  Whether the threat is trade secret theft, rogue insiders, cybercrime adversaries, aggressive competitors, or misconduct by business and supply chain partners, companies should remain constantly vigilant and defense ready. Adversaries, including especially cybercriminals operating exclusively in the digital domain, are often highly motivated, sophisticated, resourced, and innovative. The opaque, pervasive, and global nature of modern digital networked environments presents opportunities for criminals. The sophistication and relentless creativity of these bad actors pose significant challenges to companies and law enforcement agencies in being able to detect, assess, mitigate, attribute, and deter these threats. Because available tools and real-world practices to address these threats often outpace the law, companies are called upon to develop their own comprehensive approaches to investigate and remediate these forms of risk. In doing so, companies must be willing to assume a certain level of risk to effectively investigate and obtain sufficient insight to counter the problems.
Continue Reading Complex Threat Investigations: Tips for Investigating Trade Secret Misappropriation and Other Digital Crimes

Chinese national and materials scientist Hongjin Tan has pled guilty to stealing from his former employer Phillips 66 (“Phillips”) more than $1 billion in trade secrets related to next generation battery technology.

DOJ announced Tan’s guilty plea this week which revealed that he copied substantial research and development files that he knew contained protected company…