Defend Trade Secrets Act (DTSA)

For the first time, a United States federal court has held that a civil action for private damages under the Defend Trade Secrets Act (“DTSA”) can arise from acts of misappropriation that occur completely outside the United States – as long as they have a nexus with some activities within the U.S. In Motorola Sols., Inc. v. Hytera Commc’ns Corp., Ltd., No. 1:17-cv-1973 (N.D. Ill. Mar. 6, 2020) (an earlier decision in this case was previously discussed on this blog here), Motorola alleged that Hytera Communications, a Chinese company, hired away three engineers who then took with them Motorola trade secrets, including thousands of Motorola’s confidential technical documents containing millions of lines of source code and other highly confidential information.

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Crowell & Moring invites you to attend the second installment of our Trade Secrets Webinar Series: Trade Secrets are Not Intellectual Property – At Least Not in the European Union, taking place on Tuesday, February 11th at 11:00 am (EDT).

How are trade secrets defined in the EU versus in the US?

How do the US and EU judicial bodies differ in their view of trade secrets, and how does that protect, or leave vulnerable, your company’s most valuable information?

How might cross-border (or transnational) companies protect their intellectual property assets and prepare for threats when subject to dual (EU & US) enforcement?

During this webinar, Crowell & Moring attorneys Jan-Diederik Lindemans and Judith Bussé will guide you through the small differences in the language and theory behind the EU Trade Secrets Directive and the US Defend Trade Secrets Act (DTSA), and the important consequences these have on your trade secrets protection and strategy.

To register, please click here.
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The Southern District of California recently confirmed that the California Uniform Trade Secrets Act (“CUTSA”) does not preempt other civil claims to extent they are based on wrongful conduct relating to non-trade secret intellectual property.

The case involves an employee leaving a company and allegedly commercializing its trade secret with a competitor. Defendant Mr. Corey was an original co-founder of Plaintiff Javo – which sold coffee, tea, and botanical extracts. He played a key role in developing Javo’s proprietary process for making extracts. The process involved using a specially made extraction vessel and particular levels of water quality, temperature and pressure. In 2011, as a result of Chapter 11 bankruptcy proceedings, Javo terminated Mr. Corey’s employment. Importantly to this case, his employment agreement had included an assignment of all his rights and interests in any trade secrets to Javo.

Mr. Corey went on to work for the Defendant, California Extraction Ventures (“CEV”). Shortly thereafter, Mr. Corey filed patent applications disclosing some of Javo’s allegedly proprietary information, including purported trade secret information, as well as other confidential (but not trade secret) information. Rather than assign the patent applications to Javo, Mr. Corey assigned them to CEV, his new employer. Eventually seven patents issued, and seven additional applications were published.
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Legal services company CBX Law, LLC doing business as Latitude (“Latitude”) brought a lawsuit against alleged copycat company Lexikon Services, LLC in Tennessee state court. Latitude is seeking damages and injunctive relief based on allegations of trade secret misappropriation under the federal Defend Trade Secrets Act and Tennessee’s Uniform Trade Secrets Act, breach of contract,

Christopher M. Warman allegedly has some valuable fudge recipes. In his second action to protect what he claims to be a valuable trade secret recipe for fudge, Warman’s complaint does not sugar-coat the parties’ sticky situation. He and his company have sued his ex-wife, Christine Falvo, and her company for a myriad of claims—trade secret

On July 30th, 2019, the District Court for the Southern District of New York held that a news outlet’s publication of the Democratic National Convention’s (DNC) allegedly stolen trade secrets did not violate the Defend Trade Secrets Act, 18 U.S.C. § 1831, et seq. (“DTSA”).

In April 2018, the DNC filed suit against the Defendants, alleging that the Russian Federation’s military intelligence agency unlawfully hacked into the DNC’s computers and conspired with WikiLeaks to publicly distribute stolen campaign materials, which were at times helpful to the Trump Campaign.
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The United States District Court for the Northern District of Illinois recently unsealed a December 13, 2017 indictment of Chinese national, Xudong “William” Yao, who was charged with nine counts of trade secret theft. The charges stem from Yao’s theft of more than 3,000 files between September 2014 and February 2015, including trade secret information such as source code and technical specifications, from an unnamed suburban Chicago locomotive manufacturer. The stolen documents generally pertain to the Illinois manufacturer’s train control systems. According to the indictment, Yao began downloading files just two weeks after beginning his employment with the Illinois company and continued to download files while simultaneously negotiating for and accepting a job with a Chinese “provider of automotive telematics service systems.” He began working for the Chinese company several months after being fired from the Illinois company for reasons unrelated to the theft of documents, and Yao’s employer did not discover the theft until sometime later.
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A recent decision from the Eighth Circuit serves as a reminder that trade secret holders must not sleep on their rights when presented with information that would put a reasonable person on notice of potential misappropriation. See CMI Roadbuilding, Inc. v. Iowa Parts, Inc., No. 18-1075, 2019 WL 1474022 (8th Cir. Apr. 4, 2019).

Two New England craft beer companies are dealing with a hangover from a contentious trade secret dispute. Massachusetts-based franchisor Craft Beer Stellar, LLC recently filed a complaint in Massachusetts federal court against Maine-based franchisee Hoppy Days, LLC. Plaintiff brought breach of contract claims in addition to alleging violations of the Defend Trade Secrets Act, the