Defend Trade Secrets Act (DTSA)

In a recent order, a judge in the Western District of North Carolina held that even though Plaintiff filed for a preliminary injunction in the United States, it may also arbitrate the dispute in Switzerland.  This highlights that even with an arbitration agreement in place, trade secret litigation can occur on multiple fronts.
Continue Reading Multi-Front Trade Secret Protection: Moving for Injunction in U.S. Court Does Not Stop Plaintiff from Arbitrating in Switzerland

The Seventh Circuit Court of Appeals recently upheld a preliminary injunction prohibiting a former distributor and its parent company from selling a spine implant device that incorporated trade secret information. Plaintiff Life Spine, Inc. had created a device to correct spinal spacing issues during surgery. Life Spine contracted with Defendant Aegis Spine to distribute the device only to medical facilities nationwide and to keep Life Spine’s confidential information secret and use the confidential information only in furtherance of the business relationship. However, Life Spine alleged that Aegis Spine passed confidential details, such as component dimensions to fractions of a millimeter of the device, to Aegis Spine’s parent company, who quickly developed a similar device that competed against Life Spine’s device. Life Spine sued Aegis Spine and its parent, alleging that Aegis Spine misappropriated its trade secrets, as well as other contractual and tort claims, and sought a preliminary injunction. Based on findings of trade secret misappropriation and breach of contract, the Northern District of Illinois entered a preliminary injunction against Aegis Spine and its business partners from making, marketing, distributing, selling, or obtaining intellectual property rights in the competing device to Life Spine’s device.

Continue Reading Seventh Circuit Affirms Trade Secret Protection of Patented Spinal Implant Device

The District Court for the Southern District of California held that despite not alleging direct evidence of misappropriation, a complaint’s allegations about a company’s lack of experience in the particular industry coupled with its purported behavior during business negotiations were sufficient to state a claim that an allegedly competing product misappropriated trade secrets under the Defend Trade Secrets Act (DTSA) and to defeat a motion to dismiss. According to the Complaint, Applied Biological Laboratories (ABL), a biotechnology company that researches, develops, manufacturers, and distributes healthcare products, developed an antiviral nasal technology using immunoglobulin G, a common antibody in body fluids. ABL’s antiviral nasal spray is allegedly effective against rhinoviruses and novel respiratory pathogens, such as COVID-19. With an application to the mouth and nose, the antiviral spray allegedly aids in naturally flushing pathogens and foreign particles in the digestive tract.

Continue Reading Curiosity Killed A Motion to Dismiss: A Biotech Company’s Business Negotiations Turn into a Trade Secrets Fight

As the sci-fi dream of commercialized flying cars seems close to landing in reality, the electronic vertical takeoff and landing (“eVTOL”) industry is heating up, spurring new bouts over trade secrets.

Wisk Aero LLC (“Wisk”) is a veteran eVTOL company, and has been developing the technology for over a decade. The aircraft they manufacture are often described as “air taxis” or “flying cars.”  The technology behind these aircraft is now at a sufficiently sophisticated stage that commercialized versions are imminent.

Continue Reading Flying Car Trade Secrets Dispute to Be Heard on the Merits

On June 8, 2021, the Third Circuit clarified the requirements for making a trade secret misappropriation claim under the Defend Trade Secrets Act (“DTSA”) in a decision vacating the District of New Jersey’s dismissal of a trade secret misappropriation lawsuit against a former employee and his current employer. In short, the Third Circuit’s decision took a more relaxed view than the District Court, finding that a trade-secret plaintiff need not “spell out the details of its trade secret” or have direct allegations of misappropriation and harm to avoid dismissal.

Continue Reading The Third Circuit Clarifies DTSA Pleading Requirements, While Vacating Dismissal

Changing Patent Protections

U.S. and foreign patent systems have suffered legislative and judicial reverses as
to subject matter eligibility for patenting, a rising bar of obviousness due to increasing skill of the art, insights aided by artificial intelligence (AI) tools, procedural artifacts for no-risk post grant invalidation by granting agencies, and awakening of once dormant

On March 13, 2021, borrowing from California Code of Civil Procedure § 2019.210 (which requires a plaintiff to “identify. . . trade secret[s] with reasonable particularity” before it can obtain discovery on those trade secrets), a Northern District of California judge narrowed trade secret claims asserted under the Defend Trade Secrets Act (“DTSA”) due to the plaintiff’s failure to specifically identify most of its asserted trade secrets prior to discovery.  Although not an explicit requirement under federal law, the Court reasoned that the disclosure requirement served to prevent plaintiffs from getting discovery and then using that discovery to “cleverly specify whatever happens to be there as having been trade secrets stolen from plaintiff.”  The decision could be significant for trade secret litigants going forward.

Continue Reading Federal Court Imports California Trade Secret Disclosure Rule and Narrows DTSA Claim

Since its passage in 2016, the Defend Trade Secrets Act (“DTSA”) has become a powerful tool for litigants seeking civil redress for the misappropriation of trade secrets to get into federal court.  The DTSA is particularly important because it allows litigants to seek redress for misappropriation that happens outside of the United States – overcoming the general presumption that federal law does not have an extraterritorial reach.  We recently discussed the significance of the DTSA’s application across the globe and how to effectively achieve quick recourse.

Continue Reading The Sedona Conference Publishes An Analysis of How to Seek Global Redress of Trade Secret Misappropriation

A Complaint recently filed in the Southern District of New York may shed light on courts’ willingness to apply a broad interpretation of “misappropriation” in trade secrets cases. Plaintiff Greenpoint Capital Management, which grants loans to law firms to fund high-stakes litigation, has accused Apollo Hybrid Value Management LP and Apollo Hybrid Value Management GP

On December 16, 2020, the U.S. Court of Appeals for the Ninth Circuit held for the first time in Attia v. Google LLC that a misappropriation claim under the Defend Trade Secrets Act of 2016 (“DTSA”) may be brought for a misappropriation that started prior to the enactment of the DTSA as long as the claim also arises from post-enactment misappropriation or from the continued use of the same trade secret.  The decision further expands the reach of the DTSA and provides a blueprint for other courts to rule along the same lines.

The case, which was originally filed in the Northern District of California in 2014, was brought by an architect and his firm against Google under the DTSA, the Racketeer Influenced and Corrupt Organizations Act (“RICO”), and state trade secret and contract laws for alleged misappropriation of the plaintiff’s “Engineered Architecture” technology.[1] Although the Ninth Circuit affirmed the District Court’s dismissal of the DTSA claim on the grounds that  the architect lacked standing under the DTSA because Google’s 2012 patent applications based on the “Engineered Architecture” technology placed the contested information in the public domain, extinguishing any trade secret claims over it,[2] the Ninth Circuit’s ruling was significant for other reasons, namely the expansion of the DTSA’s potential applicability.

Continue Reading Ninth Circuit Allows Defend Trade Secrets Act Claims for Conduct Predating the DTSA