International Developments

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

Crowell & Moring invites you to attend the third installment of our “Safeguarding Your Secrets in the Digital Age” webinar series: How to Work with Third-Parties, Including Those Internationally, taking place on Tuesday, November 12th at 12:00 pm (EDT).

During this webinar, Crowell & Moring Counsel Raija Horstman and Associate Judith Bussé will

After posts considering confidentiality protections under the EU Trade Secrets Directive 2016/943 when litigating in various jurisdictions, we next turn to how these issues arise in the context of arbitration.

Where trade secrets are protected by a contract, an opportunity arises for parties to consider alternative dispute resolution mechanisms including arbitration and whether to adopt express rules in arbitration that protect confidentiality.
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In our next post on the EU Trade Secrets Directive 2016/943, we turn to the Netherlands. In the Netherlands, the EU Trade Secrets Directive was implemented in 2018 by the Act on the Protection of Trade Secrets (Wet bescherming bedrijfsgeheimen) and led to amendments to Dutch procedural law including those related to confidentiality clubs. For example, access to alleged trade secrets introduced in proceedings is granted to at least one person of the opposing party and that party’s lawyer under confidentiality restrictions. (Article 1019ib, Dutch Code of Civil Procedure). Depending on the nature of the trade secret, however, the court may order that access to certain documents be limited to only a lawyer or another authorized representative but not a representative of the opposing party. (Article 22a(3), Dutch Code of Civil Procedure).
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The EU Trade Secrets Directive 2016/943 contains a variety of confidentiality protections expressly protecting the publicity of the proceedings because “[t]he prospect of losing the confidentiality of a trade secret in the course of legal proceedings often deters legitimate trade secret holders from instituting legal proceedings to defend their trade secrets, thus jeopardising the effectiveness of the measures, procedures and remedies provided for.  For this reason, it is necessary to establish, subject to appropriate safeguards ensuring the right to an effective remedy and to a fair trial, specific requirements aimed at protecting the confidentiality of the litigated trade secret in the course of legal proceedings instituted for its defence.”  Article 9 of the Directive specifically required EU member states to implement rules creating such protections, such as by restricting access to hearings and creating so-called “confidentiality rings” or “confidentiality clubs” limiting the dissemination of confidential information and documents to designated persons.

The United Kingdom’s implementing law, the Trade Secrets (Enforcement, etc.) Regulations 2018, requires that the court have the power to restrict access to documents containing alleged trade secrets and to hearings. s. 10(5).  There is already significant maturity in the kinds of confidentiality protections available in English litigation so this is unlikely to lead to significant change.  Although the principle of open justice is a fundamental feature of the legal system and departures are permitted only if necessary in the interests of justice, exceptions and restrictions to openness and respect for confidentiality are actually already well-established in the United Kingdom. See McKillen v Misland (Cyprus) Investments Ltd and others [2012] EWHC 1158 (Ch).
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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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On June 28, 2019, the Luxembourgish Mémorial published the Law of June 26, 2019 on the protection of undisclosed know-how and business information better known as trade secrets implementing the EU Trade Secrets Directive 2016/943 after a one year delay. The recent Luxembourgish Law is a literal transposition of the EU Directive and provides a legal definition of “trade secrets,” which was up until now only defined by the courts. The EU Directive defined “trade secret” as information that (i) is secret, i.e. not publicly known or readily accessible to persons normally dealing with this kind of information, (ii) has commercial value because it is and remains a secret, and (iii) has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret. This definition thus includes any kind of sensitive business information that is kept secret by reasonable measures, such as market studies, business plans, pricing information, etc.
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A recent International Trade Commission (ITC) case shows that, although rarely used, the ITC remains a viable option for parties pursuing trade secret misappropriation claims. Trade secret claims can be brought under Section 337(a)(1)(A)’s catch-all for other “unfair methods of competition and unfair acts in the importation of articles”—often called “non-statutory” claims—and can result in

Curvature Inc. brought suit against British contractor Cantel Computer Services LTD (“Cantel”) for breach of contract, unfair and deceptive trade practices, tortious interference, and violations of the North Carolina Trade Secrets Protection Act in North Carolina Business Court, a special forum within North Carolina’s Superior Court that handles cases involving complex and significant issues of

Huawei Technologies Co., the world’s largest telecommunications company, and CNEX Labs Inc. went to trial this week in the U.S. District Court for the Eastern District of Texas over dueling allegations of trade secret theft relating to semiconductor chip technology behind solid-state drives. Huawei Technologies Co. Ltd. et al v. Huang et al, No.