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On Friday, September 9, the U.S. Chamber of Commerce urged the Obama Administration to take more action against the theft of trade secrets and other intellectual property.  The Chamber did so in response to a Request for Information issued by the National Institute of Standards and Technology (NIST), seeking industry input regarding various cybersecurity…

On June 15, Crowell & Moring hosted a trade secrets webinar, “What the New Federal Trade Secrets Law Means for Your Clients.” The panelists, Mark Klapow, Mark Romeo, Mike Songer, and Vince Galluzzo provided an overview Defend Trade Secrets Act (DTSA), signed by President Obama in May. The panelists also discussed how the courts are…

The Texas Supreme Court on Friday issued its first decision interpreting the recently enacted Texas Uniform Trade Secrets Act (TUTSA), holding that a defendant’s corporate representative does not have an absolute right to remain in the courtroom while a plaintiff’s trade secrets are discussed.  In re M-I L.L.C. d/ba/ MI-Swaco, No. 14-1045 (Tex. Jan. 13, 2016).  The Court’s decision is significant both because it is the first time the Texas Supreme Court has addressed the relatively new legislation (TUTSA was passed in late 2013), but also because its signals the Court’s willingness to interpret TUTSA expansively.
Continue Reading Texas Supreme Court Issues First Texas Uniform Trade Secrets Act Decision

Another court has rejected the broader interpretation of the Computer Fraud and Abuse Act (“CFAA” or “the Act”) as applying to employees who exceed their authorized use.  A recent decision in Minnesota highlights the issue of whether the Act imposes civil liability on employees who have permission to access their employers’ data, but do so with a wrongful purpose.  See TripleTree, LLC v. Walcker No. 16-609, 2016 WL 2621954 (D. Minn. May 6, 2016).

The court considered this question in the context of a trade secrets case.  A former employee of TripleTree, an investment banking company, was discovered to have accessed the Company’s confidential information and to have engaged in a series of suspicious activities just prior to leaving the Company for a competitor.  Id. at *1.  TripleTree filed claims against its former employee for, among other things, violating the CFAA and the Minnesota Uniform Trade Secrets Act.  Id. at 2. 

The court sua sponte considered whether it should dismiss TripleTree’s CFAA claim.  Id. at *3.  The CFAA sanctions a person who “intentionally accesses a computer without authorization or exceeds authorized access, and thereby obtains  . . . information from a protected computer.”  18 U.S.C. § 1030(a)(2)(c).  Any person who suffers from a violation of the Act may bring a civil claim for damages.  18 U.S.C. § 1030(g).  As an employee of TripleTree, the Defendant was permitted to access the Company’s confidential information.  The court considered whether the Defendant’s malicious intent in accessing the information transformed an otherwise lawful act (using the Company’s computers) into a violation of the CFAA.Continue Reading Recent Case Highlights Circuit Split on Important Computer Fraud and Abuse Act Question

Today, the European Parliament approved a Directive that seeks to simplify and harmonize the law on trade secrets throughout the European Union with a vast majority (503 in favor, 131 against and 18 abstentions). The Directive was first proposed in 2013. Although the initial proposal was deliberately kept ‘low profile,’ it was the subject of heated debates up until today’s vote. Certain members of parliament indeed invoked the ‘Panama Papers’ and requested that the vote be suspended until the European Commission would have prepared its proposal specifically dealing with whistleblowers. The vote now goes to the EU Council. As this typically is but a formality, it is likely that the Council will approve the Directive as it reads today. If it does, EU member states will have roughly two years to replace their current patchwork of trade secret law and implement the Directive into national law.

The Directive’s stated intent is to “enhance the competitiveness of European businesses and research bodies” and to “improve the conditions/framework for the development and exploitation of innovation and for knowledge transfer” within the EU.
Continue Reading European Parliament Votes for Simple Cross-Border Trade Secret Law

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On Monday April 4, after remarks from the bill’s sponsors Orrin Hatch (R) Utah and Christopher Coons (D) Delaware, the Senate voted 87-0 in favor of the Defend Trade Secrets Act of 2015, S. 1890. As we have previously reported, the Act will create a federal civil cause of action for trade secrets misappropriation,…

Tort claims of trade secret theft, fraud, unfair competition, tortious interference with contract, and civil conspiracy can fall within the scope of an overly broad arbitration clause. Medversant Technologies, LLC v Leverage Health Solutions, LLC, et al., 114 F. Supp. 3d 290 (E.D. Pa. 2015). In this case, the district court looked “not to the labels or legal theories attached to the claims,” but rather “focused on the factual underpinnings of the claim” when assessing whether these claims fell within the scope of the arbitration clause of a business development and marketing consulting agreement.  Id. (citing CardioNet, Inc. v. Cigna Health Corp., 751 F.3d 165 , 173 (3d Cir.2014)).

In this case, the plaintiff (“Medversant”) hired the defendant (“Leverage”) to provide
Continue Reading Beware of a Broad Arbitration Clause