Non-Disclosure Agreements

In a recent decision, the District Court for the Southern District of California held that despite not having direct evidence of misappropriation, a company’s lack of experience in the particular industry coupled with its behavior during business negotiations were sufficient to state a claim that a competing product misappropriated trade secrets under the Defend Trade Secrets Act (DTSA) and to defeat a motion to dismiss. 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 effective against rhinoviruses and novel respiratory pathogens, such as COVID-19. With an application to the mouth and nose, the antiviral spray 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

Tips for European employers on how to protect company trade secrets.

7 to 12 years. According to an Organisation for Economic Co-operation and Development study, this is the average amount of time spent by an employee with any one European Union employer. However, in some countries, regions and sectors, employees move around more frequently than this, and the current COVID-19 pandemic will also have had an impact on these numbers.

In any event, if one of your employees leaves, you do not want your company’s trade secrets and other confidential information to leave with them.


Continue Reading Employees may come and go. But will your trade secrets follow them?

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 February 10, the U.S. International Trade Commission (“ITC”) issued a final determination finding South Korean lithium-ion electric vehicle battery maker SK Innovation misappropriated the trade secrets of its Korean competitor LG Chem in violation of Section 337 of the Tariff Act of 1930.  The ITC issued a 10-year exclusion order blocking SK’s imports into the U.S. of lithium-ion batteries and related products, but with substantial exceptions: SK is permitted to continue importing these products specifically for Ford Motor Co.’s EV F-150 program for four years, for Volkswagen of America’s modular electric drive line for two years, and for the repair and replacement of EV batteries for Kia vehicles sold to U.S. customers.  President Biden and his U.S. Trade Representative—Katherine Tai has been nominated but not yet confirmed—now have 60 days to review the ITC’s electric vehicle battery exclusion order, an order that could be seen as in tension with the new administration’s promotion of green energy.

Continue Reading ITC Finds Trade Secret Misappropriation and Bars Electric Vehicle Batteries from SK Innovation—With Exceptions

The legal saga between L’Oreal USA Inc. and Olaplex LLC (“Olaplex”) over a hair-coloring product continues. In August 2019, a Delaware federal jury found that L’Oreal misappropriated Olaplex’s trade secrets, willfully infringed two Olaplex patents, and breached a nondisclosure agreement. The jury awarded Olaplex $22.3 million for willful infringement of trade secrets, $22.3 million for breach of contract, and $47 million for patent infringement. On March 24, 2020, the court entered a $66.2 million final judgment including attorneys’ fees and prejudgment interest.

Earlier this month, L’Oreal appealed and asked the Federal Circuit to reverse this judgment based on purported errors by the district court in (1) improperly excluding two witnesses and (2) improperly granting summary judgment on patent infringement.
Continue Reading L’Oreal Appeals $66 Million Trade Secret Judgment

On May 6, 2020, the U.S. District Court for the District of Maine denied plaintiff Alcom’s request for a temporary restraining order (“TRO”), which sought to enjoin a competitor’s alleged misappropriation of trade secrets. The court denied the request for a TRO, holding that Alcom’s speculation about the potential harm it would suffer absent the TRO was not enough to show a likelihood of irreparable harm, as required to obtain a TRO. The case serves as a reminder that when proving irreparable harm, courts require more than just speculation.

In 2015, Alcom (a trailer manufacturer) hired Mr. Temple (defendant) as a sales representative for its horse and livestock trailers. As the sole salesperson in North America for the Frontier line of trailers, Mr. Temple gained significant responsibilities including developing and maintaining sales leads, as well as growing Alcom’s customer base for those trailers. Mr. Temple signed various agreements as conditions to his employment, including (i) confidentiality agreement, (ii) non-disclosure agreement, (iii) non-compete agreement, and (iv) a non-solicitation agreement. Alcom required Mr. Temple to sign the agreements as a precondition for accessing highly valuable and confidential company information relating to customer incentive program details, sales and marketing information, and unique insights into the needs and operational requirements of the trailer dealers he solicited.
Continue Reading Under Alcom v. Temple, Speculative Harm Does Not Meet the Irreparable Harm Requirement

A New Mexico court of appeals recently held that a former employee could not be permanently enjoined from disclosing trade secrets because his employment agreement provided for a five-year limit on the duty of confidentiality.

Lasen, Inc. (“Lasen”), a company that uses trade secret helicopter-mounted LIDAR imaging technology to detect methane gas leaks in natural gas pipelines, sued a former research scientist who wrote the source code for the company’s signature technology. Lasen alleged that the former employee stole the source code and other crucial information as well as deleted Lasen’s copies following his termination in 2009. As a result, Lasen was unable to update its LIDAR technology because it could not decipher the source code. Lasen also alleged that the former employee used its trade secrets in seeking employment with a direct competitor. After a bench trial, the court found the former employee did not misappropriate Lasen’s trade secrets, but he did breach his fiduciary duty and wrongfully retained intellectual property and trade secrets that belonged to Lasen. Therefore, the court permanently enjoined the former employee from disseminating or retaining any of Lasen’s trade secrets (the parties had stipulated that the source code was trade secret).
Continue Reading Permanent Injunctions Restricting Use of Trade Secrets May Only Be as Permanent as an Employment Contract’s Provisions

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

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,

On Monday, August 12, a Delaware federal jury found that L’Oreal USA Inc. misappropriated Olaplex LLC’s trade secrets, breached a nondisclosure agreement, and willfully infringed on two of Olaplex’s patents related to a hair-coloring product. The patents in question related to a three-step system that protects hair from damage during bleaching.

The jury deliberated for