Trade Secret Theft

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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 August 24, 2021, the Northern District of California accepted the guilty pleas of the two co-founders of the Taiwanese biopharmaceutical start-up, JHL Biotech (now known as Eden Biologiccs) for trade secret theft and wire fraud. Pending sentencing, both face steep criminal penalties and possible prison sentences.

Chief Executive Officer Racho Jordanov and Chief Operating Officer Rose Lin were indicted for engaging in a fraudulent scheme to steal confidential and proprietary materials from competitor Genetech for over a decade. With these materials, JHL Biotech boosted its own, business because it was able to “cut corners, reduce costs, solve problems, save time, and otherwise accelerate product development timelines, ” alleged the Department of Justice in their indictment earlier this summer. Acting United States Attorney Hinds called the company a “nearly $1 billion Taiwanese unicorn built on a foundation of lies.”
Continue Reading Co-Founders of Taiwanese Biotech Company Plead Guilty to Trade Secret Theft as U.S. Cracks Down on Corporate Espionage

Nonprofit organizations rely heavily on funding from donations, gifts, and the like to make an impact in the communities they serve.  Such resources are relatively scarce, and fundraising in the nonprofit world is a highly competitive endeavor.  Accordingly, carefully guarded donor and participant lists may be considered trade secrets.  N. Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 44 (2d Cir. 1999).  Under the Uniform Defend Trade Secrets Act (“DTSA”), 18 U.S.C. § 1836 et seq., a trade secret is information that derives economic value from not being generally known that is subject to reasonable measures of secrecy by its owners.  But how does a nonprofit charitable organization sufficiently plead the economic value of its donor and participant lists?
Continue Reading The Economic Value of Nonprofits—Donor and Participant Lists

Located in the heart of Europe, Belgium is a true hub of logistics and innovation. It is for example home to one of Europe’s largest sea ports (with all the warehousing infrastructure that one would expect). Belgium also hosts several, globally leading biotech and life sciences clusters. It is no coincidence for example that pharma giant Pfizer has one of its largest production and packaging sites in Puurs, a small Belgian town, where it produces its Covid-19 vaccine. A few miles north, Jansen Pharmaceuticals has its HQ.

Such hubs are not just rich in talented human resources, but also in cutting edge and highly valuable know-how. A high concentration of know-how, combined with the increased mobility of employees, means a high(er) risk of misappropriation of this valuable information by unauthorized (third) parties. When a (foreign) company suspects its know-how has been misappropriated in Belgium, it will need evidence to substantiate this allegation in court. If the know-how is (also) covered by an intellectual property (IP) right, the holder of the know-how has access to a very efficient means of collecting evidence: the descriptive counterfeit seizure whereby discovery-like evidentiary measures will be granted ex parte. When the misappropriated know-how is only protected as a trade secret, no similar measures are provided for under EU law. The Belgian judges have therefore in the past not been very eager to grant trade secret holders access to ex parte evidence-gathering. With a recent judgment, however, the Brussels Court of Appeal has left the door behind which discovery-like measures are stored for holders of trade secrets open.Continue Reading Gathering evidence of trade secret infringement in Belgium: towards discovery-like measures?

Bolsinger is still pitching! After a recent dismissal for lack of jurisdiction in California, former Major League Baseball pitcher Michael Bolsinger refiled claims against the Houston Astros in state court in Houston, Texas on May 13, 2021.  While asserting similar factual allegations as his original California complaint, the former Toronto Blue Jays pitcher has abandoned his previous unfair business practice causes of action in favor of claims for trade secret misappropriation under the Texas Uniform Trade Secrets Act and for conversion. Bolsinger claims that the pitching signs he used during his August 4, 2017 game against the Astros were trade secrets.
Continue Reading Major League … Misappropriation?

As predicted, the trade secrets battle between Olaplex, Inc. and L’Oreal continues – and L’Oreal has scored a fresh victory.  On May 6, 2021, the Federal Circuit Court of Appeals overturned a $66 million judgment against L’Oreal and ordered a new trial – but only on one of Olaplex’s patent claims.  The panel stated that Olaplex had entirely failed to show that its information was eligible for trade-secret protection, and that no reasonable jury could find otherwise.
Continue Reading Partial Victory for L’Oreal In Hair Coloring Fight

The Massachusetts Supreme Judicial Court (“SJC”) recently found that trade secret misappropriation by employees who then use the trade secrets to compete is actionable under Massachusetts’ Unfair and Deceptive Trade Practices Law.  The SJC’s ruling in Governo Law Firm v. Bergeron means that Unfair and Deceptive Trade Practices Statute, Massachusetts General Laws Chapter 93A Section 11 (“Chapter 93A”), now applies to trade secret disputes in the employer-employer context.  Previously, such cases were considered an “internal matter” and therefore not actionable.
Continue Reading Massachusetts Supreme Judicial Court Rules that Employees May be Held Liable to Their Employer Under Massachusetts’ Unfair and Deceptive Trade Practices Law

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 April 20th, U.S. Senator Lindsey Graham, R-S.C. introduced Senate bill S. 1245, “The Combating Chinese Purloining (CCP) of Trade Secrets Act.” The full text of the bill is not yet available, but a press release announcing the legislation highlighted key features of the CCP, including:

  • increasing the maximum penalty from 5 to 20 years of imprisonment for individuals who use “communication interception devices” to aid a foreign government;
  • expanding trade secret misappropriation penalties for foreign persons, including by: the U.S. Customs and Border Protection imposing import restrictions, the U.S. Department of Commerce denying export licenses, the U.S. Patent and Trademark Office rejecting applications for patent protection, and the U.S. Department of State denying visas;
  • creating grounds for inadmissibility and deportability for individuals that seek to enter, or remain in, the U.S. to engage in espionage and intellectual property theft; and
  • prohibiting the issuance of visas to Chinese nationals who present a national security risk and to prevent their pursuit of graduate-level coursework in sensitive fields.

Continue Reading Senator Lindsey Graham’s Proposed Legislation Seeks to Combat “Chinese Purloining” of U.S. Trade Secrets