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Every year since 2009, the United State Department of Justice (“DOJ”) has published a report that details actions the DOJ has taken to implement Title IV of the Prioritizing Resources and Organization for Intellectual Property Act of 2008 (“PRO IP Act”). The PRO IP Act reports also summarize efforts, activities, and resources that the DOJ has allocated to intellectual property enforcement. There are now a dozen PRO IP Act reports available on the DOJ’s website, and they offer useful insights into how the DOJ prioritizes the enforcement of intellectual property rights and the prosecution of those violating IP rights domestically and abroad.

Under the PRO IP Act, the Office of Justice Programs can grant awards to state and local IP law enforcement task forces. The awards are designed to provide national support through training and technical assistance and improve the capacity of state and local criminal justice systems to address criminal IP enforcement, including prosecution, prevention, training, and technical assistance.Continue Reading What the DOJ Annual Reports Reveal About Federal Trade Secret and IP Protection Efforts

Restrictive covenants and non-compete agreements have been a frequent topic of this blog in recent months, and rightfully so. Non-competes are generally thought to be effective tools to help firms protect trade secrets and competitive advantages. However, these agreements are falling out of favor across the country – the DOJ recently file a Statement of Interest in a state court case taking the position that non-competes may violate the Sherman Antitrust Act. Further, states continue to pass laws limiting or banning the use of noncompete agreements, including Illinois, Oregon, Nevada, D.C., and Colorado. 

But one Texas court seems to buck this trend. Last month, Fort Bend County District Judge J. Christian Becerra granted a temporary restraining order (“TRO”) in a trade secret misappropriation case, forcing multiple former employees to stop work for a competing business, and limiting one particular employee from engaging in any competing work for any competitor. The catch? Not a single employee had a non-compete agreement.Continue Reading No Non-Compete? No Problem. Texas Court Grants TRO Forcing Former Employees to Stop Working for Competing Business.

To continue our series on trade secret employee contract clauses, we’ve surveyed the First Circuit for updates to the law relating to restrictive covenants. Such covenants remain predominantly governed by statutes in Maine, Massachusetts, New Hampshire, and Rhode Island, while Puerto Rico continues to govern them by common law. And with no significant updates since 2020, restrictive covenants remain disfavored and under increased scrutiny in the First Circuit. Generally, these courts will only enforce noncompete agreements that are reasonable, no broader than necessary to protect an employer’s legitimate business interests, properly noticed, and in line with public policy. The applicable law for each state is set forth below.
Continue Reading Restrictive Covenants in the First Circuit

The California Office of the Attorney General issued its first opinion interpreting the California Consumer Privacy Act (CCPA) on March 10, 2022, addressing the issue of whether a consumer has a right to know the inferences that a business holds about the consumer. The AG concluded that, unless a statutory exception applies, internally generated inferences that a business holds about the consumer are personal information within the meaning of the CCPA and must be disclosed to the consumer, upon request. The consumer has the right to know about the inferences, regardless of whether the inferences were generated internally by the business or obtained by the business from another source. Further, while the CCPA does not require a business to disclose its trade secrets in response to consumers’ requests for information, the business cannot withhold inferences about the consumer by merely asserting that they constitute a “trade secret.”Continue Reading California AG Interprets “Inferences” Under CCPA

For companies that rely heavily on R&D, such as those in the biotechnology, pharmaceutical, and associated manufacturing industries, IP forms some of their core assets. Protecting these assets is critical, and choosing between patents and trade secrets is not always straightforward.

This decision involves flexibility, understanding, and factoring in the ever-changing case law interpretations, which…

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Earlier this week, a Virginia jury awarded software company Appian Corp. more than $2 billion in damages after finding that competitor software company Pegasystems Inc. had misappropriated its trade secrets. The complaint alleged that Pegasystems engaged in corporate espionage and trade secrets theft in an effort to better compete with Appian. Pegasystems hired Youyong Zou, an employee of a government contractor and former developer for Appian. In exchange for payment, Zou provided Pegasystems with copies of Appian’s confidential software and documentation in violation of confidentiality restrictions that barred him from sharing Appian’s trade secrets. In 2020, Appian filed suit against both Pegasystems and Zou.
Continue Reading $2B Jury Verdict in Trade Secrets Suit

As a part of our series on trade secret employee contract clauses, we have surveyed the Seventh Circuit for updates on  the law pertaining to Restrictive Covenants. Each state’s laws are set forth below. But generally in the Seventh Circuit, states focus on reasonableness, geographic, and income restraints in restrictive covenant agreements. Indiana applies a reasonableness-standard common law approach to enforcing covenants, strictly construed against the employer. Wisconsin’s restrictive covenant statute also focuses on reasonableness restraints, and will void all parts of the covenant even if remaining portions are reasonable. Illinois recently passed a restrictive covenant statute in 2021, the Illinois Freedom to Work Act, which codifies the state’s longstanding common law, adding provisions restricting covenants against certain incomes and professions.
Continue Reading Restrictive Covenants in the Seventh Circuit

Within the Tenth Circuit, states vary in their enforcement of restrictive covenants. Wyoming, Kansas, and New Mexico govern the use of restrictive covenants through common law while Utah, Colorado, and Oklahoma govern through statute. Oklahoma is unique in that it prohibits restrictive covenants through statute. In the other five states, despite the variations in governing authority, many of the factors used are similar given the widely accepted “reasonableness” standard many jurisdictions have adopted as a metric for adjudicating the propriety of such agreements.
Continue Reading Restrictive Covenants in the Tenth Circuit

Use of an algorithm disclosed in a textbook in a different field may warrant trade secret protection according to a recent Federal Circuit decision in Masimo Corp. v. True Wearables, Inc., No. 2021-2146, 2022 WL 205485 (Fed. Cir. Jan. 24, 2022). In this case, the Federal Circuit upheld a preliminary injunction to prevent an optimization algorithm from being released even though the defendants presented that the equivalent of the algorithm had been published in a conference paper cited more than 1,200 times and in statistic textbooks since 1960s.

Masimo and Cercacor filed a suit against True Wearables and Dr. Lamego and requested for a preliminary injunction to prevent the plaintiff’s trade secret from being released to the public. The purported trade secret is an optimization algorithm used by the plaintiff on medical devices for measuring blood characteristics. Dr. Lamego is a former employee of Cercacor, who developed the purported trade secret for Cercacor and left Cercacor to found True Wearables (TW). Masimo’s preliminary injunction requested to bar TW’s patent application, which bears Masimo’s trade secret of the optimization algorithm as alleged by Masimo, from issuing.
Continue Reading Trade Secrets Not So Secret: Conventional Technique, New Application

The Sedona Conference, Working Group 12 on Trade Secrets, has released for public comment its guidance on the governance and management of trade secrets. This valuable Commentary outlines the inherent challenges in developing a trade secret protection program that aligns with a business’s goals and measurable objectives.

The Commentary recommends businesses focus on the following factors to evaluate trade secret protection programs:

  • The size, maturity, industry, and location of the business;
  • The nature and value of a business’s trade secrets;
  • How the business can leverage its trade secrets to commercialize new services and extract additional value, maintain its competitive advantage, and incentivize innovation;
  • The different measures available to protect the business’s trade secrets and their varying effectiveness; and
  • The extent and cost of measures taken and the rationale for measures not taken.

In the end, the Commentary advocates an “integrated enterprise” approach to trade secret governance in order to accommodate multiple and potentially conflicting corporate interests. This approach requires several steps:
Continue Reading The Sedona Conference Solicits Public Comment on its Commentary on the Governance and Management of Trade Secrets