The COVID-19 crisis has presented an array of novel issues for companies, including new and unexpected cybersecurity threats. In addition to the now well-known security limitations of video platforms such as Zoom, we are seeing cyber-attacks in the form of COVID-19 related phishing attempts and ransomware attacks. In at least some of these attempted hacks, cybercriminals are hoping to steal trade secrets.

  • Cybercriminals are taking advantage of the novel at-home working environment and the increased fear and uncertainty surrounding the pandemic to launch malware and phishing attacks related to COVID-19.
  • Employees may be more likely to click a link or open an attachment, even though they would never consider doing so in a normal situation at work.
  • Therefore, malware may pose more of a danger than it did when employees primarily accessed their email over their employers’ traditionally more protected systems.
  • Companies should consider putting employees on notice about the COVID-19 related phishing attempts and provide examples of common scams.


Continue Reading COVID-19 and the Unique Opportunity for Phishing

Crowell & Moring invites you to attend the fifth installment of our Trade Secrets Webinar Series – The Revolving Door of Autonomous Vehicle Talent: Managing Employee Access to Trade Secrets & Facilitating Robust Investigation of Safety Issues, taking place on Tuesday, May 12th at 02:00 pm (EDT).

Autonomous Vehicle (“AV”) developers have been aggressively working to safeguard their vital design documents and data, and have increasingly relied on lawsuits to protect their proprietary information and to prevent such information from reaching their competitors as human talent continues to revolve through the AV industry. Given the increasing popularity of self-driving technology, AV developers should remain vigilant in protecting the trade secrets governing their autonomous vehicle programs and should be sure to implement sound policies for retrieving data upon employee departure.

Join Crowell & Moring attorneys Cheryl Falvey, Rukiya Mohamed, and Paul Mathis for a live discussion on trade secret and liability issues unique to AV developers as well as best practices.

To register, please click here.
Continue Reading Please Join Us for the Fifth Installment of our 2020 Webinar Series: The Revolving Door of Autonomous Vehicle Talent

The COVID-19 pandemic is shining a new light on the risk of trade secret theft to businesses worldwide from greater employee mobility associated with rising unemployment and a looming recession, cyberattacks by opportunistic hackers, and a growing remote workforce with technological threats from increased use of smart devices that may leave little to no data trail.

Companies should not only consider what to do to safeguard their trade secrets now, as explored in our earlier post on Trade Secret Protection During the COVID-19 Pandemic, but how best to create and communicate the plan for responding to any discovery of trade secret misappropriation.
Continue Reading Are You Ready to Respond to Trade Secret Theft in the COVID-19 Age?

Are non-competes still enforceable in middle of the unprecedented economic disruption caused by COVID-19? Many employers have reacted to the business impact of COVID-19 by downsizing and laying off employees, some of whom signed non-compete agreements or restrictive covenants to protect the employer’s legitimate business interests, including its trade secrets and confidential information. Those same businesses now are left wondering whether those non-compete agreements are enforceable in the wake of massive unemployment triggered by the pandemic.

The answer to this question is complex, and depends on state law, public policy, and the terms of the specific agreements. Each state scrutinizes non-competes and restrictive covenants differently and, therefore, the answer may be different depending on where the business and employee are located or the agreement’s choice of law provision.
Continue Reading Non-Compete Agreements and Restrictive Covenants During COVID-19

When does a cause of action come close enough to a trade secret claim to become preempted by the California Uniform Trade Secrets Act (“CUTSA”)? CUTSA preempts statutory and common law claims “based upon misappropriation of a trade secret.” In other words, with some exceptions, claims predicated on trade secret misappropriation allegations may only be asserted through a CUTSA claim.

California courts have articulated two different CUTSA preemption tests: (1) the “common nucleus” test and (2) the “dependence” test. In many cases, the two tests will yield the same result. Sometimes, however, the tests will produce divergent outcomes.
Continue Reading Two Tests for Trade Secret Preemption under California Law

On April 21, 2020, Lex Machina released the third iteration of its annual trade secret litigation report (request the report here). Based on data from federal district court filings in Lex Machina practice areas from 2010 – 2019, the report reveals several interesting items worth highlighting.

First, trade secret cases increased by about 30% between 2015 and 2017. This is no surprise given the May 2016 passage of the Defend Trade Secrets Act – the first federal statute directed at trade secrets. But, since 2017, the increase in trade secret filings has leveled off, with roughly the same number of cases in 2017, 2018, and 2019 (around 1400 in each year). Remarkably, the number of cases in these three years is within five of each other.

Second, the report provided stats for the other common causes of actions pled in trade secret cases.
Continue Reading Lex Machina Releases New Trade Secret Litigation Report

On April 20, 2020, the Supreme Court granted cert in Van Buren v. United States, to resolve an important circuit split over the meaning of “authorized access” under the Computer Fraud and Abuse Act (CFAA). This is the Court’s first foray into analyzing the precise contours of CFAA liability. Van Buren may have far-reaching implications for any individual or business operating in the digital domain, as the scope of civil and criminal liability under the CFAA can impact just about any sort of relationship involving access to computer systems, whether it be employer-employee relationships or third-party relationships.

The CFAA was enacted in 1986 as a first-of-its-kind statute designed to combat computer-related crimes, and has become an important and powerful tool for not only for the government but any business seeking to protect its intellectual property and computer systems. The CFAA imposes criminal liability on any person who “intentionally accesses a computer without authorization” or “exceeds authorized access” and, in doing so, obtains information from any protected computer. The CFAA also provides a civil cause of action for similar conduct. See 18 U.S.C. §§ 1030(a)(2), 1030(a)(4), 1030(a)(5)(B)-(C).
Continue Reading “Authorized Access”: The Supreme Court’s First Foray Into The Computer Fraud and Abuse Act

A recent English court decision for the first time explores the overlap between trade secret claims under the EU Trade Secrets Directive 2016/943 and English equitable and common law claims for breach of confidence.

In Trailfinders Limited v Travel Counsellors Limited & Ors [2020] EWHC 591 (IPEC), travel agency Trailfinders brought a case against competitor TCL and four former employees who allegedly exploited customer lists and accessed Trailfinders’ customer database after joining TCL to exploit confidential information to their and TCL’s benefit.

In analyzing whether information taken by employees rose to the level of trade secrets, the judge turned to “the definition of ‘trade secret’ in art.2(1) of Directive 2016/943 (always bearing in mind the broad interpretation of ‘trade secret’ in the Directive).” Trailfinders Limited v Travel Counsellors Limited & Ors [2020] EWHC 591 (IPEC), [29]. Trade secrets under the EU Trade Secrets Directive, implemented in the United Kingdom by Trade Secrets (Enforcement etc.) Regulation 2018, must meet all of the following requirements: “(a) it is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question; (b) it has commercial value because it is secret; (c) it has been subject to reasonable steps under the circumstances, by the person lawfully in control of the information, to keep it secret.” The judge recognized that there were different categories of information that employees could be exposed to during employment which were entitled to varying levels of protections.
Continue Reading English Court Addresses Intersection of Trade Secrets Directive and Common Law Breach of Confidence Claims

In addition to reshaping how business is being done, COVID-19 has presented companies with unprecedented challenges and an increasingly remote work force and has made it more important than ever for businesses to evaluate the security and protection of their trade secrets and confidential information.

Crowell & Moring attorneys Jim Stronski, Anne Li,

We continue our coverage of English Confidentiality Protections in Trade Secret and IP Cases by exploring a recent decision involving access of party experts to confidential information and trade secrets as part of confidentiality rings.

In Infederation Limited v Google LLC & Ors [2020] EWHC 657 (Ch), Infederation Limited a/k/a Foundem – a provider of online shopping comparison services – brought a case against Google alleging Google’s search result algorithms purportedly reduced its “ranking” in violation of competition law. The parties agreed to three confidentiality rings: (1) a top “confidential” ring including the founding members of Foundem, external solicitors, counsel, and economic experts; (2) an external solicitors, counsel, and economic experts ring (the legal eyes only or “LEO” ring); and (3) a further restricted “RLEO” ring, which was 10 named external solicitors and counsel. Google made an application to strike some of Foundem’s claims in part relying on evidence related to search algorithms designated as confidential, LEO, or RLEO. In order to review and evaluate these specially designated exhibits, Foundem requested that its search engine optimization (“SEO”) expert Mr. Klöckner, who was already part of the outer confidentiality ring, be added to the LEO and RLEO rings. Google pushed back, claiming that how it ranks search results should be kept confidential or its value would be lost and that it was unlikely that Mr. Klöckner could keep the knowledge he gained from his role in the proceedings separated from his independent work as an SEO consultant. Infederation Limited v Google LLC & Ors [2020] EWHC 657 (Ch) [24-26].
Continue Reading English Trade Secrets Proceedings: Experts May Be Permitted Access to Information In Confidentiality Rings