NBA star Zion Williamson has more to celebrate than his recently announced five-year maximum rookie contract extension with the New Orleans Pelicans, worth up to $239 million. Williamson was also victorious in a lawsuit he filed against his former agent Gina Ford, and her agency Prime Sports Marketing LLC (“Prime Sports”). The case is Williamson v. Prime Sports Marketing LLC et al. in the District Court for the Middle District of North Carolina, No. 1:19-cv-00593.

Williamson entered into a marketing agreement with Ford and Prime Sports when he was just a freshman at Duke University. He brought suit in 2019, seeking to void the marketing agreement on the grounds that it violated North Carolina’s Uniform Athlete Agent Act (“UAAA”), by failing to include a “conspicuous” warning to the student athlete that execution of the contract would result in a loss of intercollegiate eligibility. In January 2021, the court ruled in favor of Williamson, holding that Williamson’s agreement with Ford and Prime Sports failed to contain the required warning, and also failed to meet the UAAA’s requirements in several other respects. The court thus deemed the marketing agreement void and unenforceable.

Continue Reading NBA Star Zion Williamson Secures Wins on the Basketball Court and in the Courtroom, After Defeating Claims of Trade Secret Misappropriation

The US Department of Justice (“DOJ”) recently filed a Statement of Interest in connection with a pending case in Nevada State Court, Samuel Beck, et al. v. Pickert Medical Group, P.C. et al., further highlighting the DOJ’s heightened scrutiny of post-employment restrictive covenants under the antitrust laws and their effects on competition. In this noteworthy Statement of Interest, the DOJ takes the position that post-employment restrictive covenants may constitute both horizontal and vertical restraints of trade that violate the Sherman Antitrust Act. The Statement of Interest follows the DOJ and FTC’s  2017 Antitrust Guidance for Human Resources Professionals which addressed how antitrust law can apply to employee hiring and compensation and a December 2021 DOJ and FTC workshop that addressed how contractual restraints on trade can harm labor markets, as well as recent executive orders and statements by the Biden administration limiting and criticizing the use of noncompetition agreements with employees. The DOJ’s Statement of Interest thus represents yet another step up in pressure by the federal government signaling it will continue taking more action to discourage the use of contractual restraints on trade in employment-related agreements.
Continue Reading Enforceability of Non-Compete Agreements; Recent Input from the DOJ

The Ninth Circuit recently issued an opinion that serves as a reminder of the importance of developing robust affirmative evidence of damages suffered as a consequence of trade secret misappropriation, including the causation of those damages. In Joshua David Mellberg LLC v. Will, the plaintiffs filed an action against its former employees and their new company for misappropriation of trade secrets and unjust enrichment. The district court granted summary judgment to defendants and the Ninth Circuit affirmed.
Continue Reading Ninth Circuit Reminds Plaintiffs That Trade Secret Misappropriation Damages Without Adequate Proof of Causation Are Not Enough

In a recent order, a judge in the Western District of North Carolina held that even though Plaintiff filed for a preliminary injunction in the United States, it may also arbitrate the dispute in Switzerland.  This highlights that even with an arbitration agreement in place, trade secret litigation can occur on multiple fronts.
Continue Reading Multi-Front Trade Secret Protection: Moving for Injunction in U.S. Court Does Not Stop Plaintiff from Arbitrating in Switzerland

The Seventh Circuit Court of Appeals recently upheld a preliminary injunction prohibiting a former distributor and its parent company from selling a spine implant device that incorporated trade secret information. Plaintiff Life Spine, Inc. had created a device to correct spinal spacing issues during surgery. Life Spine contracted with Defendant Aegis Spine to distribute the device only to medical facilities nationwide and to keep Life Spine’s confidential information secret and use the confidential information only in furtherance of the business relationship. However, Life Spine alleged that Aegis Spine passed confidential details, such as component dimensions to fractions of a millimeter of the device, to Aegis Spine’s parent company, who quickly developed a similar device that competed against Life Spine’s device. Life Spine sued Aegis Spine and its parent, alleging that Aegis Spine misappropriated its trade secrets, as well as other contractual and tort claims, and sought a preliminary injunction. Based on findings of trade secret misappropriation and breach of contract, the Northern District of Illinois entered a preliminary injunction against Aegis Spine and its business partners from making, marketing, distributing, selling, or obtaining intellectual property rights in the competing device to Life Spine’s device.

Continue Reading Seventh Circuit Affirms Trade Secret Protection of Patented Spinal Implant Device

A recently introduced U.S. Senate bill demonstrates both the United States’ continued focus on foreign government-sponsored trade secret misappropriation and the International Trade Commission’s (“ITC”) potential untapped ability to swiftly protect intellectual property (“IP”) owners against this illegal conduct under Section 337.

This summer, U.S. Senators John Cornyn (R-Tex.), Christopher Coons (D-Del.), and Todd Young (R-Ind.) introduced the “Stopping and Excluding Chinese Rip-offs and Exports with United States Trade Secrets Act of 2021,” also known as the “SECRETS Act of 2021.” If passed, the bill would amend the Tariff Act of 1930 to fortify the ITC’s power to protect IP owners against trade secret misappropriation as well as work to expedite the investigatory and exclusionary processes.
Continue Reading Legislation Would Bolster ITC Power Against Foreign Government-Sponsored Trade Secret Misappropriation

On June 8, 2021, the Third Circuit clarified the requirements for making a trade secret misappropriation claim under the Defend Trade Secrets Act (“DTSA”) in a decision vacating the District of New Jersey’s dismissal of a trade secret misappropriation lawsuit against a former employee and his current employer. In short, the Third Circuit’s decision took a more relaxed view than the District Court, finding that a trade-secret plaintiff need not “spell out the details of its trade secret” or have direct allegations of misappropriation and harm to avoid dismissal.

Continue Reading The Third Circuit Clarifies DTSA Pleading Requirements, While Vacating Dismissal

While California law is clear regarding the elements required to establish a misappropriation of trade secrets claim, the law has remained unsettled on the elements required to maintain an action for threatened misappropriation of trade secrets. However, in the case of Beauty Barrage LLC, et al. v. Dermaceutical Laboratories LLC, et al., San Francisco Superior Court Judge Anne-Christine Massullo shed some light on the question.

Continue Reading Addressing Wrinkles in California’s Threatened Misappropriation of Trade Secrets Law

First off, don’t worry, Coca-Cola’s super-secret trade secret recipe is still safe.  But on April 22, 2021, a jury in the Eastern District of Tennessee convicted a former Coca-Cola employee, Dr. Xiaorong (a/k/a Shannon) You, of stealing trade secrets related to BPA-free coatings for the inside of beverage cans for the Chinese Government. The Indictment alleged that the trade secret information cost almost $120 million to develop. The twelve-day in-person trial focused not just on the former employee’s wrong doing, but also on some the best practices Coca-Cola and Eastman Chemical Company used to protect the trade secrets at issue.

Continue Reading Former Coca-Cola Employee Convicted of Stealing Trade Secrets for the Chinese Government

Under the California Uniform Trade Secrets Act (CUTSA), and many other states’ trade secret acts, a plaintiff must identify its alleged trade secrets as a prerequisite to conducting discovery.  Cal. Civ. Code § 2019.210.  The Ninth Circuit recently held that the Defend Trade Secrets Act (DTSA) also includes this requirement to identify alleged trade secrets with sufficient particularity.  The Ninth Circuit was considering whether the U.S. District Court for the Central District of California had abused its discretion in granting summary judgment for a defendant on CUTSA and DTSA claims by finding that the plaintiff had not identified its trade secrets with sufficient particularity without any discovery. (Spoiler alert: It did.)

Continue Reading Ninth Circuit Opens the Door to Modifying a Trade Secret Identification After Discovery