Competitor Misappropriation

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

The Sedona Conference, Working Group 12 on Trade Secrets, has issued guidance on protecting trade secrets in litigation about them. This important Commentary recommends courts:

  • Balance the risk of disclosure and harm to the producing party with the need for the other party and to have the information to prepare its case when determining a

Crowell & Moring presented a webinar discussing the most influential trade secret cases from 2021 along with new legal developments, including non-compete legislation and trade secret maintenance.

Partner Astor Heaven and Counsel Raija Horstman kicked off the conversation to discuss modern trade secret protection under the DTSA and the biggest damages from jury verdicts in 2021. Counsel Christine Hawes gave an overview of recent federal and state non-compete legislation, and Associate Dalton Hughes wrapped up the webinar by covering new legal implications for maintaining and identifying trade secrets.
Continue Reading Crowell & Moring Webinar Recap: “2021 Trade Secrets Year in Review and What Lies Ahead”

In October, we published a blog post describing how trade secret claims filed by AbbVie were dismissed by the Northern District of Illinois for lack of personal jurisdiction over AbbVie’s former employee in Singapore and the competitor that poached him, Alvotech of Iceland. At that time, we thought AbbVie might replead to keep its trade secret claims in Federal District Court. AbbVie chose instead to appeal the District Court’s dismissal to the Seventh Circuit.

In addition, AbbVie has now pursued a second route—one that is becoming more and more common for global corporations claiming injury from trade secret misappropriation: AbbVie has also filed a Section 337 Complaint to the International Trade Commission (“ITC”), seeking to block imports of Alvotech’s biosimilar of AbbVie’s Humira arthritis treatment. Unlike the Federal Court action, the Section 337 Complaint is against both Alvotech and Teva (Israel) as a commercialization partner.
Continue Reading AbbVie Turns Next to the U.S. International Trade Commission in Biosimilar Trade Secret Row

On November 23rd, Pfizer filed a complaint against former employee Chun Xiao “Sherry” Li in a California federal court alleging that Li pilfered over 12,000 files worth of critical documents and trade secrets. U.S. District Judge Cathy Ann Bencivengo granted Pfizer’s motion for a temporary restraining order barring Li from using, disclosing or transmitting any confidential information or trade secrets owned by Pfizer, destroying or altering any of that information or destroying any devices storing the information. Li also must return any hard copy documents containing Pfizer’s confidential information or trade secrets, Judge Bencivengo said.

Hired as associate director of statistics in Pfizer’s global product development group at Pfizer’s facility in La Jolla, California in 2006, Li sought greener pastures at Xencor Inc. in 2021. Perhaps in the spirit of the upcoming holiday season, Li treated herself to a parting gift of what Pfizer calls its clinical “playbook.” Its complaint also cited misappropriation of documents containing operational goals, goals for various drugs including cancer drugs, clinical development plans and clinical trial techniques.
Continue Reading Bad Medicine: Pfizer Files Complaint to Halt Potential COVID-Related Trade Secret Misappropriation

In March 2021, AbbVie, Inc. and AbbVie Biotechnology Ltd. (“AbbVie”) sued rival pharmaceutical company Alvotech hf. (“Alvotech”) for trade secret misappropriation under the federal Defend Trade Secrets Act (“DTSA”) and the Illinois Trade Secret Act. In May, Alvotech filed a motion to dismiss the Complaint for both failure to state a claim and lack of jurisdiction. And just a few days ago, the North District of Illinois Court issued an order finding that it lacked jurisdiction over AbbVie’s causes of action, and dismissed the case.
Continue Reading AbbVie Trade Secret Claims Fail at Pleading Stage for Lack of Jurisdiction

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

A recent decision from the Fifth Circuit showcased the usefulness of the “discovery rule” for trade secret plaintiffs facing statute of limitations issues.  The court reversed the dismissal of a claim for misappropriation of trade secrets because the plaintiff could not have discovered the misappropriation using reasonable diligence within the applicable statute of limitations period.

Continue Reading Fifth Circuit Rules Delayed Discovery of Misappropriation Not A Bar To Suit

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