Defend Trade Secrets Act (DTSA)

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A trade secrets spat between rival self-driving car companies WeRide Corp. and AllRide.AI Inc. has ended in settlement, but not before the Northern District of California imposed terminating sanctions against the defendant AllRide for its “staggering” spoliation of evidence when it intentionally purged emails and email accounts, wiped laptops and servers, and corrupted key source code.

The suit began in late 2018, when WeRide brought claims against Jing Wang (its former CEO), Kun Huang (its former Head of Hardware Technology), and AllRide, the competing company started by Wang and Huang. The claims included trade secrets allegations under the Defend Trade Secrets Act and the California Uniform Trade Secrets Act, along with claims for defamation and intentional interference with prospective economic advantage. WeRide accused Wang, who left WeRide to launch AllRide, of soliciting Huang to join him at his new company, and accused both of stealing WeRide’s trade secrets and immediately using them at AllRide. In April 2019 the Court granted WeRide a preliminary injunction that specifically prohibited Wang, Huang, and AllRide from destroying relevant documents, and ordered Huang to make several electronic devices available for inspection by WeRide. But in October 2019, WeRide moved the Court for sanctions, claiming that AllRide had destroyed emails and key source code. Central to WeRide’s motion was the accusation that AllRide had allowed its email system to continue to implement a 90-day automatic deletion policy, resulting in the destruction of thousands of potentially relevant emails. WeRide also accused AllRide of deleting six email accounts and the source code it supposedly developed to compete with WeRide.
Continue Reading Autonomous Vehicle Competitors Resolve Trade Secrets Case Colored by “Staggering” Spoliation

One of the more challenging questions in many complex trade secret cases is: When should a plaintiff be required to identify its alleged trade secrets, and with what level of specificity? This question is not answered by the Defend Trade Secrets Act or (in most instances) state trade secret statutes, and case law on this…

On June 15, Crowell & Moring hosted a trade secrets webinar, “What the New Federal Trade Secrets Law Means for Your Clients.” The panelists, Mark Klapow, Mark Romeo, Mike Songer, and Vince Galluzzo provided an overview Defend Trade Secrets Act (DTSA), signed by President Obama in May. The panelists also discussed how the courts are…

On Wednesday November 2, the Senate Judiciary Committee held a hearing on the pending Defend Trade Secrets Act of 2015, S. 1890. We have previously reported on the Act, which will create a federal civil cause of action for trade secret misappropriation, which includes an ex parte seizure provision.

The hearing began with Chairman Grassley making opening comments about the importance of trade secrets protection and meeting the increased threats of misappropriation in this global and mobile world. Each of the four witnesses then gave opening statements, followed by a question and answer period in which several members of the Committee took part. The witnesses included DuPont’s Chief IP Counsel Karen Cochran, Corning’s Chief IP Counsel Tom Beall, and Professor Sharon Sandeen (who opposes the Act). There were several notable moments at the hearing:

  • Ms. Cochran, holding up a Kevlar® bulletproof vest, explained that DuPont’s experience in the Kolon case (in which Crowell & Moring represented DuPont) helped inform DuPont of the need for the Act. Specifically, she explained, (i) the need for assured access to federal courts in technology based trade secret cases and (ii) the need for access to the court to immediately halt the further dissemination of trade secrets and evidence destruction.

Continue Reading DuPont, Corning, and Others Speak Out in Support of Defend Trade Secrets Act at Senate Judiciary Committee Hearing

The momentum for federal trade secrets legislation appears to be growing with last week’s introduction of the “Defend Trade Secrets Act of 2015” in both chambers of Congress. The bill, H.R. 3326 in the House and S. 1890 in the Senate, would create a uniform federal civil action for trade secret misappropriation, which is currently litigated exclusively in state courts and subject to the States’ various laws. Such a uniform federal civil action seeks to eliminate the splits of authority on trade secret law among the States and the resulting uncertainty about enforcement of trade secrets.  While this is not Congress’ first attempt at civil federal trade secret law, the stakes here are high:  it has been reported that publicly traded U.S. companies maintain a combined $5 trillion in trade-secret-related assets, with the annual economic loss attributable to trade secret theft estimated to be between $167 and $503 billion. These staggering numbers, combined with a recent surge in cyber-attacks and trade secret theft, have lawmakers considering the issue anew.
Continue Reading The Growing Momentum for Federal Trade Secrets Legislation

On April 29, 2014, Senators Hatch & Coons introduced the Defend Trade Secrets Act of 2014, the third bill in as many years to propose a federal civil cause of action for trade secret misappropriation by amending the Economic Espionage Act. This latest attempt, which closely resembles the 2012 bill (also co-sponsored by Senator Coons)…