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

Last week the United States Senate unanimously approved legislation that would create a private right of action in federal court for trade secret theft. We reported on this legislation — The Defend Trade Secrets Act of 2015 – last summer, and explained how it would modify the Economic Espionage Act (EEA), 18 USC Chapter 90. See The Growing Momentum for Federal Trade Secrets Legislation
Continue Reading U.S. Senate OKs Federal Trade Secret Bill

One of the most complicated parts of litigating a trade secret case is the discovery process.  Plaintiffs often seek discovery immediately to determine the full extent of information that was taken and how it was used, and often seek expedited discovery to prevent the defendants from destroying or hiding evidence of wrongdoing.  Defendants, on the other hand, resist discovery in order to prevent the plaintiff from using the defendant’s information to help structure its claims, and to prevent the plaintiff from acquiring the defendant’s trade secrets.  Recognizing this danger, courts typically require the plaintiff to identify its trade secrets before the plaintiff may obtain any discovery from the defendant. Many states, including California, have made this preemptive disclosure requirement statutory.
Continue Reading Designation of Trade Secrets a One-Way Ratchet in Discovery

Last week the Appellate Division of the Superior Court of New Jersey dismissed a lawsuit brought by pipe-maker JM Manufacturing Co. Inc. against former JM quality assurance engineer John Hendrix and his counsel. JM had accused Hendrix and his counsel of improperly using stolen trade secrets documents and other confidential information to launch a False Claims Act (FCA) case against the company. The FCA is a federal law that imposes liability on individuals and companies who defraud governmental programs. The Superior Court refused to revive the lawsuit, finding that those claims should have been raised in California federal court with the underlying FCA claim.
Continue Reading Countersuit for Trade Secret Misappropriation Impermissible in the Face of FCA Claim Based on Trade Secret, New Jersey Appeals Court Holds

Last year saw many important trade secret developments in the court. Here is our Top 5:

1. DuPont v. Kolon

This case had it all. What appeared at first to be the actions of one disgruntled employee turned out to be a long-standing high-level initiative of Kolon to target former DuPont employees in order to develop its fledgling para-aramid fiber using the secrets behind industry standard Kevlar. There was spoliation, 400 page expert reports arguing all of DuPont’s trade secrets were disclosed in its own patents, antitrust counterclaims, criminal charges, Korean investigations, a two-month jury trial culminating in a damages award just shy of a billion dollars, an appeal, and finally—in 2015—resolution. This epic battle came to end with Kolon being criminally indicted, paying $275 million to DuPont in restitution, and settling the civil case under undisclosed terms. Read about it here.


Continue Reading 2015 Trade Secret Year in Review: Key Courtroom Developments

On December 7, 2015, Mercedes’ suit against Benjamin Hoyle, one of its former engineers who allegedly breached his employment contract and misappropriated confidential, trade secret information, was made public. Since 2012, Hoyle had been a member of Mercedes’ Performance Engineering Department working on the Mercedes’ High Performance Powertrain (HPP) Limited Formula One (F1) racing engines. Last year, Hoyle informed Mercedes that he would not be renewing his contract set to expire at the end of 2015, and was planning on joining Ferrari.
Continue Reading Vroom vroom! Mercedes v Ferrari-bound Engineer

Last week, the California Court of Appeal issued a decision highlighting the need for employers, especially large employers with operations and employees in several states or countries, to take great care in drafting mandatory forum selection clauses and to always be aware of the relevant law in the chosen jurisdiction. In Richtek USA, Inc. v. UPI Semiconductor Corp., 2015 WL 7479125, a state Court of Appeal affirmed that a mandatory forum selection clause in an employment agreement is binding on both the employee and the employer.
Continue Reading Be Careful What You Wish For: The Importance of Forum Selection Clauses

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 Supreme Court of Utah, in InnoSys, Inc. v. Mercer, held earlier this week that an employer making a prima facie case of trade secret misappropriation is entitled to a legal presumption of harm that, if unrebutted, supports a claim for trade secret misappropriation and at least injunctive relief. This August 31, 2015 decision interprets Utah’s Uniform Trade Secret Act and represents a useful precedent for companies relying on trade secret protection. It notably held that the presumption of harm attaches regardless of whether the record supports a threat of future disclosure or use of the stolen trade secrets.
Continue Reading Utah’s Supreme Court Applies Rebuttable Presumption of Harm In Trade Secret Case

Banks; oil and gas leases; trade secrets. All three came to a front in a longstanding legal battle that culminated in a decision by the Eight Circuit Court of Appeals on Friday July 17, 2015, affirming that a bank had misappropriated an energy company’s trade secrets.

The Court of Appeals upheld a decision from the U.S. District Court for the District of North Dakota that Macquarie Bank Ltd. misappropriated confidential geological and seismic information it had received as part of the collateral on a loan to develop oil and gas leases, some of which were to be on reserves of North Dakota’s Bakken Shale formation.


Continue Reading Value is in the Eye of the Court: Eighth Circuit Affirms Macquarie Bank’s Misappropriation of Trade Secrets, Resolving Longstanding Dispute