A recent decision by the Second Circuit reminds litigants that a party asserting a trade secret misappropriation claim under the federal Defend Trade Secrets Act (DTSA), or New York law, must detail in a pleading “the “reasonable measures” employed to maintain the secrecy of the alleged trade secret. In Turret Labs USA, Inc. v. CargoSprint, LLC, No. 21-952, Dkt. No 106-1 (2nd Cir. Mar. 9, 2022), the Second Circuit affirmed the District Court’s grant of a motion to dismiss, concluding that plaintiff Turret Labs failed to adequately allege that reasonable measures were taken because, although there was an agreement giving the plaintiff’s customer exclusive access to the alleged trade secret, this agreement (as well as all surrounding security policy documents) failed to contractually obligate the customer to maintain confidentiality of the alleged secret.Continue Reading Second Circuit Reminds Practitioners That A Plausible Claim for Trade Secret Misappropriation Must Detail the Reasonable Measures Used to Protect the Alleged Secret

Earlier this month, the Second Circuit clarified the requirements for alleging a trade secret misappropriation claim under the Defend Trade Secrets Act (“DTSA”). The decision affirmed the Eastern District of New York’s dismissal of a trade secret misappropriation lawsuit against a formerly licensed software user. In short, the Second Circuit’s decision affirmed a more stringent view of DTSA requirements to find that a trade-secret plaintiff alleging misappropriation of software functionality must have direct allegations it had confidentiality and non-disclosure agreements with software’s vendors and end users.
Continue Reading Second Circuit Rejects DTSA Claim Due to Weak Software Licensing Agreement

Sergey Aleynikov, the ex-Goldman Sachs computer programmer convicted of stealing high-frequency trading source code, has once again succeeded in reversing a criminal conviction related to his infamous code-copying acts. Federal prosecutors had previously charged, tried, and won a conviction of Aleynikov for violations of the federal National Stolen Property Act (NSPA) (18 USC § 2314) and Economic Espionage Act (18 USC § 1832). However, in 2012, the Second Circuit reversed both convictions. See United States v. Aleynikov, 676 F.3d 71 (2d Cir. 2012). That in turn prompted Congress to amend the Economic Espionage Act to close the loophole that allowed Aleynikov to walk.
Continue Reading Twice Convicted, Twice Reversed: Another Aleynikov Code Theft Conviction Overturned

Sergey Aleynikov, the former Goldman Sachs computer programmer accused of stealing computer source code powering the bank’s high-frequency trading platform, has been convicted by a New York jury of a single count of Unlawful Use of Secret Scientific Material.  The jury hung on a second Unlawful Use count and acquitted Aleynikov on a third count of Unlawful Duplication of Computer-Related Material.

This is not the first time Aleynikov has been criminally convicted for this same conduct:  In 2010, Aleynikov was charged, tried and convicted in federal court of violating the federal National Stolen Property Act (“NSPA”) (18 USC § 2314) and Economic Espionage Act (“EEA”) (18 USC § 1832).  However, in 2012, the Second Circuit reversed both convictions.Continue Reading Split Verdict – Second Criminal Trial of Infamous Goldman Source-Code Thief Concludes

In United States v. Agrawal, the Second Circuit upheld a jury’s 2010 conviction of a former Société Générale trader under the Economic Espionage Act (EEA) and the National Stolen Property Act (NSPA). The three-judge panel unanimously affirmed the NSPA conviction, but split on whether the EEA conviction could stand in light of the Second

The Second Circuit Court of Appeals has given employers more flexibility in pursuing trade secret claims that are based on an employee’s theft of a company’s computer files. In MacDermid, Inc. v. Deiter, No. 11-5388-cv (2d Cir., Dec. 26, 2012), the court found that misappropriation from a computer server located in one state is

On December 18, 2012, Congress approved an amendment to the Economic Espionage Act (EEA) to cover service-related trade secrets and relax the interstate-commerce jurisdictional requirement. The amendment just approved by Congress expands liability in two ways. First, the amendment criminalizes the theft of service-related trade secrets, regardless of whether they are related to a physical