trade secret misappropriation

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

A recent case from the Sixth Circuit, addressing a source code agreement, highlights the importance of carefully specifying what happens to source code (and the trade secrets therein) after breach of the agreement.  In Epazz, Inc. v. National Quality Assurance USA, Inc.,[1] the Sixth Circuit affirmed the district court’s decision that a software licensee did not misappropriate a trade secret of the licensor when the licensee acquired the source code from an escrow agent, because the plain terms of the license agreement between the two authorized the release if the licensor breached. Further, the licensee did not commit misappropriation by hiring another provider to maintain and further develop the source code, where the license provided “the right . . . to use the . . . Material” upon breach of the agreement.
Continue Reading Untangling a Messy Dispute: No Misappropriation for Trade Secret Use Authorized by Agreement

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

In a recent decision, 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

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

Located in the heart of Europe, Belgium is a true hub of logistics and innovation. It is for example home to one of Europe’s largest sea ports (with all the warehousing infrastructure that one would expect). Belgium also hosts several, globally leading biotech and life sciences clusters. It is no coincidence for example that pharma giant Pfizer has one of its largest production and packaging sites in Puurs, a small Belgian town, where it produces its Covid-19 vaccine. A few miles north, Jansen Pharmaceuticals has its HQ.

Such hubs are not just rich in talented human resources, but also in cutting edge and highly valuable know-how. A high concentration of know-how, combined with the increased mobility of employees, means a high(er) risk of misappropriation of this valuable information by unauthorized (third) parties. When a (foreign) company suspects its know-how has been misappropriated in Belgium, it will need evidence to substantiate this allegation in court. If the know-how is (also) covered by an intellectual property (IP) right, the holder of the know-how has access to a very efficient means of collecting evidence: the descriptive counterfeit seizure whereby discovery-like evidentiary measures will be granted ex parte. When the misappropriated know-how is only protected as a trade secret, no similar measures are provided for under EU law. The Belgian judges have therefore in the past not been very eager to grant trade secret holders access to ex parte evidence-gathering. With a recent judgment, however, the Brussels Court of Appeal has left the door behind which discovery-like measures are stored for holders of trade secrets open.


Continue Reading Gathering evidence of trade secret infringement in Belgium: towards discovery-like measures?

Bolsinger is still pitching! After a recent dismissal for lack of jurisdiction in California, former Major League Baseball pitcher Michael Bolsinger refiled claims against the Houston Astros in state court in Houston, Texas on May 13, 2021.  While asserting similar factual allegations as his original California complaint, the former Toronto Blue Jays pitcher has abandoned his previous unfair business practice causes of action in favor of claims for trade secret misappropriation under the Texas Uniform Trade Secrets Act and for conversion. Bolsinger claims that the pitching signs he used during his August 4, 2017 game against the Astros were trade secrets.

Continue Reading Major League … Misappropriation?

The Massachusetts Supreme Judicial Court (“SJC”) recently found that trade secret misappropriation by employees who then use the trade secrets to compete is actionable under Massachusetts’ Unfair and Deceptive Trade Practices Law.  The SJC’s ruling in Governo Law Firm v. Bergeron means that Unfair and Deceptive Trade Practices Statute, Massachusetts General Laws Chapter 93A Section 11 (“Chapter 93A”), now applies to trade secret disputes in the employer-employer context.  Previously, such cases were considered an “internal matter” and therefore not actionable.
Continue Reading Massachusetts Supreme Judicial Court Rules that Employees May be Held Liable to Their Employer Under Massachusetts’ Unfair and Deceptive Trade Practices Law