Uniform Trade Secrets Act (UTSA)

Changing Patent Protections

U.S. and foreign patent systems have suffered legislative and judicial reverses as
to subject matter eligibility for patenting, a rising bar of obviousness due to increasing skill of the art, insights aided by artificial intelligence (AI) tools, procedural artifacts for no-risk post grant invalidation by granting agencies, and awakening of once dormant

On July 21, 2020, the First Circuit clarified the high burden that a plaintiff faces when asserting that certain types of business materials are protected trade secrets. In TLS Mgmt. & Mktg. Servs., LLC v. Rodriguez-Toledo, No. 19-1104, 2020 WL 4187246, at *6 (1st Cir. July 21, 2020), the court reversed a district court’s bench trial verdict in favor of the plaintiff in a trade secret misappropriation case on the ground that the business materials at issue did not constitute trade secrets. Plaintiff TLS Management and Marketing Services, LLC, a Puerto Rico-based tax planning and consulting firm, argued that the defendants misappropriated two of its protectable trade secrets: (1) a portion of its “Capital Preservation Reports,” which contained tax recommendations specific to an individual TLS client based on an analysis of applicable statutes and regulations; and (2) its “U.S. Possession Strategy,” which consisted of a scheme that would allow Plaintiff’s clients to take advantage of a lower tax rate on outsourced services by contracting with Plaintiff and buying its shares.

Defendant Rodriguez-Toledo was the founder of Plaintiff’s competitor, Defendant ASG Accounting Solutions Group, Inc., and for some time worked for Plaintiff TLS as a Managing Director under a subcontract between Plaintiff and ASG. After departing from TLS, Rodriguez-Toledo provided tax advice to Plaintiff’s former clients regarding how to avoid certain tax penalties triggered by terminating their relationships with TLS, which TLS’s U.S. Possession Strategy was also intended to avoid. Rodriguez-Toledo also allegedly downloaded the Capital Preservation Reports from TLS’s Dropbox account without authorization before he left TLS. TLS filed suit against both ASG and Rodriguez-Toledo for misappropriation of the two trade secrets and violation of a nondisclosure agreement. The district court found they had misappropriated both trade secrets following a bench trial, and the defendants appealed.Continue Reading First Circuit Reverses Misappropriation Verdict, Citing Lack of Specificity

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

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

Under the inevitable disclosure doctrine, an employer may prevent a former employee from working for a competitor by simply demonstrating that the employee possesses the employer’s trade secrets and the former employee’s new job duties will “inevitably” cause her to rely upon those trade secrets.  The doctrine is not available in California.  However, California employers may be able to rely upon a “threatened” misappropriation of trade secrets to protect against the same risk.
Continue Reading Threatened Misappropriation Under CUTSA in Absence of “Inevitable Disclosure”?

In early May 2013, Texas’ Governor signed into law the Texas Uniform Trade Secrets Act. The Act adopts a version of the Uniform Trade Secrets Act (UTSA) and is expected to provide more uniformity, certainty, and predictability in litigation pertaining to trade secret misappropriation in this important commercial hub. While the Act is modeled on

Although trade secrets and patents are both means to protect ideas, the Eighth Circuit’s recent decision in AvidAir Helicopter Supply v. Rolls Royce Corp., 663 F.3d 966 (8th Cir. 2011), confirmed that they are still fundamentally different bodies of law. AvidAir reinforces two important facets of the law of trade secrets in UTSA jurisdictions: