On January 6, 2021, we learned that federal courts’ nationwide case management system was breached as part of the SolarWinds hack, potentially giving hackers access to sealed court documents that may include trade secret information. The AP reports that a federal court official said that the “potential reach is vast” and the “actual reach is
Many of us have had to get used to videoconferencing. But that communication platform comes with its own challenges in protecting trade secrets. The Delaware Court of Chancery in Smash Franchise Partners, LLC v. Kanda Holdings, Inc. denied a preliminary injunction motion because, among other reasons, the plaintiff failed to show a reasonable likelihood that…
On November 30, 2020, the United States Supreme Court heard oral arguments in Van Buren v. United States, which may resolve a circuit split on the extent to which the Computer Fraud and Abuse Act (CFAA) covers an employee’s alleged misappropriation of the employer’s information. Enacted in 1986, the CFAA imposes criminal penalties on…
The court in Planner 5D v. Facebook, one of the first cases about trade secrets in artificial intelligence datasets, has granted the motion to dismiss on the copyright claims and denied the motion on the trade secret claims.
Trade secrets. The court held that the amended complaint sufficiently pleaded that the Planner 5D data files were trade secrets and that the defendants used improper means to acquire those trade secrets.
Continue Reading Planner 5D v. Facebook: Trade Secrets and Copyright Update
One of the ways trade secret disputes differ from other IP litigation is that in a trade secret dispute it is not always clear what the intellectual property actually is. Trade secrets aren’t disclosed to the patent office or registered like trademarks. Nor are they as clearly defined as copyrights. Thus, a threshold question in every trade secret case is what the trade secrets actually are. This creates a natural tension, as the very definition of a trade secret includes that it be kept secret. Nonetheless, litigation cannot proceed in the dark and there must be some disclosure at some time before a case can be meaningfully resolved. Courts vary widely in their approach to the what and the when of these disclosures. Some require detailed specificity before any discovery can occur, sometimes even at the pleading stage. Other courts are more lenient and will allow discovery to proceed without first requiring early and detailed disclosures.
Continue Reading Sedona Conference Lists Principles for Identification of Trade Secrets
Judge William Orrick of the Northern District of California held a hearing last week to address 12(b)(6) motions to dismiss by Facebook and Princeton University in UAB “Planner5D” v. Facebook, Inc., et al., Case No. 19-CV-03132 (N.D. Cal.). This appears to be one of the first trade secret misappropriation and copyright cases relating to artificial intelligence datasets.
Plaintiff Planner 5D has a website with a home design tool to allow customers to digitally design their own home, office, or landscape. As alleged by Planner 5D, the tool uses thousands of object and scene files as seed data sets to train machine learning algorithms. The complaint alleges that Princeton used software tools to obtain secret internet addresses where the object and scene files were hidden and then scraped the website to obtain the files, ultimately making the data available to Princeton researchers. Princeton then allegedly shared that data with Facebook. Planner 5D contends that, although the images themselves are viewable on the internet, the underlying datafiles and secret internet addresses that were scraped by Princeton, as well as the file locations, are trade secrets.
Continue Reading Planner 5D v. Facebook: Trade Secrets and Artificial Intelligence Hearing
A Texas appellate court recently affirmed the principle that state free speech rights don’t provide immunity for trade secret misappropriation. Collaborative Imaging v. Zotec Partners. Zotec Partners provides revenue cycle and practice management services to healthcare providers. Dhruva Chopra worked at Zotec as a client service manager. In 2018, Chopra resigned and began working with Texas Radiology Associates, LLP (which had been a Zotec client) on a competing business. Chopra allegedly had knowledge of Zotec trade secrets involving, among other things, Zotec’s technology platform and software, billing, clients, and business processes.
Continue Reading Trade Secrets Suit Doesn’t Infringe Free Speech
Computer forensic information often becomes an issue in trade secret cases, as computer artifacts or other electronic information (such as on external hard drives, cell phones, etc.) can sometimes prove or disprove whether a person accessed, used, transferred, or destroyed trade secret material. If the parties or the judge determines that the computer forensic information is relevant, the next key question is how much needs to be exchanged and what limitations will be in place. The producing party often will argue that computers include numerous irrelevant files and artifacts, privileged communications, and private information that should not be subject to discovery. One middle ground is to use a neutral examiner, in which the electronic data is never handed directly to the opposing party. Instead, a neutral computer expert will field requests and/or create reports of the pertinent data.
Continue Reading Chinese Self-Driving Car Company Must Make Its Source Code Available in Lawsuit Against Tesla but Only Through a Neutral Examiner
UAB dba Planner 5D sued Facebook and Princeton for copyright infringement and trade secret misappropriation under both the Defend Trade Secrets Act and California UTSA, based on use of an AI dataset. The plaintiff alleges that it owns a large dataset of three-dimensional objects and scenes. Princeton allegedly downloaded thousands of scenes by scraping the…
In October 2018, a non-compete reform bill when into effect in Massachusetts (the Massachusetts Noncompetition Agreement Act (“MNCA”)). The MNCA is still being refined through the courts with only the second published decision regarding the MNCA being decided recently in NuVasive, Inc. v. Day, 1:19-cv-10800-DJC. The District Court there granted the employer a preliminary injunction,…