THE LATEST UPDATES IN TRADE SECRET LAW
The United States District Court for the District of Oregon recently refused to dismiss antitrust counterclaims against a plaintiff who allegedly brought misappropriation of trade secrets claims against its competitor in bad faith.
The plaintiff, Edwards Vacuum, LLC (“Edwards”), sued its supplier and competitor, Hoffman Instrumentation Supply, Inc. (“HIS”), and five former employees of Edwards for misappropriation of trade secrets, breach of contract, and several related claims.…
The U.S. District Court for the Eastern District of Texas recently denied a challenge to its subject-matter jurisdiction over a misappropriation of trade secrets claim under the Defend Trade Secrets Act (DTSA), rejecting the defendants’ argument that the DTSA’s interstate commerce requirement limits the jurisdiction of federal courts.
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Continue Reading U.S. District Court for the Eastern District of Texas Holds the Defend Trade Secrets Act’s Interstate Commerce Requirement Does Not Limit the Jurisdiction of Federal Courts
In 2010, two parties, AcryliCon USA, LLC (AcryliCon) and Silikal GmbH (Silikal) agreed to share rights to a secret formula for a flooring resin known as 1061 SW. Under the agreement, Silikal would manufacture 1061 SW and AcryliCon and its affiliates would have exclusive rights to distribution. After Silikal began selling 1061 SW without permission, AcryliCon sued for breach of their agreement and for misappropriation of a shared trade secret. A jury awarded AcryliCon $1.5 million in damages on each of the two claims and $3 million in punitive damages on the misappropriation claim. Silikal appealed, arguing, among other things, that AcryliCon failed to prove its misappropriation claim. In a recent decision, the U.S. Court of Appeals for the Eleventh Circuit agreed.
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Continue Reading Timing Is Everything: Eleventh Circuit Finds No Misappropriation Under Georgia Trade Secret Law
On September 10, 2020, San Diego law firm Slate Law Group filed suit after a former associate left the firm to become in-house counsel for a firm client, ClickUp. Slate alleged that attorney Derek Dahlin misappropriated Slate’s trade secrets by providing ClickUp with confidential business information including Slate’s contract templates and work product.
According to the complaint, Dahlin was brought on as an independent contractor for Slate in March 2020 and was hired as a full-time associate on April 21. The complaint further states that shortly after Dahlin began working on ClickUp matters, ClickUp solicited Dahlin to become its in-house counsel. …
Continue Reading Law Firm Accuses Departing Associate of Taking Firm Trade Secrets to In-House Position with Firm Client
Acer has petitioned to the U.S. Supreme Court after the Federal Circuit rejected its attempt to remove a case from state to federal court based on two federal statutes and Gunn v. Minton, 568 U.S. 251 (2013).
The underlying dispute is between Acer America Corporation and Acer Inc. (collectively, “Acer”), on one side, and Intellisoft, Ltd., and its president, Bruce Bierman (collectively, “Intellisoft”), on the other. Intellisoft sued Acer in California state court in 2014, alleging that Acer violated a nondisclosure agreement by using Intellisoft’s trade secret information in Acer’s applications for a group of related patents. Intellisoft brought various state-law claims, including a claim for trade secret misappropriation.
Continue Reading Acer Seeks Supreme Court Intervention After Federal Circuit Tossed Its Patent-Related Dispute from Federal Court
On August 4, 2020, U.S. District Judge for the Northern District of California William Alsup sentenced former Uber executive Anthony Levandowski to 18 months in prison after Levandowksi pleaded guilty to stealing trade secrets relating to Google’s self-driving vehicle project. The judge also ordered Levandowski to pay over $700,000 in restitution.
Levandowski was a Google…
A Texas appellate court reversed a $740 million trade secret theft and fraud judgment for real estate analytics company HouseCanary against rival Amrock, holding flawed jury instructions require a new trial.
In 2014, Title Source Insurance (TSI), a property valuation and settlement services company, contracted with HouseCanary, a real estate analytics company, to design an app that would allow TSI to perform appraisals more efficiently. The parties specifically agreed not to “decompile, disassemble, reverse translate, reverse engineer, or otherwise attempt to discover or directly access the source code of [the app] or any component or portion thereof.” HouseCanary’s work on the app involved multiple alleged trade secrets, including a complex data dictionary of property valuation attributes and a number of internal calculations and formulas used to evaluate property value. While HouseCanary built TSI’s app, TSI allegedly started developing its own products, utilizing HouseCanary’s protected data and formulas. Eventually the parties’ relationship deteriorated, and TSI accused HouseCanary of failing to deliver on the parties’ contract and sued for breach of contract and fraud. HouseCanary counterclaimed for breach of contract, misappropriation of trade secrets, and fraud. A jury found for HouseCanary and awarded actual and punitive damages.
Continue Reading Texas Court Orders New Trial After $740M Judgment
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…
The Southern District of New York denied defendant Lionbridge Technologies, Inc.’s (Lionbridge) motion to dismiss, holding that TransPerfect Global, Inc. (TransPerfect), sufficiently pleaded that information disclosed to potential bidders in an online auction constituted trade secrets and that Lionbridge misappropriated these trade secrets. In 2014, the Delaware Chancery Court ordered the dissolution through modified auction of TransPerfect, a translation, website localization, and litigation support company. The auction had three phases. At each phase the bidding pool narrowed, and the bidders received increasingly detailed and sensitive information about TransPerfect. HIG, an investment firm that had just submitted a bid to purchase Lionbridge (TransPerfect’s largest competitor), participated in the auction. According to TransPerfect’s complaint, HIG participated in all three phases, even though it never intended to purchase TransPerfect because TransPerfect would not agree to require its former owner to enter into a noncompetition agreement. During the final stages of the auction, HIG gained access to thousands of competitively sensitive documents, including detailed pricing and cost information. TransPerfect alleged that after the sale, HIG shared this confidential information with Lionbridge, which then used the information to undercut TransPerfect’s pricing.
Continue Reading Use of Information Outside Scope of Confidentiality Agreement as Misappropriation
