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The Third Circuit recently affirmed a ruling out of the U.S. District Court for the Middle District of Pennsylvania, which held that a NASA subcontractor could sue for misappropriation of trade secrets under the Pennsylvania Uniform Trade Secrets Act (the UTSA), even though the subcontractor did not own the trade-secret information. The subcontractor, Advanced Fluid Systems, Inc. (AFS), had signed a contract granting exclusive ownership rights in the hydraulic systems it designed to the Virginia Commonwealth Space Flight Authority. But the Third Circuit held that AFS could nonetheless maintain a lawsuit when its former employee misappropriated the designs for the benefit of AFS competitors.
Continue Reading Non-Owner Allowed to Sue for Trade Secret Misappropriation Where the Owner Had “Lawful Possession” of the Trade Secret

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In an April 16, 2020 ruling, the District Court for the District of Massachusetts re-affirmed that a plaintiff bringing a claim under the Defend Trade Secrets Act (DTSA) must allege “ownership of confidential information” to survive a motion to dismiss. The court in Focused Impressions, Inc. v. Sourcing Grp., LLC, No. 19-CV-11307-ADB, 2020 WL 1892062 (D. Mass. Apr. 16, 2020) granted a motion to dismiss a third-party complaint against a Plaintiff’s former COO where the third-party complaint failed to adequately allege ownership of confidential information.

Plaintiffs Focused Impressions, Inc. (FII) and Focused Impressions Technology, LLC (FIT) sued (among others) Lynn Smith, the former chief operating officer of FII and a former member of FIT, for violation of the DTSA. The third-party complaint alleged that Smith used confidential pricing information about FII’s clients, the Regal Press (Regal) and Wright Business Graphics, LLC (Wright). Smith moved to dismiss the complaint, arguing that Plaintiffs failed to allege ownership of confidential information, as required by the DTSA. The court agreed.
Continue Reading Federal District Court in Massachusetts Dismisses DTSA Complaint that Failed to Allege Ownership of Confidential Information