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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.

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

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The Oregon Court of Appeals recently held that while certain customer data could be protected by a trade secret claim, basic information such as customer identities and email addresses, without more, did not give rise to a trade secret. Rather, the employer had to present evidence that the information derived economic value from not being generally known and was subject to reasonable efforts to maintain its secrecy.

Factual Background

Peterson Machinery Co. (Peterson) was engaged in the business of renting and selling heavy machinery in Oregon, Washington, and California. Modern Machinery (Modern) was one of Peterson’s primary competitors in Oregon. Heavy machinery sales is a “niche” market in Oregon, and only a handful of companies are engaged in this business. Bryan R. May (May) was a former rental and sales consultant who began working for Peterson in 2006. In October 2017, May accepted a job offer from Modern as the territory manager in Eugene, Oregon. As a territory manager, May’s primary job duty was to call on prospective purchasers of heavy machinery in his assigned territory and negotiate potential sales. Continue Reading Oregon Court of Appeals Clarifies When Customer Information Constitutes Protectible Trade Secrets

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In an order dated April 20, 2021, U.S. District Judge Lorna G. Schofield granted Syntel Inc.’s request for a new trial or remittitur on the $569,710,384 punitive damage award issued against Syntel following an October 2020 jury trial.

In October 2020, a New York federal jury found that Syntel had misappropriated the TriZetto Group, Inc.’s trade secrets in violation of the Defend Trade Secrets Act and New York law. The jury also found that Syntel infringed one or more of TriZetto’s copyrights. The jury awarded $284,855,192 million in compensatory damages and $569,710,384 million in punitive damages. Continue Reading New York Federal Judge Finds Punitive Damages Award Excessive Following Trade Secrets Trial

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In 2017, EMC Outdoor, LLC (EMC) terminated Jennifer Stuart’s employment. After, EMC filed suit against Ms. Stuart, Grandesign (Ms. Stuart’s current employer), and another former employee, alleging inter alia claims for misappropriation of trade secrets under federal and state law. On March 31, 2021, the Pennsylvania District Court granted summary judgment against EMC’s trade secret claims, finding no misappropriation because, under EMC’s employment agreement, Stuart was not required to keep trade secrets confidential following her termination. Continue Reading Draft Your Employment Agreements Carefully: A Questionable Word of Warning from the District of Pennsylvania

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In trade secret litigation between two competing legal services firms, the United States District Court for the District of Connecticut recently ordered the plaintiff to produce documents without the attorneys’-eyes-only designation that the plaintiff believed was necessary. Continue Reading Legal Services Firm Ordered to Produce Confidential Documents to Competitor in Trade Secret Dispute

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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.

Continue Reading Timing Is Everything: Eleventh Circuit Finds No Misappropriation Under Georgia Trade Secret Law

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Is It Even Possible to Persuade a Biased Juror?

If you recently debated someone who adamantly supported a different candidate than you in the last presidential election, you have good reason to wonder whether there is hope of persuading someone biased against your position in a theft of trade secrets case. Fortunately, jury persuasion happens all the time (and is arguably easier than persuading a voter who holds entrenched opinions about a presidential candidate). You cannot talk a juror out of a deeply held value system; however, you can demonstrate how your case fits within it, and persuade the juror from that vantage point. Continue Reading You’re the Defense. How Do You Persuade a Pro-Plaintiff Juror?

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In an order filed January 8, 2021, the U.S. District Court judge overseeing the case cut Motorola’s $760 million jury award against competitor Hytera Corp. by over $200 million. Judge Charles Norgle of the Northern District of Illinois noted that the he made the decision “[w]ith a cool head and a keen eye.” The court found that the $760 million award included a double recovery for Motorola, in that it improperly awarded Motorola “both the $135.8 million in disgorged profits and the $73.6 million in avoided research and development costs.” Continue Reading Motorola Solutions v. Hytera Commc’ns Corp. Ltd.

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Marketing agency InnerWorkings, Inc. filed suit under the Illinois Trade Secrets Act against a former sales executive who left the company for one of its direct competitors, HALO Branded Solutions. InnerWorkings does not allege that the former sales executive, Brian Battaglia, absconded with or stole trade secrets when he left for HALO. Continue Reading InnerWorkings, Inc. v. Battaglia

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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 probably significant.” At this stage, officials do not know the full extent of the breach, which documents hackers accessed, or whether officials can retrieve those documents.

In response, the federal judiciary has announced new procedures relating to “highly sensitive” documents; namely, that courts will now accept sealed highly sensitive documents only in paper form or via secure electronic device (such as a thumb drive) and that the sealed documents will no longer be uploaded to the court’s CM/ECF electronic court records system. Individual courts around the country have begun to issue orders or notices relating to that national directive, including specifying which document categories will count as “highly sensitive” documents warranting special protections. The federal directive says that “sealed filings in many civil cases likely would not be sufficiently sensitive” to require the new special treatment and can continue to be e-filed.