shutterstock_584007385New Location Added – Westside/Silicon Beach!

Trade secret identification and protection is more critical than ever for employers in California. Technology is consuming the way we do business, and new laws concerning trade secrets and the content of employment agreements with California employees makes trade secret identification and protection more critical than ever.

We invite you to join our Seyfarth attorneys Scott Atkinson, Jim McNairy, and Robert Milligan, along with James Vaughn, one of California’s leading computer forensics experts, in an interactive briefing designed to help California employers navigate these tricky waters and provide best practices for trade secret protection.

Topics slated to cover include:

  • How to best identify and protect trade secrets
  • What employers need to know about the DTSA
  • The impact of new California Labor Code Section 925
  • Effective use of restrictive covenants in employment agreements
  • How to catch a trade secret thief
  • Responses to potential trade secret theft
  • Choosing the right court to protect trade secrets
  • Considerations for suing under the DTSA vs California law (or both)

 

May 10, 2017
8:00-10:00 a.m.
Seyfarth Shaw LLP
Los Angeles – Downtown
333 South Hope Street
Suite 3900
Los Angeles, CA 90071
register

 

May 17, 2017
8:00-10:00 a.m
Seyfarth Shaw LLP
San Francisco
JPMorgan Chase Building
560 Mission Street, 20th Floor
San Francisco, CA 94105

register

 

May 24, 2017
8:00-10:00 a.m.

Westside/Silicon Beach
DoubleTree Hotel
6161 West Centinela Avenue
Culver City, CA 90230

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shutterstock_506478736“I’m from the government and I’m here to help.” Yeah, right.[1]

Most businesses think protecting their intellectual property is their own responsibility, and it is. But what about when your intellectual property rights are violated by an evildoer? Who are you going to call? While your obvious choice will be the law firm sponsoring this blog, you might also be able to get help from your local prosecutor.

Both State Attorneys General and Federal Prosecutors have tools at their disposal that let them bring the full force of the government to your side—when they are motivated to do so. Speaking at a State Fraud & Prevention Summit in Atlanta recently, Georgia Attorney General Chris Carr announced how his office is available to take action on cybersecurity and data breach fraud cases, and he even pointed to several Assistant AGs in the audience who were there and ready to help.[2] Carr said his state’s emphasis on protecting data privacy and security is enhanced by the U.S. Army recently announcing that its new Cyber Command Headquarters (ARCYBER) will be located in Georgia.[3] Other states have similarly dedicated AGs ready to help, and sometimes you can even get local prosecutors to take interest in your case. Continue Reading Enlisting Government Help to Protect Your Trade Secrets

shutterstock_330853187It is well known that 18 U.S.C. § 1836, et seq. (the Defend Trade Secrets Act or “DTSA”) finally provides a mechanism for pursing trade secret claims in federal court. A recent decision, however, serves as an excellent reminder that failure to establish personal jurisdiction over a defendant will nevertheless result in dismissal of your DTSA claim—and potentially your entire case. So, before you rush off and file that DTSA claim in your local federal court, carefully consider if it’s really the right court after all.

In Gold Medal Products Co. v. Bell Flavors and Fragrances, Inc., 1:16-CV-00365, 2017 WL 1365798 (S.D. Ohio Apr. 14, 2017), the plaintiff filed suit in the U.S.D.C. for Southern District of Ohio against its former employee, William Sunderhaus, and his new employer, Bell Flavors, alleging misappropriation of trade secrets and confidential information. As part of its lawsuit, Plaintiff asserted a DTSA claim, which Defendants moved to dismiss for lack of personal jurisdiction. Continue Reading Don’t Forget to Establish Personal Jurisdiction in Defend Trade Secrets Act Cases

shutterstock_394537450A lawyer’s favorite phrase might be “it depends.” And when an employer asks whether its customer lists qualify as a trade secret, “it depends” is often the answer. But even if it’s difficult to definitively state whether customer lists qualify as a trade secret, the converse—whether customer lists might not constitute a trade secret—can be helpful to assessing how much protection a court will provide.

With the advent of the Uniform Trade Secrets Act (“UTSA”), no state categorically denies trade-secrets status to customer lists. That’s because the default definition of a “trade secret” under the UTSA includes compilations of information, and several states modified the default definition to explicitly include customer lists as potential trade secrets. See, e.g., Conn Gen. Stat. § 35-51(d); O.C.G.A. § 10-1-761(4); Or. Rev. Stat. § 646.461(4); 12 Pa. Cons. Stat. Ann. § 5302. Other states opted to mention that a “listing of names, addresses, or telephone numbers” may qualify as a trade secret if the listing, like any trade secret, has independent economic value because it is not readily ascertainable and is subject to reasonable efforts to maintain its secrecy.  See, e.g., Co. Rev. Stat. Ann. § 7-74-102(4); Oh. Rev. Code Ann. § 1333.61(D).

States still, however, apply varying degrees of scrutiny before conceding that customer lists constitute a trade secret. In more skeptical jurisdictions, courts decline to confer trade-secrets status on customer lists for one of three reasons. Continue Reading Are My Customer Lists a Trade Secret?

shutterstock_584007385Seyfarth Shaw attorneys Robert Milligan, Jim McNairy, and Scott Atkinson, joined by James Vaughn of iDiscovery Solutions, are presenting a briefing in Los Angeles on May 10 and a briefing in San Francisco on May 17, focused on trade secret protections.

Trade secret identification and protection is more critical than ever for employers in California. Technology is consuming the way we do business, and new laws concerning trade secrets and the content of employment agreements with California employees makes trade secret identification and protection more critical than ever.

We invite you to join our Seyfarth attorneys along with one of California’s leading computer forensics experts in an interactive briefing designed to help California employers navigate these tricky waters and provide best practices for trade secret protection.

Topics include:

  • How to best identify and protect trade secrets
  • What employers need to know about the DTSA
  • The impact of new California Labor Code Section 925
  • Effective use of restrictive covenants in employment agreements
  • How to catch a trade secret thief
  • Responses to potential trade secret theft
  • Choosing the right court to protect trade secrets
  • Considerations for suing under the DTSA vs California law (or both)

 

Los Angeles Breakfast Briefing Details
May 10, from 8 a.m. to 10 a.m.
Seyfarth Shaw LLP
Los Angeles – Downtown
333 South Hope Street, Suite 3900
Los Angeles, CA 90071
register

 

San Francisco Breakfast Briefing Details
May 17, from 8 a.m. to 10 a.m.
Seyfarth Shaw LLP
San Francisco
JPMorgan Chase Building
560 Mission Street, 20th Floor
San Francisco, CA 94105

register

itechlaw-logoSeyfarth Shaw LLP is pleased to be a Global Sponsor at ITechLaw’s 2017 World Technology Conference in Chicago May 3–5.

The Drake Hotel
140 East Walton Place
Chicago, IL 60611

ITechLaw is a not-for-profit organization established to inform and educate lawyers about the unique legal issues arising from the evolution, production, marketing, acquisition and use of information and communications technology.

The World Conference will feature a wide-ranging program and invaluable networking opportunities that will focus on cutting-edge legal topics, including e-commerce, e-contracting, disruptive technologies, data protection developments, and the impact of cognitive technologies in the legal spheres.

This year, Seyfarth Shaw Partner Robert B. Milligan is on ITechLaw’s Board of Directors and is the Co-Chair of the Local Representative Committee.  Seyfarth Shaw Partners Kevin Woolf and Dan Hart and Seyfarth Shaw Legal Project Manager Kyle Hoover will be leading the interactive workshop “Technology Contract-a-thon.” The workshop will take participants into the evolving process, labor and software solutions addressing the “more for less” challenge of efficiently handling technology transactions and contract management.

Please stop by our table during the conference to learn about our Intellectual Property, Corporate, Global Privacy & Security and Trade Secrets, Computer Fraud & Non-Competes Practice Groups. Chicago Partners Michael Wexler, Bob Sell, and Marcus Mintz, and Associate Kristine Argentine are scheduled to attend and participate at the conference.

For more information, click here.

 

webinarOn Thursday, April 20, at 12:00 p.m. Central, Seyfarth attorneys Patrick T. Muffo and Kevin J. Mahoney will present Simple Measures for Protecting Intellectual Property and Trade Secrets.

Every day, companies unknowingly give up intellectual property and trade secrets which they could have otherwise protected with simple processes. Poor R&D policies may not capture patent rights on a company invention. A faulty or simply outdated employment agreement may not protect a customer list used by an employee who leaves for a competitor. These pitfalls are easily avoidable by implementing measures on the front end and educating employees on the basics of intangible property and how to protect it.

In this webinar, Seyfarth IP and trade secret attorneys will provide a basic overview of what types of intellectual property and trade secrets are protectable, how to protect them, and helpful tips to ensure that a company is doing everything they can to avoid common issues associated with intangible property.

The topics covered include:

  • A discussion of what types of intangible property are protectable
  • The process for protecting intangible property
  • What is a “trade secret” and how do you protect one?
  • What steps can engineers, business people, and marketing teams take to ensure their intangible assets are protected on the front end?

Please join us for this informative webinar.

register

shutterstock_529332652Seyfarth Synopsis: An environmental remediation technologies company is in the midst of litigation in Chinese courts over a $1.2 million contract to provide its technology to a Chinese company. According to the Chinese entity, the technology provider failed to deliver the unit in a “timeframe that was agreed.”

The West Mountain Environmental Corp. (WMT) had issued a press release in October 2016 that it had sold its first indirect thermal desorption technology (TPS) unit in China to Shanghai Hehui Environmental Technology, Co. Ltd. (Hehui). WMT valued the contract at approximately $1.2 million.

Historically, WMT had operated in China since 2012 and has treated, it claims, over 100,000 tons of contaminated soil and oil sludge using TPS technology. TPS’ patented indirect thermal desorption technology is “recognized in the industry as one of the most efficient and safest technologies for the removal of hazardous contaminants.” WMT asserts that TPS was one of the first western environmental remediation technologies successfully transferred to China which has been recognized as a top 100 environmental technology in the 3iPET Program supported by the Ministry of Environmental Protection.

This sale, WMT indicated, represented the first time that TPS technology had been used as part of a process to treat waste purified terephalic acid (PTA) sludge. “PTA is required for the manufacture of polyester fibre, polyethylene terephthalate (PET) bottle resin and polyester film and China is the largest producer of PTA at over 50 million tonnes per year.”

Now according to a recent WMT press release, it received notice that a lawsuit had been filed against it by Hehui, claiming that WMT failed to deliver the TPS unit in a “timeframe that was agreed.” As a consequence, a Chinese Court ordered that WMT’s bank accounts be frozen until a hearing is held on March 27, 2017 in Shanghai.

Subsequently WMT was informed by its Chinese legal counsel that its motion to remand its contract dispute with Hehui to arbitration in conformance with the terms of the contract between the parties was denied. The release indicated that Chinese Intermediate Court ruled that as the contract between the parties did not specify an arbitrator, so the Intermediate Court would hear the case. As a result of the ruling and based on the recommendation from Chinese legal counsel, WMT will file an objection of jurisdiction to the Intermediate Court on April 5, 2017, at which time an official hearing for the case will be set.

This case illustrates how very careful parties need to be in preparing contracts, especially in international cases. Deals in China may be especially complicated as the law varies in different provinces.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the International Employment Law Team, the Intellectual Property, or the Trade Secrets Teams

shutterstock_287601008A California federal district court has recently given employers a small victory against former employees who misappropriate trade secrets and assert whistleblower immunity or the litigation privilege as after-the-fact defenses. The federal district court for the Eastern District of California recently rejected, for a second time, a defendant’s anti-SLAPP motion to strike a trade secret lawsuit brought against him by his former employer. Notably, the court rejected the defendant former employee’s whistleblower and litigation privilege defenses as inapplicable, thereby allowing the beer company’s trade secret action to proceed.

On March 1, 2013, the beer company sued the former employee for, among other things, trade secret misappropriation and breach of nondisclosure agreements. The former employee subsequently filed a motion to dismiss and strike the Complaint under California’s anti-SLAPP statute. Specifically, the former employee argued that the Complaint was an attempt to punish him for purportedly exercising his constitutional rights of petition and free speech in connection with a consumer class action litigation that he filed against the company exactly one week before.

The federal district court denied the former employee’s anti-SLAPP motion and concluded that the company’s claims did not arise out of the former employees protected litigation activity. The former employee appealed.

The Court of Appeals for the Ninth Circuit reversed the district court and remanded back so the district court could consider the next prong of the anti-SLAPP analysis, the plaintiff’s probability of prevailing on its claims.

Upon its second review of the former employee’s anti-SLAPP motion, the federal district court concluded that the company had demonstrated a likelihood of prevailing on its trade secret misappropriation and breach of contract claims. The court then turned to and rejected the former employee’s substantive legal defenses of public policy, whistleblower immunity, and the litigation privilege.

First, the court rejected the former employee’s argument that confidentiality agreements are unenforceable as a matter of public policy. The court refused to adopt such a sweeping rule that would render confidentiality agreements unenforceable that would allow former employees to disclose trade secret or confidential information.

Second, the court acknowledged that California provides protection to whistleblowers but only when the employee discloses reasonably based suspicious of illegal activity to a governmental agency. The court concluded that such protections did not apply to employees who disclose information to their attorneys in order to further a class action against an employer.

Lastly, the court rejected the former employee’s argument that the misappropriation of documents in furtherance of anticipated litigation was protected under the litigation privilege. The court reasoned that the litigation privilege does not protect against illegal activity that causes damage and to protect such threats is inconsistent with the purposes of the anti-SLAPP statute.

It would be interesting to see the court’s analysis and decision, however, had the alleged misappropriation occurred after the enactment of the new Defendant Trade Secrets Act (“DTSA”), which appears to provide broader whistleblower protections. The court in this case highlighted that California’s whistleblower statute protected only disclosures to government agencies and not a defendant’s attorneys. The DTSA, however, protects individuals from criminal and civil liability under any federal or state trade secret law for the disclosure of a trade secret that: (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding. (For additional information on the DTSA and its implications regarding whistleblowers, please see our DTSA Guide.)

Nonetheless, this case confirms that employees do not have an unfettered right to surreptitiously take documents from the workplace for their own use in litigation or otherwise. Indeed, the Ninth Circuit has rejected the concept of “blanket” protection for whistleblowers for violation of confidentiality agreements and misappropriation of confidential documents. See Cafasso v. General Dynamics C4 Systems, Inc., 637 F.3d 1047 (9th Cir. 2011).

With the likely broader whistleblower protections under the recently enacted DTSA, however, employers that utilize agreements and policies to protect trade secrets and other confidential information should ensure such documents have been updated to comply with the DTSA and its important employee and whistleblower notification provisions

 

shutterstock_465124364Seyfarth continues to be at the forefront of issues involving the Defend Trade Secrets Act (“DTSA”). On March 17, 2017, two Seyfarth attorneys, Andrew Boutros and Alex Meier, published the first-ever in-depth analysis of the intersection between the DTSA and the Racketeer Influenced and Corrupt Organizations Act (“RICO”) in Bloomberg’s White Collar Crime Report.

The article, “An Endangered Claim Reemerges: The Defend Trade Secrets Act Breathes New Life Into Trade-Secrets-Based RICO Claims,” examines how the DTSA, in certain circumstances, may create liability under RICO for the misappropriation of trade secrets. Pre-DTSA, courts were hesitant to impose RICO liability based on trade-secrets misappropriation, because even fraudulent acts with the end goal of misappropriating trade secrets did not present a threat of ongoing criminal activity (“continuity,” in RICO parlance). With the DTSA’s passage, however, the misappropriation, copying, disclosure, and use of trade secrets constitute “predicate acts” that may satisfy RICO’s continuity requirement. The article analyzes two scenarios that may create civil RICO liability: First, a coordinated departure involving multiple employees defecting to join the same competitor; and, second, when a company repeatedly hires key employees in an attempt to acquire its competitors trade secrets.

An Endangered Claim Reemerges: The Defend Trade Secrets Act Breathes New Life Into Trade-Secrets-Based RICO Claims” is reproduced with permission from White Collar Crime Report, 12 WCR 243, 03/17/2017. Copyright 2017 by The Bureau of National Affairs, Inc. (800-372-1033) http://www.bna.com.