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Trading Secrets A Law Blog on Trade Secrets, Non-Competes, and Computer Fraud

Tag Archives: misappropriation

Upcoming Webinar: The Stakes Just Got Higher – Criminal Prosecution of Trade Secret Misappropriation

Posted in Computer Fraud and Abuse Act, Data Theft, Espionage, Practice & Procedure, Trade Secrets

On Tuesday, December 11, 2013 at 12:00 p.m. Central, Seyfarth attorneys Michael D. Wexler, Molly M. Joyce and Justin K. Beyer will present the twelfth and final installment in our 2013 Trade Secrets webinar series, focusing on criminal liability for trade secret misappropriation.

The topics they will cover include…

Trade secret misappropriation: what it is and how does it happen

Federal Court Rules Trade Secret Misappropriation Sufficiently Alleged Based on Improper Acquisition, Even in Absence of Use or Disclosure

Posted in Practice & Procedure, Trade Secrets

The United States District Court for the Eastern District of Virginia recently denied a motion to dismiss a counterclaim for violation of Virginia’s Uniform Trade Secrets Act (“VUTSA”), holding that the counterclaim sufficiently alleged trade secret misappropriation based on improper acquisition of a trade secret, even in the absence of allegations of use or disclosure.

Factual allegations:

Plaintiff Jacqueline …

Court Awards Attorney’s Fees for “Bad Faith” Trade Secret Misappropriation Claim

Posted in Trade Secrets

The California Uniform Trade Secrets Act (“CUTSA”) allows for an award of attorney’s fees to the prevailing party on a trade secret misappropriation claim. The statute permits award of attorney’s fees to a plaintiff for a defendant’s “willful and malicious” misappropriation and to a defendant when a plaintiff makes a claim in “bad faith”:

“If a claim of misappropriation is …

Illinois Federal Court Limits Discovery of IP Address Identification Information from ISPs in John Doe Actions: Highlights Continuing Challenge of Identifying Anonymous Posters Of Trade Secrets and Other Intellectual Property On Internet

Posted in Practice & Procedure, Trade Secrets

By Robert Milliganand Jeffrey Oh

As highlighted in our recent webinar, The New Risk: Employee Theft Of Trade Secrets And Confidential Information In The Name Of Protected Whistleblowing, companies continue to struggle with anonymous whistleblowers in the Internet and social media age, including anonymous individuals who post trade secrets and other intellectual property on the Internet. Courts are often …

Utah Appellate Court Holds That “Confidential” Price List Is Not A Trade Secret But A Contract Bid Could Be, And Uniform Trade Secrets Act Preempts Common Law Claims Based On Misusing Confidential Information Not A “Trade Secret”

Posted in Trade Secrets

In a recent, lengthy decision involving allegations of deceitful acts and unfair competition, the Utah Court of Appeals largely affirmed the lower court’s grant of summary judgment to the defendants with respect to a complaint alleging misappropriation of proprietary data and related conduct. Particularly noteworthy, the appellate court held that the Utah Uniform Trade Secrets Act (UTSA) preempts many common …

Colorado Statute of Limitations For Misappropriation Of A Trade Secret Begins To Run Upon Knowledge That It, Or Even A Related Trade Secret, Has Been Misappropriated

Posted in Trade Secrets

Distinguishing between continuing misappropriation of one trade secret and separate misappropriations of related trade secrets can be a daunting task. The Supreme Court of Colorado recently held that, for statute of limitations purposes, the distinction may be inconsequential where misuse occurs on disparate occasions but the proprietary information was disclosed to the same person at substantially the same time, and in furtherance …

FLIR Systems, Inc. v. Parrish: A Cautionary Tale for Trade Secrets Misappropriation Plaintiffs

Posted in Trade Secrets

The California Court of Appeal’s recent decision in FLIR Systems, Inc. v. Parrish, 2d Civil No. B209964, 2009 WL 1653103 (Cal. App. 2d Dist. June 15, 2009), affirming a $1.6 million attorney fee award to defendants upon a finding that the action was brought in bad faith, provides a useful and interesting discussion of various factors that may lead a …

Two Senior Executives Liable for Millions in Misappropriation and Breach of Fiduciary Duty Case

Posted in Breach of Fiduciary Duty, Trade Secrets, Unfair Competition

Associated Press (Anna Jo Bratton) is reporting that a state district court judge in Lancaster County, Nebraska tagged two Nebraska Municipal Power Pool executives with millions of dollars in damages arising out of their scheme to use American Public Energy Agency’s "company information, financial data and copyrighted material."  View Article. It appears that Nebraska Municipal Power Pool ("NMPP") previously provided services to American Public Energy Agency.  …

Recent Headlines Underscore Need for Protective Measures

Posted in Breach of Fiduciary Duty, Computer Fraud, Computer Fraud and Abuse Act, Practice & Procedure, Trade Secrets

A company’s trade secrets may be some of its most important assets.  Recent headlines underscore their importance, and vulnerability: …

Recently, an employee was arrested at the airport and over 1,000 company proprietary documents containing trade secrets were seized that the employee was attempting to transport with her to her new job.

 A national retailer recently was hit with a $21.5 million

Federal Appeals Court Affirms Dismissal of Copyright and Trade Secret Misappropriation Claims Against Oprah Winfrey for Concept Behind “Oprah’s Big Give” TV Program

Posted in Trade Secrets

Tracy v. Winfrey, et al., No. 07-1630 (1st Cir. June 11, 2008).

The U.S. Court of Appeals for the First Circuit has affirmed the dismissal of Darlene Tracy’s copyright infringement and trade secret misappropriation suit against Oprah Winfrey, Harpo Productions, and ABC Television.

In a pro se complaint filed in federal district court in Boston, Tracy alleged that she came …

California Court Suggests Trade Secret Owners Must Notify Good Faith Acquirers of Information of Trade Secret Misappropriation Claims

Posted in Trade Secrets

The recent California appellate decision, Cypress Semiconductor Corp. v. Superior Court, is instructive not just on the issue of when the statute of limitations begins to run in a trade secret matter, but also contains important language with respect to the obligations of the trade secret owner to notify good faith, third-party users of the alleged misappropriation of trade secrets.…

New California State Court Appellate Decision On The Statute of Limitations For Trade Secret Misappropriation Claims

Posted in Trade Secrets

A California appellate court recently held that the statute of limitations for trade secret misappropriation claims against third parties who receive stolen trade secrets from others begins when the plaintiff, not the third party, suspects a misappropriation of trade secrets.

The Court stated: "We conclude that with respect to the element of knowledge, the statute of limitations on a cause …

Primetech v. Cohen: No Duty Of Loyalty To Past Employers

Posted in Restrictive Covenants

The California Courts of Appeal recently concluded that a former employee could not have breached a duty of loyalty to his employer where he entered into competition with the employer only after leaving the company. Primetech Corp. v. Cohen, 2008 WL 1899976 (Cal. App. 4 Dist. April 30, 2008).

The plaintiff, Primetech Corporation, a supplier of aircraft parts to the …

He Said He Said, Not Enough to Prove Computer Fraud and Trade Secret Misappropriation

Posted in Computer Fraud, Trade Secrets

By Scott Krol, New York

The United States Court of Appeals for the Fourth Circuit recently upheld summary judgment holding that a former employee did not violate the Virginia Computer Crimes Act (“VCCA”) when the former company could not prove that they were unaware of employees’ use of company funds. Further, the employee did not violate the Virginia Uniform Trade …

When Licensing Technology, Make Absolutely Clear What Rights the Licensee and Licensor Have Upon Termination of the License

Posted in Trade Secrets

The Topps Company, maker of “Bazooka” bubble gum, licensed Stani to manufacture and distribute the gum in Argentina. The original license was entered into in 1957 and was to expire in 20 years. It provided that Topps would share its “know-how, formulae, processes and techniques” with Stani in exchange for royalties on Stani’s sales. In 1976, the parties entered into …

Southern Nuclear Operating Co., Inc. v. Electronic Data Systems Corp., 2008 WL 1700204 (11th Cir. April 14, 2008)

Posted in Trade Secrets

Georgia’s Trade Secrets Act prohibits knowing misappropriation of trade secrets. See Ga. Code Ann. § 10-1-761. In a recent decision, the Eleventh Circuit briefly examined this principle in affirming a district court’s grant of dismissal and concluded that the Complaint must set forth facts from which the court could infer that any misappropriation of trade secrets was knowing. Southern Nuclear …

Illinois Appellate Court Finds Insurance Company Not Obligated to Defend Agents Who Retained and Used Company’s Trade Secrets In Violation of Agency Agreement

Posted in Trade Secrets

The Illinois Appellate Court affirmed a ruling granting summary judgment to American Family Mutual Insurance Company on its declaratory judgment action seeking a determination that it has no duty to defend the insured defendants in an underlying trade secret misappropriation action the company brought in federal court. American Family Mut. Ins. Co. v. Roth et al., No. 1-07-0526 (Ill. App., …

Home Builder Alleges Trade Secret Theft Of Strategic Plan By Former Executive

Posted in Breach of Fiduciary Duty, Trade Secrets

One of the nation’s large home builders recently filed suit against a former executive in federal court in Albuquerque, New Mexico for alleged misuse of the company’s trade secrets related to a highly confidential internal strategic plan.

Pulte Home Corporation filed suit against former executive Lynn Galindo, a former area vice president based out of Las Vegas, Nevada, in the …

Chicago-Area Woman Indicted for Theft of Trade Secrets Intended for China

Posted in Trade Secrets

A former software engineer for a Chicago-area telecommunications company has been indicted for allegedly misappropriating over 1,000 proprietary documents containing trade secrets which she was evidently attempting to transport with her to her new job in China. Neither company has been named.

The defendant, Hanjuan Jin, a naturalized citizen, took a medical leave of absence from the Chicago-based company (Company …

Counterclaim Plaintiff in Trade Secrets Case wins $27 million

Posted in Trade Secrets, Unfair Competition

The Chemical Abstracts division of the American Chemical Society (ACS) sued three software developers who left ACS to start their own company, Leadscope. ACS sued for trade secret misappropriation, alleging that the software developers used ACS trade secrets to develop their own product. The filing of the lawsuit scuttled several pending (very promising) deals that Leadscope was about to close …

Former Employer’s Suggestion To Customers To Refrain From Doing Business With Alleged Misappropriator Not Actionable As Defamation

Posted in Restrictive Covenants, Trade Secrets

In almost every trade secret/restrictive covenant dispute, a company whose trade secret information has been stolen must confront the possibility that its customers will be dragged into the dispute. One company decided to take the bull by the horns pre-litigation and sent a letter to all of its customers notifying them of a misappropriation by one of its former employees …

Northern District of California Grants Preliminary Injunction in Trade Secrets Matter

Posted in Trade Secrets

In a February 29, 2008 Order, the Northern District of California entered a preliminary injunction against four defendants on behalf of Verigy US, Inc. Verigy demonstrated in discovery that Romi Omar Mayder, the principal of Silicon Test Systems, Inc., e-mailed a number of sensitive documents to a business partner, Robert Pochowski. The documents concerned technology for testing flash memory cards.…

California Federal District Court Awards $ 6.6 Million In Damages In Trade Secret Suit

Posted in Restrictive Covenants, Trade Secrets

After granting summary judgment for plaintiff in late November 2007, Judge Susan Illston of the U.S. District Court for the Northern District of California recently awarded plaintiff $6.6 million in damages, the majority of which related to future lost profits due to breach of contract and misappropriation of trade secrets. Although the motion for summary judgment was uncontested, the court’s …