Seyfarth is pleased to be a Global Sponsor at ITechLaw’s 2019 World Technology Conference in Boston, May 15-17.

InterContinental Boston
510 Atlantic Avenue
Boston, MA 02210

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 range of programs and invaluable networking opportunities that will focus on cutting-edge legal topics and will provide practical insight into the latest developments in technology law. Data privacy and intellectual property professionals from across the world will be attending.

Seyfarth Partner Katherine Perrelli will be the moderator for the “Tech Transformation of Legal Services Delivery: Opportunities, Barriers, and Potential Solutions” session on Friday. This session will focus on the current state of legal tech tools, as well as the opportunities and challenges presented by the use of tech tools in delivering legal services.

This year, Seyfarth Partner Robert B. Milligan is on ITechLaw’s Board of Directors and is the Co-Chair of the Global Sponsorships Committee, and Partner Dawn Mertineit is on the local planning committee.

For more information or to register, click here.

The Alleghany Court of Common Pleas in Pittsburgh, Pennsylvania, recently denied a law firm’s request to enjoin its former partner from retaining a database that contained various information used to file legal actions under the American with Disabilities Act. According to the law firm, the database was a “trade secret” of the firm, and consequently, the former partner violated the Pennsylvania Trade Secrets Act when he retained a copy of the database after being voted out of the firm in January. The court, however, disagreed with the law firm. In doing so, the court noted that the former partner had an ownership interest in the database when he was part of the firm, and as a result, the former partner could retain a copy of the database when he left. The court then went on to note that, since the data base now resided at two different law firms, the database could not be considered a trade secret under the Pennsylvania Trade Secrets Act. This case, which is titled Carlson Lynch Sweet Kailpela & Carpenter, LLP v. Sweet, GD-19-2790, is a reminder to all law firms, as well as companies in general, to be cognizant of what owners can and cannot take when they are dismissed from their firm. We will continue to monitor the case and will provide additional updates on this website.

A California federal district court recently granted a temporary restraining order (“TRO”) against a former employee for misappropriating proprietary and confidential information in violation of the Defend Trade Secrets Act (“DTSA”), the California Uniform Trade Secrets Act (“CUTSA”), and company confidentiality and non-disclosure agreements. Bemis Co., Inc. v. Summers, No. 219CV00344TLNKJN, 2019 WL 1004853, at *1 (E.D. Cal. Feb. 28, 2019).

Background

Plaintiff Bemis Company, Inc. (“Bemis”) sued a former employee for trade secret misappropriation and breach of contract. Bemis is one of the largest global suppliers of flexible and rigid packaging products, including snack food bags, candy wrappers, cheese packaging, hot dog packaging, medicine packaging, and much more. Continue Reading That’s a Wrap: California Federal Court Grants TRO Against Former Employee for Trade Secret Misappropriation

Last week, the Ninth Circuit finally ruled that a former Anheuser-Busch employee cannot avoid claims filed by the brewer alleging misappropriation of trade secrets and breach of a nondisclosure agreement, the latest in a long running saga that started when Anheuser-Busch filed suit 6 years ago. Former Anheuser-Busch employee James Clark (“Clark”) had filed a motion to strike the company’s trade secrets claims accusing him of stealing proprietary information under the California Anti-SLAPP statute (“strategic lawsuits against public participation”).  Continue Reading Former Employee Accused of Spilling Secret Beer Recipe in Furtherance of Class Action Cannot Strike Claims Under Anti-SLAPP Statute

Academics and advocacy groups—including nonprofit organizations and several major labor unions—have filed a petition with the Federal Trade Commission asking the agency to initiate the rulemaking process and ban non-compete agreements. The petitioners advocate regulations “to prohibit employers from presenting a non-compete clause to a worker (regardless of whether the worker is classified as an ‘employee’ or an ‘independent contractor’), conditioning employment or the purchase of a worker’s labor on the worker’s acceptance of a non-compete clause, or enforcing, or threatening to enforce, a non-compete clause against a worker.” Continue Reading Labor Unions, Advocacy Groups, and Academics Ask Federal Trade Commission to Issue Rules Banning Non-Competes

Seyfarth Partners Erik Weibust and Jeremy Cohen participated in the American Intellectual Property Law Association’s 2019 Trade Secret Law Summit on March 21 and 22 at American Express’s corporate headquarters in New York.  Erik serves as Vice Chair of the AIPLA’s Trade Secret Committee and a member of the planning committee for the Summit, which addressed a range of topics related to trade secret protection across a wide array of industries.  Erik spoke on a panel on Protection of Trade Secrets in the Social Media Era, alongside in-house counsel from Lockheed Martin and Hanzo.  Jeremy spoke on a panel on Trade Secrets and Restrictive Covenants in the Financial Services Industry, which Erik moderated, along with counsel from Morgan Stanley Wealth Management and Brown Brothers Harriman.  Approximately 80 attendees from across the country, comprised of in-house counsel, outside counsel, and government and judicial officials, took part in the Summit, including Seyfarth attorneys Kate Perrelli, Dawn Mertineit, and James Yu.

In Seyfarth’s second installment in its 2019 Trade Secrets Webinar Series, Seyfarth attorneys J. Scott Humphrey and Marcus Mintz focused on trade secret and client relationship considerations in the banking and financial services industry.

As a conclusion to this well-received webinar, we compiled a summary of takeaways:

  • When it comes to protecting your secrets, “an ounce of prevention is worth a pound of cure.” Act proactively and consistently in protecting your trade secrets.
  • For financial firms and institutions, it is important to understand the interplay between FINRA and the Court system. Although the ultimate decision maker will be a FINRA arbitration panel, firms and institutions can still receive significant benefits from pursuing injunctive remedies in a court of law.
  • If you are thinking about joining the Protocol for Broker Recruiting, be sure to review your existing agreements before doing so in order to understand what protections you may be giving up once you join the Protocol.

As readers of this blog well know, there is a growing trend of state legislatures seeking to limit or outright ban non-competes. (See here, here, and here as just a few examples of state efforts to curb non-competes—not to mention the proposed federal legislation and international efforts—in the last six months.) Last week, the Washington Senate jumped on the bandwagon by passing a bill with a 30–18 vote that would severely limit the enforceability non-competes. (Similar efforts failed last year, as we reported here.)  Some of the key features of this year’s bill are as follows: Continue Reading Washington State Lawmakers Seek to Partially Ban Non-Competes

After being slapped with a post-trial judgment last April totaling $2.2 million for misappropriation of confidential and proprietary information, two Wyoming bank executives were named in an unprecedented “Notice of Intent to Prohibit” filed in December by the Federal Reserve Board.  If these executives thought that more than two million dollars in civil liability was harsh, they were mistaken, as they now face a much harsher consequence:  a ban from the banking business altogether.

In its Notice, the Federal Reserve Board alleges that two executives, Frank Smith and Mark Kiolbasa, conspired to misappropriate the confidential and proprietary business information of their employer, Central Bank & Trust in Wyoming, and to give it to Central’s competitor, Farmers State Bank, in exchange for employment and an ownership interest in Farmers.  The Notice contends that the bankers engaged in unsafe and unsound banking practices in breach of their fiduciary duties to Central Bank and seeks a hearing to determine whether they should be permanently barred from participating in the banking industry “in any manner.”

It is unclear whether this action stands on its own or is part of larger movement by the Federal Reserve to crack down on confidential and trade secret misappropriation.  Regardless, it is an issue we will closely monitor given its sizeable consequences.  The risk of a Federal Reserve action for a permanent ban on participation in the banking business adds greater protection to banks, but creates new risks at the same time.  The same bank who threatens to report one of its executives to Feds could also hire a new executive who brings the same baggage with them.  With the Federal Reserve Board’s recent Notice, we are continuing to notice a trend of the governments’ involvement in the confidential and trade secret misappropriation world.

As noted in our February 20th blog post, Robert O’Rourke, a 30 year salesman for cast iron products manufacturer Dura Bar, went on trial in Chicago (Northern District of Illinois) for allegedly stealing Dura trade secrets before leaving to work for a Chinese competitor.  According to the government, O’Rourke downloaded 1,900 files (in 20 minutes) that contained Dura trade secrets and then attempted to board a flight to China with the trade secrets in hand.  The FBI stopped O’Rourke at the gate and subsequently charged O’Rourke with 13 counts of trade secret theft.

At trial, O’Rourke’s defense team acknowledged that O’Rourke downloaded the 1,900 files and was in possession of the files at the time of his arrest, but maintained that the files were not trade secrets because Dura did not take “reasonable measures” to keep the information confidential.  Unfortunately for O’Rourke, the jury disagreed and convicted O’Rourke on seven counts of trade secret theft.  In reaching its decision, the jury found that Dura took reasonable steps to keep its information confidential.  O’Rourke’s texts to his ex-wife about the “damage he could do” to Dura” by giving the 1,900 files to a Dura competitor probably did not help O’Rourke either.

Each count carries a maximum 10 year prison sentence but a sentencing date has not been set because O’Rourke’s attorneys have indicated that they will be filing a motion asking to set aside the jury verdict and/or for a new trial.  We will keep monitoring the case so please check back here for updates.