In a rare appellate decision on enforceability of non-disclosure agreements and a plaintiff’s burden to establish the existence of trade secrets, the First Circuit recently overturned a district court summary judgment order and trial verdict. This decision serves as an important reminder for both those who litigate trade secrets claims and those who draft restrictive covenants agreements.
Background
TLS Management and Marketing Services, LLC, a tax planning and consulting firm, sued its former employee, Ricky Rodríguez-Toledo, for alleged misappropriation of trade secrets under Puerto Rico’s misappropriation law and breach of his NDA with TLS. TLS claimed two trade secrets germane to the litigation, the “US Possession Strategy”—essentially a tax arbitrage strategy designed to help clients avoid higher mainland taxes—and “Capital Preservation Reports” or “CPRs,” client-specific reports with tax recommendations based on an analysis of applicable statutes and regulations. Continue Reading Rare First Circuit Decision Invalidating NDA and Overturning Misappropriation Verdict Serves as a Cautionary Tale
The American Intellectual Property Law Association’s (AIPLA) Trade Secret Committee (of which partner Erik Weibust is Vice Chair) is taking its annual Trade Secret Law Summit online this year, with a series of weekly webinars. The first of the series, on Wednesday, August 12, 2020, at 2:00 p.m. EST, features partner Scott Humphrey, who will be moderating a panel entitled “Litigation Funding in Trade Secrets Cases.”
Partner Erik Weibust will be speaking on Thursday, August 13, 2020, at 12:00 p.m. EST, on an American Bar Association webinar entitled “Non-Compete Update: Practical Guidance in Response to COVID-19.” Erik will be covering topics including “Enforcing Non-Competes During High Unemployment” and “Preparation and Pursuit of Non-Compete Litigation During Court Closures/Limited Access.” Other topics include:
At the end of 2019, Coty Inc. (“Coty”) expanded its brand portfolio by closing a notable $600 million deal for a majority stake in reality star Kylie Jenner’s young cosmetics company, King Kylie LLC (d/b/a Kylie Cosmetics). The purchase placed the valuation of the Kylie Cosmetics at $1.2 billion. Drama soon followed the acquisition as reports questioning Ms. Jenner’s net worth (and consequently, the value of her cosmetics empire) surfaced in May 2020, overshadowing Coty’s launch of the Kylie Skin beauty line in Europe. On June 29, 2020, Coty announced a 21% investment in KKW Beauty (Ms. Jenner’s sister’s company) for $200 million. Prompted by these deals, the manufacturer behind both Kylie Cosmetics and KKW, Seed Beauty, LLC, filed two trade secret lawsuits in Superior Court in Los Angeles, California. 
As many of our blog readers will know, the enforceability of restrictive covenants often depends on which state’s law applies to the dispute. For example, California is well known for refusing to enforce 
Seyfarth partners Robert Milligan and Dawn Mertineit recently recorded a 60-minute webinar for California CLE provider CEB, “Handling a Remote Work Force and Return to Work Considerations in the Age of COVID-19: Best Practices for Protecting Trade Secrets and Confidential Information.”
The Massachusetts Superior Court recently held in Now Business Intelligence, Inc. v. Donahue that a temporary reassignment during a business slowdown, consisting of the addition of certain non-billable duties, does not constitute a material change invalidating a non-compete agreement. The dispute centered on Now Business Intelligence, Inc.’s (“NBI”) ability to hold its former employee, Sean Donahue (“Donahue”), liable for breach of his covenant not to compete. 
Dawn Mertineit and Robert Milligan authored an article in the