After a four day bench trial on August 10, 2021, a Houston federal judge ruled that the conceptual designs an oil and gas manufacturing company disclosed to its erstwhile collaborator under an NDA were not eligible for trade secret protection because they were neither secret nor misappropriated due predominantly to disclosure in a prior public patent. The ruling underscores the necessity that trade secrets are—in fact—kept actually secret. Moreover, any prior patent of the party seeking to protect its trade secrets should be scrutinized for similarity with the technology or information allegedly comprising a trade secret. Continue Reading Texas Oil & Gas Manufacturing Company’s DTSA/TUTSA Lawsuit Unraveled by Public Disclosure of Alleged Trade Secret in its Own Expired Patent
Robert Milligan, Seyfarth Partner and Co-Chair of the Trade Secrets, Computer Fraud & Non-Competes Practice Group, is a speaker for the “Closing Plenary – Mid-Year Updates and Ethics of Inventorship of AI Patenting” session at the American Intellectual Property Law Association (AIPLA) Mid-Winter Institute on February 4 at 9 a.m. Pacific, in Rancho Mirage, California.
Robert Milligan is on the “Mid-Year Updates” half of the session and is speaking on recent developments in trade secrets law. Other speakers are covering updates on patent, antitrust, trademark, and copyright developments.
AIPLA is a national bar association that represents a wide and diverse spectrum of individuals from law firms, companies, and institutions involved directly or indirectly in the practice of patent, trademark, copyright, trade secret, and unfair competition law, as well as other fields of law affecting intellectual property.
For more information about AIPLA’s Mid-Winter Institute or to register for the program, please visit AIPLA’s website.
What You Need to Know about the Recent Cases and Developments in Trade Secrets, Restrictive Covenants, and Computer Fraud
Thursday, January 27, 2022
2:00 p.m. to 3:00 p.m. Eastern
1:00 p.m. to 2:00 p.m. Central
12:00 p.m. to 1:00 p.m. Mountain
11:00 a.m. to 12:00 p.m. Pacific
In the first installment of the 2022 Trade Secrets Webinar Series, Seyfarth attorneys will review noteworthy legislation, cases, and other legal developments from across the nation over the last year in the area of trade secrets and data theft, non-competes and other restrictive covenants, and computer fraud. Plus, they will provide predictions for what to watch for in 2022.
Seyfarth attorneys Michael Wexler, Robert Milligan, and James Yu will address the following topics:
- Significant new legislation on non-compete and other restrictive covenants and related court decisions that may impact their enforcement
- Discussion of legislative and regulatory efforts to narrow use of non-competes, including the impact of Biden’s July 9, 2021 Executive Order and other potential federal legislation
- The Defend Trade Secrets Act and tips for navigating the law and an overview of what we know now that it’s been in effect for more than 5 years
- Recent significant trade secret misappropriation decisions concerning damages, fees, and pleading
- The viability of computer fraud claims after the Supreme Court’s decision in Van Buren v. United States limiting claims that can be brought under the Computer Fraud and Abuse Act
- Takeaways from the December 2021 DOJ and FTC Virtual Public Workshop discussing efforts to promote competitive labor markets and worker mobility
- Best practices for updating and structuring agreements and policies to adequately protect company assets and trade secrets, including addressing the challenge for multi-state employers of an increasing divergence of state laws and remote workforce
If you have any questions, please contact Colleen Vest at email@example.com and reference this event.
This webinar is accredited for CLE in CA, IL, NJ, and NY. Credit will be applied for as requested for TX, GA, WA, NC, FL and VA. The following jurisdictions accept reciprocal credit with these accredited states, and individuals can use the certificate they receive to gain CLE credit therein: AZ, CT, NH. The following jurisdictions do not require CLE, but attendees will receive general certificates of attendance: DC, MA, MD, MI, SD. For all other jurisdictions, a general certificate of attendance and the necessary materials will be issued that can be used in other jurisdictions for self-application. If you have questions about jurisdictions, please email CLE@seyfarth.com.
In what may seem to be a surprising series of events, given the state’s infamous hostility to restrictive covenants, a California appellate panel recently affirmed a Los Angeles Superior Court judgment effectively enjoining Netflix from soliciting certain employees subject to specific fixed-term employment agreements with Fox. More specifically, the panel—applying reasoning similar to the California Supreme Court’s in Ixchel Pharma, LLC v. Biogen, Inc.—upheld the trial court’s granting of summary adjudication in favor of Twentieth Century Fox Film Corporation and Fox 21, Inc. (collectively, “Fox”) on their claim under Business and Professions Code sections 17200, et seq. against Netflix Inc. (“Netflix”) and corresponding injunction in an unpublished but closely followed decision.
In affirming the judgment, the panel expressly rejected Netflix’s contention that the injunction, which prohibits Netflix, “individually … and/or in concert with others,” from “solicit[ing] employees who are subject to [f]ixed-[t]erm [e]mployment [a]greements with [Fox] or induc[ing] such employees to breach their valid [f]ixed-[t]erm [e]mployment [a]greements with [Fox],” constituted “an invalid restraint on employee mobility” under California public policy, Business and Professions Code section 16600, and other statutes concerning personal services contracts. The panel acknowledged each of these arguments and underlying public policy concerns, but ultimately found that they were not supported by the facts at hand, particularly in light of countervailing policies “favoring the stability and predictability of fixed-term employment relationships.” The panel also observed that the injunction had been carefully limited, and narrowly drawn by the trial court to curb wrongful conduct by Netflix without impeding the ability of individual employees to independently seek out new employment. Continue Reading California Court of Appeal Affirms Injunction Barring Netflix From Poaching Fox Executives, Citing Unfair Competition
This July, several Seyfarth attorneys signed a letter in response to President Biden’s Executive Order on Promoting Competition in the American Economy. On December 20, 2021, following the FTC’s and DOJ’s virtual workshop on “Making Competition Work: Promoting Competition in the Labor Markets” in early December, Seyfarth partners Dawn Mertineit, Robert Milligan, Kate Perrelli, and Erik Weibust were among the 73 signatories to another letter drafted by our friend Russell Beck, this time addressed to the FTC and Jonathan Kanter, the Assistant Attorney General, Antitrust Division.
Like the previous letter, this submission recommends against federal regulation of non-competes. It references new research by Gerald Carino at the Federal Reserve Bank of Philadelphia supporting the position that non-competes may help, rather than stifle, start-ups. The letter also points out the limitations in prior research that suggested—perhaps erroneously—that non-competes hamper innovation and growth, and highlights the “correlation implies causation” fallacy often associated with negative views of restrictive covenants (including the unproven theory that non-competes suppress wages).
The letter also addressed certain comments made at the FTC workshop suggesting—in our view, inaccurately—that non-competes are per se harmful (in fact, on the same day that the FTC/DOJ workshop started, the US Chamber of Commerce published an article noting that reasonable non-competes do not stifle competition, and may in fact benefit employees—and positing that banning non-competes could hinder employer efforts to recruit and retain top talent). While we agree that non-competes can be used inappropriately, especially with low-wage workers or where sprung upon employees with virtually no ability to review or consider their impact, many non-competes have beneficial effects for companies and workers alike. As a result, the signatories recommended again that any non-compete legislation continue to be conducted at the state level.
We are sure to hear more from the Biden Administration on this important topic, and will update our readers with any developments.
In the final webinar for 2021, Seyfarth attorneys Dawn Mertineit, Eric Barton, and Joshua Salinas discussed new legislation and the enforcement of non-competes. Any company that seeks to use non-compete and non-solicitation agreements to protect its trade secrets, confidential information, client relationships, goodwill, or work forces needs to stay informed of the varied and ever-evolving standards in each state.
As a follow up to this webinar, our team wanted to highlight the below:
- State laws are changing at a rapid rate, with dozens of bills introduced or pending this year. Multi-state employers in particular should stay abreast of changes in the law to make sure their agreements remain compliant and enforceable.
- Federal legislation continues to be proposed to establish standardized rules for non-compete agreements, which if passed, would supersede a variety of state laws, but so far, no proposals have made it past committee. We continue to closely monitor potential developments.
- The Great Resignation has created an unprecedented challenge to workforce retention and recruitment. Employers that utilize restrictive covenant agreements and intend to shift to more flexible work locations for employees should seek competent counsel regarding any ongoing or contemplated use of forum selection and/or choice of law provisions.
Stay up to date on non-compete laws with our recently updated 50 State Non-Compete Guide.
This blog post is the author’s opinion and is for educational and informational purposes only. It provides general information and a general understanding of the law, but does not provide specific legal advice. Please feel free to reach out to a Seyfarth Trade Secrets attorney if you’d like to discuss your particular situation.
Before Georgia enacted a constitutional amendment in 2011 to allow the enforcement of reasonable restrictive covenants, Georgia was a popular venue for companies and individuals to avoid non-competes and non-solicits. A recent personal jurisdiction decision in which the Georgia Supreme Court affirmed that a foreign corporation’s registration to do business in Georgia amounts to an implicit consent to general personal jurisdiction raises the question of whether Georgia will once again become a popular forum to try to void restrictive covenant agreements—at least for agreements executed before May 11, 2011.
To understand why, we’ll begin with a brief overview of Georgia’s history as a hostile venue to restrictive covenants and trends in personal jurisdiction decisions before returning to Cooper Tire’s facts and potential impact on restrictive covenants. Continue Reading Does Georgia Decision on Personal Jurisdiction Present an Invitation to Forum Shop For Non-Compete Disputes?
Throughout 2021, our dedicated Trade Secrets, Computer Fraud & Non-Competes Practice Group hosted a series of CLE webinars that addressed significant trade secret and restrictive covenant issues facing clients today. This year’s series included:
- 2020 Year in Review: What You Need to Know about the Recent Cases and Developments in Trade Secrets, Non-Competes, and Computer Fraud Law
- Employee Termination & Data Repatriation in the Remote Work Environment
- The Connection Between Wage and Hour & Restrictive Covenant Law
- How and Why Texas is Different When it Comes to Trade Secrets and Restrictive Covenants
- Anatomy of an M&A Transaction: How to Issue Spot for Non-Compete, Trade Secrets/Confidential Information, and Intellectual Capital Concerns
- Overview of Non-Compete Legislation and Enforcement Issues from 2021
As a conclusion to our 2021 webinar series, we compiled a list of key takeaway points for each program. For those clients who missed any of the programs in this year’s series, recordings of all of our past webinars are available on the blog, or you may click on the link for each webinar below to view the online recording. Continue Reading 2021 Trade Secrets Webinar Series: Takeaways & Recordings
How to Issue Spot for Non-Compete, Trade Secrets/Confidential Information, and Intellectual Capital Concerns
In this fifth installment of our 2021 Trade Secrets Webinar Series, Seyfarth partners Robert Milligan and Suzanne Saxman discussed trade secret/confidentiality, non-compete and restrictive covenant issues that typically arise in M&A transactions. The panel walked through the keys issues in the typical M&A lifecycle and provided practical tips to help businesses effectively maximize value and protect their assets.
As a conclusion to this webinar, we compiled a summary of takeaways:
- Careful management of all stages in the M&A process is critical to maintaining a high level of confidentiality and avoiding inadvertent leaks and missteps.
- Phased sharing of sensitive and confidential commercial information can preserve a Seller’s valuable intellectual assets and avoid giving undue leverage to bidders or putting the seller’s business at risk.
- Special care should be given to the seller’s key employees and the use of retention agreements with enforceable restrictive covenants to ensure that the buyer retains continuity and key company leaders.
- Experienced counsel should carefully draft restrictive covenants in the definitive buy sell agreement and ensure that the covenants apply with applicable law, including addressing issues of reasonableness and antitrust consideration.
Thursday, December 16, 2021
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific
In this installment of our 2021 Trade Secrets Webinar Series, our team will focus on new legislation and the enforcement of non-competes. Any company that seeks to use non-compete and non-solicitation agreements to protect its trade secrets, confidential information, client relationships, goodwill, or work forces needs to stay informed of the varied and ever-evolving standards in each state.
Seyfarth attorneys Dawn Mertineit, Eric Barton, and Joshua Salinas will address the following topics:
- Recent state law changes related to restrictive covenants and non-competes and the potential impact of these changes
- Proposed restrictive covenant and non-compete legislation in various states
- Trends we’re seeing in restrictive covenant legislation and what changes we may see in 2022
- Update on FTC / DOJ Non-Compete Workshop
If you have any questions, please contact Colleen Vest at firstname.lastname@example.org and reference this event.
This webinar is accredited for CLE in CA, IL, NJ, and NY. Credit will be applied for as requested for TX, GA, WA, NC, FL and VA. The following jurisdictions accept reciprocal credit with these accredited states, and individuals can use the certificate they receive to gain CLE credit therein: AZ, CT, ME, NH. The following jurisdictions do not require CLE, but attendees will receive general certificates of attendance: DC, MA, MD, MI, SD. For all other jurisdictions, a general certificate of attendance and the necessary materials will be issued that can be used in other jurisdictions for self-application. If you have questions about jurisdictions, please email CLE@seyfarth.com.