The Federal Trade Commission (FTC) recently set its sights squarely on non-compete agreements in merger transactions, making them ripe for further scrutiny. In a Consent Order issued June 14, 2022, the FTC ordered GPM Investments LLC and its parent company ARKO Corp. to roll back provisions it deemed “anticompetitive” in GPM’s May 2021 acquisition of 60 Express Stop retail fuel stations from Corrigan Oil Company. Under the FTC’s order, ARKO and GPM agreed to limit the non-compete agreement that it imposed on Corrigan, and return five retail fuel stations in several local Michigan markets. This decision comes on the heels of a June 10th statement by the FTC’s Chair Lina M. Khan, joined by Commissioners Rebecca Kelly Slaughter and Alvaro M. Bedoya, warning businesses that contract terms in merger agreements that potentially impede fair competition would be highly scrutinized.
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Texas Supreme Court Confirms that HouseCanary Must Fly Toward a $201 Million Judgment or a Retrial
On June 17, 2022, the Texas Supreme Court affirmed a lower appellate court’s decision, (which we previously wrote about here), which nixed the plaintiff’s $740 million trade secret win at trial and required the plaintiff to either accept a $201 million breach of contract win (which the defendant decried as “jackpot justice”) or go back to trial on all claims.
Briefly, real estate startup HouseCanary brought suit against Title Source, Inc., now known as Amrock, alleging misappropriation of trade secrets under the Texas Uniform Trade Secrets Act (TUTSA), fraud, and breach of contract. At trial, the jury awarded HouseCanary $740 million on its TUTSA and fraud claims and $201 million on its breach of contract claim. HouseCanary could elect to recover one or the other, and it elected to recover the $740 million. On appeal, the lower appellate court reversed the trial court decision regarding TUTSA and fraud based on deficiencies in the jury charge. The appellate court then found that the TUTSA, fraud, and breach of contract claims were inseparable, leaving HouseCanary with two options: to retry all of its claims or recover only the $201 million awarded on the breach of contract claim.
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Federal Court Provides Insight on Meaning of “Solicitation” and Plaintiff’s Burden on Motion for Preliminary Injunction
A federal court in Texas recently provided useful insights on what constitutes “solicitation” by a former employee under that employee’s restrictive covenant with his former employer, and the court provided further insights on what inferences courts will, and will not, draw in favor of a plaintiff seeking a preliminary injunction based on alleged misappropriation of trade secrets.[1]
The defendant worked for the plaintiff, Sunbelt, for over twenty years, primarily as a salesperson covering institutional customers.[2] As part of his employment, the defendant signed an employment agreement that, among other things, prohibited him from “solicit[ing]” Sunbelt’s customers or competing with Sunbelt within a certain geographic area.[3] He later left to join one of Sunbelt’s competitors. Sunbelt filed suit and sought a preliminary injunction, asserting that the employed had, among other things, solicited Sunbelt’s former customers, worked for Sunbelt’s competitor within the area prohibited by the non-competition agreement, and misappropriated Sunbelt’s trade secrets.[4]
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Seyfarth Attorneys Author Article on Texas Trade Secret Lawsuit
Seyfarth partner Jesse Coleman and associate Kevin Green authored an IP Litigator article focused on a recent DTSA/TUTSA lawsuit which involved the public disclosure of alleged trade secret in an expired patent. Read the full article from the March / April 2022 edition of IP Litigator here.
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Webinar Recap! Protecting Trade Secrets and Enforcing Restrictive Covenants Internationally
In the second program in the 2022 Trade Secrets Webinar Series, Seyfarth partners Jesse Coleman, Dan Hart, and Caitlin Lane discussed how to identify the greatest threats to trade secrets, provided tips and best practices for protecting trade secrets abroad, and covered enforcement mechanisms and remedies internationally and in the US.
As a follow up to this webinar, our
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Upcoming Webinar! Protecting Trade Secrets and Enforcing Restrictive Covenants Internationally
Thursday, March 17, 2022
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
Trade secrets are critical intellectual property, and the threat to trade secrets continues to increase year after year. It’s vital for companies to protect trade secrets, both in the US
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Texas Oil & Gas Manufacturing Company’s DTSA/TUTSA Lawsuit Unraveled by Public Disclosure of Alleged Trade Secret in its Own Expired Patent
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
Join Seyfarth at the 2021 Trade Secret Summit in Austin, Texas
Please join Seyfarth at the 2021 AIPLA Trade Secret Summit, which is being held November 8-9, 2021 at the headquarters of SolarWinds in Austin, Texas.
Boston Partner Erik Weibust is Chair of the AIPLA Trade Secret Committee and he will be offering welcoming remarks and moderating a panel entitled “Expert Advice: Practical tips for working with experts in a trade
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Jesse Coleman and Erik Weibust Present Webinar on “Available Remedies in Trade Secret and Restrictive Covenant Cases” for LawPracticeCLE
On Monday, July 19, 2021, Houston partner Jesse Coleman and Boston partner Erik Weibust are presenting a webinar entitled “Available Remedies in Trade Secret and Restrictive Covenant Cases” for LawPracticeCLE at 2 p.m. Eastern. It will also be available on demand.
Course Description
When a current or former employee or business partner misappropriates trade secrets or breaches a restrictive covenant
Continue Reading Jesse Coleman and Erik Weibust Present Webinar on “Available Remedies in Trade Secret and Restrictive Covenant Cases” for LawPracticeCLE
Webinar Recap! How and Why Texas is Different When it Comes to Trade Secrets and Non-Competes
In the fourth installment of our 2021 Trade Secrets Webinar Series, Seyfarth attorneys Jesse Coleman, Matt Simmons, and Kevin Green outlined recent legal developments in Texas trade secret and non-compete law and how it is similar to and diverse from other jurisdictions. The webinar also covered how these latest developments impact counseling, litigation, and deals involving companies with employees based
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