Seyfarth partners Erik Weibust, Jeremy Cohen, Scott Humphrey, and Marcus Mintz recently published an article entitled “Protecting Trade Secrets Without Breaking the Bank (or Even Negatively Affecting Profits)” in the Intellectual Property & Technology Law Journal. The article addresses the use of litigation funding in trade secret cases.

The Intellectual Property & Technology Law

Social distancing, a term which few of us had heard of before this year (despite the fact that it has been used since at least the early 2000s), is stretching into its third month. Notwithstanding some loosening of shelter-in-place advisories, and the fact that some employers are starting to open up offices and invite their workforce back in, a majority of employees are still working from home. This has broad implications for protection of employers’ trade secrets and confidential information—in many cases, a company’s most precious asset.
Continue Reading Security From Afar: How Best to Protect Trade Secrets in a World of Remote Working, Zoombombing, and Uncertainty

As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Hon. Elizabeth D. Laporte (Ret.)

Trade secret litigation in California is growing, in both volume and impact. The second-largest plaintiffs’ verdict in 2019 was $845 million, as reported by the Daily Journal, which was awarded to ASML, a Dutch semiconductor chip processing software company, in its case against XTAL, a company founded by two ex-employees of the plaintiff’s subsidiary in Santa Clara who allegedly worked in secret for XTAL using stolen trade secrets to get a head start in development and siphon off a major customer contract (ASML US Inc. v. XTAL Inc.). Another large verdict was a $66 million jury award, including a worldwide injunction, given to a San Jose LED manufacturer that sued a company for allegedly poaching its top scientist so that it could transfer its technology to China (Lumileds LLC v. Elec-Tech International Co. Ltd.). In these types of cases, plaintiffs have the advantage of being able to craft a compelling narrative of theft—most commonly, former employees surreptitiously appropriating the plaintiff company’s trade secrets for their own benefit in a rival venture—and to overcome employees’ general freedom to switch employers under California law, which voids almost all non-compete agreements (Bus. & Prof. Code Sec. 16600) and does not recognize the doctrine of inevitable disclosure (Schlage Lock Company v. Whyte, 101 Cal.App.4th 1443 (2002)). Moreover, trade secrets do not expire automatically; they allow broad protection without disclosure, unlike copyrights and patents.
Continue Reading Trade Secret Litigation on the Rise in California: How ADR Can Help

As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Neil Eisgruber, Director in the Disputes, Compliance & Investigations group at Stout.

For decades, companies have turned to federal courts to protect valuable business assets, such as trade secrets. Legal action has expanded over the years and recent trends have set the foundation for a continuing surge in federal trade secret litigation.
Continue Reading Trade Secret Litigation: Activity on the Rise

On Thursday, April 23 at 12 p.m. Central, Seyfarth attorneys Erik Weibust, Marcus Mintz, and Jeremy Cohen are presenting Weathering the COVID-19 Storm With Your Trade Secrets and Customer Goodwill Intact, a webinar is Seyfarth’s Responding to the COVID-19 Pandemic Webinar Series.

COVID-19 has changed the way most companies are currently doing business, from requiring

When the COVID-19 crisis hit the United States (indeed, before it was even considered a “crisis” here), we provided tips for protecting a company’s trade secrets in the event employees were permitted to work from home. In the ensuing three weeks, not only have employees been permitted to work from home, but many companies have required it. Indeed, an ever-growing list of states, including California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Ohio, and Pennsylvania have issued stay-at-home orders and shut down all non-essential businesses for the time being. As a result, there are now millions of employees working remotely who are accustomed to working in an office setting. Indeed, according to a March 12, 2020, flash survey of more than 550 employers conducted by Seyfarth, nearly 85% of responding companies were actively encouraging employees to work from home in some or all parts of the country, and more than 65% were taking steps to provide capability for employees to be able to work from home who do not normally do so. Those numbers are likely even higher now.
Continue Reading Protecting Trade Secrets During a Pandemic: Think Twice Before Loosening Security Measures in the Name of Convenience and Efficiency

On Friday, March 27 at 12 p.m. Central, Seyfarth attorneys Michael Wexler, Jesse Coleman, and Justin Beyer will present Coronavirus & Remote Work Force: Best Practices for Protecting Trade Secrets and Intellectual Capital, the next webinar is Seyfarth’s Responding to the COVID-19 Pandemic Webinar Series.

Enacting a remote work policy or expanding an existing

As we previously reported, on February 18, 2020, Medterra CBD (“Medterra”) filed a motion to dismiss a lawsuit alleging that it had misappropriated Healthcare Resources Management Group LLC’s (“Healthcare Resources”) proprietary formula for a CBD cream aimed at treating pain. In its motion, Medterra argued that Healthcare Resources failed to allege that it had provided or that Medterra had otherwise acquired any proprietary information. Additionally, Medterra claims that even if Healthcare Resources could establish that it had provided its propriety CBD cream formula to Medterra, Healthcare Resources did not take adequate steps to protect its trade secret by mandating Medterra sign a non-disclosure agreement.
Continue Reading CBD Cream Manufacturer Responds to Motion to Dismiss in Trade Secret Litigation

In 2012, Peloton rode into the home fitness scene with its now ubiquitous at-home exercise bike, which features a tablet that allows riders to stream both live and pre-recorded classes while competing against other riders on a virtual leaderboard. Peloton built the bike, including the associated technology and software, from scratch, and applied for and obtained a number of patents between 2015 and 2019 to protect its sizable investment of both time and money.

In 2017, Flywheel, a boutique exercise studio, pedaled into the home fitness scene as well with the FLY Anywhere bike. Like Peloton users, FLY Anywhere riders stream both live and pre-recorded classes while pedaling their way up the leaderboard.
Continue Reading Peloton Surges to the Top of the Leaderboard in Competitor Spat

Fear of the coronavirus is causing many employers to permit—or in some cases mandate—employees to work remotely. While this measure is designed to minimize the risk of virus transmission, it presents an altogether different risk when it comes to protecting trade secrets, as employees have ripe opportunities to remove trade secrets and other sensitive information from company systems and databases. While remote access is ostensibly provided so that employees can perform their job functions from home, and may even be a necessity in that regard, some employees may take the opportunity to exploit the situation to more nefarious ends, and others may just be careless, which can lead to equally bad outcomes. In addition, employees’ external home networks may not have robust security on par with in-office network security.
Continue Reading Love in the Time of Coronavirus: Protecting Trade Secrets During a Pandemic