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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.

In a case highly watched by trade secret lawyers and others, Robert O’Rourke, a 30-year salesman for cast iron products manufacturer Dura Bar, went on trial last week 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 was a highly respected salesman at Dura until he became disgruntled with Dura management and decided to leave Dura for a Chinese competitor. Over a two year period, O’Rourke met with the Chinese competitor (the identity of the Chinese company has not been disclosed) and eventually accepted employment with the competitor. Before resigning from Dura, O’Rourke downloaded 1,900 files that contained Dura trade secrets and subsequently attempted to board a flight to China with the trade secrets in hand. O’Rourke was stopped at the gate by the FBI and subsequently charged with 13 counts of trade secret theft.

O’Rourke’s defense team acknowledged in opening statements that O’Rourke downloaded the 1,900 files and was in possession of the files at the time of his arrest. The 1,900 files, according to O’Rourke’s attorney, however, were not trade secrets because Dura did not take “reasonable measures” to keep the information confidential. Thus, it appears that this case will be determined by whether Dura took reasonable steps to protect its trade secrets/confidential information. The trial is expected to last about three weeks—we will continue to monitor the trial, so please check back for updates.

The American Intellectual Property Law Association (AIPLA) will host its annual Trade Secret Law Summit at the American Express Company in New York City’s Financial District on March 21-22, 2019.

Seyfarth is a proud sponsor of the Summit, at which partners Erik Weibust (Vice Chair of AIPLA’s Trade Secret Law Committee) will be speaking on Protection of Trade Secrets in the Social Media Era,  and moderating a panel on Trade Secrets and Restrictive Covenants in the Financial Services Industry, on which Scott Humphrey will be speaking.  Other Seyfarth attendees will include James Yu, Jeremy Cohen, and Dawn Mertineit.

We hope you can join us there.  For more information and to register, please click here.

The 2018 Trading Secrets Year in Review is a compilation of our significant blog posts from throughout the year and is categorized by specific topics such as: Trade Secrets, Computer Fraud and Abuse Act, Non-Compete & Restrictive Covenants, Legislation, International, and Social Media and Privacy. As demonstrated by our specific blog entries, including our Top 10 Developments and Headlines, 2018 Trade Secrets and Non-Competes Webinar Series Year in Review, and our dedicated page concerning DTSA legislation, our blog authors stay on top of the latest developments in this area of law and provide timely and entertaining posts on significant new cases, legal developments, and legislation.

The 2018 Trading Secrets Year in Review also includes links to the recordings of webinars in the 2018 Trade Secrets Webinar Series. More information on our upcoming 2019 webinars is available in the program listing contained in this Review. Our highly successful blog and webinar series further demonstrate that Seyfarth Shaw’s national Trade Secret, Computer Fraud & Non-Competes Practice Group is one of the country’s preeminent groups dedicated to trade secrets, restrictive covenants, computer fraud, and unfair competition matters.

Clients and friends of the firm can request a digital or printed copy of the 2018 Trading Secrets Year in Review below.

In Seyfarth’s first installment in its 2019 Trade Secrets Webinar Series, Seyfarth attorneys Michael Wexler, Robert Milligan, and Joshua Salinas reviewed noteworthy cases and 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 provided predictions for what to watch for in 2019.

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

  • The Supreme Court will soon Rule on the meaning of the terms confidential and trade secrets within the meaning of Exemption 4 to FOIA which may have far reaching  implications to trade secret and non-compete practitioners.
  • State legislation across the country, including in Idaho, Utah, Colorado, and Massachusetts, continues to narrow or place further conditions on the scope of enforceable restrictive covenants.
  • Employers with Massachusetts employees should take care to review choice of law, choice of venue and consideration to support their agreements.
  • Employers with California employees should carefully evaluate whether to continue to use post-termination non-solicitation of employee covenants with their employees and contractors and discuss their options with counsel.
  • Company owners should be careful to not draw the attention of state attorney generals and the justice department by entering into agreements with competitors regarding the mobility of employees.

Continuing our annual tradition, we have compiled our top developments and headlines for  2018-2019 in trade secret, non-compete, and computer fraud law.

1. Government Agencies Increasing Scrutiny of Restrictive Covenants

In mid-2018, the Attorneys General of ten states investigated several franchisors for their alleged use of “no poach” provisions in their franchise agreements. In a July 9, 2018, letter, the Attorneys General for New Jersey, Massachusetts, California, Washington, D.C., Illinois, Maryland, Minnesota, New York, Oregon, Pennsylvania, and Rhode Island requested information from several franchisors about their alleged use of such provisions. Less than twenty-four hours later, some franchisors (mostly different ones than those who received the information demands) entered into agreements with the Washington State Attorney General’s Office to remove such clauses from their franchise agreements. The recent focus by state law enforcement on franchisors is a new twist, given that restrictive covenant agreements in the franchise industry are typically given more leeway than in the employment context. Continue Reading Top 10 Developments and Headlines in Trade Secret, Non-Compete, and Computer Fraud Law in 2018/2019

As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Donal O’Connell, Managing Director of Chawton Innovation Services Ltd.

Cost Management

Cost management is the process of planning and controlling the budget of a business, a function, or a project. Cost management is a form of management accounting that allows a business, a corporate function, or a project to predict impending expenditures to help reduce the chance of going over budget.

Continue Reading Trade Secret Cost Management

On January 11, 2019, the Supreme Court accepted certiorari to reconcile fractured circuit tests on when the government may withhold information from a Freedom of Information Act (“FOIA”) request based on responsive information being confidential or a trade secret. The case has major potential ramifications for the protections given to sensitive information submitted by companies to the government. Continue Reading Supreme Court Grants Cert. to Interpret Meaning of “Confidential” or “Trade Secret” Under FOIA

Please join us for a one-hour CLE webinar on Tuesday, January 29, 2019, at 1:00 p.m. Eastern / 12:00 p.m. Central / 10:00 a.m. Pacific.

On Tuesday, January 29 at 12:00 p.m. Central Time, in Seyfarth’s first installment of its 2019 Trade Secrets Webinar Series, Seyfarth attorneys will review noteworthy cases and 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 2019.
Seyfarth attorneys Michael Wexler, Robert Milligan, and Joshua Salinas will address the following topics:
  • Significant new federal and state court decisions and legislation on non-compete and other restrictive covenants that may impact their enforcement
  • 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 2 years
  • Discussion of recent trade secret misappropriation decisions
  • Noteworthy data breaches and criminal prosecutions for trade secret misappropriation, data theft, and computer fraud matters and discussion of lessons learned
  • Best practices for updating agreements and policies to adequately protect company assets and trade secrets

A Pennsylvania federal court recently denied Defendant Synchrony Group, LLC’s motion to dismiss a trade secret lawsuit filed by Plaintiff Jazz Pharmaceuticals, Inc. (Jazz”) holding that Plaintiff sufficiently stated a trade secret claim. Jazz Pharms., Inc. v. Synchrony Grp., LLC, No. 18-602, 2018 WL 6305602 (E.D. Pa. Dec. 3, 2018). Continue Reading Pennsylvania Federal Court Finds That Plaintiff’s Trade Secret Misappropriation Allegations Hold Up