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 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.

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.

Introduction

The purpose of this short paper is to ‘join the dots’ between a director’s fiduciary duties and especially a person holding dual or multiple directorships and trade secrets. Continue Reading Fiduciary Duties with Respect to Trade Secrets for Dual or Multiple Directors

Throughout 2018, Seyfarth Shaw’s dedicated Trade Secrets, Computer Fraud & Non-Competes Practice Group hosted a series of CLE webinars that addressed significant issues facing clients today in this important and ever-changing area of law. The series consisted of seven webinars:

  1. 2017 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law
  2. Protecting Confidential Information and Client Relationships in the Financial Services Industry
  3. The Anatomy of a Trade Secret Audit
  4. Protecting Trade Secrets from Cyber and Other Threats
  5. 2018 Massachusetts Non-Compete and Trade Secrets Reform
  6. Protecting Trade Secrets Abroad and Enforcing Rights Abroad and in the U.S.
  7. Criminal Trade Secret Theft: What You Need to Know

As a conclusion to this well-received 2018 webinar series, we compiled a list of key takeaway points for each program, which are listed below. For those clients who missed any of the programs in this year’s series, recordings of the webinars are available on the blog, or you may click on the title of each available webinar below for the online recording. Seyfarth Trade Secrets, Computer Fraud & Non-Compete attorneys are happy to discuss presenting similar presentations to your company for CLE credit. Seyfarth will continue its trade secrets webinar programming in 2019, and we will release the 2019 trade secrets webinar series topics in the coming weeks. Continue Reading 2018 Trade Secrets and Non-Competes Webinar Series Year in Review

As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Gilles Rouvier, founding partner of Lawways

Context

On July 31st, 2018, France adopted a law on trade secret protection, loi n°2018-670 (hereafter “French Trade Secret Law“). The aim of this French Trade Secret Law is to offer companies protection for their economic and strategic information. This legislation implements the Directive 2016/943/EU on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use, and disclosure, enacted by the European Parliament and the Council of the European Union (EU) on June 8th, 2016. Continue Reading New Trade Secrets Law for France

In Seyfarth’s sixth installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Daniel Hart, Marjorie Culver, Alex Meier, and Paul Yovanic Jr. focused on how to identify the greatest threats to trade secrets, tips and best practices for protecting trade secrets abroad, and enforcement mechanisms and remedies.

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

  • You don’t want to be in a position where you’re relying exclusively on trade secrets law to protect proprietary information. When possible, execute a confidentiality agreement. This will not only protect a wider range of information, but also often helps with securing pre-discovery injunctive relief.
  • In order to adequately protect trade secrets abroad, companies should inform employees of the important nature of secret information, take steps to secure secret information and limit access only to necessary employees, and avoid liability without culpability by revising employment agreements and informing new hires of the prohibited conduct.
  • Restrictive covenants abroad are easier to enforce when agreements are narrowly tailored for duration, geographic scope, and nature and when penalties are reasonable.
  • For international misappropriation, consider whether you want to pursue relief in the foreign jurisdiction or in the United States. The Defend Trade Secrets Act and, in some instances, Section 337 actions before the International Trade Commission rules offer powerful alternatives to proceedings in other jurisdictions.

Please join us for a one-hour CLE webinar on Monday, September 24, 2018, at 1:00 p.m. Eastern / 12:00 p.m. Central / 10:00 a.m. Pacific.

Trade secrets are critical intellectual property for most businesses, and the threat to trade secrets continues to increase year after year. It’s vital for companies to protect trade secrets, both in the U.S. and abroad. It’s also important for companies to know how to enforce their rights in regards to trade secrets. In Seyfarth’s sixth installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Daniel Hart, Marjorie Culver, Alex Meier, and Paul Yovanic will cover the following:

  • How to identify the greatest threats to trade secrets
  • Tips and best practices for protecting trade secrets abroad
  • Enforcement mechanisms and remedies

Seyfarth Shaw LLP is pleased to be a Global Sponsor at ITechLaw’s 2018 European Conference in Milan, October 17–19.

Excelsior Hotel Gallia
Piazza Duca D’aosta 9
Milan, 20124 Italy

ITechLaw is a not-for-profit organization established to inform and educate lawyers about the unique legal issues arising from the evolution, production, marketing, acquisition and use of information and communications technology.

The European Conference will feature wide-ranging programs and invaluable networking opportunities that will focus on cutting-edge legal topics and will provide practical insight into the latest developments in technology law.

This year, Seyfarth Shaw Partner Robert B. Milligan is on ITechLaw’s Board of Directors and is the Co-Chair of the Local Representative Committee. Seyfarth Shaw Partner Julia Sutherland is on the panel for the “Fashion: New Models, Old Problems?” session on Thursday, October 16. This session will focus on the use of new and innovative technology that is transforming the fashion industry, in terms of blockchain, products traceability, and AdTech.

For more information, click here: https://www.itechlaw.org/conferences/2018-european-conference

As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Jeremy Morton, Partner at Harbottle & Lewis LLP, London, UK.

For the first time ever, we have UK-wide legislation that concerns the protection of confidential information. Modifying its approach in light of a recent consultation exercise, the UK government introduced The Trade Secrets (Enforcement, etc.) Regulations 2018 on June 9, to implement the EU Trade Secrets Directive 2016/943. Continue Reading UK Adopts New Trade Secrets Legislation