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.

Seyfarth Shaw Partner Erik Weibust and Associate Alex Meier published a Law360 article about trade secret protections related to social media. Weibust and Meier discuss risks employers face when employees access social media accounts, as well as some e-discovery considerations for social media. To learn more, check out “Trade Secret Protection and Social Media: A 5-Year Update” from Law360 here.

Continuing our annual tradition, we present the top developments/headlines for 2017/2018 in trade secret, computer fraud, and non-compete law.

1. Notable Defend Trade Secrets Act Developments

Just two years after its enactment, the Defend Trade Secrets Act (“DTSA”) continues to be one of the most significant and closely followed developments in trade secret law. The statute provides for a federal civil cause of action for trade secret theft, protections for whistleblowers, and new remedies (e.g., ex parte seizure of property), that were not previously available under state trade secret laws. Continue Reading Top Developments/Headlines in Trade Secret, Computer Fraud, and Non-Compete Law in 2017/2018

There is no denying that social media continues to transform the way companies conduct business. In light of the rapid evolution of social media, companies today face significant legal challenges on a variety of issues ranging from employee privacy and protected activity to data practices, identity theft, cybersecurity, and protection of intellectual property.

Seyfarth Shaw is pleased to provide you with the 2017–2018 edition of our easy-to-use guide to social media privacy legislation and what employers need to know. The Social Media Privacy Legislation Desktop Reference:

  • Describes the content and purpose of the various states’ new social media privacy laws.
  • Delivers a detailed state-by-state description of each law, listing a general overview, what is prohibited, what is allowed, the remedies for violations, and special notes for each statute.
  • Provides an easy-to-use chart listing on one axis the states that have enacted social media privacy legislation, and on the other, whether each state’s law contains one or more key features.
  • Offers our thoughts on the implications of this legislation in other areas, including trade secret misappropriation, bring your own device issues and concerns, social media discovery and evidence considerations, and use of social media in internal investigations.
  • Concludes with some best practices to assist companies in navigating this challenging area.

How To Get Your Desktop Reference

To request the 2017–2018 Edition of the Social Media Privacy Legislation Desktop Reference as a pdf or hard copy, please click the button below:

In Seyfarth’s final webinar in its series of 2017 Trade Secrets Webinars, Seyfarth attorneys Justin Beyer, Dawn Mertineit, and Ryan Behndleman presented Protecting Trade Secrets in the Social Media Age. The panel focused on how to define and protect trade secrets on social media.

As a conclusion to this well-received webinar, we compiled a summary of takeaways: Continue Reading Webinar Recap! Protecting Trade Secrets in the Social Media Age

Social media and related issues in the workplace can be a headache for employers. There is no denying that social media has transformed the way that companies conduct business. In light of the rapid evolution of social media, companies today face significant legal challenges on a variety of issues, ranging from employee privacy and protected activity to data practices, identity theft, cybersecurity, and protection of intellectual property.

On September 28th at 12:00 p.m. Central, in Seyfarth’s fifth installment in its Trade Secrets Webinar Series, Seyfarth attorneys Justin Beyer, Ryan Behndleman, and Dawn Mertineit will discuss the relationship between trade secrets and social media.

The panel will specifically address the following topics:

  • The interplay between social media privacy laws and workplace investigations and how developing internal company policy and/or contracts can protect company assets
  • Defining, understanding, and protecting trade secrets in social media
  • How courts are interpreting ownership of social media accounts and whether social media sites constitute property
  • How to prevent trade secret misappropriation or distribution through social media channels
  • The interplay between protection of company information and ownership of company accounts in the social media age

Please join us for this informative webinar.

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By Gary Glaser, James McNairy and Marc Jacobs

We are pleased to announce the webinar “Trade Secrets, Restrictive Covenants and the NLRB: Can They Peacefully Coexist?” is now available as a podcast and webinar recording.

In Seyfarth’s fifth installment of its 2016 Trade Secrets Webinar series, attorneys Jim McNairy and Marc Jacobs conveyed strategies and best practices to help you, as in-house counsel and HR professionals, to ensure that your company and internal clients are protected.

As a conclusion to this well-received webinar, we compiled a list of  brief summaries of the more significant cases that were discussed during the webinar:

  • The National Labor Relations Act applies to all private sector workplaces — not just unionized facilities.   Among other things, the Act protects an employee’s right to engage in protected concerted activities, which in general are group action (usually by two or more employees) acting together in a lawful manner, for a common, legal, work-related purpose (e.g., wages, hours and other terms and conditions of employment).  Limits on these rights and retaliation against an employee for engaging in protected concerted activity violates the Act.  The National Labor Relations Board is aggressively protecting employees’ rights to engage in protected concerted activity. As part of this effort, the NLRB will find unlawful workplace rules, policies, practices and agreements that explicitly restrict Section 7 activities (such as a rule requiring employees to keep their wage rate confidential) or that employees would reasonably believe restricts their Section 7 rights (e.g., a confidentiality agreement or policy that generally includes in the definition of confidential information “personnel information”).
  • In the 2015 Browning-Ferris Industries decision, the NLRB substantially broadened the definition of “joint employer”.  Under this new expanded definition, an entity can be found to be a joint employer if it has the authority, even if unexercised, to control essential terms and condition of employment.  As a result, if one entity has agreements with other entities to provide labor or services, that entity may be a joint employer of the other entities’ employees based on the level of control it has over the terms and conditions of employment of the other entities/ employees.  One indicia of that control would be requirements for hiring or employment, such as requirements to sign agreements or adopt policies for the protection of confidential information and similar restrictions.
  • As a result, and also because of the signing of the federal Defend Trade Secrets Act, now is a critical time for all employers to review their policies, practices, procedures and agreements (1) regarding the protection of confidential information; and (2) with third-party service and labor providers.  In reviewing confidential information policies and agreements, the focus should be on narrow tailoring using specifics and examples to protect information that lawfully may be protected in a lawful manner.  For agreements with parties, the review should include an analysis of the factors that may show joint employer status so that you can balance the risk of a joint employer finding with the needs to protect your organization.

Join us Monday, May 16 at 2:00 p.m. Central. for our next webinar, “The Defend Trade Secrets Act: What Employers Should Know” To register, click here.

shutterstock_328329848Over the last decade, communication via email and text has become a vital part of how many of us communicate in the workplace. In fact, most employees could not fathom the idea of performing their jobs without the use of email. For convenience, employees often use one device for both personal and work-related communications, whether that device is employee-owned or employer-provided. Some employees even combine their personal and work email accounts into one inbox (which sometimes results in work emails being accidentally sent from a personal account). This blurring of the lines between personal and work-related communications creates novel legal issues when it comes to determining whether an employer has the right to access and review all work-related communications made by its employees.

Employers have legitimate business reasons for monitoring employee communications. Take, for example, the scenario in which an employee leaves her employment, and the employer is concerned that she has taken proprietary information or solicited clients in violation of her duty of loyalty or a contractual agreement. Another common scenario that gives rise to the need for employers to review all of an employee’s work-related emails is when the employer is in litigation that requires production of employee communications.

Most employers are comfortable with the notion that, with a properly worded policy that provides notice to employees of the ability and intent to monitor email, an employer can access emails on an email server provided by the employer. However, what about cases in which the employer does not provide the email service? With employees using web-based emails, like Gmail and Hotmail, and texts to communicate in the workplace, the relevant communications may be elsewhere. In these situations, what are an employer’s rights to access and review such communications?

An employer’s ability to review electronic communications is governed by the Electronic Communication Privacy Act (ECPA) and the Stored Communications Act (SCA). The ECPA prohibits the interception of electronic communications, and the term “interception” as used in the ECPA has been interpreted so narrowly that this title of the ECPA rarely comes into play in cases involving an employer’s review of employee email or texts. The SCA makes it illegal to access without authorization a facility through which electronic communication service is provided and thereby obtain access to communications in electronic storage.

With regard to an employer’s review of employee emails sent through web-based email accounts like Gmail or Hotmail, the most frequent scenario confronted by courts is one in which a former employer accesses the web-based email of a former employee, looking for evidence of malfeasance. In these cases, the former employer is typically able to access the former employee’s web-based email account because the employee has saved her username and password on a device provided by the employer, which was returned at termination, or failed to delink an account from such a device. In these cases, courts have been reluctant to punish the former employee for failing to take appropriate steps to secure their own personal, and allegedly private, communications.

For example, a district court in New York considered an employee’s claim that his former employer’s review of emails in his Hotmail account after his termination violated the SCA because it was unauthorized. The defendant argued that its review of the emails did not violate the SCA because the employee had implicitly authorized its review of the emails on his Hotmail account because the employee had stored his username and password on the employer’s computer system or forgot to remove such an account from an employer-provided phone before returning it.

The court rejected this argument, holding that it was tantamount to arguing that, if the employee had left his house keys on the reception desk at the office, he would have been implicitly authorizing his employer to enter his home without his knowledge. The court also noted that the employer’s computer usage policy did not provide the necessary authorization because it only referred to communications sent over the employer’s systems.

Likewise, a district court in Ohio confronted with similar facts, refused to hold the plaintiff responsible for his own failure to safeguard his information. In this case, the employee had turned in a company-issued blackberry upon termination without first deleting the Gmail account he had added to the phone. The former employer reviewed the emails in the former employee’s Gmail account, and the former employee alleged that this violated the SCA. The former employer argued that the former employee had negligently or implicitly consented to their review of the emails in her Gmail account by returning the blackberry to the company without deleting the account. However, the court held that the employee’s “negligence” in leaving the Gmail account on her phone when she turned it in was not tantamount to her authorizing the defendant to review the emails on her Gmail account.

However, a federal district court in California reached a different result in a case involving text messages. In this case, a company had sued its former employee for misappropriating trade secrets when it discovered, upon his termination, a number of text messages on the former employee’s company-issued iPhone that documented his misappropriation. The former employee had forgotten to delink his Apple account from the company phone he returned, and thus, his text messages continued to go to the phone — and his former employer. The court granted the company’s motion to dismiss the former employee’s counter claim that the company’s review of his text messages violated the SCA. The court held that text messages stored on phones are not in “electronic storage” within the meaning of the SCA, citing a Fifth Circuit case that reached the same conclusion about text messages. Of course, a violation of the SCA is not the only issue in these cases.

For example, in this case, the employee also alleged that his employer had invaded his privacy. However, the court held that the employee had no reasonable expectation of privacy in a company-owned phone that was no longer in his possession. In contrast to the two cases above, the court found that the employee’s failure to undertake precautions to maintain the privacy of his text messages showed he had no right to exclude others from accessing them.

The main lesson from these cases is that, if an employer wants to have the ability to review all employee communications that take place in the workplace, the employer needs to have, at a minimum, a policy that specifically provides for the right to monitor and review, for legitimate business reasons, any work-related communications made by the employee on a device provided by the company or a personal device used for work purposes. (Although the SCA does not require any showing about the employer’s motives in accessing the emails, a traditional invasion of privacy analysis would take this into account.) As a practical matter, the employer may not have the ability to access such accounts, but where access is available, this policy language is critical.

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The explosion of digital and social media enables companies to work more efficiently and to easily and creatively promote their products and services to large audiences across the globe. Modern technological developments in the workplace, however, come with modern issues – one such challenge for companies is protecting intellectual property (IP) and confidential information in today’s dynamic, digital and mobile environment.

On January 19, the State Bar of California is bringing together leading IP and employment attorneys from private industry, public agencies, private law firms and law schools for a conference in San Francisco on these issues: “Intellectual Property Protection and Social Media Issues in the Workplace.” Seyfarth Shaw is a proud sponsor of the conference and I have the honor of serving as the conference chair.

In this Q&A, I  was interviewed by CREATe.org President and CEO Pamela Passman about the conference and these important issues.

1)    The issue of social media and IP protection is a daunting one for companies. As you were putting together topic areas for the conference, how did you decide what to focus on?

Indeed, companies are challenged today with a broad range of issues related to IP protection in today’s digital and social media environment. For this conference, we considered the top areas of concern and information that would be most practical for participants.

For example, the session “Ownership of IP in the Workplace,” looks at the types of agreements you should and can have employees sign. The “IP Issues You Didn’t Know you Had” panel takes a look at emerging challenges stemming from hackers, third-party hosted sites, open source software, unscrupulous partners who claim your IP as their own, and users of torrents and the Darknet, to name a few. The luncheon program – “Testimonials and Endorsements: How to Properly Involve Employees” – will provide an overview of the restrictions on the use of testimonials and endorsements and will offer general and specific approaches to staying out of trouble when navigating new advertising media. Closing the day is the session featuring Ms. Passman – “IP Theft in the Workplace.” It looks at insider threats – both malicious and unintentional – to confidential information and provides practical steps for improving the protection of IP, including trade secrets.

2)    Why should companies be more proactive when it comes to social media in the workplace?

First, companies need to be aware of the legal risks related to the use of social media in the workplace. These include:

  • Document retention and electronic discovery issues
  • Exposure of confidential information and trade secrets and cybersecurity concerns
  • Securities law concerns, including insider trading
  • Vicarious liability for discrimination, retaliation, defamation, invasion of privacy, trademark & copyright infringement, obscene material and otherwise illegal content

A 2013 Ponemon study, while a bit dated, illustrates some of the scenarios that can get companies in trouble. They interviewed 3317 individuals in six countries (United States, United Kingdom, Brazil, France, China, and Korea) and found that of those surveyed:

  • Over half e-mail business documents from their workplace to their personal e-mail accounts (41 percent say they do it at least once a week);
  • 41 percent download intellectual property to their personally owned smart phones or tablets; and
  • 37 percent use file-sharing applications (e.g., Dropbox™ or Google Docs™) without company permission.

3)    Where should companies start? Is it necessary for your company to have a social media policy in place and, if so, what should your policy include?

Social media platforms attract large audiences worldwide: Facebook has over 1.4 billion account holders and over 936 million daily active users. LinkedIn has over 364 million members in over 200 countries in territories. Given these statistics, it is more than likely that some of your employees are active social media users. It is absolutely necessary for your company to have a social media policy in place, one which should address:

  • Proper Use: acknowledging your company provides its employees internet access, that it is a useful business tool and that employees must use it properly
  • Use During Work Hours While Using Company Provided Equipment/Systems: no or limited use of social media by your employees unless directly related or necessary to perform the job
  • Limitations on Social Media Activity to Those Impacting The Company: acknowledging that social media may be a personal activity and that your company will only seek to impose limitations on its use when it impacts your company, co-workers, clients or third parties who deal with your company

4)    Are there any legal issues for your company to consider regarding employee social media activity?

If your company decides to implement a social media policy or agreement, there are legal implications to take into consideration. Most states have limits on what you can ask an employee regarding social media accounts. Other implications include (but are not limited to):

  • First Amendment: protects free speech
  • Fourth Amendment: protects against unreasonable searches and seizures
  • National Labor Relations Act (NLRA): An employee is protected under the National Labor Relations Act (NLRA) when engaging in a discussion of work conditions with other co-workers on social media, including sharing information about wages, complaining about policies or managers and expressing union support. Section 7 of the NLRA prohibits employers from enacting policies that stifle or prevent employees from engaging in “concerted activity” for “mutual aid and protection”

You should always consult with your company’s legal department to determine the limitations you can impose on employee social media activity.

5)    You have mentioned trade secrets as one type of IP that is particularly vulnerable. What are trade secrets and how can employees access company trade secrets in the workplace?

Because trade secrets can be central to your company’s competitive edge, these company ‘crown jewels’ must be properly protected in the workplace. There are six factors to determine whether information constitutes a trade secret:

  • Extent known outside company
  • Extent known by employees and others inside company
  • Measures taken by company to protect secrecy
  • Value of trade secret to company and competitors
  • Time, effort and money expended in development
  • Ease of difficulty which it can be properly acquired or duplicated by others

Examples of trade secrets include: product launches and designs, formulas, processes, business plans and customer lists. Rogue employees and business partners account for 90% of trade secret misappropriation, the vast majority of this misappropriation occurring by electronic means.

For more information about the conference, please click here. There is still time to register.

CalBarThe workplace is often the laboratory where creative ideas are hatched and innovative products are launched. While striving to create environments where innovation and creativity thrive, successful companies must also ensure that appropriate safeguards and agreements are in place to protect intellectual property. Employers also face challenges in navigating fair trade practices and employee privacy rights while capitalizing on the explosion of social media. Complicating the entire picture are the increasingly fluid borders of where, when, and how work is accomplished in this dynamic economy.

Seyfarth’s Trade Secret and IP groups are scheduled to participate in the State Bar of California’s Day Program entitled “Intellectual Property Protection and Social Media Issues in the Workplace Program,” taking place January 19, 2016 in San Francisco, California.

Seyfarth is a sponsor of the prestigious program, which brings together preeminent speakers from leading intellectual property and employment attorneys from private industry, public agencies, private law firms, and distinguished law schools that will identify and discuss the important intellectual property and social media issues that arise in today’s workplace and suggest practical strategies for addressing them.

Seyfarth Shaw Partner Robert B. Milligan serves as the conference chair of the program and as an officer of the State Bar Intellectual Property Section’s Trade Secret Interest Group and Partner Kenneth L. Wilton will present the luncheon program “Testimonials and Endorsements: How to Properly Involve Employees”.

The State Bar of California and the Intellectual Property Law Section are approved State Bar of California MCLE providers. 7 Hours of MCLE Credit will be awarded to registrants.

For more information, please click here.