Trade Secrets

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On Friday, May 18, Eric Barton participated in a panel discussion at the 2018 ITechLaw World Technology Conference, updating attorneys from around the globe on the latest developments in cyber vulnerabilities and crime. In today’s world, businesses and individuals face the certain knowledge that electronic systems are not entirely secure. Mr. Barton’s presentation provided “real world” guidance on how companies can encourage and promote innovation while still protecting their highly valuable trade secrets and intellectual property from both internal and external threats and attacks. Mr. Barton also detailed several recent cases that provide excellent guidance on how to best protect a company’s valuable information, as well as the impact that technological advancements have had on U.S. attorneys’ professional ethics requirements, as mandated by the ABA.

On the panel with Mr. Barton were Alexander Baranchikov, an IP attorney from Moscow, and Rodrigo Azevedo Pereira, an IP attorney from San Paulo, Brazil. Mr. Baranchikov provided an entertaining update on the latest data protection cases and developments in Russia, as well as a detailed synopsis of how the Russian legal system addresses and resolves IP claims. Mr. Pereira discussed the crisis management framework that attorneys should consider using when addressing an online or ransomware attack. Calling upon his extensive experience in crisis management work, Mr. Pereira detailed how to build a multifaceted team, as well as how to respond urgently and efficiently to limit PR damages.

A copy of Mr. Barton’s presentation is available here. The panel was extremely well received and the topics prompted various discussions among the participants. For any follow-up questions or information, please do not hesitate to contact Mr. Barton directly at ebarton@seyfarth.com.

 

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.

An audit is the examination of a specific aspect of an organization, ideally by someone independent of that organization.

The purpose of an audit is to provide independent assurance that an organization’s management, governance, and processes are operating effectively and that any associated assets are being properly and professionally managed. Continue Reading Trade Secrets Audit

A recent California Court of Appeal decision held that the receipt, retention and dissemination of confidential information by a whistleblower’s attorney is protected by the state’s anti-SLAPP statute. MMM Holdings, Inc. v. Reich, 21 Cal. App. 5th 167 (2018).

Factual Background

In 2010, Jose “Josh” Valdez was promoted to president of MSO of Puerto Rico, Inc. (“MSO”), a wholly-owned subsidiary of MMM Holdings, Inc. (“MMM”). MMM offers Medicare advantage health insurance plans in Puerto Rico and contracted with the U.S. Centers for Medicare and Medicaid Services, part of the U.S. Department of Health and Human Services. Continue Reading California Court of Appeal Holds That Disclosure of Confidential Information Protected by Anti-SLAPP Statute

Seyfarth attorneys Robert Milligan, Joshua Salinas, Amy Abeloff, and Olivia Wada contributed to this year’s ABA Section of Intellectual Property Law, Trade Secrets and Interferences with Contracts Committee Annual Trade Secret Law Report.

The Annual Report, found here, covers the significant trade secrets cases from around the country that were decided in 2017. The Report is a good resource for staying current in trade secrets developments and trends.

Please join us for a one-hour CLE webinar on Tuesday, May 22, 2018, at 1:00 p.m. Eastern / 12:00 p.m. Central / 10:00 a.m. Pacific.

The risk of trade secret theft to businesses has increased in recent years, with greater employee mobility between companies, the alarming frequency of targeted data theft attacks, and the explosion of social media and cloud computing. Companies cannot simply react to these real business risks to their data after the data is compromised. By then, it’s too late.

To address these recurrent issues, Seyfarth Shaw helps clients protect their important assets and effectively manage risk by conducting trade secret audits. Our experience has shown that companies gain tremendous value by taking a proactive, systematic approach to assessing and protecting their trade secret portfolios through a Trade Secret Audit. In Seyfarth’s third installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Kate Perrelli, Dawn Mertineit, Justin Beyer, and Andrew Stark will cover the following topics:

  • Identifying trade secrets and secrecy protections
  • Effective secrecy protections, including employment and non-compete agreements
  • Effective hiring and termination protocols, including effective exit interviews and termination protocols
  • Employing a comprehensive approach and trade secret protection plan
  • Managing and working to protect computer-stored data, including responding to emergency issues related to computer fraud and security breaches

Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Compete Practice Group Co-Chair Robert Milligan is on the panel for the “Discovery in Trade Secret Litigation” session on May 4 at The Sedona Conference Working Group on Electronic Document Retention & Production 2018 Midyear Meeting in Nashville, Tennessee. The “Discovery in Trade Secret Litigation” sessions will include an introduction to The Sedona Conference’s new Working Group 12, and issues raised by the rising tide of trade secret litigation. These types of cases often involve discovery of personal devices and third-party apps, leading to a perfect storm of privilege, privacy, and proportionality considerations while handling proprietary and confidential information. The panel will also address trade secret identification issues and protective orders.

The Midyear Meeting is critical to move existing Working Group work product forward, and the topics have been chosen to help identify where The Sedona Conference can provide further guidance.

Among the Featured Sessions Are:

  • New Technology and eDiscovery Competence: Explore the impact of technology on discovery, including AI, Blockchain, IoT, and Apps. Do you know how to get information from these sources or audit the data in them?
  • GDPR for the U.S. eDiscovery lawyer: How to safely navigate cross-border EU/U.S. data transfers––making the best of tough decisions and avoiding problems on both sides.
  • Guidance from in-house lawyers to law firms and other legal service providers: Tips for outside counsel and vendors to add more value to eDiscovery engagements.

For more information, to see the full agenda, or to register, click here: https://thesedonaconference.org/node/108211

Late last week, the Texas Supreme Court denied a petition for mandamus in which the petitioner sought an order compelling a plaintiff to identify the specific trade secrets it contends were misappropriated, bucking what petitioner claimed is a “growing consensus” among the states.

In August 2015, B.J. Reynolds resigned from Sanchez Oil & Gas Corp. and began working as the vice president of operations for Terra Energy Partners LLC. In early March 2016, Terra hired two other Sanchez employees, Wes Hobbs and Mark Mewshaw. Later that month, Sanchez brought suit against Terra for misappropriation of trade secrets, alleging that after leaving the company, Hobbs and Mewshaw stole various electronic data involving processes to drill oil wells and to secure cost savings from vendors.

During the course of discovery, Sanchez produced approximately 170,000 pages of documents that allegedly contained the misappropriated trade secrets. According to Terra’s petition for writ of mandamus, however, Sanchez never specifically identified what trade secrets it accused Terra of stealing. As a result, Terra filed a motion to compel Sanchez to describe the “steps or elements of any trade secret processes that it claims were misappropriated,” arguing that Sanchez’s “data dump” ran afoul of its disclosure obligations under the Texas Rules of Civil Procedure and the Texas Uniform Trade Secrets Act. Terra also argued that it would cost its expert witnesses more than $1 million in fees to review the nearly 200,000 pages of documents Sanchez produced, and even that would not identify the specific trade secrets Sanchez claims had been misappropriated.

The trial court denied Terra’s motion to compel, and Terra filed a petition for writ of mandamus with the First Court of Appeals in Houston. Although the appellate court stayed the lower court’s proceedings, it also ultimately rejected Terra’s request.

In its petition for writ of mandamus filed with the Texas Supreme Court, Terra argued that there is a “growing consensus” among the 46 states which have adopted laws similar to the Texas Uniform Trade Secrets Act that a plaintiff must disclose the allegedly misappropriated trade secrets “with reasonable particularity at an early stage in the litigation.” Terra therefore urged the Texas Supreme Court to follow suit.

Sanchez, in response, argued that mandamus relief should be denied because Terra was improperly seeking to delay the underlying trial and to impose additional, unwarranted discovery obligations on Sanchez.

The Texas Supreme Court denied Terra’s petition without explanation.

In re Terra Energy Partners LLC et al., case number 18-0120, in the Supreme Court of Texas.

Seyfarth Shaw LLP is pleased to be a Global Sponsor at ITechLaw’s 2018 World Technology Conference in Seattle, May 16-18.

Fairmont Olympic Hotel
411 University Street
Seattle, WA 98101

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 World Conference will feature a wide-ranging program 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 Eric Barton will be on a panel for the “Cyber Vulnerabilities & Crime” session on Friday. This session will focus on a broad range of issues influenced by the vulnerability of today’s data, including the protection of data in Russia, handling an online crisis, ransomware, and protecting IP. Seyfarth Shaw Partner Daniel Hart is also scheduled to attend and participate at the conference.

Please stop by our table during the conference to learn about our Intellectual Property, Corporate, Global Privacy & Security, and Trade Secrets, Computer Fraud & Non-Competes Practice Groups.

For more information click here: https://www.itechlaw.org/seattle2018

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., and Oliver Treidler, Managing Director of TP&C GmbH.

Introduction:

Any business professor will tell you that the value of companies has been shifting markedly from tangible assets, “bricks and mortar,” to intangible assets like intellectual property (IP) in recent years. Continue Reading The Valuation of Trade Secrets

In Seyfarth’s second installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Scott Humphrey, Erik Weibust, and Marcus Mintz focused on trade secret and client relationship considerations in the banking and financial services industry, with a particular focus on a firm’s relationship with its FINRA members. In addition, the panel covered what to do if trade secrets are improperly removed or disclosed or if a former employee is violating his/her restrictive covenant agreements, how to prosecute a case against a former employee who is a FINRA member, and the impact of the Protocol for Broker Recruiting on trade secrets and client relationships.

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

  • Remember that you can seek court injunctive relief (Temporary Restraining Order and, possibly, Preliminary Injunction) before proceeding in FINRA
  • The definition of a trade secret varies, but you must take adequate steps to protect them as a company, and the information cannot be publicly available or easily discovered, to merit enforcement under the law.
  • Employers can take steps at all stages to protect their confidential information—don’t forget to implement on-boarding and off-boarding procedures, as well as policies and procedures that will be in effect during an employee’s tenure, to protect your information before a problem arises.