Trade Secrets

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As the global economy falters, a fortunate few companies have seen tremendous growth as a result of the COVID-19 crisis. Among the companies benefitting from the shelter-in-place orders currently in effect is Peloton Interactive, Inc. (“Peloton”), which manufactures and distributes home exercise equipment capable of streaming live and pre-recorded classes. Since Peloton’s IPO in late 2019, its shares have jumped over 50%, largely based on its outstanding second quarter results. As people have been shut-out of their gyms, they are frequently turning to alternatives, including Peloton, to stay active (and sane). In full disclosure, that includes the authors of this article and many of our colleagues.
Continue Reading Avoid Spinning Your Wheels: Peloton as a Case Study in the Protection of Customer Goodwill

In a case following a familiar trade-secret set of facts, on April 28, 2020, the Texas First District Court of Appeals in Houston reversed the trial court’s grant of a motion to dismiss under the Texas Citizens Participation Act (“TCPA”) in National Signs, Inc. v. John Graff. In doing so, the First District joined the growing number of Texas Appellate Courts that have held that the TCPA, in its Pre-September 2019 amended state, does not protect private communications that are centered on competition or preparing to compete against the plaintiff.
Continue Reading Houston First Circuit Court of Appeals Joins the Growing Trend by Holding that the Pre-Amendment TCPA Does Not Protect Certain Competitive Behavior

With so many employees now working remotely through the COVID-19 pandemic—using new and sometimes untested technologies—we are taking this opportunity to collect real-time perspectives on what companies are doing to protect their trade secrets in the current climate.

To that end, we have created a brief anonymous survey that should take no more than three minutes to complete. The survey…
Continue Reading Take Our Survey! Trade Secrets in the Time of COVID-19

Legal analytics powerhouse Lex Machina recently released its 2020 Trade Secret Litigation Report, which highlights federal litigation trends in the last decade, as well as the last year specifically. While it’s very much an open question whether these trends will continue in light of the COVID-19 pandemic (more on that in our next  post), the report identifies some interesting data. In addition to some of the highlights contained in the official report, a deep dive of Lex Machina’s case repository reveals even more granular trends, demonstrating the wealth of information that can be gleaned and theories that can be tested from the data compiled from the more than 1.7 million federal cases in Lex Machina’s database. In fact, we have to admit that many of our own assumptions were turned upside down upon digging into the voluminous data available on the Lex Machina website! Expect to see a guest post from Lex Machina soon explaining how this data is sourced and what subscribers can do with it.

Some of the key findings in the report and/or associated data:
Continue Reading A Decade of Data Whets the Appetite for Data Nerds: Lex Machina Releases 2020 Report on Trade Secret Litigation

Seyfarth attorney Scott Humphrey will be a presenter and panelist at the American Intellectual Property Law Association’s (“AIPLA”) Virtual Spring Meeting on May 4, 2020. Scott will take the stage with in-house counsel and a litigation finance company to discuss “Everything You Wanted to Know about Litigation Funding But Were Afraid to Ask: Exploring the Pros, Cons and Special Features…
Continue Reading Scott Humphrey to Present at AIPLA Virtual Spring Meeting

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

With so many employees now working remotely through the COVID-19 pandemic—using new and sometimes untested technologies—we are taking this opportunity to collect real-time perspectives on what companies are doing to protect their trade secrets in the current climate.

To that end, we have created a brief anonymous survey that should take no more than three minutes to complete.

We plan…

Continue Reading Take Our Trade Secrets in the Time of COVID-19 Survey

On April 16, 2020, the White House issued its “Guidelines for Opening Up America Again,” and several states have begun a slow process of emerging from the shutdown. But even the most optimistic scenarios are fraught with uncertainty. Nobody can predict when the economy will fully reopen, or what that even means in the post-COVID-19 business world. Will increased remote work become the “new normal”? Will business meetings, pitches, and conferences, continue to take place by videoconference or other remote means? What about investigations, depositions, mediations, and court proceedings? And how long will all of that last? We also do not know when the next pandemic will strike, or even if COVID-19 will rear its ugly head again in the near future.
Continue Reading Normalizing the Abnormal—Protecting Trade Secrets in a Post-COVID-19 World

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 remote work, to using new…
Continue Reading Upcoming Webinar! Weathering the COVID-19 Storm With Your Trade Secrets and Customer Goodwill Intact