Trade Secrets

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On Tuesday, January 28 at 12:00 p.m. Central, in the first installment of the 2020 Trade Secrets Webinar Series, Seyfarth attorneys will review noteworthy legislation, cases and other 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…
Continue Reading Upcoming Webinar! 2019 Year in Review: What You Need to Know About the Recent Cases and Developments in Trade Secrets, Non-Competes, and Computer Fraud for 2020

Effective on September 1, 2019, the 86th Texas Legislature’s amendments to the Texas Citizen’s Participation Act, Texas Civil Practices and Remedies Code Chapter 27 (“TCPA”) essentially removed the vast majority trade secret claims from the TCPA’s grasp.[1] These amendments intentionally sought to eliminate the application of the TCPA, an anti-SLAPP statute[2] to certain run-of-the-mill trade secret cases with fact patters arising from independent contractor relationships and departing employees. Nevertheless, the TCPA may apply in light of past precedent to other, less common fact patterns. This article explores other trade secret claims that may still be “slapped” under the TCPA.
Continue Reading Survival by the Thinnest Margins: Potential Trade Secret Claims Post-Texas TCPA Amendments

In a trilogy of recent cases, the Texas Courts of Appeals have employed the “commercial speech” exception to exclude certain business claims from the scope of the Texas Citizen’s Participation Act (“TCPA”). This trend will likely only accelerate now that the legislature has further reduced the TCPA’s reach with additional statutory changes, restricting the protections regarding the right of association and the TCPA’s application to trade secret cases and non-compete cases.

Background

The TCPA is an anti-SLAPP (Strategic Lawsuit Against Public Participation) statute allowing litigants to seek early dismissal of a lawsuit if the legal action is based on, or is in response to, a party’s exercise of the right of free speech, right to petition, or right of association. Like other states, Texas enacted the TCPA to address concerns over the increasing use of lawsuits to chill the exercise of First Amendment rights.
Continue Reading The Halcyon Days Are Over: Texas Courts of Appeals Narrow the Application of the TCPA’s “Commercial Speech” Exception Even as the Legislature Narrows Its Definitions

Manhattan restaurant Sottolio, Inc., d/b/a Norma Gastronomia Siciliana hired Giuseppe Manco—“a noted  Italian pizza chef, or pizzaiolo”—to consult on its menu. At the same time, Manco and his wife purchased a 9% interest in the restaurant, becoming co-owners of the business. Manco signed a non-compete and non-disclosure agreement in connection with his hiring, under which Manco agreed, for ten years, to not replicate, copy, or duplicate Plaintiff’s confidential information, including its “signature recipes” for arancine, pasta alla norma, caponata, anelletti al forno, and carbonara di mare, or to use the signature recipes within a ten mile radius of Sottolio’s Manhattan restaurant. 
Continue Reading Fettucine Al Fraudo—New York Pizzaiolo in Hot Water After Alleged Theft of Secret Pasta Recipe

Seyfarth Synopsis: Knowledge that a competitor or former employee is misappropriating trade secrets is difficult to come by. At the same time, however, once a company has notice that misappropriation may be occurring, the statute of limitations begins to run on any trade secrets misappropriation claim. A recent decision from the California Court of Appeals reinforces these rules and provides a good reminder of the need to take proactive steps to protect any possible claims.

When a competitor or former employee misappropriates a company’s trade secrets, the company often does not know for an extended period of time. This is especially true when the perpetrator takes action to conceal its misappropriation. For these reasons, the statute of limitations only starts to run once the company knows or should have known of the misappropriation. But this rule is not a universal remedy; companies should be aware that once they have sufficient knowledge that misappropriation may be occurring, they must take action or risk the running of the statute of limitations. A recent decision from the California Court of Appeals reinforces these principles.
Continue Reading A Little Knowledge Is a Dangerous Thing: Beware the Statute of Limitations in Trade Secrets Misappropriation Cases

On August 23, 2019, the United States Court of Appeals, Fifth Circuit ruled that the Texas Citizen’s Participation Act, Texas Civil Practices and Remedies Code Chapter 27 (“TCPA”), did not apply in federal court. Klocke v. Watson, 936 F.3d 240, 244 (5th Cir. 2019). Nine days later, on September 1, 2019, key statutory changes went into effect for cases filed after the amendments’ enactment.[1] See H.B. 2730, Sept. 1, 2019. These amendments changed the requirements of the TCPA in several ways, some of which the Klocke panel had directly addressed when determining the TCPA’s applicability in federal court.

The question therefore arises whether the TCPA remains inapplicable in federal court for cases filed after September 1, 2019.[2] A Fifth Circuit panel addressing this issue today, and applying the rulings in Klocke, would likely rule that the TPCA remains inapplicable. Specifically, despite the various changes, the TCPA still “imposes evidentiary weighing requirements not found in the Federal Rules, and operates largely without pre-decisional discovery[.]” Klocke, 936 F.3d at 246. Accordingly, the TCPA “conflicts with those rules,” “answers the same question” as those rules, and therefore “cannot apply in federal court.” Id. at 244, 245, 246.
Continue Reading Klocke’s Ongoing Viability: Whether the TCPA’s Statutory Changes Have Resurrected Its Applicability in Federal Court

It is axiomatic that in order for information to be considered a trade secret, it must have been kept secret. But what if the trade secret is disclosed without the owner’s consent? Such was the issue in Intellisoft, Ltd. v. Wistron Corp. et al., No. H044281, slip op. (Cal. Ct. App. Oct. 16, 2019), a recent unpublished decision from the California Court of Appeal for the Sixth Appellate District. 
Continue Reading California Appellate Court Rules Publication of Trade Secrets, Even Without Owner Consent, Eviscerates Protection

Seyfarth Trade Secrets Attorneys are participating in The Sedona Conference Working Group 12 Annual Meeting in Charlotte, North Carolina, November 4–5, 2019.

On November 4, Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Competes Practice Group Co-Chair Robert Milligan is speaking on “The Employee Life Cycle Relating to Trade Secrets” panel, and Seyfarth Partner Erik Weibust is speaking on the…
Continue Reading Seyfarth Trade Secrets Attorneys to Participate in The Sedona Conference Working Group 12 Annual Meeting in Charlotte

Seyfarth is pleased to be a Global Sponsor at ITechLaw’s 2019 European Conference in Dublin, October 30–November 1.

ITechLaw is a not-for-profit organization established to inform and educate about the unique legal issues arising from the evolution, production, marketing, acquisition and use of information and communications technology. Founded in 1971, ITechLaw is a worldwide organization representing lawyers and other professionals…
Continue Reading Seyfarth Trade Secret and Data Protection Attorneys to Participate in ITechLaw 2019 European Conference

Courts have long lamented that “computing damages in a trade secret case is not cut and dry,” Am. Sales Corp. v. Adventure Travel, Inc., 862 F. Supp. 1476, 1479 (E.D. Va. 1994), meaning that “every [trade secret] case requires a flexible and imaginative approach to the problem of damages,” Univ. Computing Co. v. Lykes-Youngstown Corp., 504 F.2d 518, 538 (5th Cir. 1974).

The federal Defend Trade Secrets Act (“DTSA”) and virtually every state’s version of the Uniform Trade Secrets Act (“UTSA”) (only New York has not adopted the UTSA) permits recovery of damages for (1) actual loss caused by the misappropriation; (2) unjust enrichment that is not addressed in computing damages for actual loss; or (3) a reasonable royalty for the misappropriator’s unauthorized disclosure or use of the trade secret. There has been little guidance from the courts, however, as to how to calculate these different, and sometimes competing damages calculations, many relying on the “flexible and imaginative approach” set forth in the Fifth Circuit’s 1974 pre-UTSA University Computing decision. Even more difficult is the case where a plaintiff’s damages are based on the defendant’s anticipated future use of the trade secret, given that those damages necessarily will involve speculation about the revenues the defendant will generate from its use of the trade secret.
Continue Reading Can a Party Recover Damages for the Anticipated Future Use of Trade Secrets?