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?

Cross-posted from The Global Privacy Watch blog. 

Attorney General Becerra’s office posted the long-awaited draft CCPA regulations a little before 2:00 pm (PST) October 10th. It was a bit of a curve ball, to be perfectly honest (considering the final swath of amendments to the CCPA are not even final until Governor Newsom signs them, or on October 13th). Tellingly, the California Administrative Procedure Act requires the California Department of Finance to approve “major regulations” (and they have 30 days to do that) prior to publication. Based on this, it would seem that these regulations were drafted prior to the amendments to the CCPA going through the legislature. This does not seem like an effective way to draft regulations, but hey, no one should tell the AG he shouldn’t jump the gun! They are now out there so, one reviews anyway.

Topping out at a modest 24 pages (the CCPA itself is 19 pages), the regulations are organized into seven articles. We’re directing our comments to the issues that pop out to us initially, and as always, we’ll post further observations as things progress. Continue Reading And the Wait for CCPA Rules is Over …. Kind Of

What You Need to Know about Protecting Company Assets in the Age of Employee Mobility and Digital Theft

Thursday, November 14, 2019
8:00 a.m. – 8:30 a.m. Central Time: Breakfast & Registration
8:30 a.m. – 10:00 a.m. Central Time: Program

Seyfarth Shaw LLP
233 South Wacker Drive, Suite 8000
Chicago, IL 60606

There is no cost to attend but registration is required and seating is limited.

About the Program

Significant developments in state and federal courts throughout the country, as well as in Congress and State legislatures, have changed the landscape of trade secret protection and restrictive covenant enforcement.  Understanding the impact of these changes, and the tools now available to employers for trade secret protection and restrictive covenant enforcement, will help your company safeguard its most valuable assets and maintain its advantage over competitors.

Please join us for a fast-paced and informative discussion that analyzes recent developments in restrictive covenant and trade secrets law, and provides “best practices” for protecting your company’s most valuable assets—trade secrets, intellectual property and employees.

The program will focus on practical responses to the following issues and questions:

  • The current flux of Illinois Restrictive Covenant Law due to conflicting opinions from Appellate Courts and how to best position your company in this new Restrictive Covenant environment.
  • An update on recent restrictive covenant legislation proposed, and in some cases passed, in Congress and State legislatures.
  • The interplay between criminal and civil law, and a discussion about several high profile criminal cases involving trade secret theft.
  • Your new hire is bound by a restrictive covenant agreement—what now?
  • What to do when a former employee attempts to raid your company’s employees and confidential information?
  • How to best protect confidential information and intellectual property in today’s digital age.

Seyfarth Speakers

  • Kristine Argentine
  • J. Scott Humphrey
  • Katelyn Miller
  • Michael Wexler

Seyfarth Partner and Trade Secrets, Computer Fraud & Non-Competes Practice Group Co-Chair Katherine Perrelli was recently named a vice-chair of the Trade Secrets and Interferences with Contracts Committee of the American Bar Association Intellectual Property Section.

The Trade Secrets and Interferences with Contracts Committee is focused on issues arising under federal, state, and foreign laws addressing trade secrets, unfair interference with contractual rights, and related unfair competition causes of action, including cooperation with the Uniform Law Commission in trade secret and related areas.

Learn more about the ABA Intellectual Property Section’s Trade Secrets and Interferences with Contracts Committee.

Cross-posted from the Carpe Datum Law blog. 

In our May blog post, we took issue with the broadcast statement that ‘consumer privacy law was sweeping the country and that other states were jumping on the California Consumer Privacy Law (CCPA) bandwagon to enact their own state law.’ The problem as we saw it, was that the truth behind these sensationalistic statements was a bit more nuanced than people were led to believe. Most states, we found, that introduced consumer privacy legislation simply did not follow through, either by outright killing the legislation (MS) or by taking a step back with a wait and see approach (see TX). Nevada, by contrast, did neither. Instead, its legislature enacted its own consumer privacy solution, through SB 220, or as we call it, ‘the limited privacy amendment.’ We’ve opted to discuss Nevada’s approach here primarily because of its more restrictive application online and because its October 1, 2019, operational date is a full three months before the CCPA becomes operational.

First, the limited privacy amendment is not the CCPA. Let’s make that perfectly clear. True, it was modeled on the opt-out section of the CCPA, but it isn’t a mirror copy as it amends existing law. There are three primary areas operators conducting business over the Internet need to be aware of, when evaluating compliance measures:   Continue Reading Nevada: Bucking the Wait and See Approach to Consumer Privacy Law

Seyfarth Partner J. Scott Humphrey is presenting the “Trade Secrets Theft: A Holistic Approach to Protect Your Company” webinar for The Knowledge Group on Wednesday, October 2 from 3:00 p.m. to 4:30 p.m. Eastern Time.

At this webinar, a seasoned panel of thought leaders and professionals will provide and present to the audience an in-depth analysis of the fundamentals on how to effectively deal with trade secrets theft. Speakers will also provide a holistic approach on how to protect your company against underlying risks and pitfalls. Some of the major topics covered will include:

  • Trade Secrets Theft: Latest Trends and Developments
  • Notable Cases
  • Common Pitfalls and Risk Issues
  • Practical Tips and Strategies
  • What Lies Ahead

For more information or to register for this webinar, click here.

In an a recently published opinion, the Ninth Circuit answered the question whether “LinkedIn, the professional networking website, [may] prevent a competitor, hiQ, from collecting and using information that LinkedIn users have shared on their public profiles, available for viewing by anyone with a web browser?” In affirming the trial court’s injunction enjoining LinkedIn from blocking hiQ’s access to its users’ public profiles, the Ninth Circuit held, among other things, that hiQ’s scraping did not amount to accessing LinkedIn’s users’ data “without authorization,” in violation of the Computer Fraud and Abuse Act (“CFAA”), because the data hiQ was accessing was publicly available and therefore did not fall within the scope of the CFAA. Continue Reading 9th Circuit Takes Narrow View of the Computer Fraud and Abuse Act in LinkedIn Data Scraping Case

The United States District Court for the Eastern District of Louisiana recently held that, under the Defend Trade Secrets Act, 18 U.S.C. § 1836, et seq., information included in a patent application remains an actionable trade secret, thereby extending the time for potential misappropriation until the patent’s publication.

DTSA

The DTSA was enacted in 2016 to expand trade secret law beyond its traditional roots as a state law doctrine, creating the first federal cause of action for trade secret misappropriation. To succeed in bringing a DTSA claim, a plaintiff must prove (1) the existence of a trade secret; (2) the misappropriation of a trade secret by another; (3) and the trade secret’s relation to a good or service used or intended for use in interstate or foreign commerce. Additionally, the owner must take reasonable measures to keep the trade secret a secret. 18 U.S.C. § 1836(b)(1). Continue Reading Louisiana Federal Court Rules Information in Patent Application Remains Actionable Trade Secret Under DTSA

Seyfarth’s Trade Secrets, Non-Competes & Computer Fraud Group is proud to announce that Seyfarth partner Katherine Perrelli is now a co-chair of the group. She joins partners and co-chairs Michael Wexler and Robert B. Milligan as leaders of the group.

Ms. Perrelli is the former Seyfarth Litigation Department Chair, and she regularly represents clients nationally and presents on trade secrets and restrictive covenant matters. She has been named a U.S. News/Best Lawyer. Our Legal 500 Tier 1 trade secrets team is excited to have Ms. Perrelli take on a leadership role and continue to guide our group to success.

 

Seyfarth Partner Erik Weibust was recently named as a co-chair of the Restrictive Covenants/Tortious Interference Subcommittee of the American Bar Association Litigation Section.

The Restrictive Covenants/Tortious Interference Subcommittee is part of the Business Torts & Unfair Competition Committee. The Committee and Subcommittee focus on keeping business litigators fully informed on issues and trends regarding fiduciary duties, fraud, unfair trade practices, tortious interference, trademarks, and trade secrets, remedies, evidence, and emerging technology.

Erik also currently serves as Vice Chair of the American Intellectual Property Law Association (“AIPLA”) Trade Secret Law Committee, and a Co-Lead of the Sedona Conference Working Group on Trade Secrets’ Monetary Remedies in Trade Secret Disputes Drafting Committee.

Learn more about the ABA Committee and Subcommittee on the ABA’s website.