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 of Litigation Funding Agreements.” This AIPLA discussion will cover several of the topics discussed in our April 13th blog post, “Protecting Trade Secrets Without Breaking the Bank (Or even Negatively Affecting Profits).”

For more information on the AIPLA Spring meeting, you can visit: https://www.pathlms.com/aipla/courses/17421/sections/20518/webinars/8566

Late last spring we reported on the second published decision out of the District of Massachusetts citing the Massachusetts Noncompetition Agreement Act (“MNCA”), NuVasive, Inc. v. Day. On April 8, 2020, the First Circuit issued a decision on the defendant’s appeal, upholding the lower court’s ruling. While the First Circuit’s decision does not directly analyze an agreement that is subject to the MNCA, it is still instructive for out-of-state employers with personnel who may be subject to that law. Continue Reading The First Circuit Weighs in on the Applicability of Massachusetts’ Non-Compete Law

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

On April 13, 2020, the Department of Justice’s Antitrust Division and the Federal Trade Commission’s Bureau of Competition released a joint statement and press release regarding “competition in labor markets” and potential agency actions in the face of the COVID-19 crisis. While the agencies’ joint statement appears to be focused on collusion between employers entering into horizontal “no-hire” or “no-poach” agreements, employers in certain industries affected by the crisis should also exercise reasonable care in enforcing vertical restrictive covenants, including non-competition and non-solicitation agreements. Continue Reading The DOJ and FTC Issue Joint Statement on Competition in Labor Markets in Light of COVID-19: What Effect, If Any, Does This Have on Non-Competes?

As we recently reported, Virginia recently joined Maine, Maryland, Massachusetts, New Hampshire, and Washington in passing a new law restricting the use of non-competes against low-wage earners (DC legislators made a similar attempt last year, but there has been no movement on those efforts). Now, Indiana has joined the growing number of states that have recently enacted legislation to restrict the permissible scope of non-compete agreements, although Indiana’s new non-compete law ignores the low-wage issue and instead focuses on a particular occupation: physicians. Continue Reading A Check-Up on Non-Competes: Indiana Legislature Passes Law to Facilitate Physician Mobility

Legislators in the Commonwealth of Virginia, the site of Patrick Henry’s infamous “Give me liberty, or give me death” speech, have enacted legislation that gives more liberty to low-wage workers looking to leave for greener pastures, joining the ranks of many other states that have passed similar restrictions (stay tuned for a post soon on Indiana’s own recently passed non-compete legislation application to physicians). While the new law was passed quietly, it’s not particularly surprising that the Commonwealth sought to join the trend of restricting non-competes for low earners (see for example similar efforts in DC, Maryland, Maine, New Hampshire, Washington, and Massachusetts)—especially in light of the COVID-19 pandemic that is sending unemployment rates soaring. Continue Reading “Give Me Liberty”: Virginia Legislature Passes Law to Exempt Low-Wage Workers from Employment Restrictions

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 to share the results so you can get a sense of what other businesses are doing to mitigate risks and manage confidential information and trade secrets in this time of crisis.

Take the 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

While it can be hard to remember in a world dominated by COVID-19 headlines, the wheels of justice have not stopped turning at the Supreme Court—even if Justices are now hearing argument remotely. On Monday, April 20, SCOTUS granted a petition for certiorari in a case that may finally provide clarity to a question that has troubled defense attorneys and trade secrets practitioners alike for many years: what does it mean to “exceed authorized access” under the Computer Fraud and Abuse Act? Continue Reading CFAA Battle Heading to the Supreme Court