A Pennsylvania federal court recently denied Defendant Synchrony Group, LLC’s motion to dismiss a trade secret lawsuit filed by Plaintiff Jazz Pharmaceuticals, Inc. (Jazz”) holding that Plaintiff sufficiently stated a trade secret claim. Jazz Pharms., Inc. v. Synchrony Grp., LLC, No. 18-602, 2018 WL 6305602 (E.D. Pa. Dec. 3, 2018). Continue Reading Pennsylvania Federal Court Finds That Plaintiff’s Trade Secret Misappropriation Allegations Hold Up
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.
The purpose of this short paper is to ‘join the dots’ between a director’s fiduciary duties and especially a person holding dual or multiple directorships and trade secrets. Continue Reading Fiduciary Duties with Respect to Trade Secrets for Dual or Multiple Directors
Throughout 2018, Seyfarth Shaw’s dedicated Trade Secrets, Computer Fraud & Non-Competes Practice Group hosted a series of CLE webinars that addressed significant issues facing clients today in this important and ever-changing area of law. The series consisted of seven webinars:
- 2017 National Year in Review: What You Need to Know About the Recent Cases/Developments in Trade Secrets, Non-Compete and Computer Fraud Law
- Protecting Confidential Information and Client Relationships in the Financial Services Industry
- The Anatomy of a Trade Secret Audit
- Protecting Trade Secrets from Cyber and Other Threats
- 2018 Massachusetts Non-Compete and Trade Secrets Reform
- Protecting Trade Secrets Abroad and Enforcing Rights Abroad and in the U.S.
- Criminal Trade Secret Theft: What You Need to Know
As a conclusion to this well-received 2018 webinar series, we compiled a list of key takeaway points for each program, which are listed below. For those clients who missed any of the programs in this year’s series, recordings of the webinars are available on the blog, or you may click on the title of each available webinar below for the online recording. Seyfarth Trade Secrets, Computer Fraud & Non-Compete attorneys are happy to discuss presenting similar presentations to your company for CLE credit. Seyfarth will continue its trade secrets webinar programming in 2019, and we will release the 2019 trade secrets webinar series topics in the coming weeks. Continue Reading 2018 Trade Secrets and Non-Competes Webinar Series Year in Review
- Have trade secret protections. Built into the definition of a trade secret is the requirement to have reasonable secrecy measures. Companies that do not use non-disclosure agreements with their employees can be at a tremendous disadvantage if they decide to litigate against former employees for trade secret misappropriation. Well thought out policies, procedures, and agreements are a must to have defensible trade secret protections.
- Be careful who you hire and what baggage they may come with. Sometimes what appears too good to be true is in fact the case. Employers should take particular care when hiring high-level employees or sales employees from direct competitors. They should carefully review any restrictive covenants that the candidate has before extending an offer and ensure that the prospective employee does not bring data from their previous employer.
- Don’t be a company that has a “Do what I say not what I do approach.” Many company sabotage their own trade secret protections by requiring lower level and mid-level employees to follow policies, procedures, and agreements but then upper management, including executives, fail to abide by the same policies, procedures, and agreements—this can lead to a confused and disgruntled workforce. A culture of confidentiality, which is a staple of companies that adequately protect trade secrets, starts at the top.
- Protect your company trade secrets along the supply chain. In today’s global and mobile economy, companies often hire contractors, consultants, or third parties to assist with products or services. Those same third parties are often provided access to the company’s trade secrets as part of their role in the supply chain. Companies need to ensure that they have had adequate agreements and cybersecurity protections in place with those third parties to ensure that trade secrets are not compromised.
- Have coherent computer policies and enforce those policies. Companies conduct business via email and through the transfer and sharing of electronic files. Those files may contain trade secrets and can be easily transferred to a variety of storage devices and accounts, including computers, electronic devices, and the cloud. Companies should provide clear instructions to employees concerning acceptable use, storage, and transfer of company files and should enforce those policies. Some companies use software solutions to monitor compliance and prevent data extraction. Many trade secret cases involve the illicit transfer of company files to personal devices or accounts.
While these tips provide a good overview, it is highly recommended that you consult a Seyfarth attorney familiar with counseling or litigating trade secret matters to develop a robust plan to protect your company’s trade secrets and intellectual property.
Please join us for a one-hour CLE webinar on Wednesday, November 14, 2018, at 1:00 p.m. Eastern / 12:00 p.m. Central / 10:00 a.m. Pacific.
Trade secret misappropriation is increasingly gaining the attention of law enforcement authorities. This reality creates different dynamics and risks depending on whether a company is being accused of wrongdoing or is the victim of such conduct. On Wednesday, November 14, 2018, at 12:00 p.m. Central, Seyfarth Shaw attorneys Andrew Boutros and John Schleppenbach will present the “Criminal Trade Secret Theft Update” webinar, the seventh installment in Seyfarth’s 2018 Trade Secrets Webinar Series.
The webinar will focus on criminal liability for trade secret theft, including:
- Key statutes: Economic Espionage Act, Computer Fraud and Abuse Act, and the Defend Trade Secrets Act
- Key elements for criminal prosecution
- Factors that prosecutors consider when deciding whether and what to prosecute
- How to work with federal prosecutors and their law enforcement partners
- Civil RICO under the Defend Trade Secrets Act
- Best practices for avoiding misappropriation and what to do when you suspect misappropriation has occurred
In Seyfarth’s sixth installment in its 2018 Trade Secrets Webinar Series, Seyfarth attorneys Daniel Hart, Marjorie Culver, Alex Meier, and Paul Yovanic Jr. focused on how to identify the greatest threats to trade secrets, tips and best practices for protecting trade secrets abroad, and enforcement mechanisms and remedies.
As a conclusion to this well-received webinar, we compiled a summary of takeaways:
- You don’t want to be in a position where you’re relying exclusively on trade secrets law to protect proprietary information. When possible, execute a confidentiality agreement. This will not only protect a wider range of information, but also often helps with securing pre-discovery injunctive relief.
- In order to adequately protect trade secrets abroad, companies should inform employees of the important nature of secret information, take steps to secure secret information and limit access only to necessary employees, and avoid liability without culpability by revising employment agreements and informing new hires of the prohibited conduct.
- Restrictive covenants abroad are easier to enforce when agreements are narrowly tailored for duration, geographic scope, and nature and when penalties are reasonable.
- For international misappropriation, consider whether you want to pursue relief in the foreign jurisdiction or in the United States. The Defend Trade Secrets Act and, in some instances, Section 337 actions before the International Trade Commission rules offer powerful alternatives to proceedings in other jurisdictions.
On Wednesday, July 25, Seyfarth Shaw partners J. Scott Humphrey and Justin K. Beyer are presenting webinars for myLawCLE.
Scott Humphrey is presenting “Protecting Confidential Information & Client Relationships in the Financial Services Industry” webinar on July 25, 10 a.m. – 12 p.m. Eastern. The webinar will focus on the following topics:
- What are (and are not) considered trade secrets in the financial services industry
- Types of restrictive covenants and which covenants are most likely to be enforceable in court and before FINRA
- Practical steps financial institutions can implement to protect trade secrets and client relationships
- What to do if your trade secrets are improperly removed or disclosed, or if a former employee is violating his/her restrictive covenant agreements
- How to prosecute or defend a case against a former employee who is a FINRA member
- The impact of the Protocol for Broker Recruiting on trade secrets and client relationships
For more information or to register for “Protecting Confidential Information & Client Relationships in the Financial Services Industry” webinar, click here.
Justin Beyer is presenting “The Anatomy of a Trade Secret Audit” webinar on July 25, 2 p.m. – 4 p.m. Eastern. The webinar will focus on 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
For more information or to register for “The Anatomy of a Trade Secret Audit” webinar, click here.
As a special feature of our blog—guest postings by experts, clients, and other professionals—please enjoy this blog entry from Jeremy Morton, Partner at Harbottle & Lewis LLP, London, UK.
For the first time ever, we have UK-wide legislation that concerns the protection of confidential information. Modifying its approach in light of a recent consultation exercise, the UK government introduced The Trade Secrets (Enforcement, etc.) Regulations 2018 on June 9, to implement the EU Trade Secrets Directive 2016/943. Continue Reading UK Adopts New Trade Secrets Legislation
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).
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
Tervis Tumbler Company, the maker of the infamous insulated tumblers, has found itself in hot water with a former supplier, Trinity Graphic. Trinity filed suit in the Middle District of Florida against Tervis and its new supplier, Southern Graphics, alleging misappropriation of trade secrets under both the Defend Trade Secrets Act (“DTSA”) and Florida trade secret statute along with breach of confidentiality and non-disclosure agreement, fraud, aiding and abetting, and civil conspiracy. Trinity seeks compensatory, exemplary and punitive damages, disgorgement of profits related to the misappropriation and attorney’s fees and costs.
In support of its claims, Trinity alleges that it “revolutionized” the creation of tumbler inserts with the development of its “Trinity Wrap.” Trinity further alleges that before it created the Trinity Wrap at Tervis’ request, Tervis was limited to the use of “crude and costly embroidery or flat one-sided images.” In creating the Trinity Wrap, Trinity purports to have developed two trade secrets: a printing method that reduces static electricity during the printing process, resulting in increased visual sharpness and a second printing method using a state of the art printer to perfectly align images printed on both sides of a transparent medium. Continue Reading Popular Insulated Cup Manufacturer in Hot Water over Alleged Trade Secret Misappropriation