Seyfarth Synopsis: In a case of first impression, the Ninth Circuit held that the continued use doctrine is available under the DTSA, and the court permitted a plaintiff to raise a DTSA claim for misappropriation of trade secrets even though the initial misappropriation allegedly occurred before the DTSA was passed. The Ninth Circuit also held that a patent application may preclude a DTSA claim when the plaintiff does not claim that any trade secret information was misappropriated beyond what was included in the patent application.
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California Supreme Court Clarifies Pleading Requirements for Claims of Tortious Interference with At-Will Contracts and Adopts Rule of Reason in Evaluating Competitive Restraints in Contracts Between Businesses
Called upon by the Ninth Circuit in Ixchel Pharma, LLC v. Biogen, Inc. to answer two key questions concerning the validity of a settlement provision requiring a party’s termination of a collaboration agreement with a third-party, the California Supreme Court unanimously held:
- to state a claim for tortious interference with an at-will contract, a plaintiff must allege that the defendant engaged in an independently wrongful act, and
- in determining the validity of a competitive restriction in a business-to-business agreement under Business and Professions Code section 16600, the rule of reason applies and such restriction is not per se void.
The Court’s decision will impact how companies contracting under California law decide to set up their contracts and whether they will agree to the at-will termination of such contracts. The decision also provides some clarity for businesses that include competitive restraints with other companies in their commercial dealings, such as exclusive dealing and collaboration agreements, licenses, leases, and franchise agreements, as such restraints are not per se void under Section 16600 but subject to a rule of reason analysis.
Continue Reading California Supreme Court Clarifies Pleading Requirements for Claims of Tortious Interference with At-Will Contracts and Adopts Rule of Reason in Evaluating Competitive Restraints in Contracts Between Businesses
Supreme Court Refuses to Hear Password-Sharing Case, Leaving Scope of Criminal Liability Under Computer Fraud and Abuse Act Unclear
On Tuesday, October 10, 2017, the United States Supreme Court denied certiorari in Nosal v. United States, 16-1344. Nosal asked the Court to determine whether a person violates the Computer Fraud and Abuse Act’s prohibition of accessing a computer “without authorization” when using someone else’s credentials (with that other user’s permission) after the owner of the computer expressly revoked the first person’s own access rights. In denying certiorari, the Court effectively killed the petitioner’s legal challenge to his conviction in a long-running case that we have extensively covered here, here, here, here, here, here, and here (among other places). The denial of certiorari leaves further development of the scope of the CFAA in the hands of the lower courts.
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Nosal Update: Ninth Circuit Hears Oral Arguments on Password Sharing and Scope of Computer Fraud and Abuse Act
On October 20, 2015, a Ninth Circuit panel consisting of Chief Judge Sidney Thomas and Judges M. Margaret McKeown and Stephen Reinhardt heard oral argument from the U.S. Department of Justice and counsel for David Nosal on Nosal’s criminal conviction arising under the Computer Fraud and Abuse Act (CFAA). In 2013, Nosal was found to have violated the CFAA by
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California Federal Courts Reiterate: Unless Computer Hacked, Computer Fraud and Abuse Act Permits Misuse Of Electronic Information
In United States v. Nosal, 676 F.3d 854 (9th Cir. 2012) (en banc), the court held that the Computer Fraud and Abuse Act, 18 U.S.C. § 1030, prohibits unlawful access to a computer but not unauthorized use of computerized information. Although that holding represents a minority position, two recent opinions — one in a Ninth Circuit criminal
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The Two Billion Dollar Zhu Zhu Pet, Sold for $5k: Puffing in Trade Secret Misappropriation Pleadings May be Perilous
Zealous advocacy, copious use of Latin, and literary devices advantageously applied to attack our adversaries’ arguments. These are the cornerstones of American legal representation.
These tools are part of the modus operandi of every lawyer. This article may use dead language and assonance as running themes, but some lawyers take zealous advocacy ad infinitum. Such attorneys are rarely even
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Corporate Recruiter Convicted of Computer Fraud and Trade Secret Theft By San Francisco Jury
By Robert Milligan and Joshua Salinas
A California federal jury convicted a San Francisco executive recruiter this week for violations of the Computer Fraud and Abuse Act (“CFAA”) and theft of trade secrets from his former employer. The conviction represents a significant landmark in the closely watched eight-year case that deepened a federal circuit court split concerning the appropriate scope
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Recent California Federal Court Rulings Muddy the Interpretation of the Computer Fraud and Abuse Act
Does the Computer Fraud and Abuse Act (“CFAA”) prohibit hacking–improperly gaining entrance into a computer system–or simply prohibit improper use of a computer system? U.S. Courts of Appeal are divided. Now, district and appellate court judges in a single federal case pending in the Northern District of California, U.S. v. Nosal, have produced several divergent opinions
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Ninth Circuit Hears Oral Argument in Rival Toy Makers’ Trade Secrets Dispute
Two rival toy makers engrossed in an eight-year battle over the Bratz doll line have once again taken their fight to the Ninth Circuit. This week, a Ninth Circuit panel consisting of Chief Judge Alex Kozinski, Judge Kim Wardlaw, and Judge Stephen Trott, heard oral argument concerning an award of more than $310 million in damages and attorneys’ fees against
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United States v. Nosal Update: Solicitor General and DOJ Still Deciding Whether To File Writ Of Certiorari With United States Supreme Court
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According to a recent filing with the California federal district court in the United States v. Nosal case, the Solicitor General, in consultation with the Criminal Division of the Department of Justice and the United States Attorney’s Office, is still deciding whether to file a writ of certiorari with the United States Supreme Court.
The writ would challenge the Ninth
Continue Reading United States v. Nosal Update: Solicitor General and DOJ Still Deciding Whether To File Writ Of Certiorari With United States Supreme Court