Trade Secrets & Noncompete Blog

Trade Secrets & Noncompete Blog

News & Updates On Developments in the Law of Restrictive Covenants, Unfair Competition & Trade Secrets

Tag Archives: misappropriation

Recent Federal Decisions Confirm That DTSA Claims Must Follow Longstanding Pleading Standards

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As the law’s first anniversary approaches, federal courts continue to adjudicate claims arising under the Defend Trade Secrets Act (“DTSA”).  Enacted on May 11, 2016, DTSA provides the first private federal cause of action for trade secret misappropriation, allowing parties to sue in federal court for trade secret misappropriation.  Although the law is in its infancy, employers and legal practitioners filing complaints that assert DTSA claims must nevertheless adhere to longstanding rules of pleading set forth by the Supreme Court and the Federal Rules of Civil Procedure (“FRCP”).  Two recent decisions address this fundamental concept and serve as reminders that … Continue Reading

Contractual Clause Requiring Return Of Confidential Information At Termination Helps Former Employer Obtain Injunction On Misappropriation Claim

Trade secret misappropriation cases turn on details. Accordingly, it is always interesting to see the particular details which tilt a court’s decision one way or the other.

In Lincoln Chemical Corp. and Dole v. Dubois Chemicals, Inc. and Galaxy Associates, Inc., Judge Miller of the Northern District of Indiana was faced with a motion for a preliminary injunction in a case involving, among other things, an alleged misappropriation of trade secrets by a former employee, Edward Dole. According to Judge Miller’s decision, when Dole switched employers, he “retained on his personal computer considerable proprietary information” of his former employer. … Continue Reading

Just the Stats Please! New Study Provides Statistical Snapshot of Federal Court Trade Secret Litigation

A new study of federal court trade secret litigation confirms that the number of lawsuits involving alleged trade secret misappropriation continues to grow exponentially. According to the study, which was published in the Gonzaga Law Review on March 17, 2010, the number of federal court “trade secret cases doubled in the seven years from 1988 to 1995, and doubled again in the nine years from 1995 to 2004.”

Other interesting findings in the study include the following:

• “In over 85% of trade secret cases, the alleged misappropriator was someone the trade secret owner knew – either an employee or … Continue Reading

Alleged Trade Secret Theft Results in Federal Criminal Charge

Although issues involving misappropriation of trade secrets are frequently litigated, they rarely result in criminal charges. However, according to recent stories in The Chicago Tribune, Reuters.com, and other media outlets, a former employee of Goldman Sachs was recently arrested by the FBI for allegedly stealing trade secrets (software code regarding a proprietary trading system) worth millions of dollars.… Continue Reading

Preventing The Misappropriation Of Trade Secrets Through Proactive Policies And Procedures

In this high technology era, where a company’s most valuable assets are frequently its people and information and where the equivalent of thousands of pages of documents can be copied and moved with a few keystrokes, attorneys are increasingly being asked to stop the misappropriation of confidential information and trade secrets by employees and rival businesses. While there is no magic wand that will prevent a theft or stop a thief in his tracks, a company can substantially lower the risk of trade secret misappropriation through proactive policies and procedures. An article that I recently published in the Labor & … Continue Reading

A TOOL FOR FIGHTING ECONOMIC ESPIONAGE: Federal Law Criminalizes Misappropriation of Trade Secrets

This article originally appeared in the April 27, 2009 Connecticut Law Tribune. 

The Economic Espionage Act ("EEA"), 18 U.S.C. §§ 1831-39, gives companies another tool in the fight against misappropriation of trade secrets to "adopt a national scheme to protect U.S. proprietary economic information" and to combat the rising tide of espionage against and threats to corporate trade secrets. It criminalizes misappropriation of trade secrets.

The EEA creates a crime for the misappropriation of a trade secret to the economic benefit of anyone other than the trade secret owner generally, or specifically a foreign government. For example, in June 2008, … Continue Reading

Second Circuit Vacates Injunction and Refines Analysis of Whether Irreparable Harm May be Found When Trade Secrets Have Been Misappropriated

Many New York attorneys, when seeking a preliminary injunction against a party that has misappropriated their clients’ trade secrets, will argue that a presumption of irreparable harm to their clients automatically arises upon the determination that a trade secret has been misappropriated, citing Ivy Mar Co. v. C.R. Seasons, Ltd., 907 F. Supp. 2d 547, 567 (E.D.N.Y. 1995). A recent decision of the U.S. Court of Appeals for the Second Circuit, however, holds that misappropriation of trade secrets does not automatically lead to irreparable harm. The aggrieved party only faces irreparable harm if the misappropriator will disseminate the secrets to … Continue Reading

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