Two recent decisions by the Fifth Circuit Court of Appeals clarify the intersection between federal copyright law and state trade secret law. In GlobeRanger Corp. v. Software AG United States of America, Inc., 836 F.3d 477 (5th Cir. Sep. 7, 2016), the Fifth Circuit rejected an appeal in which the defendant argued that a plaintiff’s trade secret misappropriation claim was preempted by federal copyright law. Just four months later, in Ultraflo Corp. v. Pelican Tank Parts, Inc., No. 15-20084, 2017 U.S. App. LEXIS 509 (5th Cir. Jan. 11, 2017), the Fifth Circuit upheld a district court’s dismissal of … Continue Reading
Whether you are a young child missing teeth, or a grown-up taking account of her life, or Santa Claus himself checking up on everyone else’s life, many of us make lists at holiday time. They can be lists of gifts we want, or those we need to get, or people we wish to see or write to, or things we need or want to do before the end of the year. Sometimes they are just lists of things that happened this year or that we want to happen next year. Certainly there are lots of “Top Ten” holiday lists. This … Continue Reading
Many businesses progressively fear that their trade secrets and valued business relationships are at risk of attack by competitors – and even by their own employees. Do you know what it takes to protect those critical assets in the ever-changing world of trade secret and non-compete law?
Join Epstein Becker Green attorneys Anthony J. Laura, Robert D. Goldstein, and Peter A. Steinmeyer on Wednesday, November 30, 2016 at 1:00 p.m. EST for a complimentary, 75-minute webinar hosted by Practical Law. This webinar offers insights into recent developments and expected trends in the evolving legal landscape of trade … Continue Reading
On May 6, the White House released a report entitled: “Non-Compete Agreements: Analysis of the Usage, Potential Issues, and State Responses” (the “White House Report”). This report comes on the heels of the United States Department of Treasury’s Office of Economic Policy releasing a similar report about non-competes in March 2016 (the “Treasury Report”). While the U.S. economy has recovered since the last recession, the Obama Administration has identified a decline in competition for workers as a structural problem worth tackling in its final months. The Administration believes that non-competes restrict workers’ ability to … Continue Reading
Over the last several years, I have blogged about the Massachusetts Legislature’s many unsuccessful attempts to pass a statute establishing guidelines applicable to non-competes. (See my latest blog posted last March “Proposed Legislation to Place Limits on Enforcement of Non-Competes in Massachusetts.”) Former proposed bills have contained several types of provisions to accomplish this including ones that: a) prohibited the enforcement of all non-competes following California’s approach; b) created presumptions of reasonableness regarding the time and geographic scope; and c) banned the enforcement of non-competes signed by non-exempt and lower paid employees. (See my previous … Continue Reading
As the story explains, the U.S. Court of Appeals for the Sixth Circuit has upheld a ruling that a group of workers at a fastener company used confidential drawings from the company to design, manufacture, and sell competing parts for their new business venture. On appeal, the former workers argued that they were “filling a gap” for customers, not competing with the original company. But the Sixth Circuit found that this argument ignored undisputed evidence in the case.
Mr. Steinmeyer discusses steps that … Continue Reading
This morning the Obama administration publicly released the previously-undisclosed text of the Trans Pacific Partnership, or TPP, revealing, among other things, the provisions related to trade secrets that had previously been discussed here. As noted in that earlier piece, the administration had said that the TPP would “provide strong enforcement systems, including, for example, civil procedures, provisional measures, border measures, and criminal procedures and penalties for commercial-scale trademark counterfeiting and copyright or related rights piracy. In particular, TPP Parties will provide the legal means to prevent the misappropriation of trade secrets, and establish criminal procedures and penalties for … Continue Reading
A great amount of attention has been focused in recent days on the just concluded Trans Pacific Partnership (“TPP”) negotiations, and it should not escape notice that the TPP promises to enhance trade secret protections in and across the Pacific Rim. That is because the twelve TPP countries of Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam have apparently agreed that each of them will “provide strong enforcement systems, including, for example, civil procedures, provisional measures, border measures, and criminal procedures and penalties for commercial-scale trademark counterfeiting and copyright or related rights … Continue Reading
In what has become an annual rite, legislators from both sides of the aisle in the U.S. Congress again have proposed a bill seeking to create a private right of action allowing companies to assert civil trade secret misappropriation claims under federal law (which would supplement the existing patchwork of state law remedies). As we have blogged previously, similar bills were introduced in 2013 and 2014, but despite some progress they were not enacted into law.
As a follow up to our prior post on the trials and tribulations of former Goldman Sachs programmer Sergey Aleynikov, once again he obtained a judicial ruling that overturned a conviction following a jury trial. In a 72-page opinion the trial court, Justice Daniel Conviser, concluded that there was insufficient evidence to support the jury’s conclusion that Mr. Aleynikov had violated New York’s unlawful use of secret scientific material statute. N.Y. Penal Law § 165.07.
Much like the Second Circuit found in 2012 when it reversed his federal conviction under the National Stolen Property Act and the Economic Espionage Act … Continue Reading
The Manhattan District Attorney’s office last week prevailed over Sergey Aleynikov, the former Goldman Sachs high frequency trading programmer accused of stealing computer source code from the bank, on just one count of the three of which he was charged. It is somewhat hard to imagine how one might be found guilty of “unlawful use of secret scientific material” (N.Y. Penal Law § 165.07 as defined in § 155.00(6)), yet not get convicted for “unlawful duplication of computer related material” (N.Y. Penal Law § 156.30).
With Mr. Aleynikov previously avoiding federal charges of theft of trade secrets under the Economic … Continue Reading
U.S. Attorneys in many jurisdictions are more willingly stepping into the fray between financial services firms and their former employees who have misappropriated trade secret information. In a recently reported case out of the Northern District of Illinois, two former employees of Citadel LLC, a Chicago based premier hedge fund in the high frequency trading space, pled guilty and received three-year sentences for their participation in a scheme to steal source code from Citadel and a prior employer in order to create their own trading strategy for their personal future use. This continues a trend begun in earnest in 2013 … Continue Reading
In the year-end holiday rush, employers and other trade secret owners may not have noticed that the Judiciary Committee of the United States House of Representatives in mid-December reported favorably on HR 5233, a proposal to create a federal civil cause of action concerning trade secrets. (Click here for copy of Committee Report and here for text of bill). The Senate has its own version. (Click here). While Congress did not vote on it before year end, the bill is said to have bi-partisan support in the House and there are intimations of White House approval.
The House Report … Continue Reading
To register for this webinar, please click here.
This webinar will discuss recent developments and what to expect in the evolving legal landscape of trade secrets and non-competition agreements. With some businesses progressively feeling that their trade secrets are at risk for attack by competitors – and perhaps, by their own employees – this session will focus on how to navigate this developing area and effectively protect client relationships … Continue Reading
A new Uniform Trade Secrets Act bill has been proposed by the Massachusetts Board of Commissioners on Uniform State Laws for the Massachusetts Legislature to consider in its 2015 legislative session. The proposed bill represents another effort to bring Massachusetts law protecting trade secrets in line with that of the vast majority of other states. As discussed here last August, previous efforts to reform Massachusetts law on trade secrets and non-compete agreements have failed, including Governor Patrick’s efforts in the last legislative session to make non-compete agreements unenforceable in Massachusetts.
The current proposal tracks quite closely the 1985 Uniform … Continue Reading
After a bench trial, a Connecticut state court rejected a violation of trade secret complaint by an employer against a former employee in BTS USA v. Executive Perspectives, Superior Court, Waterbury, Docket No. X10-CV-116010685 (Oct. 16, 2014). The plaintiff, BTU USA, provides training and consulting services to corporate clients using learning maps, computer simulations and board games. The defendant, Executive Perspectives (“EP”), offers essentially the same services and products.
Marshall Bergmann, a former BTS Senior Director who had access to much of BTS’ proprietary information, had signed a non-compete clause stating, among other things, that when he left, he … Continue Reading
As we have previously noted, Congress this year is actively considering two bills that would create a federal private right of action for trade secret theft: The Trade Secrets Protection Act (H.R. 5233) and the Defend Trade Secrets Act (S. 2267). These bills have been spurred in large part by increased foreign cyber-espionage affecting American companies.
Although the bills have enjoyed bipartisan support in Congress and in the business community, including from the National Association of Manufacturers, last month a group of dozens of law professors in the intellectual property and trade secret fields sounded a note of … Continue Reading
Co-authored by Ted A. Gehring.
On April 17th, 2012, we blogged about a malicious prosecution claim brought against Latham & Watkins in Los Angeles Superior Court. The suit alleged that the Plaintiffs, William Parrish and Timothy Fitzgibbons, were former officers and shareholders of Indigo Systems Corporation, which was purchased by FLIR Systems, Inc. in 2004. From 2004 to 2006 the Plaintiffs worked for FLIR, leaving in 2006 to start their own business. FLIR retained Latham and sued them for, among other things, misappropriation of trade secrets. The trial court denied FLIR’s request for a permanent injunction, found FLIR brought … Continue Reading
For some time, the media has covered the prosecution of a former Citadel, LLC employee, Yihao Pu, for allegedly stealing Citadel’s trade secrets. The recent guilty plea of another Citadel LLC employee, Sahil Uppal, highlights the potential consequences of complicity in trade secrets theft.
In his plea deal earlier this month, Uppal admitted that he transferred Citadel’s intellectual property (consisting of computer code) to Pu without Citadel’s authorization or approval. Additionally, Uppal admitted that, after he learned that Citadel representatives had confronted Pu about having obtained confidential business information from Citadel, he and a third person removed certain computer equipment … Continue Reading
For years, I have been writing about the continuing efforts of legislators and others to reform the Massachusetts trade secret and non-compete law (see, e.g., my previous blog posts here and here). In this legislative session, Governor Patrick surprised many by submitting a bill that would, with some exceptions, make non-competes unenforceable in Massachusetts (much like the law in California), in an effort to encourage spin-offs, primarily in the high tech area, to compete more effectively with competitors in other states. There was also an effort for Massachusetts to adapt the Uniform Trade Secrets Act (“UTSA”), a federal law … Continue Reading
A threshold tactical decision in virtually every non-compete and trade secret case is where to file the suit. This decision is particularly important when a non-compete dispute has a California angle, because non-compete agreements are generally void as against public policy in California. Not surprisingly, employers seeking to enforce non-compete agreements try to stay away from the Golden State, while those seeking to avoid enforcement find it welcoming.
That scenario was recently faced by a federal judge in Chicago, where a California resident (Jon Thorsell) was sued by his former employer (Brunswick Corporation, which is headquartered in Illinois) for allegedly … Continue Reading
In a complimentary webinar on May 20 (1:00 p.m. ET), our colleagues James A. Goodman and Ian Carleton Schaefer will lead a webinar focusing on how the cloud and employee mobility are impacting trade secret protection strategies.
Join the Technology, Media, and Telecommunications (TMT) strategic industry group and the Non-Competes, Unfair Competition, and Trade Secrets group of Epstein Becker Green’s Labor and Employment practice for a discussion on the following topics:
- The Cloud and Its Impact on Employee Mobility and Trade Secrets
- Trade Secret Law, Disclosure Risks, and Reasonable Efforts to Safeguard Trade Secrets
- Employment Law and Corporate Strategies to Identify and
Our Epstein Becker Green colleague Angel Gomez, a Member of the Firm in the Labor and Employment and Litigation practices, based in Los Angeles, wrote an article for Law360 titled "In Light of Snowden: How to Use Independent Contractors." (Read the full version – subscription required.)
Following is an excerpt:
… Continue Reading
Recent events connected with Edward Snowden have captured the world’s attention. Snowden, an admitted leaker of national security secrets, was, at the time of the leaks, an employee of the well-known consulting firm Booz Allen Hamilton — Booz Allen Hamilton was a contractor to the National Security Agency,
As in-house counsel or the human resources director, you have probably received a frantic phone call from the business folks telling you that a former employee disclosed trade secrets or violated a restrictive covenant and demanding that immediate action be taken. After gathering the facts, the next step is usually to send a cease and desist letter to the former employee, and oftentimes to the former employee’s new employer. Such letters generally set forth the applicable confidentiality or non-compete restrictions as well as the former employee’s offending conduct. As my colleague Kara Maciel recently noted in her blog posting, Cease … Continue Reading