Trade Secrets Trends

Analysis and Commentary on the Latest Developments in Trade Secrets Protection, Disputes, and Enforcement

Please join us for a Crowell & Moring webinar, “New Year, New Look at the Enforceability of Employee No-Solicitation Agreements – State Law Developments,” scheduled to take place on February 28th, 2019 at 12:00 pm Eastern. Employers frequently enter into restrictive covenants with their employees, including those that prohibit former employees from recruiting other employees away from their current employment. These agreements are intended to protect the employer’s intellectual property, trade secrets and other business interests. They have…
Legislation recently introduced in the United States Senate to protect low-wage workers could roll back the use of non-compete agreements, a common tool companies use to protect their trade secrets. Florida Senator Marco Rubio introduced the “Freedom to Compete Act,” which aims to protect low-wage and entry-level employees from non-compete agreements, which generally restrict former employees from working at or starting competing businesses. Under this proposed legislation, employers would be prohibited from entering into,…
On January 25, 2019, the Illinois Supreme Court in Rosenbach v. Six Flags Entertainment Corp. ruled unanimously that plaintiffs do not need to allege “some actual injury or adverse effect” in order to challenge alleged violations of Illinois’ Biometric Information Privacy Act (BIPA). In so doing, the Supreme Court expressly held that the loss of an individual’s right to control her “biometric privacy” is a “real and significant” injury on its own – whether or…
The Freedom of Information Act (FOIA) Exemption 4 provides that “trade secrets and commercial or financial information obtained from a person [that is] privileged or confidential” can be withheld when responding to a FOIA request. But what does this exemption mean? Many district courts and circuit courts have ruled on this issue but the rulings have been inconsistent regarding the standard to justify withholding information. On January 11, 2019, the Supreme Court granted certiorari in the case…
A California federal court recently called into question the enforceability of employee non-solicitation clauses within the state. In Barker v. Insight Global, LLC, et al., Case No. 5:16-cv-07186-BLF, the United States District Court for the Northern District of California reconsidered its position regarding the legality of an employee non-solicitation clause in plaintiff’s employment agreement, reversing its decision to dismiss a putative class action claim for failure to state a claim. Plaintiff Jonathan Barker, a former…
In Dunster Live, LLC v. LoneStar Logos Mgmt. Co., LLC, 17-50873, 2018 WL 5916486 (5th Cir. Nov. 13, 2018), the United States Court of Appeals for the Fifth Circuit recently dealt a blow to parties seeking to recover attorneys’ fees under the fee shifting provision of the Defend Trade Secrets Act (“DTSA”). In the underlying case, plaintiff sued defendants, a competitor company and its owner who was formerly a member of the same LLC, for…
Two New England craft beer companies are dealing with a hangover from a contentious trade secret dispute. Massachusetts-based franchisor Craft Beer Stellar, LLC recently filed a complaint in Massachusetts federal court against Maine-based franchisee Hoppy Days, LLC. Plaintiff brought breach of contract claims in addition to alleging violations of the Defend Trade Secrets Act, the Computer Fraud and Abuse Act, Massachusetts trade secret law under M.G.L. C. 93, §§ 42 & 42A, and the Massachusetts Consumer Protection…
It is a long standing principle in trade secret law that “[a] trade secret can exist in a combination of characteristics and components, each of which, by itself, is in the public domain, but the unified process, design and operation … [makes it] a protectable secret.” Imperial Chem. Indus. v. Nat’l Distillers & Chem. Corp., 342 F.2d 737, 742 (2d Cir. 1965). In a recent decision, the United States Court of Appeals for the Fourth…
In an indictment unsealed last week, the U.S. Department of Justice charged two companies – one based in China and the other in Taiwan – as well as three individuals, with trade secret theft, conspiracy to commit trade secret theft, economic espionage, and other related crimes. These charges are the latest in a recent string of similar prosecutions, as U.S. officials have sought to combat the threat of Chinese economic espionage against American technology companies,…