Trade Secrets Trends

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

States within the Seventh Circuit employ the reasonability standard used in many other circuits to determine whether a restrictive covenant is enforceable. Two of these states, Illinois and Indiana, apply a common law framework but largely disfavor such covenants as a restraint on trade. Wisconsin’s restrictive covenant statute focuses on the reasonableness of the agreement as well, but will void the entire agreement if even a portion of the agreement is “illegal, void and unenforceable” – even…
On March 22, 2019, the State of Utah amended its non-compete statute for the third time in only three years. “Strike One” came in 2016, when the State of Utah enacted Utah Code Annotated 34-51-201 et seq.to restrict the validity of post-employment restrict covenants to no more than one year from the date on which an employee is no longer employed by the employer. (But it only applied to covenants entered into on or after…
Each of the states within the Eleventh Circuit governs the use of restrictive covenants through statutes. Generally, both Florida and Alabama permit the use of restrictive covenants where the restrictive covenant is “reasonably necessary” to protect a legitimate business interest, but the legitimate business interest requirement is applied differently in both jurisdictions. Alabama law prohibits any contract that prevents an individual from exercising a lawful profession, trade, or business of any kind, unless it falls…
Germany recently adopted new legislation governing trade secret protection. The “Gesetz zum Schutz von Geschäftsgeheimnissen” (or Trade Secrets Act) implements European Union Directive 2016/943, which is intended to harmonize trade secrets law across the European Union. While many of the core provisions of the Trade Secrets Act will be familiar to practitioners of U.S. trade secrets law, they are new to Germany. For example, German law did not previously define what constitutes a protectable trade…
Unlike in the Ninth Circuit, in states comprising the Second Circuit, common law generally governs the use of restrictive covenants. Still, many of the specific factors for analysis in these states will be familiar, given the widely accepted “reasonability” standard for adjudicating the propriety of such agreements. Both the Vermont and N.Y. State Legislatures have introduced bills restricting the use of restrictive covenants, but to date, neither bill has passed. Vermont’s iteration, known as House…
Last month, the Government Accountability Office (GAO), the legislative agency tasked to conduct auditing, evaluation, and investigative services for the U.S. Congress, released a report regarding the sustainment of operational system software for Department of Defense (DoD) weapon systems. Software sustainment is essential to the operations of DoD weapon systems, including tactical and combat vehicles, and military aircraft. In relevant part, the report examined the extent to which the DoD has addressed challenges to securing necessary…
We recently shared a California federal court decision in Barker v. Insight Global, LLC, et al. that relied on Section 16600 of California’s Business and Professional Code to hold that, in California, non-solicitation provisions in employee agreements are presumptively invalid. The California statute governing restrictive covenants provides that “[e]xcept as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to…
The Federal Reserve is prepared to ratchet up the penalty for bankers caught misappropriating their employer’s trade secrets. Although bankers were already subject to civil liability under state laws governing trade secrets and breach of contract, the Federal Reserve now appears willing to subject guilty bankers to an outright ban from working with any institution specified in 12 U.S.C. § 1818(e)(7)(a), pursuant to section 8(e) of the Federal Deposit Insurance Act. Two Wyoming bankers are seemingly…
In a recent decision, the Supreme Court of Vermont affirmed its commitment to protecting commercial secrets of private companies, even if they may have been disclosed to a public agency. Long v. City of Burlington, 199 A.3d 542 (Vt. 2018). The Burlington City Council was working with its consultant, ECONorthwest, and private property owners Devonwood Investors, LLC and BTC Mall Associates LLC (collectively BTC) to redevelop several downtown city blocks. The parties entered into a…
Despite continued trade talks with China, the federal government continues to aggressively pursue efforts to prevent and hold Chinese companies accountable for trade secret theft and economic espionage. As described below, in the last month alone, the U.S. Government has taken three very decisive actions in combating the threat. The Senate Judiciary Subcommittee announced the creation of a subcommittee on Intellectual Property. The subcommittee will focus, among other intellectual property matters, on the theft of…