Earlier this year the Federal Judicial Conference released its Trade Secret Case Management Judicial Guide. That paper is over 400 pages but contains comprehensive insights for courts and litigants in the various stages of a trade secret case. It is required reading for those practicing in the field.
Pinkerton Tobacco v. Kretek Int’l: Defendant’s Statute of Limitations Argument Goes Up in Smoke
A Central District of California court recently denied a defendant’s motion for summary judgment where the defendant argued that the plaintiff’s claims for trade secret misappropriation were barred by the applicable statute of limitations. The court determined that the statute of limitations did not bar the plaintiff’s claim because a reasonable jury could find that the plaintiff did not have reason to believe that all of the elements of its trade secret misappropriation claim were met prior to the bar date. In particular, the court concluded that a reasonable jury could find that the plaintiff did not have reason to believe that the defendant possessed the required knowledge of the trade secrets themselves, despite having knowledge that the product was manufactured using the trade secrets.Continue Reading Pinkerton Tobacco v. Kretek Int’l: Defendant’s Statute of Limitations Argument Goes Up in Smoke
$2B Jury Verdict in Trade Secrets Suit
Earlier this week, a Virginia jury awarded software company Appian Corp. more than $2 billion in damages after finding that competitor software company Pegasystems Inc. had misappropriated its trade secrets. The complaint alleged that Pegasystems engaged in corporate espionage and trade secrets theft in an effort to better compete with Appian. Pegasystems hired Youyong Zou, an employee of a government contractor and former developer for Appian. In exchange for payment, Zou provided Pegasystems with copies of Appian’s confidential software and documentation in violation of confidentiality restrictions that barred him from sharing Appian’s trade secrets. In 2020, Appian filed suit against both Pegasystems and Zou.
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The Sedona Conference Solicits Public Comment on its Commentary on the Governance and Management of Trade Secrets
The Sedona Conference, Working Group 12 on Trade Secrets, has released for public comment its guidance on the governance and management of trade secrets. This valuable Commentary outlines the inherent challenges in developing a trade secret protection program that aligns with a business’s goals and measurable objectives.
The Commentary recommends businesses focus on the following factors to evaluate trade secret protection programs:
- The size, maturity, industry, and location of the business;
- The nature and value of a business’s trade secrets;
- How the business can leverage its trade secrets to commercialize new services and extract additional value, maintain its competitive advantage, and incentivize innovation;
- The different measures available to protect the business’s trade secrets and their varying effectiveness; and
- The extent and cost of measures taken and the rationale for measures not taken.
In the end, the Commentary advocates an “integrated enterprise” approach to trade secret governance in order to accommodate multiple and potentially conflicting corporate interests. This approach requires several steps:
Continue Reading The Sedona Conference Solicits Public Comment on its Commentary on the Governance and Management of Trade Secrets
The Sedona Conference Issues Commentary on Protecting Trade Secrets Throughout the Employment Life Cycle
The Sedona Conference, Working Group 12 on Trade Secrets, has issued guidance on protecting trade secrets throughout the employment life cycle. This significant Commentary analyzes the tension between an employer’s interest in protecting its trade secrets and an employee’s interest in engaging in future employment.
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Second Circuit Rejects DTSA Claim Due to Weak Software Licensing Agreement
Earlier this month, the Second Circuit clarified the requirements for alleging a trade secret misappropriation claim under the Defend Trade Secrets Act (“DTSA”). The decision affirmed the Eastern District of New York’s dismissal of a trade secret misappropriation lawsuit against a formerly licensed software user. In short, the Second Circuit’s decision affirmed a more stringent view of DTSA requirements to find that a trade-secret plaintiff alleging misappropriation of software functionality must have direct allegations it had confidentiality and non-disclosure agreements with software’s vendors and end users.
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The Sedona Conference Issues Report on Protecting Trade Secrets in Litigation About Them
The Sedona Conference, Working Group 12 on Trade Secrets, has issued guidance on protecting trade secrets in litigation about them. This important Commentary recommends courts:
- Balance the risk of disclosure and harm to the producing party with the need for the other party and to have the information to prepare its case when determining a
New Platform Launches to Manage a Company’s Trade Secrets
Tangibly launched in February as a solution for companies to manage their trade secrets. Tangibly offers two distinct products: (1) a cloud-based platform that provides a dashboard where users can manage their assets and associated people and (2) a platform designed to make it easy for companies to execute and track NDAs.
Tangibly’s founder and CEO Tom Londergan said that Tangibly is architected around five questions companies should be able to answer regarding their trade secrets:
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The Sedona Conference Publishes An Analysis of How to Seek Global Redress of Trade Secret Misappropriation
Since its passage in 2016, the Defend Trade Secrets Act (“DTSA”) has become a powerful tool for litigants seeking civil redress for the misappropriation of trade secrets to get into federal court. The DTSA is particularly important because it allows litigants to seek redress for misappropriation that happens outside of the United States – overcoming the general presumption that federal law does not have an extraterritorial reach. We recently discussed the significance of the DTSA’s application across the globe and how to effectively achieve quick recourse.
Continue Reading The Sedona Conference Publishes An Analysis of How to Seek Global Redress of Trade Secret Misappropriation
Article of Interest: Seeking Relief for Foreign Trade Secret Theft—Where to Begin
In an increasingly global economy, trade secrets and confidential information frequently cross borders and so do claims of trade secret theft and misappropriation. This article provides practical advice for business leaders on how to ensure that trade secret claims against foreign defendants can remain in court.