Posts Tagged: "Trade Secrets"

Greater DOJ Action Needed to Stop Corporate IP Theft

In a laudable effort to curtail rampant corporate IP theft, a bipartisan group of U.S. Senators has called on a hesitant Department of Justice (DOJ) to step up its enforcement. As reported in Forbes, Senators Thom Tillis (R-NC), Chris Coons (D-DE), and Marsha Blackburn (R-TN) recently issued a letter to the DOJ identifying the core gap in its prosecution habits. Their primary complaint was “the DOJ’s focus on individual, as opposed to corporate, offenders.” This is an oversight that must be corrected. 

When Protecting Everything Means Protecting Nothing

Tightening your grip on a company’s trade secrets can actually lead to losing them. Stay with me here; this kind of excessive protection is more widespread than you might think, and most companies don’t appreciate the risks that they are taking by overdoing it. The first category is legal risk. Recall that courts require, as part of any case for misappropriation of trade secrets, that you prove you have taken “reasonable measures” to maintain control over the information. Because most trade secret loss happens through employees, you might assume that judges want you to have strong confidentiality agreements. And you would be right; in fact, if you don’t have them, you are statistically likely to lose. But here’s the hidden problem: if your employee non-disclosure agreements (NDAs) are too broad, courts could throw them out.

AI and Trade Secrets: A Winning Combination

Generative AI (“Gen AI”) is everywhere, with all sorts of promises about how it can help the world. Let’s say a company has created new confidential methods for cancer treatments, but they are not really effective. They ask a Gen AI to come up with a cure for cancer using these new methods.  The gen-AI (using the billions of words and images available to it beyond human comprehension) conceives of the cure, and it works, saving many lives. [Note: Generative AI (“Gen AI”) as used herein will refer to deep-learning models that can generate high-quality text, images or other content based on the billions of pieces of data they were trained on].

SCOTUS Declines Solving Circuit Split on Awarding Avoided Costs in Trade Secret Cases

On November 20, the U.S. Supreme Court denied a petition for writ of certiorari filed in Tata Consultancy Services Ltd. v. Epic Systems Corp. The denial leaves in place an appellate court decision awarding $280 million for unjust enrichment and punitive damages in a trade secret misappropriation case where the plaintiff suffered no economic harm and the defendant gained no actual benefit from the misappropriated information.

BTIG Trade Secret Suit Against StoneX Group Alleges More Than $1 Billion in Unjust Enrichment

On November 13, global investment banking firm BTIG filed a lawsuit  in California state court against rival company StoneX Group, alleging trade secret and breach of contract claims related to a StoneX’s recruitment of several key BTIG employees in order to gain access to valuable proprietary software code developed at BTIG. BTIG’s suit seeks disgorged profits of $200 million as well as remuneration for StoneX’s unjust enrichment, which BTIG estimates could reach over $1 billion.