Posts Tagged: "trade secret theft"

The normally staid world of intellectual property law was buzzing last year about one of the biggest trade secret cases and largest punitive damages awards in American history. The case involves automated valuation models (AVMs), which are computer models typically generated by machine learning—a form of artificial intelligence—and used to estimate property values by analyzing the property’s attributes, comparable properties, and the like. Jaws dropped last March when a Texas jury awarded HouseCanary, a Silicon Valley company specializing in residential real estate data and analytics, more than $700 million in compensatory and punitive damages after accepting its claims that it possessed AVM-related trade secrets that were allegedly misappropriated by Amrock (formerly Title Source), one of the nation’s largest appraisal and title service companies. The jury’s verdict might lead you to believe that Amrock is guilty of one of the most blatant and outrageous intellectual property thefts in history. But when you look closer, it is the jury’s verdict that is outrageous and nearly impossible to justify. I say that not only as a lawyer, but also as someone who built AVMs much like those at issue here before attending law school.

In late May, news reports surfaced regarding allegations of trade secret theft committed by Chinese telecom giant Huawei Technologies that had been made in an Eastern District of Texas case. The claims targeted an executive working for Huawei who is accused of participating in a scheme to misappropriate trade secrets from California-based semiconductor startup CNEX Labs. The recent filings mark a new turn in the case, which was originally filed in 2017 by Huawei when it accused CNEX of committing trade secret theft and poaching employees in an effort led by a former Huawei employee and CNEX co-founder. CNEX Labs might be a startup, but it has been attracting venture capital funding for its cloud software and solid-state drive controller products from major names in the tech industry, including Dell and Microsoft. While Huawei has made its own allegations against CNEX, news reports indicate that Huawei’s attempt to access a closely guarded research project by working through a Chinese university professor isn’t an isolated incident. In fact, such activities may be a major factor behind the company’s rapid rise in recent years.