Posts Tagged: "trade secret"

I am particularly concerned about the impact this case law has on the patent application process. Instead of focusing on novelty and clarity, examiners and applicants alike spend time struggling to make sense of Section 101 jurisprudence. That is a serious misallocation of the limited resources of both patent examiners and applicants, leading to longer examination times and less reliable patent grants. Delays in patent review and patent grants can interrupt a startup’s lifecycle, negatively influencing employment growth, sales, and subsequent innovation. This is just one of several factors lengthening patent examination, but it is one that may warrant a congressional response.

On Wednesday, February 1st, a jury in the U.S. District Court for the Northern District of Texas (N.D. Tex.) entered a case verdict which orders virtual reality developer Oculus VR to pay $500 million to Rockville, MD-based interactive computing firm ZeniMax Media Inc. The verdict is the latest activity in a case involving allegations of copyright infringement and trade secret misappropriation levied against Oculus, now a subsidiary of social media giant Facebook Inc. (NASDAQ:FB) of Menlo Park, CA.

On Wednesday, January 11th, retractable roof system developer Uni-Systems LLC of Minneapolis, MN, filed a patent infringement suit against multiple defendants, including the United States Tennis Association (USTA). The lawsuit alleges that multiple defendants conspired to infringe upon Uni-Systems’ patents and trade secrets by planning to build a retractable roof over a USTA tennis stadium in New York. The patent infringement suit has been filed in the U.S. District Court for the Eastern District of New York (E.D.N.Y.).

If you ask ten different people, you will probably get ten different answers. In fact, fewer than half of the European Union’s 28 member states actually have a clear legal definition at all for a trade secret. It’s no surprise, therefore, that the ways in which trade secrets are defined and treated varies considerably between the EU’s member states. These inconsistencies make it tricky for companies to do business in the EU. Somewhat belatedly, the EU has recognized the problems posed and, in order to address them, it has taken the step of harmonizing and upgrading the existing legal landscape by passing the Trade Secrets Directive.

It is one again time to take a moment to look back on the year that was, reflecting on the biggest, most impactful moments of 2016. For us that means looking backward at the most impactful events in the world of intellectual property. This year we received such a good response from our panel of experts that we decided to break this column into two…

Earlier this year, President Obama signed into law the new federal “Defend Trade Secrets Act of 2016.” It arms with substantial new weaponry those whose trade secrets have been taken. What has been less heralded, but might just affect you more directly, are new requirements that might lead you to revise your standard confidentiality and non-disclosure agreements.

In July, Kilpatrick Townsend and Ponemon Institute released their findings from The Cybersecurity Risk to Knowledge Assets study, which confirmed most companies’ worst fears — their intellectual property is at risk every day, and theft is rampant. The 600 survey respondents also disclosed that most companies are unsophisticated when it comes to identifying their key intellectual property (particularly trade secrets) and protecting that adequately. And, most surprisingly, the expected costs associated with loss of these important assets was estimated by nearly seven out of ten respondents to total more than $100 million.

American water treatment company Purolite of Bala Cynwyd, PA, recently filed a federal complaint over misappropriated trade secrets against the American division of Japanese conglomerate Hitachi (TYO:6501). Purolite alleges that Hitachi broke business agreements by sharing Purolite’s confidential trade secrets related to the decontamination of water including radioactive waste with other companies in the hopes of securing a major contract. Purolite filed its lawsuit in the U.S. District Court for the Southern District of New York (S.D.N.Y.).

Disruptive innovation, like what we are seeing in the health care industry, often causes disruption elsewhere, and the legal landscape is no exception. The life cycle of digital health products and services — from conception to promotion — presents a unique set of legal challenges, and there is no one-size-fits-all approach to the matrix of issues facing these products. As a lawyer, these are the kind of projects that remind us of law school exams — lots of issues and, often, no clearly defined answers or solutions… This article explores some of those tools and why one might choose to pursue one or, in the more probable case, some combination of them.

The IP Licensing Guidelines, which state the agencies’ antitrust enforcement policy with respect to the licensing of intellectual property protected by patent, copyright, and trade secret law and of know-how, were issued in 1995 and are now being updated. In the agencies’ view, the IP Licensing Guidelines remain soundly grounded, as a matter of antitrust law and economics. Nevertheless, the agencies have determined that some revisions are in order because the IP Licensing Guidelines should accurately reflect intervening changes in statutory and case law.

The DTSA amends the Economic Espionage Act of 1996 (“EEA”) to provide for civil remedies in federal courts for the misappropriation of trade secrets. The new Section 1836(b) provides for both equitable and monetary relief. Subsection 1836(b)(3) authorizes a federal court to grant an injunction to prevent actual or threatened misappropriation of trade secrets. The language is identical to § 2 of the Uniform Trade Secrets Act (“UTSA”). However, there are a number of limitations as to when a court may issue an injunction under the DTSA. First, the injunction may not “(I) prevent a person from entering into an employment relationship, and that conditions placed on such employment shall be based on evidence of threatened misappropriation and not merely on the information the person knows ….” Section 1836(b)(3)(A)(i)(I).

Orrick announced that James Pooley, a world-renowned intellectual property lawyer and authority in the area of trade secrets law, has joined the firm as senior counsel. He will be based in the Silicon Valley office. As a pioneer in intellectual property law for more than three decades, Jim adds to Orrick’s top-ranking IP bench a seasoned first-chair trial lawyer, scholar, author and global diplomat. In April, he was the only American to be inducted this year into the IP Hall of Fame. Jim’s leadership in the IP bar included a five-year term as Deputy Director General of the World Intellectual Property Organization in Geneva, where he served as the senior American officer and managed the international patent system.

The DTSA’s provision for civil seizures provides victims of trade secret theft with a powerful remedy to prevent further dissemination of the trade secret and limit further harm. However, Congress balanced this powerful tool with severe consequences for those movants who misuse it. When seeking to use this remedy, victims of trade secret theft must be careful to comply with all the detailed requirements or they may be far worse off than before. It is a powerful weapon, but like most powerful weapons, it must be handled with great care lest it cause serious self-inflicted injury.

At present, there is no statutory penalty for not providing the required Notice. However, if an employer fails to provide the required Notice, the employer cannot recover punitive damages or attorneys’ fees under the DTSA from an employee to whom the required Notice was not provided. (The employer could nevertheless obtain such punitive damages and attorneys’ fees under state law in nearly every state.) There may also be adverse consequences from a contractual perspective, or in a government audit, if the required Notice is not provided.

The DTSA amends the definition of misappropriation from what was found in the EEA to bring the definition more in line with that of the Uniform Trade Secrets Act (UTSA) that has been adopted by almost all U.S. states. Indeed, apart of explicitly recognizing certain potential defenses that are discussed in the commentary of the UTSA, the DTSA is identical to the UTSA. According to the House Report, “The Committee intentionally used this established definition to make clear that this Act is not intended to alter the balance of current trade secret law or alter specific court decisions.” House of Representatives, Report No. 114-529, April 26, 2016, at 14. Federal courts therefore, will look to state decisions involving the state’s version of the UTSA for guidance.