Posts in Trade Secrets

Employers should think twice before including the unenforceable provisions in employment contracts merely for their deterrent effect. Such a practice is risky. If an employer terminates an employee who refuses to sign an agreement that contains an unenforceable non-compete provision, such action would constitute a wrongful termination in violation of public policy and would entitle the employee to recover tort damages, including punitive damages, as well as economic damages… Given the strong protections against non-competes in California, it is too risky to require employees to sign employment agreements that contain these provisions. All employment agreements entered into with employees who live or work in California should be carefully reviewed to ensure compliance.

Is it reasonable to say that the U.S. got an unfair head start on the Industrial Revolution by stealing secrets from Britain? I don’t think so. Industrial espionage had been practiced in Europe throughout the 18th Century, with the British and French particularly active, even using diplomats to get access to valuable commercial information. Moreover, Britain, like some other European countries, frequently granted “patents of importation,” which didn’t require the applicant to be an inventor, if the invention was new within the country’s borders. In this way, governments regularly encouraged people to “steal” ideas from abroad and bring them home. This opportunistic behavior by nations was seen as acceptable only because of the mercantilist attitude of the time, where national interest was all that mattered. It would be another hundred years before international treaties were established to guarantee respect for foreign intellectual property laws, creating the more integrated environment for IP that promotes global commerce today.

The current extraterritorial reach of U.S. trade secret law may seem ironic given trade secret law’s “local” roots. In the United States, common law trade secret principles emerged through a diverse patchwork of state court decisions addressing local commercial disputes. These local common law principles were first distilled in the Restatement of Torts and the Restatement of Unfair Competition and then codified in the Uniform Trade Secrets Act in 1979. Underscoring the local prerogative of trade secret law, state legislatures modified and tailored the Uniform Trade Secrets Act to reflect their state-specific concerns and needs. For many years, despite a push for national uniformity, a number of states chose not to adopt a statutory scheme at all (some still haven’t).

At the top of Amin’s prepared remarks delivered to the Senate judiciary committee, he noted the fact that the importance of protecting IP was made explicit by Article I, Section 8, Clause 8 of the U.S. Constitution, often referred to as “the IP clause.” Amin said that his first responsibility as IPEC, if confirmed, would be to work with the White House as well as senior leadership at relevant agencies and departments to ensure well-coordinated efforts as well as the effective and efficient use of resources. “We need to ask ourselves three important questions — What are we doing well? What isn’t working? And what should we be doing?” Amin’s remarks read. Second, Amin would use existing law enforcement tools in order to ensure IP laws are enforced and prevent counterfeit and infringing goods from entering the U.S. market by engaging with stakeholders and trading partners on those issues. Third, he would focus on developing an IP enforcement policy which addresses all sectors of intellectual property including patents, copyright, trademark and trade secrets.

Typically, the reform debate over the U.S. patent system features smaller players, but America’s largest tech firms also have issues with the patent system, which go way beyond any single company’s ability to sustain success… Leading off the panel’s remarks was Manny Schecter, chief patent counsel for IBM, who noted that innovation is a risk-bearing operation. “The likelihood that you ever make an investment [into research & development] is based on the return you anticipate on getting in that investment,” Schecter said. Any reduction to the anticipated return caused by uncertainty in IP policy discourages R&D investment. Schecter added that one of the ways in which intellectual property promotes innovation is by preventing others from taking innovations which are not their own. “We want to minimize or control uncertainty in the IP space if we want to maintain an IP surplus and promote the viability of the economy,” he said.

Waymo’s suit includes counts of infringement for each of the four patents asserted in the case. The suit also includes counts for violations of the Defend Trade Secrets Act and state claims for violations of the California Uniform Trade Secret Act. Waymo is seeking preliminary and permanent injunctions, damages for patent infringement including trebled damages for infringement of the ‘922, ‘464 and ‘273 patents and punitive damages among other forms of relief.

There are several different forms of intellectual property rights available in the United Kingdom, each with its own formality, level of protection, and duration period. It is crucial that any individual who creates a product, or who believes that they would benefit through protecting their intellectual property ensures that they follow the correct procedure… Many individuals will incorrectly assert a claim for copyright infringement. However, copyright infringement is a niche protection right and is only afforded to ‘artistic output’. No formality is required to register this right in the United Kingdom, which is different than U.S. practice.

ZeniMax offers useful insights for enterprises seeking to maximize the benefits of NDAs while minimizing the time and effort needed to negotiate them… Most technology enterprises are well-acquainted with NDAs. On the positive side, they recognize the importance of entering into NDAs with outside parties before disclosing confidential information, whether in the context of discussions related to potential commercial transactions, funding, or joint R&D projects, or for other purposes, such as to support product-related investigations or certification activities. On the negative side, enterprises commonly associate the negotiation of NDAs with cumbersome paperwork, obstacles, and delay.

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.

This week’s news headlines include nomination hearings for the potential incoming U.S. Commerce Secretary, the Supreme Court’s granting certiorari for an important case in biologics, a patent infringement suit targeting the NFL, the expiration of copyright protecting the works of a very influential science fiction author from the early 20th century, and another sports figure — this time UFC Lightweight Champion Conor McGregor — filing trademark applications.

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.