Posts in Trade Secrets

When faced with an employee who allegedly accesses a work computer to misappropriate trade secrets, many employers have turned to the Computer Fraud and Abuse Act (CFAA) and the Defend Trade Secrets Act (DTSA) as potential causes of action against the former employee. However, the Third Circuit’s recent decision in NRA Group, LLC v. Durenleau, 2025 WL 2449054 (3d Cir. Aug. 16, 2025), has set further limits on the application of both statutes in this common scenario, holding that violating an employer’s computer-use policy does not constitute a violation of the CFAA and that passwords are not considered trade secrets because they lack independent economic value.

The U.S. Court of Appeals for the Federal Circuit (CAFC) on Tuesday issued a precedential decision in Focus Products Group International, LLC v. Kartri Sales Co., Inc., affirming-in-part, reversing-in-part, vacating-in-part, and remanding for a new trial involving patent, trademark, and trade dress infringement claims related to “hookless” shower curtains. The opinion, authored by Circuit Judge Chen, with Chief Judge Moore and Circuit Judge Clevenger joining, held that while the U.S. District Court for the Southern District of New York properly denied Kartri Sales Co., Inc.’s and Marquis Mills, International, Inc.’s venue transfer motion and unclean hands defense, it erred in several of its infringement findings and damages awards.

Late last week, the Federal Trade Commission (FTC) announced that the agency was acceding to decisions by U.S. regional circuit courts vacating the agency’s Biden Administration-era rule banning noncompete clauses from U.S. employment contracts and preventing their enforcement. While some lawmakers have decried the decision to end this rule, the FTC also issued a request for information (RFI) as the Trump Administration seeks to develop a case-by-case enforcement approach for cracking down on noncompete abuses.

Trade secret litigation presents a fundamental paradox at the pleading stage: on the one hand, a plaintiff must identify their allegedly misappropriated trade secrets with sufficient specificity to survive a motion to dismiss, without providing an overly detailed disclosure in the public complaint that could effectively destroy the trade secret’s protected status, undermining the very foundation of the claim, while also describing the trade secrets sufficiently to provide defendants with adequate notice to mount a defense and ensure compliance with required pleading standards. The federal Defend Trade Secrets Act (DTSA) does not provide explicit identification guidance. At the state level, only California and Massachusetts have enacted statutory provisions addressing certain aspects of trade secret identification under their respective versions of the Uniform Trade Secrets Act.

The U.S. Court of Appeals for the Ninth Circuit issued an opinion on Tuesday reversing a district court’s decision to grant a DNA-sequencing-analysis company’s motion to strike nine of 11 trade secrets asserted against it by a competitor. The The U.S. District Court for the Northern District of California found the trade secret owner, Quintara Biosciences, Inc., had failed to identify the trade secrets with “reasonable particularity” under the California Uniform Trade Secret Act (CUTSA) Section 2019.210, and therefore granted Ruifeng Biztech, Inc.’s motion to strike them under Federal Rule of Civil Procedure 12(f). However, the Ninth Circuit panel said that, under the Defend Trade Secrets Act (DTSA), “the fact question of ‘reasonable particularity’ should be resolved on summary judgment or at trial.”

On July 30, 2025, a California Superior Court in Propel Fuels, Inc. v. Phillips 66 Company, awarded Propel Fuels $195 million in exemplary damages for “abusive behavior” after the jury had awarded $605 million in damages for trade secret misappropriation. Beyond the staggering financial consequences, the case offers critical lessons for companies navigating the delicate process of corporate acquisitions, particularly those involving the exchange of confidential information.

Fintiv, Inc. has filed a complaint against Apple, Inc. in the U.S. District Court for the Northern District of Georgia, Atlanta Division, alleging “corporate theft and racketeering of monumental proportions” due to Apple’s misappropriation of Fintiv’s mobile wallet technology. Fintiv’s complaint charges that Apple blatantly stole its trade secrets for mobile wallet technology from Fintiv’s predecessor, CorFire, under pressure to develop a mobile digital wallet and an inability to do so on its own.

The U.S. Court of Appeals for the Tenth Circuit on Tuesday partially reversed and remanded a district court decision granting summary judgment for an employer in a trade secret misappropriation case brought against it by a former employee. The district court found the employer was not liable for misappropriating a customer list belonging to the former employee, and also granted a motion to exclude an expert witness, as well as any evidence or witnesses on lost wages.  

A group of Chinese companies struck out for a second time at the U.S. Court of Appeals for the Ninth Circuit Monday when the court ruled they lacked foreign sovereign immunity and therefore are not shielded from an indictment for economic espionage in connection with their alleged efforts to steal trade secrets from E.I. du Pont de Nemours & Company (DuPont).

On April 4, 2025, the U.S. Court of Appeals for the Federal Circuit (CAFC) in a precedential decision largely upheld damages awarded to ams-OSRAM USA Inc. (formerly Texas Advanced Optoelectronic Solutions, or TAOS) in a long-running trade secret and contract dispute against Renesas Electronics America Inc. (formerly Intersil). The court affirmed tens of millions of dollars in disgorgement, exemplary damages, and reasonable royalties—but remanded for a narrow correction to the prejudgment interest calculation.

Cloud-based computing provides numerous benefits in today’s modern, hybrid work economy, such as allowing employees to work from anywhere, to seamlessly transition between home and office, and to more efficiently collaborate with colleagues and partners. Businesses, especially Silicon Valley tech companies, are increasingly choosing to leverage cloud-based solutions, such as Google Workspace (Gmail, Drive, Sheets, etc.), Microsoft M365, or Apple iWork with iCloud, for their information management. Such solutions enable employees to access and edit documents across their devices and save copies of those documents locally for offline access. But cloud-based document management comes with its own set of risks.

On Monday, the U.S. Supreme Court denied petitions for writ of certiorari in several appeals involving intellectual property claims. These denials included yet another Section 101 case seeking clarity on the court’s two-step eligibility test and a suit seeking vacatur of a stipulated settlement for trademark infringement involving a fraudulently procured mark. The Supreme Court also granted a motion by patent owner Cellspin Soft allowing it to file its petition for writ with a supplemental appendix under seal.

Yesterday, the U.S. Supreme Court issued an order list denying several petitions for writ of certiorari involving intellectual property appeals. These cases include questions over attorney’s fees awards for parallel patent validity proceedings and following voluntary dismissals of copyright allegations. The Federal Circuit’s standard of appellate review and questions regarding the interpretations of the Defend Trade Secrets Act also evaded closer scrutiny by the Court.

On Monday, January 13, the U.S. Supreme Court issued an order list denying petitions for writ of certiorari in three cases involving intellectual property claims. Two appeals came from the Federal Circuit regarding the court’s application of Hatch-Waxman’s safe harbor against infringement liability and its review of the International Trade Commission’s (ITC) economic prong analysis. Another appeal from the Seventh Circuit challenged that court’s application of the Colorado River abstention doctrine in a trade secret case involving a complex ownership dispute.

Trade secrets refer to confidential information that businesses use to maintain a competitive edge. They are often thought of as the “secret sauce” of a business — the recipe that makes a product unique and special — that no one else knows about. Trade secrets can include any information that is not generally known to the public, such as manufacturing processes, customer lists, software algorithms, and marketing strategies. This information can be critical to the success of a business, particularly in industries that are highly competitive.