Posts Tagged: "misappropriation"

Employers often spend considerable resources recruiting, hiring and training key talent, only to face potential disaster when those trusted employees quit to join a competitor, often taking sensitive files on their way out the door. Even if they don’t act in bad faith, departing employees carry critical, confidential information inside their heads, which can’t be deleted. Fortunately, various remedies may be available for the former employer, from confidentiality and non-competition agreements, to lawsuits for actual or threatened misappropriation of trade secrets and the doctrine of inevitable disclosure. But there’s a conflict. Employers have a legitimate interest in preventing misappropriation of trade secrets, while employees have a legitimate interest in utilizing knowledge and skills gained through work experience and working for employers of their choosing.

Last week, police detained three employees of Taiwanese smartphone-maker HTC, raided their homes and offices and seized their computers and cellphones to search for evidence, as HTC is accusing them of stealing sensitive technology to sell to HTC’s competitors. The three men – a vice president of product design, director of R&D, and senior designer – are accused of stealing secrets relating to HTC’s Sense 6.0 smartphones, which are scheduled for launch later this year. The accused purportedly formed design companies in Taiwan and China and began speaking with Chinese phone-makers about selling them the stolen secrets. They are also accused of defrauding HTC out of more than US$300,000, by use of forged documents, apparently to raise capital for their new venture.

United States Marine, Inc. (USM) sued the United States government in the United States District Court for the Eastern District of Louisiana under the Federal Tort Claims Act (FTCA), 28 U.S.C. § 1346(b) and 28 USC §2674. USM alleged that the United States misappropriated USM’s trade secrets. Specifically, USM claimed that the United States Navy, which had lawfully obtained USM’s proprietary technical drawings under a contract (to which USM was not a party), owed USM a duty of secrecy that it breached by disclosing those drawings to a rival private firm for use in designing military boats for the government.

Mehmet Oz, M.D. is taking the fight to the scam operators who have been duping the public using his good and extremely popular name. Indeed, the two-time Emmy Award-winning, nationally syndicated daytime series The Dr. Oz Show is launching an aggressive campaign to stop illegal use of the Dr. Oz name, image and show. This campaign dubbed “IT’S NOT ME,” began Monday, May 6, 2013.

AP’s common law misappropriation claim has its origins in a remarkably similar suit AP brought against a competing news service almost a century ago. In INS v. AP the Supreme Court, in 1918, enjoined INS, a competing news service, from free-riding on the work product of AP. The misappropriation action was based on INS re-distributing information to its customers which AP had previously released into the public domain. INS was enjoined from using the information for a limited time period while it was hot news (i.e. while it had commercial value as news). The Supreme Court’s decision was based on two rationales: (1) preventing unacceptable conduct in the form of a commercial enterprise free-riding on the investment of time and money by a competitor; and (2) avoiding the resulting ruinous competition that could result from a commercial enterprise free-riding on the efforts of a competitor.