Posts Tagged: "Trade Secrets"

The SECRETS Act Adds a Critical New Defense Against IP Theft Threatening U.S. Tech Leadership

Intellectual property (IP) theft, especially of trade secrets, remains a significant threat to advanced U.S. industries, global competitiveness, and national security. It is foundational to the U.S. trade dispute with China, given state-sponsored efforts to steal as much American know-how as possible. Yet, instead of new laws and regulations, the United States has relied mainly on tariffs in an indirect effort to convince China to curb these illegal practices. That is, until now. As Congress and the Biden administration prepare to finalize competitiveness bills and set the country’s annual defense budget, they have an opportunity to advance another bill that will benefit American businesses and workers by combatting the Chinese threat to U.S. industries—the SECRETS Act, introduced last summer by Sens. John Cornyn (R-TX), Chris Coons (D-DE), and Todd Young (R-IN).

GIPC’s Tenth International IP Index: Reasons to Be Hopeful, But More Work to Do

The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) today revealed its 2022 International IP Index, “Compete for Tomorrow,” which is now in its tenth edition. Last year, the report focused on the role of effective intellectual property (IP) frameworks in helping economies to combat and recover from the COVID-19 pandemic and identified several emerging economies that had made significant improvements. This year, the report analyzes ten years of data, which reveals that the global IP environment has steadily improved overall, including in the last two years of turmoil, and that emerging economies are particularly making a conscious decision to bolster their IP regimes.

Learning to Live with ‘Zero Trust’: It’s Not as Depressing as it Sounds

Trust is getting a lot of attention these days. Of course, it’s always been important in the United States. We declare trust in God on our currency, Scouts have to be trustworthy, and we even seem to trust the algorithm behind cryptocurrencies. On the other hand, we worry about what feels like a decline, if not complete rupture, in social trust. For businesses that depend on controlling the confidentiality of data shared with employees and outsiders, these are perilous times. Our most important assets are stored and transmitted through digital systems that are imperfect; and that’s without accounting for the frailties of the people with access to those assets. Information security has come a long way since I started my career in the 1970s. There were no networks to worry about then, no powerful computers in the pockets of employees. Data was transmitted on paper. You just needed to watch the front door and photocopier. Employees with their badges as markers of trust could go pretty much anywhere they wanted within the facility.

Patent vs. Trade Secret Strategy: A Four Factor Decision Framework

Patents and trade secrets are both valuable assets that companies can utilize to protect their innovations and establish competitive advantages in the market. Strategic IP portfolio development and management leverages both patents and trade secrets where they are most effective with the goal of maximizing protection while minimizing costs.

Lessons From Theranos and the Trade Secret Defense

What a strange and compelling story. Brilliant young inventor conceives revolutionary machine, raises staggering amounts from investors, is fawned over by the press for a decade, then crashes to earth on revelations of faked demonstrations and technology that doesn’t work. When I learned of the recent jury verdict, I naturally turned over in my mind how all this could have happened to such a well-meaning person as . . . John Ernst Worrel Keely. Okay, you were expecting someone else. But since you may not have heard of Keely, let me fill you in and explain the role that secrecy played in one of the country’s most elaborate and long-running scams. I assure you that the Theranos investors wish they had boned up on Keely’s operation.

Abusive IP Litigation Poses Threat to Innovation at Home and Abroad

The World Trade Organization (WTO) was scheduled in December to hold its 12th Ministerial Conference (MC12) in Geneva, bringing together officials from 164 countries to negotiate the future of global trade. Concerns over the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) were expected to feature in discussions, however, in-person deliberations have been tabled until at least March as a result of growing health concerns related to the Omicron COVID-19 variant. In the meantime, it is important leaders consider how TRIPS can be strengthened and refined as needed. TRIPS plays a crucial role in driving global innovation, but ambiguities surrounding the agreement’s dispute settlement mechanism have led some to conclude that it is vulnerable to abuse by countries seeking to advance their national interests.

What You Need to Know About Trade Secrets in 2021

Last year at this time we thought we had been through the worst of it and, with the new vaccines arriving, that life would return to normal in 2021. Hahaha, how naïve we were! But take heart; some things hold steady through the storm, such as the popular sport of trade secret litigation. Unlike most patent and copyright cases, every dispute is guaranteed to unfold as a morality play—a story of good guys and bad guys. Let’s now look back on the year when remote work dug in to become a permanent fixture, and remind ourselves of the broad sweep of trade secret law by looking at some of the more instructive and interesting opinions issued by the courts – and one inexplicable decision by our government.

When the Secret Enables the Brand: The Long-Lasting Listerine License

Question: how do you make money from a secret formula for a product that smells and tastes horrible and that no one wants? Answer: you make everyone believe they have a medical problem that only this stuff can solve. Back in 1879, Joseph Lawrence, a St. Louis doctor, was experimenting with surgical disinfectants. This was a new thing. In the 1860s, a British surgeon named Joseph Lister was the first to perform surgery antiseptically, using carbolic acid as a disinfectant. Inspired by Lister, Lawrence came up with a compound of alcohol and essential oils that seemed to kill whatever bugs it touched. To honor Lister (and presumably to take advantage of his fame), Lawrence named the concoction “Listerine.”

Acquisition Contamination: The Mythology of the ‘Clean Team’

Have you ever shopped for something dangerous? Back in the 1950s, my mother wanted to buy a pressure cooker to make dinner faster (and use cheaper cuts of meat). That wasn’t an easy decision, because the early models had a reputation for occasionally exploding (there was no Consumer Product Safety Commission then). My father, a self-taught steam engineer, was skeptical that a kitchen appliance could safely contain double the normal atmospheric pressure. But Mom did her homework, researching what the problems were (usually a single pressure valve prone to clogging) and finding cookers with redundant pressure relief systems. It worked for years, and no one went to the hospital. Companies shopping to buy other companies, or to acquire a license to their technology, also entertain risk. That’s because in the process of interviewing potential targets they can become exposed to highly valuable trade secrets. If any particular transaction doesn’t go forward, but the shopper implements similar technology, the disappointed seller may file a lawsuit claiming misappropriation.

Noncompete Agreements: Finding the Balance Between Reasonable Restraints and Free Range Talent

You may remember 2014 as the year when we all discovered a plague of noncompete agreements threatening our economy. No? Let me help you. In June that year, the New York Times published an expose of sorts relating the story of a 19-year-old summer camp counselor who couldn’t get hired by a certain camp because the year before she signed a contract with another camp that blocked her from working for any nearby competitor. Noncompete contracts, the article suggested, had previously been reserved for high level corporate executives, and suddenly (and “increasingly”) they were being foisted on rank and file employees engaged in event planning, investment management, and even yoga instruction. A follow-on piece in the Times confirmed the emerging crisis by revealing that the Jimmy John’s fast food chain had forced noncompete clauses on all its sandwich makers (acknowledging, however, that there was no evidence that the company had ever tried to enforce the contracts).

The Houston Astros Stole Bases and Signs—But Did They Also Steal Trade Secrets?

The category of “trade secrets” is broad and encompasses information that people may not ordinarily associate with the term. Easy, iconic examples of trade secrets include the secret recipe for Coke or the secret formula for creating the nooks and crannies in Thomas’ English Muffins. Others, such as the algorithms that determine what appears in our social media feeds, or how much an office supply store charges a particular client for a box of paper clips, may not be so apparent. In reality, a “trade secret” is any secret, commercially valuable piece of information to which its owner restricts access and takes reasonable steps to protect. But even if you knew how wide-ranging the category is, you may not have considered “catcher’s signs” a trade secret. That is exactly what a former Major League Baseball (MLB) pitcher is contending in a recent lawsuit filed in Texas state court. This case is generating much debate in the legal and baseball communities. Time will tell whether this suit is a dribbler that does not get past the pitcher or a line drive into the gap for extra bases, so let’s step up to the plate and take a good look at this recent case.

Carefully Connecting the Dots: Consider All the Evidence Before Launching a Trade Secret Misappropriation Attack

The job of the trial lawyer starts with figuring out what happened and collecting evidence to use in telling a compelling story to a judge or jury. Direct evidence takes you immediately to the fact you’re trying to prove and is most commonly seen in eyewitness testimony. Betty saw John shoot the gun at Phil, who collapsed on the floor. That’s direct evidence that John murdered Phil. But if Betty had been outside the bar, heard an argument and then a gunshot before entering and seeing John holding a smoking gun, that’s indirect, or circumstantial, evidence of the murder…. In the realm of trade secret disputes, there are special challenges in trying to sort out the truth because one side knows the facts and the other doesn’t.

ITC and Trade Secret Cases Against Apple Over Pulse Oximetry Tech Highlight Need for Better Ways to Rein in Big Tech

In late June, medical technology firm Masimo Corporation and its consumer device subsidiary Cercacor Laboratories filed a complaint with the U.S. International Trade Commission (ITC) asking the agency to institute a Section 337 investigation into several versions of the Apple Watch. Masimo’s allegations, which also include trade secret litigation ongoing in U.S. district court, follow an increasingly familiar narrative in which a Big Tech player, in this case Apple, engages in licensing negotiations with a small tech developer, only to poach employees and ideas from the smaller firm without paying the original developers.

How Organizations Must Protect Themselves from Ransomware Attacks

When one thinks of cybercrime, it can be easy to imagine a mysterious figure in a dimly lit room sending out various phishing emails to unsuspecting victims. However, this is not always the most dangerous tactic used by hackers, according to the United Kingdom (UK) Government Communications Headquarters’ (GCHQ’s) cybersecurity arm. On June 14, the UK National Cyber Security Centre claimed that ransomware represented the biggest threat to online security for most people and businesses, with the number of incidents soaring worldwide in the last two years. And it is a problem and a threat that we must all be wary of.

‘Decoupling’ with China is Not the Answer

We’ve all seen him when driving by the strip mall. Trying to focus on the traffic, our eyes are diverted by “Tube Man,” a 10-foot tall hollow, collapsible stick figure with a fan at the bottom, adjusted so that the body repeatedly folds and then jumps upright, with arms whipping around in a constant frenzy, trying to grab our attention. And that’s the point. Tube Man accomplishes nothing except to demand that we look at what he’s doing…. And that, in my view, describes very well the recent rush of legislative attempts to punish China. That is not to say that China is our best friend. We are in serious competition, and it’s obvious that our leading position in some critical technologies has been targeted. That “giant sucking sound” you hear in the direction of China may be some cutting-edge secrets being displaced. We should be deeply concerned. We need a thoughtful, long-term strategy to respond.