Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well one or two that I missed over the past few weeks (better late than never): 

Noteworthy Trade Secret and Non-Compete Posts and Cases: 

• CBS has dismissed its trade secret and copyright lawsuit against ABC over the "Glass House" reality show. Readers of this blog will recall U.S. District Court Gary Feess denied CBS' request for a TRO back in June. CBS announced its decision last week and said the lawsuit was no longer necessary because its "Big Brother" show had trumped "Glass House" where it counted, in the battle for ratings.
• Interested in the dark side of trade secrets? Set your DVR or watch Crime, Inc.'s episode on corporate espionage tonight at 9:00 p.m. on CNBC. (Thanks to Josh Durham for the reminder.)
• "How to Protect Your IP in China? Don't Hire Anyone," recommends Dan Harris in his always-interesting China Law Blog. 
• Texas federal courts are divided over whether to extend a non-compete's duration when an employee has violated the non-compete, reports Paul Freehling in Seyfarth Shaw's Trading Places Blog.
• For those in Missouri, Robert Milligan has an important post in Seyfarth's Trading Secrets Blog about the Missouri Supreme Court's recent opinion reaffirming the enforceability of non-competes in that state. 
• The U.S. District Court for the District of South Carolina has reaffirmed that a compilation of information can qualify as a trade secret, according to Parker Poe's Trade Secret & Unfair Competition Reporter Blog. 
• Burr & Forman's Non-Compete & Trade Secrets Blog has a nice primer on the Inevitable Disclosure doctrine. 
• "Trade Secrets: Your Secret Weapon under Patent Reform" argues Nixon Peabody's R. Mark Halligan and Stout Risius & Ross' David A. Haas.
• Kenneth Vanko's Legal Developments in Non-Competition Agreements Blog has a fine wrap-up of some noteworthy posts and articles. 

Computer Fraud and Abuse Act Posts: 

• Yet another district court has adopted the reasoning of U.S. v. Nosal and WEC Carolina v. Miller, reports Littler's Unfair Competition & Trade Secrets Blog. In International Airport Centers, LLC v. Citrin, U.S. District Court for the District of Minnesota Patrick Schlitz dismissed the agency’s CFAA claim, reasoning that had Congress “meant to so vastly expand the jurisdiction of the federal courts, Congress would have been much more explicit.” 

Cybersecurity Posts and Articles: 

• "Are smart buildings the next cyber-threat?" asks TechnoLlama. 
• "Cybersecurity Is Top of Mind for General Counsel and Co. Directors" writes Molly McDonough for the ABAJournal.
• "Is An International Cyber Regulatory Agency Needed?" asks Richard Stiener in an article for Forbes.
• "The Business BYO Craze: Has It Gone Too Far?" asks the HR Bartender Blog.
• "Are Lawyers Safe Up in the Cloud? asks Martin Scarinci for the Martindale.com Blog. 

News You Can Use:

• "Ten Tips and Tricks Every iPhone and iPad User Should Know" offers The Wall Street Journal.

Here are the noteworthy posts, articles and cases of the past week:

Trade Secret and Non-Compete Cases and Posts:

• U.S. District Court Judge Gary Keess issued his opinion explaining his reasons for denying CBS' Motion for TRO to prevent the premiere of ABC's Glass House reality show.  A copy of the Opinion can be found in the PDF below. As expected, Judge Keess expressed "serious doubts" about whether CBS had any trade secrets, let alone whether ABC had misappropriated them. He dismantled CBS' claims that its Big Brother "House Guest" manual qualified as a trade secret (labelling it "generic") and found that the "filming, editing and production techniques" were commonplace in the industry. Judge Keess also rejected any claim of irreparable injury, reasoning any harm was readily compensable by a damages award.  For more on this case, see my earlier posts here and here.
• MGA's insurers have sued for their share of the $137 million in lawyers' fees and costs award in the epic MGA v. Mattel "Bratz" case according to Alison Frankel's On The Case Blog. National Union Fire Insurance Company of Pittsburgh and Crum & Forster Specialty Insurance Company have filed a declaratory action for those fees and MGA is expected to oppose the complaint as premature.
• The "inevitable disclosure doctrine" appears to be on life support in Massachusetts, according to recent posts in Kenneth Vanko's Legal Developments in Non-Competition Agreements Blog and Seyfarth Shaw's Trading Secrets Blog. Both posts describe the U.S. District Court of Massachusetts' ruling in U.S. Elec. Svcs., Inc. v. Schmidt, 2012 U.S. Dist. LEXIS 84272 (D. Mass. June 19, 2012), that the doctrine cannot be applied in the absence of a non-compete, at least under Massachusetts law. 
• For those practicing before the International Trade Commission, the ITC 337 Blog has a comprehensive summary of the latest trade secret cases filed before the ITC. 
• In a post entitled "Can I Protect My Trade Secrets Via Social Media Policy," James Douglass provides a nice recap of the recent National Labor Relations Board's opinion on social media and how to draft enforceable social media policies to protect your trade secrets in Fisher & Philips' Trade Secrets and Noncompete Blog. 
• "You Want to Enforce a Non-Compete? Bad Facts, Sir, Give Me Some Bad Facts!"  advises the Mass Law Blog. Well stated, Mass Law Blog, well stated.
• "Employers beware: Revisions of non-compete agreements are becoming essential" writes Richard Glovsky for Inside Counsel. Richard's article details the challenges of enforcing non-competes against employees who are promoted, reassigned or take on additional responsibilities. 
• How will the America Invents Act's "prior user rights" impact the bio and pharma industries? The Patent Docs Blog has a post that concisely summarizes the debate at the recent BIO International conference (the post concludes that the impact may be minimal). 
• Are you representing both the employee accused of stealing trade secrets and his/her new employer? Then you should read "Three Pitfalls of Joint Representation in Non-Compete Cases" by W. Mark Bennet for Strasburger's NonCompete Blog. 

 
Cybersecurity: 

• "Lawyers Get Vigilant on Cybersecurity" reports The Wall Street Journal. For more on this issue, please see my February post detailing increasing cyberattacks directed at lawyers. 
• The latest headache in BYOD? "Who Owns the Email?" asks Gardere's Peter Vogel in his Internet, Information Technology and e-Discovery Blog. 
• Monica Bay details "The Fast Rise of the 'Bring Your Own Device' Buzzword" in Corporate Counsel. 
• For an interesting take on the ongoing debate over the pending cybersecurity legislation, check out Forbes writer Ken Silverstein's "Cyber Security Debate Pits Corporate Interests Against National Security."
• Looking for "An App that Encrypts, Shreds, Hashes and Salts"?  Check out this post on The New York Times Bits Blog.

News You Can Use: 

• The Time Management Ninja has "10 Apps to Make Your iPad More Productive."
• In "Stunning Progress in Technology: The Death of Unskilled Labor," Forbes' Aaron Franks details the changes in tech manufacturing that may mean these jobs are never coming back.

CBS v ABC Order 06 21 12.pdf (63.65 kb)

Yesterday in Los Angeles, U.S. District Court Judge Gary Feess advised that he was unlikely to grant CBS' request for a Temporary Restraining Order to forbid ABC from airing its new reality show, The Glass House. While he did not issue a formal opinion or written order, the throngs of media assembled have reported on his statements before a packed court house. (I have attached the minute order and parties' respective briefs in PDF format below). Given that The Glass House show is set to premiere on Monday, June 18, it is highly unlikely that Judge Feess will change his mind and restrain ABC from rolling out the show.

CBS brought the lawsuit last month, contending that a team of 19 individuals who had worked on its Big Brother reality show were using its trade secrets and violating its copyrights by working on ABC's new show. The template of of the two shows was very similar — i.e., a show following a group of unrelated people living together in a house all summer, with individuals being eliminated until a finalist wins a prize. For more background on the show, please see my earlier post.

The minute order (which is a short filing in which federal courts simply memorialize that a conference or hearing took place with a brief description of the subject matter) does not provide any insight on the court's inclination.  However, the many media reports indicated that Judge Feess applied an appropriate balancing test, by looking at the relative strength of the trade secret and copyright claims, the harm to CBS, and the harm to ABC and other third parties (such as the contestants).

The Hollywood Reporter, The New York Times and other media have reported that the judge was unimpressed with CBS' claims. According to The New York Times, Judge Feess started the Friday hearing "by saying he was not inclined to accept CBS’s arguments that it would win a copyright lawsuit against ABC and its corporate owner, Walt Disney. At the conclusion of the argument by lawyers from each side, the judge said he was not granting CBS the injunction request Friday and was unlikely to do so before the start of ABC’s show on Monday. He said he would read the accompanying materials before making a final decision."

As for the trade secrets claim, CBS' Motion for TRO emphasized that its production process, multiple camera feeds, and its production manual outlining the manner of maintaining the show's fast pace were trade secrets. The Hollywood Reporter reported that Judge Feess rejected those claims, reasoning that "he did not see that there were trade secrets being stolen because CBS has allowed tours of the Big Brother set and control room, and much of what is being done is common industry practice." As for the copyright claims, the media quotes the judge as stating that many of the elements of the show were "generic" and that while there were similarities between the two shows, “the idea, in my view, cannot be copyrighted.”

Judge Feess was apparently also unpersuaded that CBS would be irreparably harmed and was quoted as saying he believed that ABC would be damaged by an injunction because ABC would lose its investment in the show, the crew would lose their jobs, and the contestants would lose the time and effort they put into the show.

CBS has announced its intention to fight on (after waging such a high profile campaign, it really cannot say anything else at this stage). However, as a practical matter, the loss of an important and contested injunction at the outset of a case is generally fatal to a trade secrets claim. In the normal course, an unsuccessful trade secret claimant will quietly dismiss the case at an opportune time. However, as ABC has apparently filed a counterclaim against CBS, that option has been taken off the table.

CBS TRO Motion.pdf (332.51 kb)

ABC Opposition.pdf (92.71 kb)

CBS v ABC Minute Order.pdf (8.33 kb)

CBS followed through on its threat to sue ABC for allegedly misappropriating CBS' trade secrets for ABC's new reality show, Life in the Glass House, and it is seeking an injunction against ABC and 19 former producers and staffers who worked on CBS' long-running reality show, Big Brother. In the lawsuit filed in federal court in Los Angeles last Thursday, CBS argues that the ABC show also infringes  its copyrights and that the producers are violating non-disclosure agreements they signed with CBS when they worked on the Big Brother series. (I have attached a PDF of the complaint, courtesy of The Hollywood Reporter's website, below).

For those not familiar with the Big Brother series, it involves a contest among guests who live in a house and who are filmed continuously, perform challenges and tasks, and then ultimately vote one another off of the show. According to CBS, Glass House "replicates every key aspect of Big Brother, including, among other things, its plot, theme, mood, setting, pace, characters, sequence of events, and other concrete elements." 

Of course, none of those elements represent a trade secret as they are available for the world to witness.  Rather, CBS identifies a number of technical processes that better enable the show to quickly cycle and capture various story lines and assist in streaming around the clock to maintain its fast pace and unique format. In the context of the breathless allegations of copying and theft, these appear to be somewhat mundane trade secrets, although we have witnessed relatively weak trade secret cases succeed in the past (see the AvidAir Helicopter v. Rolls Royce decision by the Eighth Circuit last year).

In essence, this dispute really boils down to a misappropriation of idea case. While the elements and standards for this type of claim differ from state to state, these cases have traditionally proven to be tough ones to win.  (See, for example, NBC's successful defense of The Biggest Loser from a writer who claimed it stole her idea, "Phat Farm/Fat Farm — A Weight Loss Adventure," as well as Tom Cruise and the producers of The Last Samurai's recent jury verdict against two brothers who said they pitched them the idea for the movie first).

Glass House is set to debut on ABC on June 18 so there will likely be a request for a temporary restraining order, or perhaps even a preliminary injunction, over the next few weeks. As always, I will keep you posted on any developments.

CBS_ABC.pdf (1.81 mb)

After a spirited groundswell that had been building over the past few weeks finally overflowed into the mainstream media yesterday, it appears that SOPA (the House bill known as the Stop Internet Piracy Act) and its sister bill in the Senate, PIPA (the Protect IP Act), are on life support, if not dead. After President Obama expressed concern about some of SOPA's measures over the weekend, several legislators have now indicated that they have misgivings about the bill. 

For those hiking in the Congo yesterday, Google, Wikipedia and other Internet advocates went "black" to protest SOPA. Others, including Mark Zuckerberg of Facebook, also made their public opposition known to the bill. There were 2.4 million tweets yesterday about SOPA, and I am willing to bet virtually all of them were anti-SOPA. The debate has been cast as a parable of Old World technology (lumbering Hollywood) v. New World technology (nimble innovators) but it can probably be shoehorned into whatever narrative a writer or blogger wants.
 
It would be fair to say that the majority of those for and against SOPA agree with its purpose -- namely, addressing or preventing the wholesale theft of copyrighted materials (i.e., bootleg movies, videos and music). However, where they differ, not surprisingly, is on the means of addressing those concerns. For a balanced summary of the arguments of both sides, check out this link. People whom I follow and respect (such as Eric Goldman's Technology Law & Marketing Blog, Ron Coleman's Likelihood of Confusion Blog and Tim O'Reilly's many media missives) have been pretty critical of SOPA.
 
I don't have a dog in this fight. As a distant observer of the fray, I tend to agree with the opponents of the bill that some of the proposed procedures for attacking the alleged piracy and counterfeiting under SOPA seem heavy-handed. 

SOPA's success or failure should not directly affect trade secret or non-compete law, as SOPA is primarily directed at copyright, counterfeiting and piracy misconduct. However, if SOPA does ultimately fail, my fear is that it could be perceived as a further erosion in the larger battle of protecting IP rights over the Internet or generally in our society. Let's be honest: There is a subtle but increasingly pervasive view by many that all information should be shared and that no one person or company should have the right to any information. That view now permeates our dialogue about technology and its role in our world. We can debate the cause of that view (i.e., fraying of the employer/employee relationship, the fruit of Napster and unlawful file-sharing, bad economy, greater temptation posed by technological advances, decline in moral and ethical values), but we really can't dispute that it is out there and that it is growing.

At the micro level, that view, through the process of osmosis, might influence an employee's decision to walk out the door with source code or strategic documents because that employee concludes that his employer has no right to exercise ownership over that information because it really should not "belong" to anyone. It is this corrosive assault on basic standards of ownership that concerns me. In that respect, SOPA's over-reach and its apparent defeat would not be a good thing for the trade secret community.

Has Mattel finally had enough? A press release issued after a withering ruling by U.S. District Court Judge David Carter suggests that the embattled toymaker may be prepared to finally throw in the towel in its epic battle with rival MGA. Yesterday, Judge Carter assessed an additional $85 million in punitive damages and $139.5 million in attorneys fees against Mattel. This will be added to the $88 million that a Southern California jury awarded to MGA last spring when it found Mattel had misappropriated MGA's trade secrets. 

The following lines from Judge Carter's opinion have generated the most media attention: "Mattel asserted a copyright claim that was stunning in scope and unreasonable in relief it requested," Judge Carter wrote. "The claim imperiled free expression, competition, and the only serious competitor Mattel had faced in the fashion doll market in nearly 50 years." Ouch.

Some day, someone will write a very, very, very long book about this case, which is best described as the legal equivalent of an ultimate fighting cage match between the two very bitter rivals. Mattel won round one, persuading a jury to award $100 million against MGA in 2008 for the theft of trade secrets for the Bratz dolls line, arguing that the idea was conceived by former employee Carter Bryant while he was still employed by Mattel. However, after the Ninth Circuit reversed, MGA won round two earlier this year, securing an $88 million verdict against Mattel on evidence that Mattel employees slipped into MGA’s showrooms at toy fairs using phony business cards. The jurors awarded MGA $3.4 million for each of the 26 instances in which they found that Mattel had misappropriated a trade secret; in his post-trial rulings, Judge Carter reduced the overall award to $85 million. (As a matter of full disclosure, I litigated a commercial injunction case against Mattel several years ago).

Now to the "tell" in the Mattel press release: "Mattel strongly believes that the outcome at the trial level is not supported by the evidence or the law," Mattel said in a statement. "We remain committed to finding a reasonable resolution to the litigation." Roberto Duran could not have said it better.

The takeaway? Avoid blood feuds.