Media Room

dedicated, diverse counsel helping you reach your goals

 

Friday Wrap-Up (April 5, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 5. April 2013 09:40

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • House Intelligence Committee Chairman Mike Rogers (R-MI) has announced that he will be presenting a bill later this year that will penalize foreign countries that sponsor hackers that attempt to steal trade secrets from U.S. companies. In an article for Main Justice, Katy O'Donnell writes that Rogers will be considering some unconventional remedies such as suspension of visas and other tools.
  • "DuPont Wins Kolon Property In $920M Recovery Effort," reports Law360.
  • For the latest on the Eagle v. Morgan social media ownership case, see Jessica Mendelson's post for Seyfarth Shaw's Trading Secrets Blog. As Jessica details, the trial court found that Dr. Eagle's former employer misappropriated her LinkedIn profile but that Dr. Eagle failed to prove her damages.
  • "Live Events Agency Sues Former Employees And Independent Contractor For Breach Of Non-Solicitation Agreements," advises John Paul Nefflen for Burr & Forman's Non-Compete Trade Secrets Blog.
  • "Patterson Atty Gained Secrets Through Ruse, Doc Says," reports Law360. According to the article, the attorney approached a Pennsylvania physician to advise him and then extracted information from the inventor of surgical stapling technologies in order to give a client a leg up in licensing negotiations.
  • "Cease and Desist Letters Enjoy an Absolute Privilege from Libel Claims," advises Kara Maciel for Epstein Becker's Trade Secrets & Non-Compete Blog.
  • "MGA's Trade Secrets Claim On Brink In Bratz Case," reports Law360, as MGA fights upstream to revive its trade secrets claim.
  • "Restaurant Industry Giant Landry’s Sues Former Employee & Rival Restaurant Company," advises Jonathan Pollard in the non-compete blog.
  • "Many U.S. Businesses in China Cite Data Theft," reports Carlos Tejada for The Wall Street Journal's Corruption Currents Blog. According to the survey, 26% of companies with a presence in China have had their trade secrets stolen and 40% see the risks rising.
  • "How New Trade Secret Legislation Impacts Pharma Compliance Programs," reports Fish & Richardson's Jose Sierra for the Pharmaceutical Compliance Monitor.
  • "Practice Tip: Don't Call Your Liquidated Damages Clause a 'Penalty In the Contract," cautions Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • For the litigators: "Sanctions For Deleted Facebook Give Employers A Boost," reports Law360. Epstein Becker has a post about the case as well.

Cybersecurity Posts and Articles:

  • In The Wall Street Journal's "Weekend Interview" entitled, "Why China is Reading Your Email," cyber expert Timothy Thomas believes the recent cyber attacks are part of a military strategy and that an offensive strategy may be needed.
  • "Cyberattacks Seem Meant to Destroy, Not Just Disrupt," notes Nicole Petlroth for The New York Times Bits Blog.
  • "New Hacking Study Shows What Good Guys Are Up Against," advises The Wall Street Journal's Digits Blog.

Computer Fraud and Abuse Act Posts and Cases:

  • "Aaron Swartz’s Prosecutors Were Threatened and Hacked, DOJ Says," reports David Kravets for Wired.
  • "Is the Computer Fraud and Abuse Act a Failed Experiment?" asks Brian Bialas in Foley & Hoag's Massachusetts Noncompete Law Blog, in a rejoinder to Eric Goldman's post on the CFAA last week.
 

Friday Wrap-Up (March 29, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 29. March 2013 11:00

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • "Always be the good guy." That is the title of an excellent post by Brian Bialas for Foley & Hoag's Massachusetts Noncompete Law Blog that should serve as an important reminder to lawyers that in injunctive proceedings, which are so dependent on the exercise of equity, that your client (employer or employee) have the moral high ground.
  • "House Dems Push For China Trade Secret Theft Designation" reports Law360.  Congressmen Sander Levin ( D-Mich.) and Charles Rangel, (D-N.Y.) asked acting U.S.Trade Representative (USTR) Demetrios Marantis  to consider designating China as a “priority foreign country” under Section 182 of the Trade Act of 1974.  According to Law360, the law requires the USTR to identify countries that have inadequate protection of intellectual property rights, and those with the most egregious IP protection records can be targeted as priority. Once the USTR designates a priority foreign country, the trade agency is required under Section 301 of the act to complete an investigation, the results of which may lead to President Obama imposing import duties or taking other action. The Congressmen said that, “as evidence mounts” that the Chinese government is engaging in cybertheft, China may deserve the special designation.
  • Liu Sixing was sentenced to five years by a New Jersey federal judge for stealing defense trade secrets from L-3 Communications, reports the BBC. The trade secrets included information on U.S. missile, rocket and drone technology.
  • New blogger Erik Ostroff advises "Federal Circuit Addresses Uniform Trade Secrets Act Discovery Rule" in his Trade Secrets Law Blog.
  • "Worker stole trade secrets to ‘lure away’ clients, tobacco company says" reports Ken Bradley for the Knowledge Effect Blog for Thomson-Reuters.
  • "Enviros Can't Make Wyo. Reveal Halliburton Fracking Formula" advises Law360.
  • For those in New York, Neal Dlausnera and David Fisher ask "Are Restrictive Covenants Enforceable Against Employees Terminated Without Cause? 'Hyde' indicates the answer may be yes." In their fine article for The New York Journal, Neal and David consider the recent case of Hyde v. KLS, which may have eroded New York's longstanding ban on non-competes against terminated employees. (For more on the Hyde case, see my post last year).
  • "Protecting Company Information When Employees Bail: California Alternatives to Employee Non-Compete Agreements" advise Robert Milligan and Jessica Mendelson for Seyfarth Shaw's Trading Secrets Blog.
  • "Plaintiffs' Attorneys, Rest Easy: Cease and Desist Letters Likely Aren't Defamatory," reports Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • "Litigating Theft of Trade Secrets before the International Trade Commission," details Peter Toren.
  • "7 Steps to Enhance Post-Employment Restrictive Covenants," reports Jeffrey Boxer for Corporate Counsel.
  • At last, something they can agree on: the latest on "Apple Inc. (AAPL), Samsung And Their Trade Secrets," and their appeal to the Federal Circuit reports Michelle Jones for ValueWalk.
  • "The non-compete that didn't happen," advises Rob Radcliff for his Smooth Transitions Blog.

Cybersecurity Posts and Articles:

  • "New U.S. law says government agencies will need OK before buying Chinese IT equipment" reports Danielle Walker for SC Magazine.
  • "How to Avoid Getting Duped By A Hacker," advises The Wall Street Journal's Digits Technology Blog. 
  • "The Question of ‘International Law of Cyberwar," posits Stewart Baker for Steptoe's Cyberblog.

Computer Fraud and Abuse Act Posts and Cases:

  • "The Computer Fraud and Abuse Statute is a Failed Experiment," laments Eric Goldman in a guest post for Forbes.
  • "Another Court Construes the CFAA Narrowly and More of My Thoughts on the Statute," ponders Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog. Ravindra Shaw provides her take on the same case out of New York, in her post for Jackson Lewis' Non-Compete & Trade Secrets Report Blog.
 

Friday Wrap-Up (March 22, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 22. March 2013 16:30

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • Does a law firm have to reveal its client's non-compete to the client's business partners? In "Texas Firm Beats Fraud Suit For Keeping Mum On Noncompete," Law360 reports that the answer is "no." The Texas Court of Appeals held that there was no duty to disclose the client's non-compete by the law firm and its attorney when they negotiated legal documents with those third parties.
  • "Non-Compete Fight in the World of Surgical Robotics: MAKO Surgical Sues Competitor, Former Employee," advises Jonathan Pollard for the non-compete blog.
  • "FBI arrests NASA contractor employee trying to flee to China," reports The Washington Examiner.
  • "Stryker Exec Who Jumped Ship Must Hand Over Trade Secrets," reports Law360.
  • "Protecting Trade Secrets with a Mobile Workforce and Telecommuters," reports Cliff Atlas for Jackson & Lewis' Non-Compete & Trade Secrets Report.
  • Even The Economist is writing about the importance of trade secrets, asking, "Can you keep a secret? To patent an idea, you must publish it. Many firms prefer secrecy."
  • "Mediating Non-Competes in the Medical Device Industry," explains Michael Greco for Fisher & Phillips' Non-Compete and Trade Secrets Blog.
  • Will the ability to preserve an invention as a trade secret lead patentholders to withhold the best mode of that invention in their patent applications? In "Patent law's 'best mode' requirement a conundrum for attorneys," Erin Geiger Smith warns that could be the case for Bloomberg.
  • "5 ways in-house lawyers can support innovation at their companies: Inside counsel have a duty to help drive innovation to success, within the limits of existing law and policy," advises Eric Esperne in Inside Counsel.
  • Want to enforce a non-compete against a Chinese employee? You need to read, "China Employee Non-Competes. Do Not Try This At Home," by Dan Harris for his China Law Blog.

Cybersecurity Posts and Articles:

  • "After a Data Breach, Do You Need an Investigator or a Lawyer?" asks Catherine Dunn for Corporate Counsel.
  • "Take Chinese Hacking to the WTO," urges James P. Farwell for The National Interest.
  • "Infographic: How Criminals Guess Your PIN," warns Gina Smith for Tech Page One.

Computer Fraud and Abuse Act Posts and Cases:

  • "U.S. v. Nosal: Back In the District Court, the Defendant Isn't as Fortunate," reports Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • "The Split in the Circuit Courts Over the Proper Interpretation of the Computer Fraud and Abuse Act Actually Goes Three Ways," updates Brian Bialas for Foley & Hoag's Massachusetts Noncompete Law Blog.
  • Is journalist Matthew Keys the latest Aaron Swartz? asks Garance Burke in his article for The Huffington Post entitled, "Matthew Keys' LA Times Hack: Security Breach Or Harmless Prank?"
  • And in another high profile CFAA prosecution, Orin Kerr writes, "United States v. Auernheimer, and Why I Am Representing Auernheimer Pro Bono on Appeal Before the Third Circuit," for The Volokh Conspiracy.
 

Friday Wrap-Up (March 15, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 15. March 2013 16:30

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • Add Illinois to the list of states considering legislation over their non-compete laws, as Kenneth Vanko advises in "A Brief Commentary on Illinois' Proposed Noncompete Agreement Act" in his Legal Developments in Non-Competition Agreements Blog. Ken reports that, unlike the legislation in Minnesota, Michigan and Massachusetts which seeks to scale back or limit non-competes, the proposed legislation would tend to benefit employers.
  • "Schwab Says Ex-Advisers Diverted $47M In Accounts To Rival," reports Law360.  Epstein Becker's Peter Altieri has a post about the dispute as well.
  • "DuPont Trade-Secret Prosecutors Add Charges Against Liew," reports Bloomberg.
  • "Recent Non-Compete Case Highlights Pennsylvania’s 'Worthless Employee Doctrine' advises Jonathan Pollard for the non-compete blog. This poorly-named doctrine holds that an employer cannot enforce a non-compete against an employee that it just terminated for poor performance.
  • The Unintellectual Property Blog has a post about a recent software trade secret dispute in Delaware against Cisco. In ExpertUniverse v. Cisco, the court applied the California Uniform Trade Secret Act and dismissed ExpertUniverse's claims because it failed to adequately describe its trade secrets and demonstrate misappropriation.
  • "Want to avoid a prosecution under the Economic Espionage Act? You might want to consult "Economic Espionage Act: Seven Tips to Close a Fast-Growing Compliance Gap" by Lauren M. Papenhausen and Benjamin Franklin of McDermott, Will & Emery, LLP for Bloomberg Law.
  • Looking for a primer on forensic computer examinations?  Then check out "Nuts and Bolts for Terms Commonly Used in Trade Secret Computer Forensic Investigations" by Jonathan Karchmer for Seyfarth Shaw's Trading Secrets Blog.
  • "It takes a village to protect trade secrets," advises Naomi Fine of Pro-Tech for Forbes.
  • "Protecting Your Closely Held Business," recommends Peter Vilmos for Burr & Forman's Trade Secrets Non-Compete Blog.
  • In "Trade Secrets for Sale," Douglas Alexander proposes a robust and aggressive trade secret protection program for EBN.
  • In "A Little-Publicized Change in Patent Law on Secret Prior Art," Paul F. Prestia details changes in the America Invents Act that may permit an inventor to preserve an invention as a trade secret indefinitely for Corporate Counsel.  For more on this issue of the newly revised section §102(a)(1), see my post last fall.

Cybersecurity Posts and Articles:

  • Lots of articles on the Obama Administration upping its calls for China to address the reported cybersecurity attacks.  The New York Times is reporting that "Cyberattacks Prominent in Obama Call With New Chinese President." Also check out "U.S. Demands That China End Hacking and Set Cyber Rules," also by The Times, and "Obama Aide Demands China Stop Hacking" by The Wall Street Journal.  The Journal also had an op-ed piece this week by John Wohlsetter entitled "Chinese 'Hackers' Is a Misnomer. They're Spies."  Finally, Todd Sullivan provides his thoughts and takes the Administration to task for taking so long to single out China.
  • "How to avoid being hacked: Strong passwords and other security tips" recommends Anick Jasdenun for SiliconValley.com

Computer Fraud and Abuse Act Posts and Cases:

  • Looking for an update of recent CFAA cases? Then check out Shaw E. Tuma's excellent summary here.
  • "When leaving your job, make sure you do this if you really want to violate the Computer Fraud and Abuse Act!", another fine post by Shawn Tuma.
 

Thursday Wrap-Up (February 28, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 28. February 2013 10:45

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • There is a lot of good stuff analyzing the Obama Administration's trade secrets initiative from last week.  You should check out out Peter Toren's post, Morrison & Foerster's Dan Westman and Jessica Childress' analysis, Jessica Mendelson's post for Seyfarth Shaw's Trading Secrets Blog, Press Millen's post in Womble Carlyle's Trade Secrets Blog, and the article, "Private Sector's Role In White House Trade Secrets Plan" by David Fagan of Covington Burlington for Law360.
  • For the latest in the epic DuPont v. Kolon saga, see "Judge Kills DOJ's Summons Of Kolon In Trade Secrets Action," as reported by Law360 and Todd Sullivan in his Trade Secrets and Employee Defections Blog.
  • "Pfizer Gets New Trial After $39M Trade Secrets Verdict," reports Law360.
  • Interested in the latest on Massachusetts' proposed non-compete statute?  Then check out Brian Bialas' post at Foley& Hoag's Massachusetts Noncompete Law Blog, where Brian has the latest language proposed under the bill.
  • Speaking of non-compete statutes, Kenneth Vanko analyzes the proposed Michigan non-compete statute, which is modelled after New Hampshire's recent statute requiring an employer to give notice of a non-compete to a prospective employee before an offer of employment.
  • "Race to California Courthouse Fails in Recent Non-Compete Dispute," reports Jonathan Pollard in the non-compete blog.
  • Epstein Becker's Trade Secrets & Noncompete Blog reports on an unfortunate employee whose employer's merger with another company triggered his non-compete. Because his newly-merged employer failed to take steps to safeguard the former employer's protectible interests, the U.S. District Court of Connecticut enforced the covenant not to compete.
  • Can a non-signatory to a covenant not to compete move to compel arbitration of that provision? A California federal court has answered in the affirmative, ordering that the company of a former employee can also invoke arbitration as to claims arising out of that agreement. Kenneth Vanko's Legal Developments in Non-Competition Agreements Blog and Paul Freehling for Seyfarth Shaw's Trading Secrets Blog have posts on the case.
  • For the litigators, "Anonymous Yelp Review Counts as Evidence" advises Jacob Gershman for The Wall Street Journal Law Blog.

Cybersecurity Posts and Articles:

  • "In Cyberspace, A New Cold War," advises The New York Times.
  • "If China wants respect abroad, it must rein in its hackers," warns The Economist, although it also notes that "Old-fashioned theft is still the biggest problem for foreign companies in China."
  • Are we worrying too much about China? Jon Evans thinks so, in an article for TechCrunch entitled "The Chinese Are Coming! The Chinese Are Coming!"
  • But then again, one can't be too careful: "Data Security for Lawyers Traveling to China," warns Alan Cohen for Corporate Counsel.
  • "Employees May Be a Company's Greatest Cybersecurity Vulnerability," recognizes Catherine Dunn for Corporate Counsel.
  • "Keeping your data Cloud-secure," advises JJ Milner for the Global Micro Blog.

Computer Fraud and Abuse Act Posts and Cases:

  • "Aaron Swartz Prosecutors Weighed 'Guerilla' Manifesto, Justice Official Tells Congressional Committee," reports Ryan Reilly for The Huffington Post.
 

The Obama Trade Secrets Initiative: A Welcome Start, But the Administration Needs to Engage, Partner with and Unleash the Private Sector

 
by John Marsh 24. February 2013 21:45

On Wednesday, the Obama Administration announced its five point initiative, "Strategy on Mitigating the Theft of U.S. Trade Secrets,” for combating the increasing threat posed by international trade secret misappropriation.  I was in the midst of gearing up for a preliminary injunction hearing, so while I was able to briefly report on the press conference and resulting media reports, I didn't have the opportunity to carefully review the report and its specific strategies.  I now have had the weekend to look at it; while there is a lot to like, there is some significant room for improvement, particularly on efforts to engage and unleash the private sector.
 
The Plan:  The Administration's roll out of the strategy on February 20, 2013, was accompanied by statements from senior administration officials covering six agencies with economic and security responsibilities.  The report identifies five action items: (1) focused diplomatic efforts to protect trade secrets overseas; (2) promoting voluntary best practices by private industry to protect trade secrets; (3) enhanced domestic law enforcement operations; (4) improved domestic legislation; and (5) public awareness and stakeholder outreach.

The Good:  This Administration has built up some credibility based on its willingness to use the Economic Espionage Act to prosecute offenders.  It has been assertive in its criminal prosecutions to date (the Liew/Pangang Group prosecution, the Aleynikov prosecution, the Hanjuan Jin prosecution, etc.) and has been thoughtful and considered in identifying the problem.  It also deserves credit for using the bully pulpit to acknowledge the problem and commit its resources to remedying it.

The Elephant in the Room:  Curiously, the Administration's report does not explicitly identify China, althought it repeatedly references prosecutions involving Chinese nationals.  To its credit, the Justice Department has not hesitated to push ahead against Chinese nationals and companies -- most notably, its indictment of the Pangang Group, a company owned and controlled by key members of the Communist party.  However, it was a little disappointing that the Administration was reluctant to identify China as the prime culprit and catalyst for the initiative.

What Hasn't Worked Yet and Probably Won't Work in the Near Term:  Diplomatic engagement is important, but if a nation's policy is to affirmatively steal trade secrets, it is going to take a fair amount of time to dissuade it from that course.  In the meantime, trade secrets and know how will be usurped and the the misappropriators will be the first to market.  Last year, the National Security Agency described trade secret theft as the greatest transfer of wealth in history, estimating the losses of theft of trade secrets and cyberbreaches to be in excess of $334 billion per year.  With numbers like that, don't expect any offending nation to go gently.

Criminal prosecution, if you have the individuals detained here in the U.S., can be effective but we have seen that service of process and extraterritorial complications have bedevilled prosecutors and can limit the effectiveness of this approach (the Pangang Group prosecution has been effectively derailed because of this problem and this same approach is now being used in other high profile prosecutions). 

Likewise, the renewed emphasis on best practices should be commended.  But sophisticated companies like DuPont, Ford and GM certainly have these safeguards in place and have still been victims of trade secret theft, as the report notes.  Public awareness and training can only protect companies so much.  A determined and committed competitor (especially one supported by its government) will probe, and ultimately find, either cyber or employee weaknesses and exploit them.  Prevention is important but it is simply not enough.

Private Attorney Generals?  More can and should be done.  Not surprisingly, the report is fairly heavy on reliance on governmental administration.  This doesn't come as a great surprise given the political philosophy of the Administration and the fact that this is a report that is after all being issued by the government.  But frankly my jaw dropped when I looked at the section of the report emphasizing legislative priorities, and there was no mention of the Protecting American Trade Secrets and Innovation Act (PATSIA), the civil remedy that was sponsored by three Democratic senators.  This is a pretty serious omission.

There are limits to what the government can achieve on this front.  Public enforcement by nature lacks the nimbleness and expertise that one will find when private companies commence litigation to protect their own commercial interests. 

No one would expect the federal government to prosecute a patent infringement as effectively as the patent owner and its lawyers.  Trade secret litigation is no different; a company and its lawyers will understand the technology best and will have the incentive to litigate hard and aggressively over a coveted invention.

I remember from law school that the Sherman Act's civil remedy was enacted to create an incentivized "private army of attorney generals" to enforce the antitrust laws and challenge the monopolies of that day.  The problem of international cyberattacks and trade secret theft is no less important, and that same aggressive approach should be encouraged here through enactment of PATSIA.

Tags:

China | Cybersecurity | Economic Espionage Act | International | Legislation | Trade Secrets

 

Thursday Wrap-Up (February 21, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 21. February 2013 18:00

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Cybersecurity Posts and Articles:

  • After the Obama administration's announcement of its initiative to combat international trade secret theft, the other big news this week was The New York Times front-page article calling out China's army for its role in hacking U.S. companies. In "Chinese Army Unit Is Seen as Tied to Hacking Against U.S.," The Times cited a report by the security firm Mandiant that fingered Unit 61398 of the Peoples Liberation Army as having a role in 141 attacks in recent years.
  • Spearphishing -- i.e., using targeted attacks against employees based on information gleaned from social media -- was used in these cyberattacks, according to an article by Kim Zetter for Wired, "Chinese Military Group Linked to Hacks of More Than 100 Companies."
  • "Claims of cyberstealing by China prompt administration to develop more aggressive responses," reports The Washington Post.
  • "Cyberwar With China Is Here, Like It or Not," laments Arik Hesseldahl for All Things Digital.
  • "U.S. ready to strike back against China cyberattacks," reports Associated Press.
  • "Successful hacker attack could cripple U.S. infrastructure, experts say," reports Erin McClam for NBC News.
  • "Cloud Data Security: How to Analyze your Risk," recommends Emma Byrne for Forbes.

Trade Secret and Non-Compete Posts and Cases:

  • In the most recent social media decision in the trade secret and non-compete context, the U.S. District Court of Oklahoma has recently found that a former employee's Twitter invitations and Facebook posts did not violate the provisions of a non-solicitation agreement.  Venkat Balasubramani of the Technology & Marketing Law Blog (Feb. 18 post) and Seyfarth Shaw's Justin K. Beyer both have posts on this decision (if time permits, I may do a post with my thoughts on this decision this weekend).
  • Ernst & Young has been sued for allegedly stealing the trade secrets of its client, Express Scripts, after having been engaged to provide consulting services to Express Scripts in its acquisition of Medco Solutions last year, reports Todd Sullivan in his Trade Secrets & Employee Defections Blog. Ernst & Young says a former employee did violate its policies.
  • "South Carolina Court of Appeals Upholds Physician Non-Compete and Forfeiture Provisions," reports Parker Poe's EmployNews.
  • In another healthcare trade secret case, "Indiana Univ. Health Misused Trade Secrets, Suit Says" reports Law360.
  • "The End of Noncompete Agreements in Minnesota?" asks Mark E. Dooley for Thompson Hall as he describes a recent bill proposed in Minnesota to ban non-competes along the lines of California.
  • "Analysis of a Winning Argument for Enforcing a Non-Compete Agreement at the Preliminary Injunction Stage," reports John Paul Nefflen for Burr & Forman's Noncompete Trade Secrets Blog.
  • "Is Mattel raising the white flag in Bratz copyright case?" asks Alison Frankel in her On The Case Blog.
  • Considering what discovery you might need for your next trade secrets or non-compete case? Then check out Kenneth Vanko's post, "Some Thoughts On Pursuing Expedited Discovery," which provides some practical pointers on what you need to do.
  • "5 Trade Secret Trends That Could Shape 2013," predict Randall Kahnke, Kerry L. Bundy and Peter C. Magnuson of Faegre Baker Daniels LLP for Law360.

Computer Fraud and Abuse Act Posts and Cases:

  • "IP: Why companies need clear policies against giving computer access to non-employees," advise James Ware and Mindy Ware for Inside Counsel.
 

Obama Administration Launches Effort to Combat International Trade Secret Theft

 
by John Marsh 21. February 2013 05:35

President Obama announced an initiative to battle international trade secret theft and cyberattacks aimed at U.S. companies yesterday afternoon. According to The Wall Street Journal, "[t]he White House threatened China and other countries with trade and diplomatic action over corporate espionage as it cataloged more than a dozen cases of cyberattacks and commercial thefts at some of the U.S.'s biggest companies."

"There are only two categories of companies affected by trade-secret theft: those that know they've been compromised and those that don't know it yet," Attorney General Eric Holder is quoted as having stated at a White House conference Wednesday. "A hacker in China can acquire source code from a software company in Virginia without leaving his or her desk."  This echoes the comments of former Counter-terrorism czar Richard Clarke, who last year said the same thing.

According to The Washington Post, Holder said "the Justice Department has made prosecution of trade-secret theft a top priority. The department is seeking to bring cases of economic cyber-espionage that officials hope will deter foreign governments from hacking U.S. company networks."

This initiative follows allegations of cyberspying this week by the Chinese military, as well as cyberattacks that were recently directed at The Wall Street Journal, The New York Times and The Washington Post. It hopefully represents a serious effort by the federal government to respond to growing complaints by American companies about the theft of corporate trade secrets by other countries and foreign companies.

According to The Journal, the Obama administration's strategy, outlined in a 141-page report at the conference, will bring together officials from across the government. New measures are expected to include greater U.S. trade restrictions on products and services derived from stolen trade secrets, efforts to "promote voluntary best practices" by U.S. corporations, and diplomatic pressure to reinforce the administration's commitment to curbing such thefts.

Perhaps this means that the Administration will throw its considerable weight behind the Protecting American Trade Secrets and Innovation Act (PATSIA), which has been mired in the Senate for nearly two years (a hat tip to Peter Toren, who is quoted in the article in The Post, for highlighting the need for this statute). This an important development within the trade secret community, and I will obviously follow it very closely in the coming weeks.

Tags:

Economic Espionage Act | International | Cybersecurity | Legislation | Trade Secrets

 

Thursday Wrap-Up (February 14, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 14. February 2013 13:00

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Cybersecurity Posts and Articles:

  • President Obama's cybersecurity executive order was the big news this week.  For a fine summary of the executive order, see "White House Cyber Security Order Likely to Have Long-Term Impact on Critical Infrastructure Owners and Operators" by Boris Segalis for the Information Law Group Blog
  • "U.S. said to be target of massive cyber-espionage campaign" reports The Washington Post.
  • "CISPA’s back: Hacking, online espionage resurrect cybersecurity bill" advises RT.
  • "Tips to Improve Your Cybersecurity" advises The Wall Street Journal.
  • "Firms Using Cloud Storage, BYOD Face Security Challenges," notes Jess Davis for Law360.
  • "How far should companies be allowed to go to hunt cyberattackers?" asks James Podgers for the ABA Journal.
  • "Survey of GCs Sees Cybersecurity Risk, Anxiety" advises Sue Reisinger for Inside Counsel.
  • "6 mobile security screw-ups you're (probably) guilty of" warns Raj Sabhlok for Forbes Tech.

 
Trade Secret and Non-Compete Posts and Cases:

  • In yet another healthcare non-compete case, "Texas Court of Appeals Strikes Down Cardiologist Non-Compete Agreement on Public Interest Grounds" reports Jonathan Pollard in the non-compete blog.
  • "Validity of Trade Secrets Final Injunction May Hinge on Applicability of Erie Doctrine" advises Collin Freer for Berman Fink Van Horn's The Georgia Non-Compete and Trade Secret News Blog.
  • "California Federal Court Dismisses California Employee’s Challenge Of His Non-Compete Agreement Based Upon Enforceable Forum Selection Provision" advises Robert Milligan for Seyfarth Shaw's Trading Secrets Blog.
  • "New York Federal Court Denies Injunction to Enforce Restrictive Covenants Against Terminated Employee" reports Robert Freehling for Seyfarth Shaw's Trading Secrets Blog.
  • "Kolon Industries Argues Feds Failed to Properly Serve Them with Process in Massive Trade Secret Theft Criminal Case" reports Todd Sullivan in his Trade Secrets & Employee Defections Blog.
  • Are you a government contractor but still want to protect confidentail information that might have been shared with the state or federal government? Then you should check out "Confidentiality Issues in Government Contracting: Promoting Open Government and Fair Competition" by Casey Johnson for Nossaman's Infra Insight Blog.
  • "Enforceability of Non-Compete Agreements in Delaware" writes Molly DiBianca for The Delaware Employment Law Blog.
  • If you are looking for more on the new Theft of Trade Secrets Clarification Act, check out Mathew Levine's "With Expansion of Economic Espionage Act, Will More Prosecutions Follow?" for The New York Law Journal (attached as a PDF below) and "What You Should Know About The New Trade Secrets Laws" by Diane Danoff of Dechert for Law360.
  • "Non-Compete Case Law Update: The Mildly Interesting, But Useful, Edition" from Kenneth Vanko's Legal Developments in Non-Competition Agreements Blog.
  • "China Issues New Judicial Interpretation on Non-compete Covenants and Various Employment Issues" reports Helen Liao and Andy Yao of Johnson Stokes & Master Mayer Brown for JDSupra.
  • "Confessions of a Corporate Spy" admits George Chidi for Inc.

 
Computer Fraud and Abuse Act Posts and Cases:

  • The Aaron Swartz story continues to generate interesting commentary. I would recommend "The Life and Afterlife of Aaron Swartz" for New York Magazine and "The Idealist: Aaron Swartz wanted to save the world. Why couldn’t he save himself?" by Justin Peters for Slate.

Levine Article Trade Secret Prosecutions.pdf (255.98 kb)

 

Friday Wrap-Up (February 8, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

 
by John Marsh 8. February 2013 14:00

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Cases: 

  • In an unusual ruling, the U.S. Court of Appeals for the Sixth Circuit upheld the convictions of two engineers for stealing Goodyear's trade secrets, but vacated the sentences, essentially holding that they were too lenient, reports Law 360. Both Todd Sullivan and Kenneth Vanko provide their takes on the decision.
  • In what may be the final installment of the trade secret case that will live in infamy, the U.S. Court of Appeals affirmed a district court's finding that train equipment manufacturer Wabtec Corp. copied rival Faiveley Transport USA Inc.’s trade secrets involving braking technology used in New York City's subway system, but knocked the jury's damages award down to $15 million. This case caused great consternation in the trade secret community several years ago when the Second Circuit inexplicably reversed an injunction and held that a defendant could use a plaintiff's trade secrets so long as it did not disclose them.
  • "Recent California Supreme Court Decision Stokes Debate Over Scope of Trade Secret Preemption" advises James D. McNairy for Seyfarth Shaw's Trading Secrets Blog.
  • "Court Finds Common Law Causes of Action Not Preempted by New Jersey Trade Secrets Act" writes Michael Kessel for Littler's Unfair Competition & Trade Secrets Counsel Blog.
  • "Orrick wins $23 million award vs MGA, Bratz maker sues to vacate" advises Alison Frankel's On The Case Blog.
  • "A Surge In Trade Secret Misappropriation Cases at ITC" report Jeffrey Telep and Taryn Williams of King & Spalding for Law360.
  • "Failing to Trust the Public: The Process of Submission of the Enabling Amendment to the Georgia Constitution for the Restrictive Covenant Act Was Unconstitutional" writes David Pardue for his Trade Secrets and IP Today Blog.
  • Jonathan Pollard has a post about an interesting non-compete case in the broadcast industry that was recently filed in Alabama.
  • "Florida Appellate Court Says: “'Independent Contractor' Still an Employee for Purposes of Enforcing Non-Compete Agreement" advises Peter Vilmos for Burr & Forman's Trade Secrets Noncompete Blog.
  • "Calif. Noncompete Clauses — Still Unenforceable" reports David Bloom of Milbank Tweed for Law360.
  • "IBM Suit Over Corporate Raiding Illustrates Use of Social Media Evidence" advises Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • "10 Steps to Take When Hiring from a Competitor" recommends Peter Steinmeyer for Epstein Becker's Trade Secrets & Noncompete Blog.

Computer Fraud and Abuse Act Posts and Cases:

  • For those looking for the latest on Aaron's Law, see "Congresswoman Posts Revamped 'Aaron's Law' on Reddit" as reported in Mashable.
  • "Employment Agreement Restrictions Determined Whether Employees Exceeded Authorized Access Under Computer Fraud and Abuse Act" advises Shawn Tuma about a recent federal decision out of Oklahoma that elected not to follow the reasoning of U.S. v. Nosal.
  • "How 'Aaron's Law' Is Good for Business" advises Doc Searls for the Harvard Business Review.
  • "We Need to Think Beyond the Aaron in ‘Aaron’s Law" writes Micah Schaeffer for Wired.

 Cybersecurity Posts and Articles:

  • The big cybersecurity story this week were the reports by The Washington PostThe New York Times and The Wall Street Journal that they believed Chinese hackers had penetrated their defenses to spy on their communications with critics of the Chinese government.
  • "Here a Hack, There a Hack, Everywhere a Cyber Attack" laments Arik Hesseldahl for All Things Digital.
  • "Calling General Counsel to the Front Lines of Cybersecurity" reports Sue Reisinger for Corporate Counsel.

About John Marsh

John Marsh Hahn Law AttorneyI’m a Columbus, Ohio-based attorney with a national legal practice in trade secret, non-compete, and emergency litigation. Thanks for visiting my blog. I invite you to join in the conversations here by leaving a comment or sending me an email at jmarsh@hahnlaw.com.

Disclaimer

The information in this blog is designed to make you aware of issues you might not have previously considered, but it should not be construed as legal advice, nor solely relied upon in making legal decisions. Statements made on this blog are solely those of the author and do not necessarily reflect the views of Hahn Loeser & Parks LLP. This blog material may be considered attorney advertising under certain rules of professional attorney conduct. Regardless, the hiring of a lawyer is an important decision that should not be based solely upon advertisements.

BlogRoll

Download OPML file OPML