Trade Secrets Law Blog

In July 2021, President Biden signed an Executive Order directed at promoting competition in the U.S. economy.  As part of that overarching goal, the Biden Administration tasked the Federal Trade Commission (“FTC”) with curtailing the use of non-compete clauses “and other clauses or agreements that may unfairly limit worker mobility.”  While the FTC has only recently initiated informal proceedings on the issue, the agency – and perhaps Congress as well – seems poised to move forward in 2022 to address restrictive covenants.
Continue Reading FTC reviews non-compete agreements: An Update On The Future Of Restrictive Covenants Following The Biden Administration’s Proposed Curtailment and Safeguarding of Proprietary Information

In a recent decision from the U.S. District Court for the District of Florida, a healthcare product manufacturer’s claim of trade secret misappropriation against a competitor and a customer was thrown out on summary judgement.  While the plaintiff showed that at least some defendants had access to the plaintiff’s alleged trade secret protected CBD cream formula and manufacturing process, the plaintiff failed to demonstrate that the defendants’ accused CBD cream product was manufactured using the alleged trade secret.  Healthcare Res. Mgmt. Grp., LLC v. Econatura All Healthy World, LLC, No. 9:20-cv-81501-Matthewman, 2021 U.S. Dist. LEXIS 206871 (S.D. Fla. Oct. 27,
Continue Reading Healthcare Res. Mgmt. Grp., LLC v. Econatura All Healthy World, LLC – A Cautionary Tale: Meticulous or Careless Strategy Required to Prove Your Trade Secret Claim

With tightening labor markets and the increasing mobility of healthcare workers, including physicians, now is a good time to revisit non-compete agreements to ensure they are enforceable.  Texas courts will generally enforce non-compete agreements as long as they are ancillary or part of an otherwise enforceable agreement and do not contain restraints greater than necessary to protect the employer’s legitimate interests.  These interests include business good will, trade secrets, or other confidential  and proprietary information.
Continue Reading Healthcare Agreements – Key Issues Impacting the Enforceability of Non-Compete Clauses for Texas Physicians

A recent California Court of Appeals decision found nominal damages could be awarded for an employee’s breach of a non-disclosure agreement (“NDA”), even if no actual harm was done to the employer.  An award of nominal damages for breach of an NDA may be important for companies seeking to protect confidential information and trade secrets for two reasons: (1) this may give rise to an award of litigation costs, and (2) may also support a permanent injunction ruling preventing the former employee from any further possession or use of the protected information.
Continue Reading NDA: An Effective Way to Protect Confidential Information

No-hire or “no-poaching” agreements have recently come under increasing scrutiny by the federal government, as well as various state regimes.  However, a recent Ninth Circuit decision upholding a no-poach agreement highlights the various hurdles an antitrust claimant will face in bringing such a claim.
Continue Reading Illegal Deal? Ninth Circuit Rejects Attempt to Revive No-Poaching Claims

Whether a court order is appealable is often the first issue analyzed by appellate attorneys. An interlocutory order is an order issued by a court while a case is pending. These orders are not a final disposition of the case, but some interlocutory orders may be appealed even while the litigation continues. California law generally holds that “[t]o qualify as appealable, the interlocutory order must be a final determination of a matter that is collateral—i.e., distinct and severable—from the general subject of the litigation.”[1]
Continue Reading Trade Secret Misappropriation: Denial of Motion for Attorneys’ Fees under CUTSA is Not an Appealable Order

A recent decision by the Ninth Circuit Court of Appeals in BladeRoom Group Limited v. Emerson Electric Co. further stresses the importance of carefully crafting the terms and conditions in a non-disclosure agreement (“NDA”), and ensuring there is no ambiguity as to when the NDA’s confidentiality protections expire.  The Court in Bladeroom reversed a multi-million dollar judgment for the plaintiff, based largely on the Court’s differing interpretation of the duration of the confidentiality obligations under the NDA.
Continue Reading A Cautionary Tale on Including an Expiration Date in NDAs

In an important decision on August 19, 2021, the Ninth Circuit Court of Appeals in Aya Healthcare Services, Inc. v. AMN Healthcare, Inc. affirmed the grant of summary judgment in favor of AMN, finding that the non-solicitation provision in the parties’ agreement was not an unreasonable restraint in violation of the federal antitrust law known as the “Sherman Act.”  Instead, the Court ruled that the non-solicitation provision was “reasonably necessary to the parties’ pro-competitive collaboration” and that Aya failed to show the non-solicitation provision had a “substantial anticompetitive effect.”[1]
Continue Reading Ninth Circuit Denies Sherman Act Challenge To No-Poach Provision

Trade secrets and patents offer very different forms of protection, with different pros and cons. A trade secret may last indefinitely, while a patent has a fixed term of 20 years. Independent reinvention is permissible under trade secrets, but not with patents. And of course to obtain a patent, one must disclose the claimed invention to the public, in sufficient detail to enable one skilled in the relevant technology to make and use the invention.
Continue Reading Trade Secret vs. Patent – a False Dichotomy

For most (if not all) professional services firms, client databases, client contact lists, and information reflecting client preferences are regarded by such firms as trade secrets that are essential to the business.  Invariably, businesses identify this type of information as proprietary and trade secret in their employee confidentiality agreements and handbooks and subject them to duties of confidentiality.  However, a recent federal ruling provides an important reminder that the term “trade secret” is a legal term of art subject to strict standards and merely labeling general categories of company information as trade secrets does not make them so—no matter how
Continue Reading Reminder to Professional Services Firms – Do Not Take Your Trade Secrets for Granted

On July 9, 2021 President Joe Biden issued an Executive Order on Promoting Competition in the American Economy, which urges the Attorney General and Federal Trade Commission (FTC) to curb the use of non-compete and no-poach agreements.  The Executive Order aims  to foster a “fair, open, and competitive marketplace,” and calls for a “whole-of-government” approach to reverse trends of industry consolidation and anticompetitive practices. The Order indicates these trends have harmed employees’ wages, work conditions, and mobility.  It further targets what it characterizes as the “overuse” of non-compete agreements and other barriers to entry in certain markets.
Continue Reading President’s Executive Order Aims to Foster a Competitive Marketplace

In trade secrets litigation, it is often critical to expeditiously obtain protection from further disclosure or continued misappropriation of the trade secret at issue through a motion for preliminary injunction.  Courts are quick to point out, however, that preliminary injunctions are “an extraordinary and drastic remedy,” and are only to be granted if the movant, “by a clear showing, carries the burden of persuasion” as to each element of the preliminary injunction test.  Lopez v. Brewer, 680 F.3d 1068, 1072 (9th Cir. 2012) (observing that to obtain preliminary injunctive relief, a plaintiff must generally demonstrate that: “1) he is likely
Continue Reading Trade Secret Litigants Take Note: California District Court Provides Guidance on Obtaining a Preliminary Injunction and Expedited Discovery

You may be able to bring a misappropriation of trade secrets claim even if you do not actually own the misappropriated trade secret.  A growing number of federal cases indicate ownership of a trade secret may not be required in order for a plaintiff to sue for misappropriation; possession alone may be enough to confer standing.
Continue Reading Is Lawful Possession of a Trade Secret Enough for Standing to Sue for Misappropriation?

When filing a claim for trade secret misappropriation under the Defend Trade Secrets Act (DTSA) or a state’s Uniform Trade Secrets Act (UTSA), it is essential to strike the proper balance between sufficiently describing an underlying trade secret and avoiding disclosure of any details that would destroy its secrecy.  A federal court decision issued earlier this month in the Northern District of California, MBS Engineering Inc., et al. v. Black Hemp Box, LLC, et al., No. 20-cv-02825-JD, 2021 WL 2458370 (N.D. Cal. June 16, 2021), highlights this “obvious tension between the right of public access to court proceedings and the
Continue Reading Striking the Balance Between Detailed Description and Unnecessary Disclosure of the “Secret” in Trade Secret Litigation Pleadings

The Supreme Court’s recent decision in Van Buren v. United States, — S. Ct. —-, 2021 WL 2229206 (2021) resolved a longstanding Circuit split regarding the scope of liability under the Computer Fraud and Abuse Act of 1986 (CFAA), 18 U.S.C. § 1030 et seq. As we previewed last year, Van Buren addressed whether a person “exceeds authorized access” within the meaning of the CFAA when accessing information on a computer for an improper purpose. In an Opinion authored by Justice Barrett, the Supreme Court ruled, 6-3, that the CFAA does not cover those who have improper motives for obtaining computerized
Continue Reading Supreme Court Narrows The Scope of Liability Under The Computer Fraud and Abuse Act

Amidst long-simmering diplomatic tensions between China and the United States, disputes arising out of Chinese companies’ alleged theft of technological trade secrets from rival American companies[1] have found their way to federal courtrooms. This stems, in part, from the availability of worldwide injunctive relief under the Defend Trade Secrets Act (“DTSA”), which provides American companies with a robust tool to combat trade secret misappropriation by foreign entities in cases where “an act in furtherance of the offense was committed in the United States.” 18 U.S.C. § 1837(2).
Continue Reading Illinois Court Finds China Inadequate Forum For Trade Secret Misappropriation Claims Against Chinese Tech Company