Mealey's Trade Secret : Mealey's : Legal News & Analysis

Mealey's Trade Secret

February 25, 2020
Cyber Security Developer’s Preliminary Injunction Request Denied

SAN FRANCISCO — Developers of cyber security productions have failed to show that there is a substantial likelihood of success on the merits of their federal trade secret law claim against a former executive and industry competitor who are alleged to have misappropriated the developers’ trade secrets and source code for two products after the former employee left the company to work for the competitor, a federal judge in California ruled Feb. 20 (Proofpoint Inc. v. Vade Secure Inc., No. 19-4238, N.D. Calif., 2020 U.S. Dist. LEXIS 30184).
February 21, 2020
Defendant Seeks Dismissal Of CBD Manufacturer’s Trade Secret Law Claims

WEST PALM BEACH, Fla. — A manufacturer of cannabidiol-based (CBD) products has failed to sufficiently show that a former customer violated state and federal trade secret misappropriation laws when it entered into a direct manufacturing and production relationship with the manufacturer’s business partners and cut the plaintiff out of the business relationship because the manufacturer failed to show that the defendant was provided with any confidential or trade secret information, the former customer alleges in a Feb. 18 motion to dismiss filed in Florida federal court (Healthcare Resources Management Group LLC v EcoNatura All Healthy World LLC, et al., No. 19-81700, S.D. Fla.).
February 21, 2020
Findings On Post-Trial Motions In Trade Secret Suit Survive 8th Circuit Scrutiny

ST. LOUIS — A federal district court did not err in granting a defendant’s motion for judgment as a matter of law on a counterclaim for trade secret misappropriation in violation of Arkansas law that it brought against Walmart Inc. in a breach of contract lawsuit because the defendant sufficiently pleaded the necessary elements of its counterclaim, an Eighth Circuit U.S. Court of Appeals panel ruled Feb. 12 (Walmart Inc. v. Cuker Interactive LLC, Nos. 18-1959 and 18-2081, 8th Cir., 2020 U.S. App. LEXIS 4289).
February 21, 2020
Trade Secret Law Claims Dismissed Against Independent Contractors

PITTSBURGH — A federal judge in Pennsylvania on Feb. 14 adopted a federal magistrate judge’s report and recommendation to dismiss several claims in a breach of contract and trade secret misappropriation lawsuit filed by a tax services provider against two of its former independent contractors and an industry competitor they formed based on a lack of any objections filed in response to the report and recommendation, as well as the judge’s review of the record (Profit Point Tax Technologies Inc. v. DPAD Group LLP, et al., No. 19-698, W.D. Pa., 2020 U.S. Dist. LEXIS 28477).
February 21, 2020
Analytics Services Provider Sues Former Exec In Trade Secret, Contract Dispute

DALLAS — A provider of data-driven analytics, software, services and solutions for financial institutions sued a former senior executive in Texas federal court on Feb. 14, alleging that the defendant violated the terms of an employment agreement and misappropriated the company’s trade secrets when he terminated his employment with the plaintiff and accepted a similar position with an industry competitor (Marquis Software Solutions Inc. v. Jeffrey Robb, No. 20-372, N.D. Texas).
February 21, 2020
Panel Affirms Court’s Dismissal Of Insufficiently Pleaded Trade Secret Claim

NEW YORK — A Third Circuit U.S. Court of Appeals panel on Feb. 12 ruled that a federal district court did not err in dismissing minority shareholders’ trade secret misappropriation claims against former business partners because the minority shareholders failed to sufficiently state that any defendants misappropriated any trade secrets obtained under the terms of a business agreement (Inspired Capital LLC, et al. v. Conde Nast, et al., No. 19-2057, 2nd Cir., 2020 U.S. App. LEXIS 4703).
February 19, 2020
Businessman Gets Prison Term For Conspiring To Steal Competitor’s Trade Secrets

WASHINGTON, D.C. — A federal judge in the District of Columbia on Feb. 10 sentenced a businessman with ties to a Peoples’ Republic of China (PRC) marine technology company who was charged with conspiring with others to steal trade secrets from an American competitor in the marine technology industry to 16 months in prison followed by two years of supervised release, according to a minute entry on the court’s docket (United States v. Shan Shi, et al., No. 17-110[CRC], D. D.C.).
February 19, 2020
Charges Against Remaining Defendants In Trade Secret Theft Lawsuit Dismissed

SAN JOSE, Calif. — Without providing further detail, federal prosecutors in California on Feb. 14 dropped charges against four former employees of technology company Jawbone stemming from their alleged theft of Jawbone’s trade secrets and subsequent misappropriation of those trade secrets while working for industry competitor Fitbit Inc. (United States v. Katherine Mogal, et al., No. 18-cr-0259, N.D. Calif.).
February 19, 2020
Defendants’ Personal Jurisdiction Arguments In Trade Secrets Suit Rejected

CLEVELAND — A federal judge in Ohio on Feb. 18 ruled that a designer and manufacturer of battery chargers and related products for motor vehicles has sufficiently shown that a federal district court has specific jurisdiction over claims made in a trade secret misappropriation lawsuit against an industry competitor alleged to have stolen a notebook from the plaintiff containing trade secret information (The NOCO Co. v. CTEK Inc., et al., No. 19-853, N.D. Ohio, 2020 U.S. Dist. LEXIS 27237).
February 19, 2020
Magistrate Judge Recommends Dismissal Of Contract, Trade Secret Claims

NEW YORK — A federal magistrate judge in New York on Feb. 3 ruled that a defendant in a trade secret misappropriation and breach of contract lawsuit filed by his former employer is entitled to summary judgment claims that he misappropriated the former employer’s confidential and trade secret customer lists in violation of certain restrictive covenants contained in his employment agreement (Markets Group Inc. v. Pablo Oliveira, No. 18-2089, S.D. N.Y., 2020 U.S. Dist. LEXIS 20709).
February 18, 2020
Prosecutors Add Conspiracy Charges In Huawei Trade Secret Theft Lawsuit

BROOKLYN, N.Y. — Government prosecutors in a criminal action against Chinese telecommunications equipment manufacturer Huawei Technologies Co. Ltd. and certain of its subsidiaries and senior executives added two charges against several of the defendants to a superseding indictment filed on Feb. 13 in New York federal court (United States v. Huawei Technologies Co. Ltd., et al., No. 18-457, E.D. N.Y.).
February 18, 2020
Illinois Jury Sides With Motorola In Trade Secret, Copyright Row

CHICAGO — In a verdict rendered Feb. 14 in Illinois federal court, Motorola Solutions Inc. was awarded $764.6 million in an intellectual property dispute with a Chinese firm accused of trade secret theft and copyright infringement; a docket entry in the case indicates that the jury found in favor of Motorola in full (Motorola Solutions Inc. v. Hytera Communications Corp., et al., No. 1:17-cv-01973, N.D. Ill.).
February 13, 2020
DTSA Claim Survives Dismissal With Allegations Of Ongoing Misappropriation

SAN JUAN, Puerto Rico — A federal judge in Puerto Rico on Jan. 29 ruled that a diagnostic imaging systems manufacturer has sufficiently shown that although a third-party provider of maintenance and service for certain of the manufacturer’s equipment allegedly began misappropriating its trade secrets before the enactment date of the Defend Trade Secrets Act (DTSA), the manufacturer has also shown that the alleged misappropriation is ongoing (Philips Medical Systems Puerto Rico Inc., et al v. Alpha Biomedical and Diagnostic Corp., et al., No. 19-1488, D. Puerto Rico, 2020 16351).
February 11, 2020
Court Lacks Jurisdiction Over Freight Broker’s Trade Secret Suit, Judge Rules

CINCINNATI — A federal judge in Ohio on Feb. 7 ruled that he lacks the necessary jurisdiction over claims in a trade secret misappropriation lawsuit brought by a freight brokering and third-party logistics services provider against a former employee because the forum-selection clause in the former employee’s employment agreement is overreaching while its choice-of-law provision does not favor enforcement (Total Quality Logistics LLC v. Daniel DeSantis, No. 18-0796, S.D. Ohio, 2020 U.S. Dist. LEXIS 21299).
February 07, 2020
Former Tech Company Executive Found Not Guilty Of Trade Secret Theft

SAN JOSE, Calif. — A federal jury in California on Feb. 3 found a former executive of technology company Jawbone not guilty on six counts of theft of trade secrets on charges that she allegedly stole the trade secrets when she left her employment with the company and accepted a new position with rival Fitbit Inc. (United States v. Katherine Mogal, et al., No. 18-cr-0259, N.D. Calif.).
February 05, 2020
Tech Company’s Trade Secret Claim Gets 1 More Shot At Amendment

SAN JOSE, Calif. — A technology company and its acquired affiliate have again failed to sufficiently describe the trade secret information that its former employee and a third-party contractor allegedly misappropriated in violation of several agreements signed between the parties, a federal magistrate judge in California ruled Jan. 31 in dismissing the plaintiffs’ trade secret misappropriation claim with leave to amend (Calsoft Labs Inc., et al. v. Venikata Panchumarthi, et al., No. 19-4398, N.D. Calif., 2020 U.S. Dist. LEXIS 17214).
February 04, 2020
Most Defendants In DTSA Suit Subject To Specific Jurisdiction, Judge Rules

SAN JOSE, Calif. — A federal judge in California on Jan. 31 ruled that industrial refrigeration contractors have sufficiently shown that several defendants in a theft and misappropriation of trade secrets lawsuit engaged in actions to support a finding of specific jurisdiction in the action and not require the action to be transferred to another federal district court (Degree Mechanical Inc., et al. v. J.C. Welding LLC, et al., No. 19-5133, N.D. Calif., 2020 U.S. Dist. LEXIS 16394).
February 03, 2020
Dismissal Of Company’s Trade Secret Law Claims In Amended Complaint Denied

SACRAMENTO, Calif. — A printing and imaging provider has sufficiently amended its complaint to state claims for misappropriation of trade secrets in violation of state and federal law against several former employees and a competing company by stating with the required specificity what trade secrets the defendants are alleged to have misappropriated, a federal judge in California ruled Jan. 30 (Zoom Imaging Solutions Inc. v. Edward Roe, et al., No. 19-1544, E.D. Calif., 2020 U.S. Dist. LEXIS 15933).
January 31, 2020
Hershey Sues Former Exec For Compensation After Alleged Trade Secret Theft

HARRISBURG, Pa. — The Hershey Co. sued a former executive in Pennsylvania federal court on Jan. 27, alleging that the defendant engaged in a scheme to steal some Hershey’s trade secrets and use those trade secrets while working for a competitor and has failed to repay Hershey money he owes the company under several contracts (The Hershey Co. v. Doug Behrens, No. 20-140, M.D. Pa.).
January 28, 2020
Renewed Preliminary Injunction In Franchiser’s Trade Secret Dispute Granted

YOUNGSTOWN, Ohio — A federal judge in Ohio on Jan. 27 granted a franchisor’s emergency renewed motion for preliminary injunction against franchisees who allegedly violated the terms of a franchise agreement and misappropriated the franchisor’s trade secrets when they opened a competing business, holding that the franchisor has sufficiently shown that all four factors considered in granting such relief have been met (Handel’s Enterprises Inc. v. Kenneth S. Schulenburg, et al., No. 18-508, N.D. Ohio, 2020 U.S. Dist. LEXIS 1185).
January 28, 2020
Security, Bond In Trade Secret Suit Denied After Defendant Filed Late Motion

DETROIT — A federal judge in Michigan on Jan. 24 denied a defendant’s motion requesting security or bond in a breach of contract and trade secret misappropriation lawsuit filed by his former employer, ruling that the defendant failed to properly seek such relief during pleading on a motion for preliminary injunction or soon after (RGIS LLC v. Keith Gerdes, No. 19-11866, E.D. Mich., 2020 U.S. Dist. LEXIS 11831).
January 24, 2020
Judge: Former Distributor Infringed On Trademark, Breached Contract

AKRON, Ohio — A federal judge in Ohio on Jan. 22 found that a former distributor breached a contract with Matco Tools Corp. following the termination of a distributorship agreement, infringed on Matco’s trademark and breached a promissory note (Matco Tools Corp. v. Cary G. Urquhart, No. 19-1009, N.D. Ohio, 2020 U.S. Dist. LEXIS 10247).
January 24, 2020
Manufacturer’s Preliminary Injunction Request In Trade Secret Dispute Denied

MINNEAPOLIS — A quartz surface manufacturer failed to show that a preliminary injunction barring a former employee from working for an industry competitor during the pendency of a trade secret misappropriation and breach of contract lawsuit is warranted because the plaintiff has not shown that there is a substantial likelihood that it will succeed on the merits of its claims, a federal judge Minnesota ruled Jan. 23 (Cambria Co. LLC v. Adam Schumann, et al., No. 19-3145, D. Minn., 2020 U.S. Dist. LEXIS 11373).
January 23, 2020
Magistrate: Counterclaims In Trade Secrets Dispute Should Be Dismissed

PITTSBURGH — A federal magistrate judge in Pennsylvania on Jan. 14 recommended dismissing counterclaims brought by a former employee of the maker of equipment for steel manufacturing, finding that the man lacked standing to bring a claim for tortious interference with business relationships and that claims for declaratory judgment with respect to two patents should be litigated in federal court in Indiana (New Berry Inc. v. Todd G. Smith, No. 18-CV-1024, W.D. Pa., 2020 U.S. Dist. LEXIS 6510).
January 23, 2020
Unfair Competition Claim Found Not Preempted By Arizona Trade Secret Law

PHOENIX — A federal judge in Arizona on Jan. 22 ruled that dismissal of a software company’s unfair competition claim against an airline company in a lawsuit stemming from the defendant’s alleged breach of a nondisclosure agreement (NDA) during a request for proposal (RFP) process is unnecessary, rejecting the airline company’s argument that the claim is preempted by Arizona’s uniform trade secrets law (TLX Inc. v. JetBlue Airways Corp., No. 19-4734, D. Ariz., 2019 U.S. Dist. LEXIS 10323).