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Mealey's Trade Secret

September 22, 2020
Allegations In Tesla Model 3 Trade Secrets Suit Against Former Employee Trimmed

RENO, Nev. — Although a former Tesla Inc. employee has sufficiently shown that his alleged theft of company trade secrets pertaining to the company's Model 3 automobile and subsequent release of that information to a reporter could not have caused the declines in Tesla's stock price to which its damages expert testified, a federal judge in Nevada on Sept. 17 ruled that she was not persuaded by any of the other arguments proffered by the defendant in his summary judgment motion (Tesla Inc. v. Martin Tripp, No. 18-0296, D. Nev., 2020 U.S. Dist. LEXIS 170855).
September 22, 2020
Panel Upholds District Court's Trade Secret Suit Findings In Revised Opinion

NEW ORLEANS — In a revised opinion, a Fifth Circuit U.S. Court of Appeals panel on Sept. 17 ruled that a Texas federal court did not err in finding that a company did not use its former employee's patented and trade secret technology to develop a competing product because although the proclaimed legal issue raised by the former employee and the company he formed was a factual one, the plaintiffs "failed to carry their burden of proof at trial" (In the Matter of: ATOM Instrument Corp., No. 19-20151, 5th Cir., 2020 U.S. Dist. LEXIS 30065).
September 16, 2020
Ex-Worker Violating Terms Of Trade Secrets Suit Deal, Biotech Company Alleges

SAN FRANCISCO — A biotechnology company's former employee is breaching the terms of a permanent injunction and judgment in a trade secret misappropriation lawsuit based on his current employment arrangement with an industry competitor, the biotechnology company alleges in an Aug. 27 complaint filed in California federal court (AllCells LLC v. BioIVT LLC, et al., No. 20-6044, N.D. Calif.).
September 16, 2020
Equity Compensation Services Provider Seeks Injunction In Trade Secrets Row

CHICAGO — A provider of equity compensation services asks a federal judge in Illinois in a Sept. 11 motion to grant its request for a preliminary injunction against former employees in a trade secret misappropriation lawsuit, arguing that overwhelming evidence shows that the defendants misappropriated the company's trade secrets for its peer tracker software to develop a competing product (Aon plc, et al. v. Infinite Equity Inc., et al., No. 19-7504, N.D. Ill.).
September 14, 2020
Law Firm Sues Former Employee For Trade Secret Law Violations In Poaching Scheme

SAN DIEGO — A law firm sued one of its former attorneys, a client and three of the client's senior executives in California federal court on Sept. 10, alleging that the client and its executives engaged in a scheme to poach the former employee, hire him as its in-house counsel and misappropriate the company's confidential and proprietary information and/or trade secrets in violation of an employment agreement the attorney signed with the law firm and in violation of state and federal trade secret laws (Whiteslate LLP v. Derek Dahlin, et al., No. 20-1782, S.D. Calif.).
September 09, 2020
CBD Products Manufacturer Refiles Trade Secret Suit After Securing Counsel

WEST PALM BEACH, Fla. — A cannabidiol-based (CBD) products manufacturer refiled a previously dismissed trade secret misappropriation lawsuit in Florida federal court on Sept. 3, alleging that a former customer and others misappropriated the manufacturer's proprietary formulas for its CBD products and began marketing a substantially similar CBD product using those trade secrets in violation of state and federal trade secret laws (Healthcare Resources Management Group LLC v. EcoNatura All Healthy World LLC, et al., No. 20-81501 S.D. Fla.).
September 04, 2020
Appeal Of Permanent Injunction In Trade Secrets Dispute Dismissed As Moot

ST. LOUIS — An Eighth Circuit U.S. Court of Appeals panel on Sept. 3 dismissed as moot an appeal of a Missouri federal court's issuance of a permanent injunction in a trade secret misappropriation lawsuit against a consulting and sales for optimization services and software products provider's former employee and an industry competitor, ruling that the terms of the permanent injunction have expired because the appellants failed to seek a stay of the injunction before filing their appeal (Perficient Inc. v. Thomas Munley, et al., No. 19-2951, 8th Cir., 2020 U.S. App. LEXIS 28089).
September 03, 2020
Professor Sentenced To 18 Months' Imprisonment For Stealing Trade Secrets

SAN JOSE, Calif. — A federal judge in California on Sept. 1 sentenced a Chinese professor to 18 months in prison and ordered the defendant to pay $476,834.81 in restitution after finding him guilty of economic espionage and theft of trade secrets and conspiracy to commit both offenses stemming from his involvement in a scheme to misappropriate semiconductor technology from two U.S. companies (United States v. Hao Zhang, No. 15-106, N.D. Calif.).
September 03, 2020
6th Circuit Says Copyright Infringed, Trade Secret Injunction Proper

CINCINNATI — In an Aug. 21 ruling, the Sixth Circuit U.S. Court of Appeals left intact a final judgment that copyrighted database-script source code was infringed by Carrier Corp. in its effort to develop heating, ventilation and air conditioning (HVAC) testing software (ECIMOS LLC v. Carrier Corporation, Nos. 19-5436, -5519, 6th Cir., 2020 U.S. App. LEXIS 26722).
August 31, 2020
Majority Of Claims In Trade Secret Misappropriation Suit Preempted, Judge Rules

SAN DIEGO — Although a pharmacy benefit management (PBM) services provider and its subsidiaries have sufficiently pleaded allegations to support their claims under the Defend Trade Secrets Act (DTSA) that a former business partner and its subsidiary and others violated federal trade secret law by breaching the terms of a joint venture (JV) agreement by misappropriating the provider's trade secrets to create a competing PBM platform, eight of the plaintiffs' remaining claims are preempted by the California Uniform Trade Secrets Act (CUTSA) and must be dismissed, a federal judge in California ruled Aug. 27 (MedImpact Healthcare Systems Inc., et al. v. IQVIA Holdings Inc., et al., No. 19-1865, S.D. Calif., 2020 U.S. Dist. LEXIS 155996).
August 28, 2020
Texas Panel Remands Trade Secret, Fraud Claims To Lower Court For New Trial

SAN ANTONIO — A Texas appellate panel ruled Aug. 26 on rehearing that remand and a new trial are warranted in a breach of contract trade secret misappropriation lawsuit that previously resulted in a nearly $720 million judgment on certain claims because a jury question asking jurors to determine whether the title insurer misappropriated those trade secrets under a "use" or "acquisition by improper means" theory allowed the jury to reach its findings on the question based on invalid theories (Title Source Inc. v. HouseCanary Inc., No. 04-19-44-CV, Texas App., 4th Dist., 2020 Tex. App. LEXIS 6835).
August 26, 2020
Mobile Application Owner Appeals Orders In Trade Secret Suit To 9th Circuit

LOS ANGELES — The owner of a group-scheduling mobile application has appealed three summary judgment orders that led to the dismissal of all federal claims in a trade secret misappropriation lawsuit against certain of its former employees and competitors StubHub Inc. and its parent company, eBay Inc., according to an Aug. 24 notice of appeal filed in California federal court (Calendar Research LLC v. StubHub Inc., et al., No. 17-4062, C.D. Calif.).
August 26, 2020
Digital Music Distributor: Former Exec Provided Competitor With Trade Secrets

FRESNO, Calif. — A distributor of digitalized music sued its former chief operations officer and an industry competitor in California federal court on July 29, alleging that the former executive misappropriated its confidential recording codes and metadata in violation of state and federal trade secret law by providing the proprietary information to the competitor so that it may exploit the trade secrets to compete with the plaintiff in the digitalized music industry (Colonize Media Inc. v. Tate A. Palmer, et al., No. 20-1053, E.D. Calif.).
August 25, 2020
$140M Damages Award In Trade Secrets Row Upheld; Punitive Damages Award Vacated

CHICAGO — Although a federal jury was provided with sufficient evidence to support a software developer's assertion that an industry competitor stole its confidential information and trade secrets and used this information to develop a comparative analysis of its product to the developer's to advance its business in the United States, the jury was not provided with evidence that would allow it to determine that the competitor misappropriated any of the developer's other information, a Seventh Circuit U.S. Court of Appeals panel ruled Aug. 20 in partially overturning a federal district court's damages award in a trade secret misappropriation lawsuit (Epic Systems Corp. v. Tata Consultancy Services Ltd., et al., Nos. 19-1528 and 19-1613, 7th Cir., 2020 U.S. App. LEXIS 26473).
August 25, 2020
Former Mars Employee Seeks To Have Trade Secret Claims Arbitrated In Belgium

WASHINGTON, D.C. — Dismissal of claims in a trade secret misappropriation lawsuit against a former employee of confectionery, pet food and other food productsmanufacturer Mars Inc. and an industry competitor is warranted because the claims against the former employee are subject to mandatory arbitration in Belgium and were filed as nothing more than part of a smear campaign against the defendants, the defendants argue in an Aug. 20 motion to dismiss filed in District of Columbia federal court (Mars Inc. v. Jacek Szarzynski, et al., No. 20-1344, D. D.C.).
August 21, 2020
Judge: Company Failed To Show Defendants Stole, Misappropriated Trade Secrets

GRAND RAPIDS, Mich. — A federal judge in Michigan on Aug. 20 ruled that a company that engages in the sale and installation of solar energy panels has failed to sufficiently identify the trade secrets it alleges a former employee and industry competitor stole and misappropriated in violation of state and federal trade secret laws to improperly compete with the company in the solar energy industry (Skywatcher LLC v. Gregory Oliver, et al., No. 19-409, W.D. Mich., 20202 Dist. LEXIS 150642).
August 20, 2020
Judge Awards A Quarter Of Attorney Fees Requested In Trade-Secret Dispute

NEW ORLEANS — Stating that the "time has come" for a trade secret misappropriation lawsuit "to be laid to rest once and for all," a federal judge in Louisiana on Aug. 18 granted a motion for attorney fees and costs filed by defendants, granting them 25 percent of an amount to be determined at a later date after an in camera review of their unredacted attorney time records has been completed (Source Production & Equipment Co. Inc., et al. v. Kevin J. Schehr, et al., No. 16-17528, E.D. La., 2020 U.S. Dist. LEXIS 149827).
August 19, 2020
Multilevel Marketing Company Allowed To Replead Claims In Trade Secrets Dispute

LAS VEGAS — A federal judge in Nevada on July 30 ruled that although a multilevel marketing company has failed to sufficiently plead which claims it is asserting in a breach of contract and trade secret misappropriation lawsuit against two former affiliates as statutorily required, it is likely to be able to correct the deficiencies in its complaint (My Daily Choice Inc. v. Shanna Lee Hunter, et al., No. 20-0809, D. Nev., 2020 U.S. Dist. LEXIS 135671).
August 18, 2020
Panel Rules That Tech Company Failed To Plead Protectable Trade Secret

ST. LOUIS — An Eighth Circuit U.S. Court of Appeals panel on Aug. 17 ruled that a federal district court did not err in denying an agriculture technology company's motion for summary judgment in a trade secret misappropriation lawsuit against its former employees and the industry competitor they formed because the company failed to allege that the trade secrets the defendants are alleged to have misappropriated were protectable within the meaning of state and federal trade secret statutes (Farmers Edge Inc., et al. v. Farmobile LLC, et al., No. 18-2900, 8th Cir., 2020 U.S. App. LEXIS 25962).
August 17, 2020
Thinly Pleaded DTSA Claim Dismissed In AI Developer's Trade Secret Lawsuit

WILMINGTON, Del. — A federal judge in Delaware on Aug. 13 ruled that a developer of artificial intelligence (AI) products for the pharmaceutical industry has failed to sufficiently state its claim for trade secret misappropriation under the Defend Trade Secrets Act (DTSA) with the requisite particularity against drug maker AstraZeneca Pharmaceuticals LP, stemming from the defendant's alleged misappropriation of proprietary information it obtained during discussions regarding AstraZeneca's interest in becoming a customer of the developer (Lithero LLC v. AstraZeneca Pharmaceuticals LP, No. 19-2320, D. Del., 2020 U.S. Dist. LEXIS 145592).
August 17, 2020
Panel Partly Upholds Denial Of Relief In Trade Secret, Copyright Row

ST. LOUIS — Although agreeing with a Minnesota federal judge that claims of copyright infringement and trade secret misappropriation involving payroll source code do not warrant preliminary injunctive relief, the Eighth Circuit U.S. Court of Appeals on Aug. 14 vacated the district court's order in part, with instructions to consider "in the first instance" allegations that the software was wrongfully sublicensed (MPAY Inc. v. Erie Custom Computer Applications Inc., et al., No. 19-2206, 8th Cir., 2020 U.S. App. LEXIS 25816).
August 17, 2020
Vice Chancellor Awards Mobile Trash Franchisors Limited Injunction

WILMINGTON, Del. — Franchisors of a mobile trash compaction business were awarded a limited preliminary injunction by a Delaware vice chancellor on Aug. 13 because "the record does not support a business-stopping injunction" (Smash Franchise Partners, LLC, et al. v. Kanda Holdings, Inc., et al., No. 2020-0302-JTL, Del. Chanc., 2020 Del. Ch. LEXIS 263).
August 17, 2020
Federal Judge Refuses To Dismiss Employer's DTSA, UCL Suit Against Former Employees

SAN DIEGO — A federal judge in California on Aug. 10 refused to dismiss an employer's claims for breach of contract and violations of the Defend Trade Secrets Act (DTSA) and California's unfair competition law (UCL) against its former employees, finding that because the employer sufficiently pleaded its DTSA claim, it sufficiently alleged the unlawful prong of its UCL claim (Power Integrations, Inc. v. Edison D. De Lara, et al., No. 20-410, S.D. Calif., 2020 U.S. Dist. LEXIS 142851).
August 14, 2020
Former Banker Hit With Civil Contempt For Violating TRO, PI In Trade Secret Suit

ORLANDO, Fla. — A federal judge in Florida on Aug. 12 held a former banker in civil contempt for continuing to possess photographs of a handwritten list of customer information he took after being required to turn the list over to his counsel under the terms of a temporary restraining order (TRO) and preliminary injunction (PI) in a trade secret misappropriation lawsuit (Seacoast Banking Corp. of Florida, et al. v. Matthew Diemer, et al., No. 20-0057, M.D. Fla.).
August 14, 2020
Software Provider's TRO Request In Trade Secret Suit Against Customer Granted

LAS VEGAS — A provider of software that tracks flood insurance claims has sufficiently shown that a temporary restraining order (TRO) against its largest customer, which is alleged to have misappropriated its trade secret technology in developing a clone application, is necessary because the software provider has shown that there is a substantial likelihood that it will succeed on the merits of its state and federal trade secret law claims, a federal judge in Nevada ruled Aug. 12 (ImageKeeper LLC v. Wright National Flood Insurance Services LLC, No. 20-1470, D. Nev., 2020 U.S. Dist. LEXIS 144336).