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Mealey's Trade Secret

August 14, 2020
In Cross-Appeal, Patent Owner Says Trade Secret Damages Wrongly 'Curtailed'

WASHINGTON, D.C. — In an Aug. 4 corrected cross-appellant brief, a patent assignee and its licensee defended a jury's infringement verdict in their favor but said a federal judge in Delaware "erroneously curtailed the jury's original $22,625,000 award" of damages on allegations of trade secret misappropriation (L'Oréal USA Inc. v. Liqwd Inc., et al., Nos. 2020-1382, -1422, -1689, -1690, Fed. Cir.).
August 13, 2020
Tesla Asks Court To Order Former Worker To Cease Dissemination Of Trade Secrets

RENO, Nev. — Tech giant Tesla Inc. filed an emergency motion on Aug. 10 in Nevada federal court seeking an order in a trade secret misappropriation lawsuit prohibiting a former employee from any further dissemination of confidential information the company alleges he stole in retaliation for his reassignment of job duties during his employment (Tesla Inc. v. Martin Tripp, No. 18-0296, D. Nev.).
August 12, 2020
Company Accuses Former Manager Of Misappropriating Proprietary Algorithm

PITTSBURGH — A real estate referral company sued a former employee and the competing business for which he now serves as CEO on Aug. 7 in Pennsylvania federal court, alleging that the defendants have misappropriated the company's proprietary algorithm used for pairing real estate agents with home sellers and buyers in violation of state and federal trade secret laws (HomeLight Inc. v. YourHome.AI Inc., et al., No. 20-5502, N.D. Calif.).
August 12, 2020
Parties In Payment Processing Company's Trade Secret Suit Granted Dismissal

SACRAMENTO, Calif. — A federal judge in California on Aug. 7 granted a payment processing company's stipulation for dismissal of defendants in a trade secret misappropriation lawsuit in a two-page order, ruling that there is "good cause" to enter such relief against the company's former employees (Granite Payments LLC, et al. v. 1Point Merchant Solutions Inc., et al., No. 18-2727, E.D. Calif.).
August 11, 2020
Panel: Court Properly Construed Arbitration Panel's Ruling In Trade Secret Dispute

NEW ORLEANS — A federal district 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, a Fifth Circuit U.S. Court of Appeals panel ruled Aug. 7, rejecting an argument by appellants that the court misconstrued what an arbitration panel had ruled that the former employees' trade secrets included (In the Matter of: ATOM Instrument Corp., No. 19-20151, 5th Cir., 2020 U.S. Dist. LEXIS 24999).
August 10, 2020
Appellant Did Not Breach Separation Contract, Panel Says In Partial Reversal

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Aug. 7 held that a lower federal court erred in finding that a former employee of a digital marketing firm breached the terms of a separation contract but affirmed the lower court's summary judgment ruling in favor of an industry competitor as to the firm's claim for violation of California unfair competition law (UCL) and denial of the firm's motion for a new trial on its trade secret misappropriation claim (Six Dimensions Inc. v. Inc., et al., No. 19-20505, 5th Cir., 2020 U.S. App. LEXIS 25004).
August 10, 2020
Tech Company Properly Pleads Economic Value Of Trade Secrets, Judge Rules

OAKLAND, Calif. — A federal judge in New York on Aug. 5 ruled that a manufacturer of hardware, software and other electronic devices and its related company have substantially cured pleading deficiencies that led to a prior dismissal of their state and federal trade secret law claims against several former employees and an industry competitor, ruling that newly added evidence supports a showing that certain trade secrets that defendants are alleged to have misappropriated maintain independent economic value (Cisco Systems Inc., et al. v. Wilson Chung, et al., No. 19-7562, N.D. Calif., 2020 U.S. Dist. LEXIS 140193).
August 06, 2020
Files Retained By Former Employee Not Shown To Be Trade Secrets, Judge Rules

BALTIMORE — A federal judge in Maryland on Aug. 3 ruled that a group of businesses in the retail jewelry industry has failed to plead that a former employee violated state or federal trade secret laws by failing to turn over files that the group alleges contained confidential business information because the group has not shown that the information he possessed constituted trade secrets under the Defend Trade Secrets Act (DTSA) or the Maryland Uniform Trade Secrets Act (MUTSA) (Albert S. Smyth Co., et al. v. Mark A. Motes, et al., No. 17-677, D. Md., 2020 U.S. Dist. LEXIS 138631).
July 31, 2020
North Carolina Trade Secret Law Claim Passes Muster On Dismissal Bid

RALEIGH, N.C. — A company that installs and maintains electrical transmission and distribution power lines has sufficiently pleaded its claim for trade secret misappropriation pursuant to North Carolina law with the required particularity in alleging that a former employee improperly removed the company's trade secret before his resignation and subsequent acceptance of employment with an industry competitor, a federal judge in North Carolina ruled July 13 (Volt Power LLC v. William "Billy" Butts, et al., No. 19-149, E.D. N.C., 2020 U.S. Dist. LEXIS 124402).
July 31, 2020
6th Circuit Review Of Preliminary Injunction Ruling In Trade Secrets Suit Sought

CINCINNATI — Parties in a trade secret misappropriation lawsuit stemming from a failed business partnership recently asked a Sixth Circuit U.S. Court of Appeals panel to determine whether a federal district court erred in granting a preliminary injunction that enjoins a medical device maker's former business associates based in China from conducting a number of actions both in the United States and China (AtriCure Inc. v. Meng, et al., No. 20-3264, 6th Cir.).
July 30, 2020
Prosecutors, Former Google Engineer Differ On Sentencing In Trade Secret Suit

SAN FRANCISCO — Government prosecutors and a former Google LLC engineer who pleaded guilty to one charge of trade secret theft in connection with his alleged theft of self-driving automobile technology trade secret information from his former employer and misappropriation of the trade secrets in forming a competing company that was later purchased by Uber Technologies Inc. offered differing suggestions for the punishment to be doled out to the defendant in sentencing memoranda filed July 28 in California federal court (United States v. Anthony Scott Levandowski, No. 19-cr-377, N.D. Calif.).
July 30, 2020
Panel: Factors Weigh Against Injunction Stay In Trade Secret Dispute

CINCINNATI — A Sixth Circuit U.S. Court of Appeals panel on July 27 ruled that a federal district court did not abuse its discretion in granting a preliminary injunction in a trade secret misappropriation lawsuit filed by a medical device maker against former business associates based in China because the district court's ruling sufficiently meets each of the four factors necessary to show that staying the injunction pending appeal is not warranted (AtriCure Inc. v. Meng, et al., No. 20-3264, 6th Cir., 2020 U.S. App. LEXIS 23763).
July 29, 2020
Repleaded Trade Secret Law Claims Can Proceed In Web Developer's Scraping Suit

SAN FRANCISCO — A federal judge in California on July 24 ruled that a home design website developer has sufficiently cured pleading deficiencies relating to its state and federal trade secret law claims made against Facebook Inc. and one of its affiliates and Princeton University in connection with the defendants' alleged scraping of digital information from its website (UAB "Planner5D" v. Facebook Inc., et al., No. 3:20-cv-02198, N.D. Calif.).
July 28, 2020
Trade Secret Claims In Online Auction Company's Suit Survive Dismissal Bid

TRENTON, N.J. — A federal judge in New Jersey on July 23 substantially denied a motion to dismiss filed by an online auction solutions provider's founder and former owner and a competing company that he formed in a trade secret misappropriation lawsuit, rejecting the defendants' argument that the plaintiff failed to sufficiently specify what confidential and proprietary information the founder is alleged to have misappropriated when he formed the competing online auction business (Sandhills Global Inc. v. Lawrence Garafola, et al., No. 19-20669, D. N.J., 2020 U.S. Dist. LEXIS 130674).
July 23, 2020
Tax Planner Failed To Plead Existence Of Trade Secret, Panel Rules

BOSTON — A federal district court erred in finding that defendants in a trade secret misappropriation and breach of contract lawsuit brought by a tax planning and consulting firm were liable for trade secret misappropriation because the plaintiff failed to sufficiently plead the existence of a trade secret, a First Circuit U.S. Court of Appeals panel ruled July 21 (TLS Management and Marketing Services LLC v. Ricky Rodriguez-Toledo, et al., No. 19-1104, 1st Cir., 2020 U.S. App. LEXIS 22732).
July 23, 2020
Adviser Sues Real Estate Investment Trust For Contract Breach, DTSA Violations

NEW YORK — An advisory firm that provides management services to a real estate investment trust (REIT) sued the REIT in New York federal court on July 21, alleging that the defendant breached the terms of a management agreement and intends to misappropriate certain intellectual property owned by the plaintiff in violation of the Defend Trade Secrets Act (DTSA) and New York common law (PRCM Advisers LLC v. Two Harbors Investment Corp., No. 20-5649, S.D. N.Y.).
July 21, 2020
Michigan Trade Secret Law Claim Remains In Printer Company's Trade Secret Suit

DETROIT — A federal judge in Michigan on July 7 ruled that neither a printing and imaging devices and software manufacturer nor its former employees are entitled to summary judgment on claims that those defendants misappropriated the company's trade secret information when they left their employment there to accept similar position with an industry competitor (Konica Minolta Business Solutions U.S.A. Inc. v. Lowery Corp, d/b/a Applied Imaging Systems Inc., et al., No. 15-11254, E.D. Mich., 2020 U.S. Dist. LEXIS 120082).
July 22, 2020
Claims In Home Decor Company's Trade Secret Suit Pared Down

CHICAGO — A federal judge in Illinois on July 20 ruled that a producer of home decor products' state law trade secret misappropriation claim against a former business partner and an industry competitor is not time-barred because the plaintiff has sufficiently shown that its claim did not start accruing until 2018 (Chartwell Studio Inc. v. Team Impressions Inc., et al., No. 19-6944, N.D. Ill., 2020 U.S. Dist. LEXIS 126748).
July 21, 2020
Texas High Court Declines Review Of TCPA Ruling In Trade Secrets Dispute

AUSTIN, Texas — The Texas Supreme Court on July 17 declined review of a state appellate court’s ruling that the Texas Citizens Participation Act (TCPA) does not apply in a trade secret misappropriation lawsuit stemming from communications between a recycling company formed by former employees of an industry competitor and scrap metal suppliers the industry competitor had alleged were contacted based on confidential and trade secret information obtained by the former employees prior to departing to start their competing business (Geomet Recycling LLC, et al. v. EMR [USA Holdings] Inc., et al., No. 20-0141, Tex. Sup.).
July 20, 2020
Spoliation Sanctions Stand In Copyright Infringement, Trade Secret Dispute

RICHMOND, Va. — A federal district court did not err in issuing spoliation sanctions in a copyright infringement and trade secret misappropriation lawsuit against a former employee of a software company, his wife and the competing company they owned because any less drastic sanctions would have failed to properly address the prejudice suffered by the company, the Fourth Circuit U.S. Court of Appeals ruled July 16 (QueTel Corp. v. Hisham Abbas, et al., No. 18-2334, 4th Cir., 2020 U.S. App. LEXIS 22124).
July 20, 2020
Discovery Stay Granted In Rental Equipment Provider's Trade Secret Suit

SEATTLE — A federal judge in Washington on July 9 granted a motion to stay discovery in a breach of contract and trade secret misappropriation lawsuit brought by a provider of construction equipment rental services against a former employee and an industry competitor, ruling that the competitor has shown “good cause” for granting such relief (Ahern Rentals Inc. v. Travis Mendenhall, et al., No. 20-542, W.D. Wash., 2020 U.S. Dist. LEXIS 120948).
July 17, 2020
L’Oréal Appeals $66M Patent, Trade Secret Judgment To Federal Circuit

WASHINGTON, D.C. — In a July 2 appellant brief, L’Oréal USA Inc. tells the Federal Circuit U.S. Court of Appeals that it was entitled to judgment as a matter of law (JMOL) on allegations that it misappropriated four trade secrets relating to hair care products, citing a Delaware federal judge’s own finding that a patent assignee-plaintiff “did not prove the value of any trade secret except maleic acid as an active agent” (L’Oréal USA Inc. v. Liqwd Inc., et al., No. 20-1382, Fed. Cir.).
July 16, 2020
Digital Music Provider’s Trade Secret Claims Dismissed On Jurisdictional Grounds

LOS ANGELES — A provider of digital music services to DJs has failed to sufficiently plead that a federal district court has federal jurisdiction over claims against a European competitor because it has not properly shown that the defendant had minimum contacts with California “sufficient to justify requiring the company to defend the action” in the state, a federal judge in California ruled July 13 in dismissing the action without leave to amend (Beatport LLC v. SoundCloud Ltd., No. 19-847, C.D. Calif., 2020 U.S. Dist. LEXIS 123719).
July 16, 2020
Company Sues Over Alleged Misappropriation Of Cement Truck Cleaning Tech

LOS ANGELES — A company sued a number of related parties in California federal court on July 14, alleging that the defendants misappropriated its trade secret information for the development of a cement truck internal cleaning system they obtained as part of an agreement to construct the system and are in the process of developing a substantially similar system using the company’s trade secret information in violation of federal trade secret law (Core Insight Systems Inc. v. Global Barrier Services Inc., et al., No. 20-1246, C.D. Calif.).
July 13, 2020
Judge Compels Arbitration Of Trade Secrets Claims Against Chinese Manufacturer

LOS ANGELES — A federal judge in California on July 8 dismissed a U.S. auto parts distributor’s complaint and motion for a preliminary injunction to enjoin the alleged misappropriation of trade secrets by a Chinese manufacturer, its U.S. subsidiary and employees and granted a defense motion to compel arbitration of the claims after finding that an arbitration clause consented to by the parties was in effect at the time the dispute arose (Pilot Inc. v. TYC Brother Industrial Co. Ltd., et al., No. 20-2978, C.D. Calif., 2020 U.S. Dist. LEXIS 120083).