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Mealey's Trade Secret

June 04, 2020
S.C. High Court: Plaintiffs Failed To Plead Elements Of Trade Secrets Claim

COLUMBIA, S.C. — A South Carolina trial court did not err in ruling that a company failed to sufficiently show that its former member and two companies for which he worked violated the state’s trade secret law when he removed certain of the company’s trade secrets contained on two company-owned laptops and a Blackberry device because the company failed to show that the trade secrets had the required independent economic value for a showing of trade secret misappropriation, the South Carolina Supreme Court ruled June 3 (David Wilson v. John Gandis, et al., No. 27980, S.C. Sup., 2020 S.C. 88).
June 04, 2020
Drilling Company Says Fracking Patents Infringed, Trade Secrets Misappropriated

HOUSTON — A drilling company that provides services to hydraulic fracturing operators on June 3 sued a former consultant, alleging that he misappropriated trade secrets to which he had access during the time was under contract with the company and later infringed patents for products and procedures by registering those patents in his own name (Abaco Drilling Technologies LLC v. PV Fluid Products Inc., et al., No. 20-1946, S.D. Texas).
June 03, 2020
Company Hits Former CEO With Trade Secrets Suit Over Sale Of Counterfeit Product

SAN FRANCISCO — A technology company sued its former CEO in a California federal court on June 2, alleging that the defendant misappropriated the company’s trade secrets, violated the terms of a separation agreement between the parties and has continued to misrepresent himself as an employee of the company in order to sell counterfeit versions of the company’s hands-on learning tool for children in Asia in violation of state and federal trade secrets laws (Piper Inc. v. Mark Pavlyukovskyy, No. 20-3663, N.D. Calif.).
June 03, 2020
Judge Won’t Give Software Developer Another Chance To Identify Trade Secrets

CHICAGO — Opining that although a software developer has been given numerous opportunities to sufficiently identify trade secrets a former business partner is alleged to have misappropriated when it developed its own rebate portal processing system using the developer’s trade secrets, a federal judge in Illinois on May 31 held that the developer has failed to do so (NEXT Payment Solutions Inc. v. CLEAResult Consulting Inc., No. 17-8829, N.D. Ill., 2020 U.S. Dist. LEXIS 94764).
June 02, 2020
Questions Prevent Tech Company’s Bid For Injunction In Trade Secrets Dispute

BOSTON — A federal judge in Massachusetts on May 29 ruled that a technology company is not entitled to a preliminary injunction in its breach of contract and trade secret misappropriation lawsuit against a former employee and his present employer, Facebook Inc., because questions exist as to whether the source code and algorithms the defendants are alleged to have misappropriated are truly trade secrets and whether the alleged trade secrets were obtained by the defendants by improper means (Neural Magic Inc. v. Facebook Inc., et al., No. 20-10444, D. Mass.).
June 01, 2020
Former GE Engineer Admits To Stealing Company’s Trade Secrets

ALBANY, N.Y. — A former General Electric Co. (GE) engineer has pleaded guilty to stealing trade secret information relating to GE’s next generation semiconductor technology so that he could use the trade secrets to form his own competing company, according to a plea agreement filed by government prosecutors on May 28 in New York federal court (United States of America v. Yang Sui, No. 20-cr-109, N.D. N.Y.).
May 29, 2020
Judge: Tech Company Failed To Show Trade Secrets Derived Economic Value

OAKLAND, Calif. — A federal judge in California on May 26 ruled that a manufacturer of hardware, software and other electronic devices and its related company have sufficiently pleaded state and federal trade secret law claims against only certain defendants because although the plaintiff had adequately alleged that it owned the trade secrets the defendants’ allegedly misappropriated, it has failed to show the independent economic value of all of the trade secrets at issue (Cisco Systems Inc., et al. v. Wilson Chung, et al., No. 19-7562, N.D. Calif., 2020 U.S. Dist. LEXIS 92497).
May 28, 2020
Trade Secret Claim Trimmed From Lawsuit Over Misused Mailing List

CAMDEN, N.J. — Although the holder of certain trademarks associated with his baseball training and tournament business has sufficiently alleged that his business’s mailing list is a trade secret pursuant to the New Jersey Trade Secrets Act (NJTSA), he has failed to properly show that he took the necessary steps to maintain the secrecy of the mailing list, a federal judge in New Jersey ruled May 27 (Joseph Barth v. Ajay Vulimiri, No. 19-20755, D. N.J., 2020 U.S. Dist. LEXIS 91206).
May 26, 2020
CBD Manufacturer’s Trade Secret Suit Dismissed For Failure To Prosecute

WEST PALM BEACH, Fla. — A cannabidiol-based (CBD) products manufacturer’s failure to obtain replacement counsel within the 20-day time period it was provided requires dismissal of the plaintiff’s trade secret misappropriation lawsuit because the manufacturer is an “artificial entity” and must be represented by counsel, a federal judge in Florida ruled May 21 (Healthcare Resources Management Group LLC v. EcoNatura All Healthy World LLC, et al., No. 19-81700, S.D. Fla.).
May 22, 2020
Non-Source Code Allegations In Trade Secrets Suit Dismissed On Summary Judgment

LOS ANGELES — The owner of a group-scheduling mobile application has failed to state any issue of material fact precluding a federal judge in California from granting summary judgment in favor of former employees and competitors StubHub Inc. and its parent company, eBay Inc., on claims that they violated provisions of federal trade secret law by misappropriating and refusing to return the company’s non-source code information for its application, the judge ruled May 13 (Calendar Research LLC v. StubHub Inc., et al., No. 17-4062, C.D. Calif.).
May 21, 2020
Panel: Court Erred In Dismissing Claims Against Defendant In Trade Secret Suit

LAKE CHARLES, La. — A Louisiana trial court erred in finding that a defendant in a trade secret misappropriation and breach of contract lawsuit was merely a “passive owner” of a rubber and gasket company during time between entering into an act of sale and its execution when she and other defendants are alleged to have misappropriated the company’s trade secrets, a Louisiana appellate panel ruled May 20 in ruling that the trial court erred in dismissing claims against her for violations of Louisiana trade practices and trade secret law (Vesta Halay Johnston, et al. v. Susan Halay Vincent, et al., No. 19-55, La. App., 3rd Cir., 2020 La. App. LEXIS 769).
May 21, 2020
Panel Vacates Magistrate Judge’s Flawed Findings In Trade Secret, Copyright Suit

ATLANTA — A federal magistrate judge erred in determining that although a software company had sufficiently shown that its transformative database is a trade secret in a pair of lawsuits against industry competitors, the company failed to show that the defendants misappropriated the trade secret because he failed to consider multiple alternative types of misappropriation contemplated under Florida’s trade secret law, an 11th Circuit U.S. Court of Appeals panel ruled May 20 in partly remanding the magistrate judge’s findings of fact (Compulife Software Inc. v. Moses Newman, et al., Nos. 18-12004 and 18-12007, 11th Cir., 2020 U.S. App. LEXIS 16052).
May 20, 2020
Defendants In Trade Secret Dispute Seek Dismissal Of State, Federal Law Claims

CHICAGO — Dismissal of state and federal trade secret law claims brought against former employees of a provider of equity compensation services by their former employer is warranted because the plaintiffs have failed to sufficiently show that the defendants improperly acquired, used or disclosed any trade secret information, the defendants argue in a May 15 motion to dismiss filed in Illinois federal court (Aon plc, et al. v. Infinite Equity Inc., et al., No. 19-7504, N.D. Ill.).
May 20, 2020
Video Game Developer’s Trade Secret Claims Survive Dismissal Attempt

SEATTLE — A federal judge in Washington on May 18 ruled that dismissal of a video game developer’s state and federal trade secret misappropriation claims against a former business partner and its CEO stemming from a failed video game development agreement is not warranted because the plaintiff has pleaded plausible claims under both statutes sufficient to survive the defendants’ attempt to dismiss (tinyBuild LLC v. Nival International Ltd., et al., No. 18-805, W.D. Wash., 2020 U.S. Dist. LEXIS 87122).
May 20, 2020
Public Safety Equipment Seller Hits Former Employee With Trade Secret Suit

RIVERSIDE, Calif. — A former employee of a custom apparel retailer that manufactures and sells public safety equipment and uniforms to the military and law enforcement and fire and EMS industries, among others, violated terms of several employment agreements he signed and state and federal trade secret laws by engaging in a scheme to provide an industry competitor with his former employer’s confidential and trade secret information so that the company could start a competing product line, the retailer alleges in a May 15 complaint filed in California federal court (Amwear USA Inc. v. Jeff Schlabowske, et al., No. 20-1038, C.D. Calif.).
May 19, 2020
IT Company Seeks Denial Of Spoliation Sanctions Request In Trade Secrets Suit

NEWARK, N.J. — Calling a motion for spoliation sanctions in a trade secret misappropriation lawsuit filed by a life sciences data company against its industry competitor “hyperbolic and groundless,” a pharmaceutical information technology company on May 15 argues in an opposition brief that a federal judge in New Jersey should deny the motion because no spoliation occurred and the defendant has not violated any court orders and has engaged in no impropriety (IQVIA Inc., et al. v. Veeva Systems Inc., No. 17-177, D. N.J.).
May 18, 2020
Drug Developer’s Fraud, Trade Secret Claims Survive Competitor’s Dismissal Bid

CHICAGO — In a May 13 opinion, a federal judge in Illinois ruled that a drug development company pleaded with sufficient particularity that it took reasonable efforts to maintain the secrecy of its trade secret information pertaining to the production of its cancer treatment drug, rejecting an argument by a former business partner that the company failed to do so as required under Illinois trade secret law (Meridian Laboratories Inc. v. OncoGenerix USA Inc., No. 18-6007, N.D. Ill., 2020 U.S. Dist. LEXIS 84352).
May 18, 2020
Supreme Court Won’t Hear Dispute Over Consent Decree Assignability

WASHINGTON, D.C. — In its May 18 orders list, the U.S. Supreme Court denied a petition for certiorari that challenged findings by the Sixth Circuit U.S. Court of Appeals that a consent judgment relating to trademarks and trade secrets was assignable (M.W. Watermark LLC, et al. v. Evoqua Water Technologies LLC, No. 19-1079, U.S. Sup.).
May 15, 2020
Dismissal Of Trade Secret Law Claims Against Domino’s Upheld On Appeal

SAN FRANCISCO — A federal district court did not err in ruling that a communication options and custom software provider failed to present sufficient evidence creating a triable issue of fact in arguing that Domino’s Pizza Inc. misappropriated its trade secrets when it developed an in-house custom GPS driver tracking system (the solution) for its franchisees using trade secrets the plaintiff had allegedly provided to Domino’s while working to develop a similar system for the pizza maker, a Ninth Circuit U.S. Court of Appeals panel ruled May 14 (Prostar Wireless Group LLC v. Domino’s Pizza Inc., No. 19-15130, 9th Cir., 2020 U.S. App. LEXIS 15439).
May 14, 2020
Franchisor Sues Trash Hauling Business For Trade Secret Misappropriation

WILMINGTON, Del. — A trash hauler and its subsidiary sued an industry competitor and its owners in Delaware state court on April 28, alleging that the defendants engaged in a scheme to misappropriate by entering into discussions under the guise of purchasing a franchise from the trash hauler when, in fact, they were seeking to use the franchisor’s trade secrets and other confidential information to start a competing business (Smash Franchise Partners LLC, et al. v. Kanda Holdings Inc, et al., No. 2020-0302-JTL, Del. Chanc.).
May 14, 2020
Claims In Plumbing Fixture Manufacturer’s Trade Secrets Dispute Trimmed

NEW YORK — A kitchen and bathroom plumbing fixture manufacturer has sufficiently shown that two of its former employees and certain industry competitors misappropriated its confidential and trade secret information in violation of federal and common law, a federal judge in New York ruled May 12 in granting in part and denying in part the defendants’ motion to dismiss (Kraus USA Inc. v. Sergio Magarik, et al., No. 17-6541, S.D. N.Y., 2020 U.S. Dist. LEXIS 83481).
May 12, 2020
Limited Monetary Sanctions Against Stored Energy Solutions Provider Adopted

CHICAGO — A federal judge in Illinois on May 8 adopted a federal magistrate judge’s report and recommendation that defendants in a breach of contract and trade secret misappropriation lawsuit brought by a stored energy solutions provider are entitled to limited monetary sanctions covering half of the attorney fees incurred by the defendants as a result of the plaintiff’s failure to properly collect documents and its issuance of misleading responses to other discovery requests (LiiON LLC v. Vertiv Group Corp., et al., No. 18-6133, N.D. Ill., 2020 U.S. Dist. LEXIS 81337).
May 12, 2020
Stipulation Of Dismissal In Autonomous Vehicle Tech Trade Secrets Suit Granted

SAN JOSE, Calif. — A federal judge in California on May 8 granted a joint stipulation and proposed order to dismiss all claims in a trade secret misappropriation lawsuit brought by an autonomous vehicle developer that alleged that certain of its former employees and companies they formed after leaving the company misappropriated the company’s autonomous vehicle technology to assist a company the former employees formed to compete with the plaintiff (WeRide Corp., et al. v. Jing Wang, et al., No. 18-7233, N.D. Calif.).
May 08, 2020
Firm Says Experian Misused Its Trade Secrets To Create Competing Product

SAN DIEGO — Personal and credit data collectors Experian Information Solutions Inc. and Experian Services Corp. engaged in a scheme to collect a residence data analytics firm’s confidential and trade secret information to misappropriate the information and develop a competing current expected credit losses (CECL) product in violation of the parties’ business agreement and state and federal trade secrets law, the firm alleges in a May 6 complaint filed in California federal court (Weiss Residential Research LLC v. Experian Information Solutions Inc., et al., No. 20-861, S.D. Calif.).
May 08, 2020
Permanent Injunction Granted In Window Seller’s Trade Secrets Lawsuit

FORT MYERS, Fla. — A federal judge in Florida on May 6 granted a stipulated joint motion for final judgment and permanent injunction in a breach of contract and trade secret misappropriation lawsuit filed by a windows and doors distributor against its former employee and certain industry competitors, enjoining the former employee from any further disclosure of the distributor’s confidential and trade secret information (LouMac Distributors – U.S. LBM LLC v. Louis Luongo, et al., No. 19-220, M.D. Fla., 2020 U.S. Dist. LEXIS 79752).