Trade Secrets

This month the Seventh Circuit in Motorola Sols., Inc. v. Hytera Commc’ns Corp. Ltd. upheld the Northern District of Illinois in finding that the Defend Trade Secrets Act (DTSA) has extraterritorial reach. Companies can seek relief when misappropriation occurs abroad and for the sales lost abroad when an act in furtherance of the trade secret misappropriation occurs in the United States.

Successful defense of trade secrets in litigation begins with evaluating valuable confidential information and steps taken to safeguard it before any disputes arise. Trade secret asset management allows companies to effectively frame misappropriation or theft claims and advance arguments at every stage of a trade secrets dispute.

Starting a high-tech company is a difficult, exhausting, and thrilling endeavor – one in which founders will face seemingly endless challenges, deadlines, and make or break decisions. From a venture’s inception, founders face numerous decisions that if not thoughtfully considered can result in significant legal and financial risk.

Innovators developing IP strategies for 2023 are reflecting on last year’s key IP issues, including entity size designations for US patent applications, erasures of patent damage awards due to flawed expert opinions, and developments involving the ITC, artificial intelligence and machine learning, and inter partes reviews.

Since the passage of the Defend Trade Secrets Act (DTSA), trade secret owners have been able to use allegations of trade secret misappropriation under the DTSA to support civil claims under the Racketeer Influence and Corrupt Organizations Act (RICO). Specifically, DTSA violations that qualify as predicate acts can be used to show a pattern of racketeering activity, which may allow a trade secret owner to state civil claims under RICO, and thus take advantage of the substantial remedies that the RICO statute provides, including the potential for treble damages and attorney’s fees. 

We previously discussed which portions of an artificial intelligence/machine-learning (“AI/ML”) platform can be patented.  Under what circumstances, however, is it best to keep at least a portion of the platform a trade secret? And what are some best practices for protecting trade secrets? In this post, we explore important considerations and essential business practices to keep in mind when working to protect the value of trade secrets specific to AI/ML platforms, as well as the pros and cons of trade secret versus patent protection.

Last year, the U.S. District Court for the Southern District of New York addressed an issue of first impression concerning what constitutes “misappropriation” under the Defend Trade Secrets Act (DTSA) in a decision potentially relevant to cases involving allegations of trade secret misappropriation under the DTSA against a former employee. This case is worthy of note for any trade secret practitioner and is an important reminder that when pleading alleged trade secret misappropriation, it is not only important to describe the trade secret with sufficient particularity, but also to sufficiently describe the alleged misappropriation so as to illustrate the alleged acquisition of the trade secret by improper means or disclosure of the trade secret without consent.

Amid the continuing threat to U.S. intellectual property rights posed by foreign actors, the International Trade Commission (ITC) is poised to become the latest federal agency to bolster protections for U.S. IP owners. The ITC’s broad power to exclude the importation into the U.S. of products that infringe American intellectual property now has the potential to be made even more robust through a new bill introduced by Senators John Cornyn (R-Tex.), Christopher Coons (D-Del.), and Todd Young (R-Ind.) on June 15, 2021, that would provide expedited relief for trade secret theft victims.

Innovations that are eligible for patent protection are often vital to a company’s revenue stream and profitability, but in some cases, opting for trade secret protection is a better strategic choice.

An ethical corporate culture and clear expectations during the hiring process can help companies curtail trade secret disputes when hiring employees from rival companies.

In the fourth installment of our video series on trade secret litigation,  Adam Samansky discusses the importance of taking a holistic approach to intellectual property, looking at both patent and trade secret protection where appropriate.

Companies can minimize trade secret theft by business partners by instituting non-disclosure agreements before sharing trade secrets and establishing general confidentiality agreements with business partners.

By proactively protecting trade secrets and using litigation strategically, companies can minimize trade secret misappropriation by former employees.

Companies can quickly detect trade secret theft by planting an unneeded feature or part that would be included in a copycat item and continually monitoring competitors’ new products.

Companies can lower the risk of trade secret theft amid a reduction in force by limiting and auditing the use of trade secrets and including confidentiality provisions in severance agreements.

In the latest installment of our video series on trade secret litigation, Nick Armingtion provides an overview of the two types of relief available to parties who have had their trade secrets stolen – injunctions and damages. 

Companies across the United States quickly rolled out remote work arrangements in response to the COVID-19 health crisis, and as virus caseloads continue to climb, the trend is likely to continue. As working off-site becomes “the new normal,” companies can institute systems and policies to protect their valuable trade secrets.

In the second of a series of videos discussing developments in trade secret litigation, Mintz’s Adam Samansky discusses steps companies can take to implement reasonable protective measures to maintain secrecy of information in this remote work environment including confidentiality agreements, trade secret protection plans, and restricting access. 

The sharp upswing in trade secret litigation triggered by the global financial crisis of the late 2000s taught companies some hard lessons about trade secret theft and disputes.