Episode 27 of Fairly Competing is out!

In this episode, recorded on January 3, 2025, Ben, Russell and I take a look back on some of the more significant developments in trade secret and restrictive covenant law in 2024, and try to give some insight into what to expect in 2025. We discuss the FTC’s noncompete ban, extraterritoriality of the Defend Trade Secrets Act, damages in trade secret cases, legislative changes to state noncompete laws, noteworthy cases from various states and the Third Circuit, and other issues and predictions.

You can join us on Spotify or Apple Podcasts, or go to FairlyCompeting.com, if you’re just looking for the RSS feed.

And, because this show is for you, please email Ben, Russell or me with any topics you’d like to hear us discuss. While we cannot offer legal advice on the show, we can certainly discuss any issues you may be wondering about.

Trade secret litigation is expensive. But trade secret owners often don’t have the resources to pay for the litigation necessary to protect their rights against a larger adversary with deeper pockets.

Enter: litigation funding.

Litigation funding can level the playing field and provide the resources necessary for the trade secret owner to recover damages and enforce its trade secret rights. 

Join Ben, Russell as and me as we talk with Stephanie Southwick of Law Finance Group about how litigation funding works, its pros and cons, and things to know if you or your client is considering funding.

So, come join us on Spotify or Apple Podcasts. Or, if you’re just looking for the feed, it’s here: Fairly Competing RSS feed.

Litigation Funding with Guest, Stephanie Southwick (Fairly Competing, Episode 26)

I will be speaking at the American Intellectual Property Law Association’s 2024 Annual Meeting on Saturday, October 26, 2024 from 9:00 a.m. – 10:45 a.m. ET at the Closing Plenary Session as part of the IP Year in Review panel at the Gaylord National Resort in National Harbor, Maryland.

It will be a dynamic session as I join Kevin Tottis of TottisLaw (copyright), Amy L. Landers of Drexel University’s Thomas R. Kline School of Law (patent) and Katie Laatsch Fink of Banner Witcoff (trademark) on a panel moderated by Jocelyn Ram of The Broad Institute of MIT and Harvard. I’ll be covering the past year’s developments in trade secrets law.

We’ll be discussing trends that cut across different IP subject matters, including extraterritoriality (Motorola v. Hytera), administrative rulemaking (Loper and the FTC) and damages (unjust enrichment verdicts including the Appian v. PegaSystems and Syntel v. Trizetto decisions).

REGISTER HERE: 2024 Annual Meeting

Hope you can join us.

Remedying the overseas misappropriation of U.S. companies’ trade secrets, particularly in China, was one of Congress’ core goals when it enacted the Defend Trade Secrets Act (DTSA) in 2016. But despite that goal, some district courts have wrestled over the extent to which the DTSA could apply to misconduct that occurred abroad. Now, in Motorola Sols., Inc. v. Hytera Commc’ns Corp. Ltd., the U.S. Court of Appeals for the Seventh Circuit has resoundingly affirmed the extraterritorial reach of the DTSA, finding that worldwide sales of a product incorporating misappropriated trade secrets may be recoverable as damages. The Seventh Circuit has ruled that, under the DTSA, liability can accrue for acts committed wholly abroad if some act in furtherance of the misappropriation occurred in the U.S. In the Motorola case, the marketing of the product at trade shows in the U.S. was a sufficient act in furtherance of the overseas misappropriation for a damages award including sales from around the world.

Continue Reading Motorola v. Hytera: The Seventh Circuit Upholds Damages for Worldwide Sales under the Defend Trade Secrets Act

On April 23, 2024, the FTC adopted its noncompete rule to ban virtually all employee noncompetes. For background, see my posts on the rule here and here.

The rule was scheduled to go into effect on September 4, 2024. But on August 20, 2024, Judge Dana Brown of the U.S. District Court for the Northern District of Texas vacated the rule.

Companies and employees have a reprieve, but they should not let their guard down. In this episode, Ben, Russell and I discuss what happened, what to expect going forward, and what companies should do now to protect their trade secrets, confidential information, customer goodwill, and the integrity of their workforce.

You can join us on Spotify or Apple Podcasts, or go to FairlyCompeting.com, if you’re just looking for the RSS feed.

And, because this show is for you, please email Ben, Russell or me with any topics you’d like to hear us discuss. While we cannot offer legal advice on the show, we can certainly discuss any issues you may be wondering about.

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Well, that was quick. After rejecting a request for a nationwide injunction in her original opinion granting the plaintiffs’ motion for a preliminary injunction, and then summarily denying a motion to reconsider that ruling, this afternoon U.S. District Court Judge Ada Brown reversed course, granted summary judgment against the FTC, and effectively entered a nationwide ban against the Federal Trade Commission’s Final Rule banning noncompetes. This should mean that employers around the country will not have to send out notices to their former and current employees telling them their noncompetes are no longer valid, as the Final Rule required by September 4, 2024. For a concise review of Judge Brown’s opinion, read on.

Continue Reading Ding, Dong, the Rule is Dead: Judge Brown Effectively Enters a Nationwide Ban Preventing Enforcement of the FTC’s Noncompete Rule

I will be providing a 1-hour webinar for the Ohio State Bar Association entitled “Strategies for Defusing Trade Secret Disputes” on Friday, August 16, 2024 at 1:00 p.m. ET. Here’s a description of the presentation:

What can employers and employees do to avoid litigation and minimize their risk once they are ensnared in a trade secret lawsuit? The number of trade secrets and restrictive covenant cases continue to grow each year. These cases are notoriously contentious and can be extremely expensive. We’ll look at high profile trade secret lawsuits and share tips to minimize your client’s risk of and exposure in litigation.

You can register for the seminar here.  Hope you can join us.

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As widely predicted, U.S. District Court Judge Dana Brown granted Ryan, LLC’s motion for a preliminary injunction against the Federal Trade Commission’s (FTC) Final Rule banning noncompetes. In her July 3, 2024 opinion, Judge Brown found that the FTC “lacks substantive rulemaking authority with respect to unfair methods of competition.” She also enjoined the FTC from implementing or enforcing the Final Rule against the parties in that case, which included the plaintiff Ryan, LLC, the U.S. Chamber of Commerce and the Business Roundtable.

But while employers may cheer that decision, their noncompetes are not out of the proverbial woods yet. To date, Judge Brown has declined to issue a nationwide injunction prohibiting the FTC from enforcing its rule against other parties. This means that the FTC may still try to enforce its Final Rule against other employers who are not parties to that lawsuit. The FTC’s Final Rule becomes effective Wednesday, September 4, 2024 and it requires employers to provide a notice to current and former employees that their noncompetes are no longer enforceable. Given that impending deadline, many employers are concerned about the uncertainty left by Judge Brown’s decision. However, as explained below, the Final Rule may provide cover for employers under a “good faith” exception.

Continue Reading Worried about the Current Uncertainty Over the FTC’s Noncompete Ban? How the FTC’s “Good Faith” Exception May Provide Cover to Employers

On April 23, 2024, the Federal Trade Commission issued its final rule banning the use of most employee noncompetes throughout the United States.  It is estimated that this new rule will impact at least 30 million employment contracts, including confidentiality agreements and other forms of employee restrictive covenants.  Several lawsuits have already been filed to stay that rule and challenge its validity.

My partner Chris Tackett and I will be providing a 1-hour webinar for the Ohio State Bar Association entitled “The FTC Just Issued A Rule Banning Noncompetes: What you need to know and should be doing to protect your company” on Thursday, June 6, 2024 at 1:00 p.m. ET. In-house counsel, human resources professionals and senior executives will learn the specifics of the rule, who is affected by the rule, and steps they can take now to protect their trade secrets and customer relationships.

You can register for the seminar here. 

As readers of this blog know, on April 23, 2024, the Federal Trade Commission voted to adopt a rule banning virtually all employee noncompetes. The rule is scheduled to go into effect on September 4, 2024. If that happens, how will companies protect their trade secrets, confidential information, customer goodwill, and the integrity of their workforce?

Join John, Ben, and Russell for a discussion of what the FTC’s noncompete rule will do, when it will go into effect, legal challenges to the rule, and what companies can do to limit the impact of the new rule.

Listen to us on Spotify or Apple Podcasts. Or, if you’re just looking for the feed, it’s here: Fairly Competing RSS feed.The FTC’s Rule Banning Noncompetes (Episode 24)