One of the primary arguments for enacting the Defend Trade Secrets Act (DTSA) in 2016 was the perceived need for the protection of the trade secrets of U.S. companies abroad.  These issues received significant media attention with the focus far and away on China; by way of example, 60 Minutes cited the Justice Department as saying “the scale of China’s corporate espionage is so vast it constitutes a national security emergency, with China targeting virtually every sector of the U.S. economy, and costing American companies hundreds of billions of dollars in losses — and more than two million jobs.”  A consensus emerged that existing civil trade secret remedies at the state court level were inadequate.  These concerns led to calls for a robust federal statute that would provide a civil remedy empowering federal courts to assert their jurisdiction over parties outside the United States.  An important decision issued by the U.S. District Court for the Northern District of Illinois last year, Motorola Solutions v. Hytera Communications Corp.,  2020 U.S. Dist. LEXIS 35942 (N.D. Ill. Jan. 31, 2020), paved the way for other federal courts over the past year to exercise jurisdiction over international actors and international conduct under the DTSA.  This blog post summarizes these recent decisions. Continue Reading Trade Secrets Without Borders: The Defend Trade Secret Act’s Promise as an Extra-Territorial Statute Finally Comes to Pass

Episode 9 of Fairly Competing is out!

In this episode, Ben Fink, Russell Beck, and I discuss litigating trade secret cases generally and post-COVID, this time with a focus on the reasons for the lack of civility in trade secret and restrictive covenant cases — and what to do about it.

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.

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.

*And, thank you again to Erika Hahn for the intro and outro voice over, Tyler Beck for the music, and mohamed_hassan for the base image.

Episode 8 of Fairly Competing is out!

In this episode, Ben Fink, Russell Beck, and I discuss litigating trade secret cases — including expedited discovery, depositions, protective orders, and hearings on motions for temporary restraining orders and preliminary injunctions — generally and post-COVID.

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.

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.

*And, thank you again to Erika Hahn for the intro and outro voice over, Tyler Beck for the music, and mohamed_hassan for the base image.

You would think that evidence of the improper downloading of 5,000 files by a former employee who then invokes his Fifth Amendment privilege against self-incrimination, coupled with the remarkable similarity between inventions (see the picture alongside) would be enough to demonstrate circumstantial evidence of the misappropriation of trade secrets.  If you thought so, you would be wrong.  In one of the highest profile trade secret case since Waymo v. Uber, the plaintiff Wisk Aero thought it had its competitor dead to rights after expedited discovery revealed these and other facts.  However, U.S. District Court for the Northern District of California Judge William H. Orrick disagreed, rejecting the circumstantial evidence presented by Wisk Aero because it did not tie the alleged trade secrets with the circumstantial evidence of misappropriation.  As explained below, this case is the latest in a line of decisions declining to find that evidence of improperly downloaded information may be sufficiently compelling circumstantial evidence of misappropriation.  (A copy of the opinion can be found here). Continue Reading Wisk Aero LLC v. Archer Aviation Inc.: A High Profile Trade Secrets Case Shows the Limits of Circumstantial Evidence

Episode 7 of Fairly Competing is out, and it’s a wrap up of our previous episode, Trade Secret Roundtable on Developments and Emerging Issues, a program presented by NERA Economic Consulting.  As you will remember, Ben Fink, Russell Beck, and I were panelists, along with Dr. Stephanie Demperio and Vicki Cundiff.

The program covers emerging issues in trade secrets litigation, including what satisfies the reasonable efforts requirement; considerations in early case assessment, including when and how to involve an expert; how the COVID-19 pandemic has impacted trade secret litigation; and new developments in noncompete agreements and the expected impact on trade secrets litigation.

This episode is the second half of the program.

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.

 

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.

*And, thank you again to Erika Hahn for the intro and outro voice over, Tyler Beck for the music, and mohamed_hassan for the base image.

Earlier this month, I wrote a post about President Biden’s executive order directing the Federal Trade Commission (FTC) to take action to curtail the abuse of non-competes and other employment agreements that could limit employee mobility.  In response to that executive order, nearly sixty lawyers (including yours truly) joined in a letter asking the FTC to exercise care in deciding whether to assert jurisdiction in this area.  That letter, drafted by Russell Beck, lays out multiple grounds for concern about the FTC asserting itself in an area traditionally addressed by state legislatures.

Russell’s letter addresses a wide range of topics and I would commend those with interest in this area to read it.  It provides a thorough consideration of the reasons for the need for non-competes in certain situations and also addresses common misconceptions about their use.  The letter also notes a key development that is already taking place — that many states are actively taking steps to address the issues giving rise to the perceived need for federal intervention.  Most notably, the use of non-competes against low wage workers — arguably the biggest driver behind the push to curtail or ban non-competes — has been recently addressed by ten states including Illinois, Maine, Maryland, Massachusetts, Nevada, New Hampshire, Oregon, Rhode Island, Virginia and Washington.

We’ll see what actions the FTC decides to take and I will continue to blog about any future developments.

Episode 6 of Fairly Competing is out, and it’s a departure from our usual podcast.

We are making available (through this episode and the next) Trade Secret Roundtable on Developments and Emerging Issues, a program presented by NERA Economic Consulting at which Ben Fink, Russell Beck, and I were panelists, along with Dr. Stephanie Demperio and Vicki Cundiff.

The program covers emerging issues in trade secrets litigation, including what satisfies the reasonable efforts requirement for establishing a trade secret; considerations for early case assessment of trade secret cases, including when and how to involve an expert; how the COVID-19 pandemic has impacted trade secret litigation; and new developments in noncompete agreements and the expected impact of those developments on trade secrets litigation.

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.

And, because this show is for you, please email BenRussell 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.

*And, thank you again to Erika Hahn for the intro and outro voice over, Tyler Beck for the music, and mohamed_hassan for the base image.

As he promised during the 2020 presidential campaign, President Joe Biden issued an Executive Order on Friday that directs the Federal Trade Commission (FTC) to curtail the use of unfair non-competes or other agreements that may limit employee mobility.  This Executive Order is the culmination of efforts by federal legislators to ban or limit non-competes.  A number of bills have been brought to the floor of the U.S. Senate, mostly by Democratic Senators, and none of been able to marshal sufficient bipartisan support to advance.   As those legislative efforts fizzled, several of those senators then lobbied the FTC to ban non-competes, which in turn held hearings over whether to take regulatory action early last year.

As explained in greater detail below, the Biden Executive Order is short on detail and simply encourages the FTC to take unspecified action against unfair non-competes and other agreements limiting employee mobility.  On its face, the Executive Order focuses on “unfair” agreements which have generally been understood to mean non-competes imposed on lower-wage workers.  Should, however, the FTC take a more aggressive approach to ban all non-competes, that could harm one of the key drivers of employment in the U.S. — small and medium-sized businesses that more heavily rely on non-competes to protect their companies. Continue Reading The Biden Executive Order Seeking to Curtail Non-Competes: Why It May Be Bad for Small Companies

In this episode, Ben Fink, Russell Beck, and I discuss the standards that apply and issues that arise when seeking or defending against an injunction in a trade secret or restrictive covenant case, and how they’ve been impacted by COVID. We also discuss the infamous “Unicorn Case” — a federal court decision issued in March 2020 that expressed skepticism over requests for emergency injunctions in the midst of a pandemic — and whether geographic restrictions make sense anymore.

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.

And, as always, please don’t hesitate to 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 interested in.

*And, thank you again to Erika Hahn for the intro and outro voice over, Tyler Beck for the music, and mohamed_hassan for the base image.

 

 

Fairly Competing, Episode 5: Litigating Trade Secret and Restrictive Covenant Injunctions, Generally and in the COVID Era

The Sedona Conference’s Working Group on Trade Secrets has just published its draft Commentary “Protecting Trade Secrets throughout the Employment Life Cycle.”  The Commentary, which I helped draft with fellow Senior Editors Russell Beck and Robert Milligan, Managing Editor Jim Ko, and Editors-in-Chief Vicki Cundiff and Jim Pooley (as well as with the help and support of many other team members too numerous to list), addresses the paradox of trade secret protection — namely, that the individuals that employers depend on most to protect their trade secrets may prove to be their future competitors.

The forward of draft Commentary better sets the stage for this tension, which primarily arises from the employer’s need to protect what it perceives to be its trade secrets and the potential mobility of the employee, who may find himself/herself working at a competitor some day:

While in most circumstances, employers and employees will be aligned in protecting trade secrets for their mutual benefit at the beginning and during the employment relationship, at the end of the relationship, there is an inherent tension between an employer’s interest in protecting its trade secrets and an employee’s interest in engaging in future employment. This tension is further complicated by the fact that, although the departing employee is at the end of one employment life cycle, they are typically simultaneously at the beginning of the next, where the former employer’s risk of loss of its trade secrets corresponds directly to the new employer’s risk of infiltration of those same trade secrets.

The Commentary addresses those tensions chronologically, starting at the recruiting and on-boarding period, then the period of employment, and finally, the during the off-boarding period.  For those interested in reading more about this Commentary, you can download the Commentary from here. Comments can be submitted through September 30, 2021, to comments@sedonaconference.org.