Here are some noteworthy articles, cases and posts from the past week:
Trade Secrets and Non-Competes:
- Todd Sullivan’s Trade Secrets Blog is reporting that Motorola and Lemko have settled their long-running trade secret dispute. On January 13, 2011, the Northern District of Illinois denied Lemko’s motion for summary judgement, paving the way to trial and presumably putting greater pressure on the parties to settle. Motorola filed the lawsuit four years ago against Lemko, a company formed by several former Motorola employees, and former Motorola software engineer Hanjuan Jin. Jin was about to board a one-way flight to China in 2007 when she was subjected to a random search at O’Hare Airport that turned up hundreds of documents from Motorola.
- In another high profile trade secret case in Chicago, Groupon’s two former managers have filed counterclaims against Groupon claiming that the complaint is abusive and specious. I wrote about this case last November, which was filed with a flourish just before Groupon’s IPO. Groupon has accused the two employees of improperly using its trade secrets after they left to join Google Offers. Lawyers for the managers are now accusing Groupon of using “sham litigation” to bully and silence these former employees and obtain intelligence on a burgeoning competitor. This tactic worked famously well here in Columbus, Ohio in American Chemical Abstracts v. Leadscope, to the tune of over $25 million for the counterclaimants (the case is on appeal before the Ohio Supreme Court).
- Bloomberg’s Business Week has an article this week emphasizing the increasingly large verdicts in trade secret cases, and details the DuPont v. Kolon and St. Jude Medical disputes. The article notes, among other things, the growth of trade secret litigation and the factors contributing to its growth (employee mobility, technology making it easier to copy or download information, etc.).
- Speaking of DuPont, a federal criminal case brought in connection with the alleged theft of trade secrets relating to titanium dioxide, an ingredient used in paints and other industrial materials, is back in the news. The Wall Street Journal is reporting that federal prosecutors successfully opposed bail for Walter Liew, a Chinese national who has admitted to obtaining DuPont’s trade secrets and selling them to companies affiliated with the Chinese government. Liew has been charged with providing false statements to authorities and obstruction of justice, and he is expected to be indicted on trade secret theft charges soon as well.
- Neil Weinrich has done a fine post in the Georgia Non-Compete & Trade Secret News Blog cautioning defendants against removing an injunction case to federal court that does not specify the amount in controversy. Neil’s post discussed a recent decision from the Northern District of Georgia that remanded the non-compete case back to state court, reasoning that evidence of the employee’s past salary was too speculative to establish the amount in controversy. I believe the standard in the Sixth Circuit (where I frequently practice) is a little more lenient in injunction cases but this is a useful post for those considering removal of a case in the Eleventh Circuit.
- The Technology Law and Marketing Blog has reported that the remaining claims for intentional and negligent interference in the PhoneDog v. Kravitz dispute have recently survived a motion to dismiss. This case has generated tremendous media and blogosphere interest; last month, the district court found that the other claims, including a dubious misappropriation of trade secrets claim, were sufficiently plead to survive an earlier motion to dismiss. PhoneDog has sued its former employee Noah Kravitz over the ownership of a high profile Twitter account (17,000+ followers).
- In the patent and trade secret context, Dennis Crouch of Patently O testified before Congress yesterday about the prior commercial use defense under the America Invents Act. As readers of this blog will recall, James Schweikert and I have written several posts about the impact this new defense may have on trade secret protection. Dennis’ take? He planned on testifying that it was “unlikely to have any real or measurable impact on the market for U.S. patents, demand for innovation, or process of patent litigation.” As a review of the comments accompanying that post indicate, many of his readers disagree.
- I recently stumbled across a website called Cyberscrime Review launched last year by Jeffrey Brown, an enterprising third-year law student from the University of Mississippi. The blog provides a good summary of Computer Fraud and Abuse cases and other cybersecurity issues and is worth following.
News You Can Use:
- For those worried about the security of their smartphones, the New York Times’ Personal Tech site has a good article on precautions you can take to protect you and your phone.
- For those not suffering from post-SOPA fatigue, take a look at Jesse Saviar’s solid analysis of both sides’ arguments in “No SOPA for you! Why SOPA Led to Such an Acrimonious Fight and What We Can Learn from It.”