Here are this week’s noteworthy posts and articles on trade secrets, non-competes and cybersecurity:
Trade Secrets and Non-Competes:
- The conviction of former Goldman Sachs’ programmer, Sergey Aleynikov, under the Economic Espionage Act (EEA) for stealing Goldman’s source code was overturned by the Second Circuit Court of Appeals within hours after oral argument last week. The Second Circuit issued a short order advising of a more detailed opinion later, but no grounds were provided. According to a thorough article in the New York Times, the Second Circuit likely focused upon “whether Goldman’s high-frequency trading system, and the code upon which it was built, was a ‘product produced for interstate commerce’ within the meaning of the statute.” This promises to be an important opinion under the EEA and I will post later when it comes out.
- IBM used an unconventional defense — the plaintiff’s deceased mother — to prevail in a trade secret case in the Northern District of California. Alison Frankel’s On the Case Blog reports that in Bierman v. IBM, IBM successfully argued that the statute of limitations barred the plaintiff’s claims because he could not produce evidence that his deceased mother, to whom he transferred his technology for several years, was unaware of the alleged misappropriation.
- In the latest salvo in the DuPont v. Kolon dispute, Eastern District Court of Virginia Judge Robert Payne denied Kolon’s request to have him recuse himself because of his role in a 1985 patent dispute for DuPont while he was a partner with McGuire Woods, one of the law firms representing DuPont. The decision, which was issued in the remaining antitrust portion of the case brought by Kolon, rejected Kolon’s arguments on the merits and as untimely. (A link to the opinion can be found below).
- The Texas Employment Law Update Blog reports on a recent decision refusing to enforce a forfeiture provision in a stock incentive program that was triggered by a non-compete violation. The decision, Drennen v. Exxon Mobile Corp., found that the provision in question did not comply with the Texas Covenant Not to Compete Act.
- Seyfarth Shaw’s Trading Secrets Blog has an outstanding post about a recent decision by the Southern District of California, Platinum Logistics v. Mainfreight, involving the Computer Fraud and Abuse Act (CFAA). This is a rare CFAA decision from a court within the Ninth Circuit, as the district courts and litigants await the Ninth Circuit’s en banc reconsideration of U.S. v. Nosal. According to Robert Milligan, the former employee’s breach of her non-disclosure agreements could qualify as a violation of the CFAA as it is currently interpreted.
- For you compulsive test takers, take a crack at the hypotheticals offered up in a recent post entitled “Would You Know a Trade Secret If It Jumped Up and Bit You?” on Coatings World.
- And for those who don’t think the issue of trade secret misappropriation in China has reached the tipping point, take a look at The Onion, which provides its own parody of the recent Hanjuan Jin conviction. In the post, The Onion reports that a Motorola engineer was convicted of stealing “the plots to the next three Droid commercials” and “closely guarded, highly advanced tablet and smartphone tech specs that Motorola originally stole from Apple and Samsung.” Ouch.
- Stroz Friedberrg, the renowned security firm, confirms in an article, “Securing Corporate Data in a Law Office’s Computer Network,” that lawyers and law firms are hacking targets. The article by Catherine Dunn in the Corporate Counsel site confirms a number of points in an earlier post of mine, including the use of “spear-phishing” to trick unsuspecting lawyers. It also provides an excellent checklist of steps a firm and its lawyers can take to protect themselves from these attacks.
- According to Wired, Anonymous is promising regularly scheduled attacks on Fridays. Although Anonymous’ mastery of the news cycle may be suspect, the government is taking them seriously on other fronts. According to the Wall Street Journal, National Security Agency director, Gen. Keith Alexander warns that Anonymous could have the ability within the next year or two to bring about a limited power outage through a cyberattack.
News You Can Use:
- With all the news about app providers downloading personal information, you may want to take a look at “Smartphone Security Blankets,” an article that appeared in last weekend’s New York Times, as well as Smart Money’s “Keeping Prying Eyes Off Your Phone.”