It was a slower week in the trade secret and non-compete realm, so I had the opportunity to catch up on some recent decisions that had not made it into last week’s wrap-up:

Trade Secret and Non-Compete Articles:

  • There were two major rulings in the Mattel v. MGA dispute last week, one in favor of Mattel and the other in favor of MGA. In a decision certain to please both MGA and its lawyers, the Southern District of California ruled that MGA’s insurers had a duty to defend MGA in its litigation against Mattel. In the other decision, Judge David Carter dismissed MGA’s anitrust counterclaim against Mattel, ruling it was barred by, among other things, the doctrine of res judicata under California law. Copies of both opinions are attached as PDFs below.
  • Speaking of antitrust counterclaims in high profile trade secret cases, Kolon continues to take it on the chin in its dispute with DuPont. Earlier this week, Judge Payne sanctioned Kolon for failing to timely contact its sales representatives and produce documents after providing DuPont and the Court assurances it would do so in a hearing last year. Judge Payne found the violation of the discovery order was in bad faith and as a result, awarded attorneys fees and held he would impose an adverse inference as to any missing documents.  A PDF copy of the opinion can be found below. 
  • A license agreement’s provisions can’t trump the California Uniform Trade Secrets Act (UTSA) when it comes to a party’s right to reverse engineer a product. An article by Douglas Wickham of Littler details a recent decision by the Central District of California in Aqua Connect, Inc. v. Code Rebel, LLC holding that the violation of a license provision forbidding reverse engineering did not constitute “improper means” under the UTSA.
  • Alison Frankel’s On The Case Blog has an update on the University of Pennsylvania’s trade secret row with its former chief researcher, Dr. Craig Thompson. When I wrote about this dispute last month, I noted the absence of an employment agreement as a potential Achilles Heel in Penn’s claim that Dr. Thompson had taken its trade secrets for his research for his own company. However, according to Alison, Penn has filed a second action with a more detailed complaint that identifies an employment agreement with Dr. Thompson that confirms its ownership of the trade secrets at issue and supplies greater detail about his alleged duplicity. 
  • A study commissioned by the National Science Foundation and the U.S. Census Bureau found that trade secrets are perceived as an increasingly important method of intellectual property protection. According to the study, more businesses reported that trade secrets were important or somewhat important (14%) than for patents (9%).
  • Littler’s Unfair Competition and Trade Secrets Counsel Blog writes about a recent decision reinforcing the severe consequences to a party who fails to preserve evidence. In Amron Diving Supply v. Hydrolinx Diving Communications, the Southern District of California sanctioned the defendant/former employee for violating a preservation order because he “destroyed computer data by using wiping software and destroyed and threw away hard drives,” installed “document destruction software on two computers to permanently eradicate data,” and allegedly “installed a new hard drive on a third computer after the court issued the preservation order and manipulated its system clock to make it appear older.”  
  • “Are non-competes bad for innovation?” asks The Intangible Economy.  It is a question that has been asked a lot lately, and opponents of non-competes frequently point to the success of Silicon Valley (and the bar against non-competes in California) as evidence that innovation is spurred in their absence.  As the article notes, the academic community has certainly weighed in against them. I smell a future post…. 


  • WikiLeaks is back!  The New York Times is reporting that WikiLeaks has published confidential emails from the security consulting firm, Stratfor. Stratfor had reported last December that Anonymous had hacked its servers. According to WikiLeaks, the emails show concerted attacks by the U.S. government directed at Julian Assange.
  • If you are negotiating a contract with the government, John Burd of Wiley Rein provides “Six cybersecurity questions for in-house counsel” to pose in those negotiations. 

News You Can Use:

  • For those still trying to preserve their privacy, the c/net article “How to prevent Google from tracking you” may help. Good luck.

MGA-Hartford Ins Order.pdf (166.95 kb)

MGA v. Mattel dismissal order.pdf (122.12 kb)

Kolon Industries v E I du Pont re Feb. 2012 Sanctions Opinion.pdf (318.10 kb)