Here are the noteworthy posts of the week:
Trade Secret and Covenant Not to Compete Posts, Cases and Articles:
- In the latest high profile battle over which state’s law should apply (i.e., California v. every other state), sports agent Aaron Mintz is battling his former employer Priority Sports & Entertainment over the enforceability of his non-compete. Mintz filed a lawsuit in California on the day he left Priority Sports to join powerhouse Creative Artists Agency. Mintz, who has resided in California for the past 11 years, is challenging the enforceability of his employment agreement’s choice of law provision, which provides that Illinois law will apply and he is asking the California federal court to set aside the restrictive covenant on the grounds that it is against California’s public policy.
- Does an employer get screwed if it can’t extend its non-compete past the expiration date? Littler’s Unfair Competition & Trade Secrets Counsel Blog has a fine post about this rule in many states — namely, that even if an employee breaches a non-compete, an employer cannot extend the covenant past its expiration date to get the full benefit of its covenant. For what it is worth, Ohio is an exception to this general rule, as it allows an employer to get the full term of its covenant provided the employer initiates the action before the expiration of the non-compete.
- Ignore a permanent injunction and you may find yourself in jail, at least that’s what a Nebraska insurance agent is learning. Larry Hall was jailed because of his most recent violation of a judge’s order that he stop writing policies and commissions to certain clients, having been held in contempt before for violating a previous injunction enforcing a non-compete, according to the insurance website ProducersWEB.com.
- Freedom of Information Act Requests (FOIA) seeking potential trade secrets are becoming a hot topic. Law360 is reporting that power plant operator PPL Montana LLC has sued the EPA to stop it from releasing data to two environmental groups about upgrades to its Montana coal-fired plant, arguing the move would reveal confidential business information to competitors.
China and Trade Secrets:
- Should you be worried about employees providing trade secrets to Chinese competitors? Peter Torren says you should and notes that 86% of recent prosecutions under the Economic Espionage Act (EEA) have had a connection to China in an article for Forbes entitled “Chinese Espionage: The Risks Within U.S. Companies.” Peter urges Congress to act on the pending Cybersecurity legislation and proposed civil amendment to the EEA.
- U.S. corporations have lost more than $13 billion due to spying and that’s just for cases now under FBI investigation according to FBI counterintelligence chief Frank Figliuzzi in an article entitled “China-linked economic spying on the rise” according to a post by The Beaumont Enterprise.
Posts and Articles on Procedural Issues Important in Trade Secret Disputes:
- What does it take to persuade a court to order the imaging of computers of a departing employee? KL Gates has a fine post in its Electronic Discovery Law Blog about a recent case, United Factory Furniture Corp. v. Alterwitz, that provides a template for what you may need to show to image that evidence (always good to have in your hip pocket in a trade secret case).
- You have great electronic evidence but can you authenticate it? Given the growing importance of social media and other electronic communications in litigation, authentication may be a greater challenge than you might expect. Eric Goldman’s Technology & Marketing Blog reports on a recent case allowing “circumstantial” authentication and provides other links to cases looking at this issue.
- Are settlement negotiations discoverable? The Eastern District of Texas says “maybe,” according to a post about a recent ruling in a patent case, Hill v. Abt. According to EDtexweblog, in the context of determining the reasonableness of a royalty rate, “[w]hether the license negotiations and settlement discussions are properly discoverable will likely depend on whether, within the context of each case, they are an accurate reflection of the patents’ underlying value and whether their probative value exceeds their prejudicial effect.”
Cybersecurity Articles and Posts:
- “With so much at stake, companies turn to hired hackers” according to the Los Angeles Times.
- “Is the boss spying on you? Cyber-snooping on rise,” according to an article by The Palm Beach Post News.
- “Do you have a data breach response plan?” asks tech blogger Pete DiNardo (thanks to Mark Halligan for locating this one, which I missed from last February).
- “Refund Tax Fraud, iPhone, Feed Identity Theft By Employees” reports Janet Novack of Forbes.
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