Here are the noteworthy posts, articles and cases of the past week:
Trade Secret and Non-Compete Cases and Posts:
- Capital One has squeezed $20 million from former executives John Kanas and John Bohlsen on the eve of a jury trial that might have prevented their new employer’s expansion into New York, reports Reuters’ Alison Frankel in her On The Case Blog. As readers of this blog may recall, I posted Kenneth Vanko’s fine report on this case when U.S. District Court Judge Liam O’Grady of the Eastern District of Virginia enforced the former executives’ non-competes after taking into account their sophistication and commercial expertise. The two men had signed an agreement that awarded restricted stock deals worth $24 million for Kanas and $18 million for Bohlsen in exchange for the non-compete clauses.
- Alliant has scored a big victory in its ongoing dispute with Aon over allegations that former Aon employees had improperly poached clients. In June 2011, Alliant and former Aon employees Peter Arkley, Ken Caldwell and Michael Parizino sued to challenge the enforceability of the non-competes the men signed while at Aon. Last Wednesday, Judge Dale Fischer of the U.S. District Court for the Central District of California struck down the non-compete provisions in Aon’s employment agreements.
- Don’t identify your general counsel (GC) as a witness in a trade secret case cautions Womble Carlyle’s Trade Secrets Blog in a recent post. After an unsuccessful injunction against its competitor Logoplaste, the plaintiff Portola was ordered to produce its GC’s damaging emails because he was listed as a witness. The emails revealed he had urged Portola to sue just to hurt Logoplaste’s business interests and had hired Logoplaste’s regular counsel in an unrelated matter to create a conflict. Finally, although Portola claimed that its confidential documents were used to lure an employee away, the emails showed the very opposite — that the GC knew the employee approached Logoplaste first. As a result, the court ordered Portola to pay all of Logoplaste’s attorneys’ fees for the three years of litigation.
- In another post about a trade secret case gone wrong, Foley & Hoag’s Massachusetts Non-Compete Law Blog reports that the counterclaim arising from the unsuccessful case brought by Brocade Communications against its former employee, David Cheung, has been dismissed. The court dismissed the counterclaim because the only evidence in support of the claim arose from settlement discussions and was therefore inadmissible. Law 360 has since reported that the parties have agreed to dismiss their respective claims against one another.
- In an article entitled “Arbitrators Slam SunTrust’s Legal Tactics In Non-Solicitation Case Against Former Employee,” Forbes‘ Bill Singer writes about a recent FINRA arbitration decision scaling back a covenant because of the “hardball” tactics of SunTrust’s counsel. According to Bill, the panel was unhappy with the fact that SunTrust secured an ex parte TRO despite knowing the former employee had an attorney who had requested notice of any legal proceeding.
- Burr & Forman’s Non-Compete and Trade Secrets Blog has a good post about the benefits of a seldom-used provision called a “Full Time and Attention” provision. This provision requires that an employee dedicate his or her full efforts to her job up until departure. As many employees may use the bulk of their final weeks planning and readying to leave, this provision could provide another arrow for the employer to have in its quill for a breach of contract claim in a potential lawsuit.
- Good news for employees in New Hampshire, reports Seyfarth Shaw’s Trading Secrets Blog. Beginning July 14, 2012, employers in New Hampshire will have to disclose that they will require a non-compete or anti-piracy agreement as a condition of employment prior to making offers of new employment and to existing employees with an offer of change in job classification.
Computer Fraud & Abuse Act Cases and Posts:
- Covington’s Inside Privacy Blog details the recent dismissal of CFAA and trespass claims against Amazon. In Del Vecchio v. Amazon, a district court in Washington dismissed the claims that Amazon “exploit[ed]” browser controls in Internet Explorer by publishing a “gibberish” P3P compact policy and using Flash cookies for tracking. The court found, among other things, that the plaintiff failed to meet the requisite $5,000 showing for damages.
Cybersecurity Posts and Articles:
- In an article entitled “The promises and perils of the cloud” for Inside Counsel, James Kunick explains things in-house counsel should consider before making the big move to cloud computing.
- “Negotiate a Source Code Audit to Resolve Software Theft Disputes” advises Daniel T. McClosky for Corporate Counsel.
- “BYOD wave sparks big security concerns” warns Barb Darrow for Gigaom.
- “Insider threat: The game has changed” writes Bill Anderson for SC Magazine.
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