Before posting links to the noteworthy trade secret, non-compete and cybersecurity stories from the past week, I wanted to remind everyone that the ABA Blawg 100 is still accepting nominations until tomorrow, Sept. 7th, which means there is one more day for you to nominate your favorite legal blogs for inclusion on this prestigious list.
Of course, I mention this with the hope that this blog might be among your favorites, and, if so, that you would take a moment to submit it to the ABA for consideration. However, whether you do so or not, my genuine and sincere thanks for simply reading The Trade Secret Litigator. You, my readers, are what have made this blog what it is today, and I wouldn’t be here without your feedback and support.
For those interested in nominating this or any other blog, simply go to http://www.abajournal.com/blawgs/blawg100_submit and enter your name, employer, city, email address, nominated blog URL, and a description in 500 characters or fewer of why you are a fan of that blog.
Now, on to the news of the week!
Noteworthy Trade Secret and Non-Compete Posts and Cases:
- Can you prevent a newspaper from publishing your trade secrets? Not in federal court, according to a fine post by Paul Freehling for Seyfarth’s Trading Secrets Blog. Paul details a recent decision by the U.S. District Court for Louisiana in Rain CII Carbon, LLC v. Kurz, finding that an effort to prevent media dissemination of financial trade secrets amounted to a forbidden prior restraint under the First Amendment (a TRO had been granted by a state court before removal to federal court). Longtime readers may recall that this issue gained prominence last year when WikiLeaks was flexing its muscles. In my view, federal courts are unduly sensitive to claims of prior restraint while states like California and Ohio have been more inclined to balance the various interests in these disputes.
- Florida employers may breathe a little bit easier after a merger or acquisition, as Carlon Fields’ Thomas Dye reports that the First District Court of Appeal of has held that an assignment of a non-compete may be permissible even if the non-compete fails to provide successor and assign language. In DePuy Orthopaedics, Inc. v. Waxman, 2012 WL 3138681 (Fla. 1st DCA August 3, 2012), the First District reversed the denial of a preliminary injunction and found that a covenant not to compete could be assigned despite the absence of the customary “successor and assign” language. Whether this language is required has been the subject of a high profile case before the Ohio Supreme Court, Acordia of Ohio v. Fishel — the court initially found the absence of that language doomed any transfer to a successor in a merger, but has since accepted a request for reconsideration.
- Mattel claims that it is not responsible for $140 million of MGA’s attorneys fees sought by insurer Evanston Insurance Co., arguing that this type of subrogation has already been rejected in another case, reports Law360. For a short history of the the Mattel/MGA trade secret feud over the Bratz dolls, see here.
- Two Chinese nationals have been charged with the theft of trade secrets of Pittsburgh Corning, Bloomburg is reporting. Ji Li Huang, 45, and Xiao Guang Qi, 31, attempted to buy what they were told were documents revealing Pittsburgh Corning’s processes for making cellular-glass insulation, U.S. prosecutors in Kansas City said earlier this week.
- The U.S. District Court for the Southern District of New York has refused to enforce a non-compete against a fired employee. In Arakelian v. Omnicare, Inc., the court applied New York’s rule that an employee terminated without cause is not bound by non-competition and non-solicitation provisions. For those looking for competing perspectives, an article by Cullen and Dankamp LLC presents a pro-employer slant while Pollard LLC’s the non-compete blog presents the perspective from the employee’s side.
- For those in Alabama, Burr & Forman’s Non-Compete & Trade Secrets Law Blog describes a recent decision from the Alabama Supreme Court scaling back what it found to be an overly-broad non-compete.
- Employers, thinking of waiving your non-competes to ease the pain of a lay-off? Strasburger’s Noncompete Blog says you should document it properly or run the risk of a claim of selective enforcement.
- Dan Harris’ China Law Blog has a typically thorough post on protecting trade secrets in China, “China NDAs/NNN. What You/We Need to Know.” One interesting nugget: don’t expect a forum selection clause choosing the U.S. to have to much value since Chinese courts will not enforce U.S. judgments.
- For those practicing before the Northern District of Illinois, R. David Donoghue’s Chicago IP Litigation Blog reports on a recent decision rejecting a claim for a breach of a non-disclosure agreement because it was premised on inference upon inference upon inference.
- Russell Beck’s Fair Competition Law Blog’s monthly update is out and as always, it details a number of interesting posts and cases from around the U.S. (and Europe too).
Procedural Issues (for the Litigators):
- Want to get a photograph on a social media site into evidence? Eric Goldman’s Sept. 1, 2012 post in his Technology & Marketing Blog says you better make sure you can authenticate it and show that the party against whom you are seeking to admit it had some role in posting it. In In re A.D.W., A.L.W., and X.M.M., No 2-648 / 12-1060 (Iowa Ct. App.; Aug. 8, 2012), an Iowa appellate court reversed because there was no proof that a mother had placed a photograph of a marijuana grower’s operation on her Facebook page.
Computer Fraud and Abuse Act Posts:
- Todd Sullivan’s Trade Secrets & Employee Defections Blog reports that Toyota has sued a former employee, Ibrahimshah Shahulhameed, who allegedly hacked into Toyota’s toyotasupplier.com website, allegedly downloaded sensitive proprietary information from it, moved on to unauthorized accessing of the Toyota computer system, and then sabotaged the company’s internal software. As many of you no doubt remember, Todd was a major contributor to Womble Carlyle’s Trade Secrets Blog, before forming his own firm, Graebe Hanna & Sullivan.
- In an article entitled, “A Narrow View of ‘Authorized Access’ in the CFAA” for Law Technology News, Elkan Abramowicz and Barry Bohrer not only provide a nice summary of the recent decisions in U.S. v. Nosal and WEC Carolina Energy v. Miller but also provide an update on a recent proposal by Senator Patrick Leahy to codify the narrow interpretations of “exceeded authorized access” applied by those courts.
Cybersecurity Posts and Articles:
- Foley & Lardner’s Privacy & Security Source Blog has an excellent post, “Appellate Court Decision Demonstrates that Security is Not Just About Technology — It’s About People.” The post by Chanley T. Howell details the lessons to be taken from a recent case, Patco Construction Company v. People’s United Bank, 1st Cir., July 3, 2012, http://www.ca1.uscourts.gov/pdf.opinions/11-2031P-01A.pdf), in which the First Circuit found that a bank was potentially liable to a small business for cyberfraud resulting in the withdrawal of approximately $500,000 from the customer’s account. Chanley describes the impressive array of security procedures and precautions offered by the bank, yet human breakdowns invariably contributed to the breach. It is a reminder of the importance of culture and reinforcing security practices time and time again.
- “Rise in Cyber Data Kidnapping: Tips on Protecting Your Data From Being Taken Hostage” advises Pullman & Comley LLP.
- For a solid description of the recent hack of Apple by AntiSec, see The New York Times Bits Blog’s “Hackers Claim to Have 12 Million Apple Device Records.”
News You Can Use:
- Do you have a digital will in place? If not, Kelly Greene advises what you should do in an article for The Wall Street Journal, “Passing Down Digital Assets.”