Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well one or two that I missed over the past couple of weeks:
Noteworthy Trade Secret and Non-Compete Posts and Cases:
- A Congressional investigation has ignited a political firestorm by finding that two Chinese telecommunications companies pose a national security threat, reports The Wall Street Journal. The companies, Huawei and ZTE, wished to merge with American companies so that their shares could be publicly listed here in the U.S., but the House Intelligence Committee, in a bipartisan report, savaged them, citing among other things, their poor record in protecting the intellectual property and trade secrets of others. The Washington Post quotes the investigation as stating that “Huawei and ZTE have failed to assuage the committee’s significant security concerns presented by their continued expansion into the United States. In fact, given their obstructionist behavior, the committee believes addressing these concerns have become an imperative for the country.” (A copy of the Report can be found in the PDF below).
- The criminal trade secrets case against former Bridgestone research engineer Xiaorong Wang has unraveled as prosecutors dismissed the 3 remaining counts after an Ohio federal judge dismissed the other 12 charges against him, reports Alison Grant of The Plain Dealer. U.S. District Court Judge James Gwin found that there was insufficient evidence to support those charges, which included theft of trade secrets and making false statements to investigators. Prosecutors argued the technology was proprietary and that Wang had intended to sell the information to other tire makers.
- The American Chemical Society (ACS) has announced that it has settled its long-running trade secret dispute with Leadscope, a company founded by former ACS employees, for $22.7 million. The Supreme Court of Ohio had recently affirmed approximately $11.5 million of a $26.5 million verdict, upholding a claim of unfair competition against ACS but reversing a defamation claim valued at $15 million. I am guessing that the settlement approximates the accumulated prejudgment interest and attorneys fees for the unfair competition claim. For more on this important case, see my post from last month.
- Trade secret claimants in California who secured a stipulated injunction in a dispute won an important victory, reports Epstein Becker’s Trade Secrets & Noncompete Blog. In Wanke Residential, Comm’l & Indus., Inc. v. Superior Court of California, the Fourth Appellate District Court of Appeals held that a party may not defend against the enforcement of a court order by simply arguing that the underlying order is legally erroneous. Rather, a party is limited to challenging the validity of the injunction “only in the narrow circumstance in which the party can demonstrate that the injunction was beyond the trial court’s jurisdiction to issue in the first instance.” Daniel Joshua Salinas of Seyfarth Shaw’s Trading Secrets Blog also has a post about the decision.
- Interested in “Practical Pointers in Respect to Non-compete Agreements in China”? Then consider McDermott Will & Emery’s recent newsletter on the subject.
- “Trade Secret Misappropriation – $taggering Numbers For Employers to Consider” notes the Michigan Employment Law Advisor Blog.
- Kenneth Vanko has a fine update on various decisions around the country addressing lost profits, remedies and other procedural issues arising in non-compete and trade secret cases.
- “Theft of trade secrets worsening in China-U.S. business” advises Reuters.
- On the social media front, the federal battle over a LinkedIn account has survived a motion for summary judgment and will go to trial on October 16, 2012, reports Venkat Balasubramani in the October 7, 2012 edition of the Technology & Marketing Law Blog. In Eagle v. Morgan, the district court has dismissed the former employee’s claims under the Computer Fraud and Abuse Act (failure to present adequate evidence of damages) and Lanham Act (failure to demonstrate sufficient likelihood of confusion) but has elected to retain supplemental jurisdiction over the remaining state law claims. For more on the Eagle v. Morgan case, see my post from earlier this year.
Computer Fraud and Abuse Act Posts and Articles:
- “New Federal Legislation Proposed To Amend Computer Fraud and Abuse Act To Address Unauthorized Cloud Computing Activities” from Jessica Mendehlson of Seyfarth Shaw’s Trading Secrets Blog. For a more critical take on the proposed legislation, see Eric Goldman’s post from yesterday.
- Poyner Spruill’s Under Lock & Key Blog has a nice summary of recent split within CFAA cases, including the U.S. District Court of Eastern Pennsylvania’s decision in Synthes, Inc. v. Emerging Medical, Inc. applying the more narrow version.
- And in a post from July that I missed, Professor Orin Kerr, one of the leading voices for that narrower version of the CFAA, gave his take on recent decisions and legislative developments for The Volokh Conspiracy (a hat tip to Kenneth Vanko for posting this article).
- For a contrary view, the IP Stone Blog asks “Computer Fraud and Abuse Act: Did the Ninth Circuit Blow It?”
Cybersecurity Posts and Articles:
- Defense Secretary “Panetta Warns of Dire Threat of Cyberattack on U.S.” according to The New York Times.
- Stewart Baker continues to churn out solid, thought-provoking posts for Steptoe’s Cyberblog as he advocates taking the fight to cyberthieves and hackers. In his post entitled “Good News for Cybersecurity and Attribution?”, Stewart dismisses protestations within the cybersecurity community that the bad guys can’t be identified and punished.
- In a post entitled “Clouds, Mobile Devices and the Workplace,” The Massachusetts Non-Compete Blog’s Brian Bialas cites to a recent article by Margaret Keane on the subject.
News You Can Use:
- For you informed voters, you should consult “What the Presidential Candidates Say About Tech” in The New York Times Bits Blog.