Economic Espionage Act

Last week, in a significant development in the simmering IP and technology dispute between the U.S. and China, the U.S. Department of Justice unsealed an indictment filed in the U.S. District Court for the Western District of Washington against Chinese telecommunications manufacturer Huawei for the theft of trade secrets from T-Mobile.  This salvo is the latest in an increasingly high stakes confrontation between the U.S. and China arising from longstanding concerns in the U.S. about China’s involvement in and support for the theft of trade secrets from U.S. companies.  Huawei, which was also the subject of a FBI sting last month in another unrelated trade secret investigation involving a U.S. smartphone screen manufacturer, is now at the center of this international IP superpower row.  What’s the international context that led to this indictment, what did Huawei do to trigger the indictment, and what forces are now in play that will shape the prosecution going forward?  Read on for my thoughts below.
Continue Reading

AT_YOUR_OWN_RISKWhen moving to enforce a non-compete, the last thing a litigator wants to do is to stumble out of the gates and struggle over a profound legal issue that could delay consideration of that normally urgent request.   A new and little-talked-about section of the Defend Trade Secrets Act (DTSA), however, has the potential to trip up employers seeking to enforce non-competes if they are not prepared to address this new entanglement.

There has been a significant amount of commentary about the DTSA and its new amendments since President Obama signed the DTSA into law on May 11, 2016. The “whistle-blower” immunity and ex parte seizure order, for example, have generated the most discussion to this point.  However, the section of the DTSA that may have the greatest future impact on litigation under the DTSA is 18 U.S.C. §1839(3)(A)(i)(1)(I), which prohibits injunctions that “prevent a person from entering into an employment relationship.”

That new provision, which I will refer to as the “No-Ban-on-Employment” provision, was intended to curb, if not eliminate, the use of the inevitable disclosure doctrine under the DTSA.  However, it may have a significant unintended consequence–namely, it may complicate employers’ efforts to enforce non-competes through temporary restraining orders (TRO), the key legal mechanism for non-compete disputes.  For the reasons below, employers may want to reconsider invoking the DTSA when they want to enforce their non-competes because of the potential complications of this section’s language and instead opt to file them in state court, at least in the short-term.  As the DTSA is likely to overtake the Uniform Trade Secret Act (UTSA) as the dominant statutory regime for trade secret law, this DTSA provision may well set another blow in motion to the viability of the non-compete as an effective tool to protect trade secrets.


Continue Reading

To the excitement of many in the trade secret law community, this past Thursday, May 11, 2016, President Obama signed a new federal trade secret act into law that will give employers and businesses a new federal right to file trade secret claims in federal court. That legislation, the Defend Trade Secrets Act (DTSA), moved swiftly through Congress as the Senate voted 87-0 in favor of the legislation on April 4, 2016 and the House of Representatives passed the bill by a 410 to 2 vote on April 30, 2016.  A link to the new statute can be found here.

As readers of this blog know, I have supported a federal trade secret bill and worked with others to advance it’s passage.  The DTSA has been recently described by The Wall Street Journal as “the most significant expansion” of federal intellectual property law in 70 years.  I believe it will transform trade secrets law in the United States and worldwide, which will I detail in future posts.  Today, I am going to provide a high level history and summary of this important new federal remedy.

What will the DTSA’s passage mean to employers and the business community in the short term?  First, the DTSA will now provide them with the ability to present their trade secret claims in federal court in a new federal cause of action.

Second, the DTSA will provide a new and unique procedural remedy, the ex parte seizure order, that is designed to prevent the dissemination of trade secrets in extraordinary situations.

Third, the DTSA has created an immunity for whistleblowers that may require employers to amend their policies and agreements if they want to take full advantage of the DTSA.

Finally, for companies that believe that their trade secrets have been stolen overseas, the DTSA will provide a powerful federal remedy for them here in the U.S.
Continue Reading

Sunday Wrap-Up (Aug. 25, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web
Continue Reading

Thursday Wrap-Up (July 4, 2013): Noteworthy Trade Secret, Covenant Not to Compete and Cybersecurity News from the Web
Continue Reading

Thursday Wrap-Up (June 20, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web
Continue Reading

Thursday Wrap-Up (May 23, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web
Continue Reading