05022013Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • Good advice from Josh Durham: “Use Covenants Not To Compete To Protect Legitimate Business Interests, Not Just Because You’re Scared Of A Little Competition.” In his post for Poyner Spruill’s Under Lock & Key Blog, Josh recounts the holding of a recent North Carolina case, Phelps Staffing LLC v. CT Phelps, Inc., in which the court found that a non-compete involving temporary staffing employeees lacked a legitimate business interest to justify the restraint. It is an important reminder to companies to ensure that their non-competes be narrowly tailored to protect interests that actually arise from the former employee’s employment.
  • Sergey Aleynikov will stand trial a second time, this time in New York State’s Supreme Court, for the alleged theft of Goldman Sachs’ trade secrets, reports The Wall Street Journal and Law360. Judge Ronald Zweibel ruled that the state charges were not barred by the dismissal of his federal conviction under the Economic Espionage Act last year by the U.S. Court of Appeals for the Second Circuit. (For more on the Aleynikov saga, see my posts here and here).
  • For more on the Ohio Supreme Court’s recent holding that rental payments are trade secret, see Todd Sullivan’s take in his Trade Secrets Blog. Todd notes the incongruity in the Court’s reasoning that disclosure of the trade secrets would lead to a “poisonous” tenant environment, despite the fact that it noted later in its opinion that the landlord’s expert said tenants were incentivized not to share rental information. (My post on the case can be found here).
  • “Pushing Back Against Restrictive Covenants in Physician Agreements” advocates Mark Gisler as he questions whether non-competes violate the American Medical Association’s code of ethics.
  • “Illinois Federal Court Issues Preliminary Injunction Prohibiting Use Of Misappropriated Trade Secrets But Rejects Request For Expanded Injunction Based On Alleged “Inevitable Disclosure” reports Paul Frehling for Seyfarth Shaw’s Trading Secrets Blog.
  • “Florida Court Reverses Preliminary Injunction on Restrictive Covenant,” reports Peter Vilmos for Burr & Forman’s Non-Compete Trade Secrets Law Blog.  Eric Ostroff also has a post on the case in his Trade Secrets Law Blog.
  • “When a Restriction on Soliciting “Prospective” Customers Is Unreasonable (and How to Fix It),” recommends Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • “Never Bring a Knife to a Gun Fight: One Simple Weapon to Fight Economic Espionage in a Cyberspace World,” warns Hayden J. Silver III for Womble Carlyle for The Compass.
  • “Why intellectual property theft is everyone’s problem,” remind Texas U.S. Attorneys Sarah Saldana and John M. Bales for The Dallas Morning News.
  • “Does social media change the meaning of “solicitation”? How to prevent ex-employees from using social networks to lure employees or customers” recommends Jon Hyman for Inside Counsel. 
  • “Why Abuse of Discretion Matters to Employers (Non-Compete),” advises Rob Radcliff for his Smooth Transitions Blog.
  • “Trade Secret “Inevitable Disclosure” Doctrine Taking Shape in North Carolina,” advises Betsy Cook Lanzen of Womble Carlyle for The National Law Journal.

Cybersecurity Posts and Articles:

  • “Reflections On Recent Cybersecurity Developments,” ponder David N. Fagan, John K. Veroneau, Robert Nichols and Kristen E. Eichensehr of Covington & Burling LLP for Law360.
  • “The War On Cybercrime: How Far Can You Go?” posits Gabriel Ramsey, Mark Mermelstein and James Hsaio of Orrick for Corporate Counsel.
  • “Is the Specter of a Cyber Cold War Real?” asks James McGregor for The Atlantic.
  • “Law firm fell victim to phishing scam, precipitating $336K overseas wire transfer, bank suit alleges,” reports Debra Cassens Weis for The ABA Journal’s Law News Now.
  • “Looking at the Future of Cybersecurity,” predicts Sue Reisinger for Corporate Counsel.

Computer Fraud and Abuse Act Posts and Cases:

  • Looking for a post-mortem on the recent CFAA trial of David Nosal? Then check out “In Executive’s Trade Secret Prosecution, a Company’s Outsized Role,” by Vanessa Blum who covered the trial for The Recorder, Venkat Balasubrumani’s post in the Technology & Marketing Law Blog and Daniel Joshua Salinas’ post for Seyfarth Shaw’s Trading Secrets Blog.
  • Earlier this week, The Washington Post ran a front-page story, “As cyberthreats mount, hacker’s conviction underscores criticism of government overreach,” detailing the prosecution of hacker Andrew Auernheimer.
  • Similarly, The ABA Journal has drawn attention to efforts to reform the CFAA, in an article “Hacker’s Hell: Many want to narrow the Computer Fraud and Abuse Act,” by Stephanie Francis Ward.

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • As many of you know, the Obama Administration has invited public comments on possible federal trade secret legislation by April 22, 2013. Peter Toren has posted his letter and comments to the Administration on his blog and I would commend everyone to review them and to get their own comments to the Administration if they favor a federal trade secret statute. I am hoping to get my letter and comments finished and posted as well by the end of the week.
  • Similarly, in “Obama Administration’s Request for Public Comment on Trade Secrets Law Underscores Importance for Companies to Protect Their Proprietary Assets Now,” Robert Milligan has a fine summary on a recent American Bar Association resolution supporting a federal trade secrets civil cause of action in Seyfarth Shaw’s Trading Secrets Blog.
  • The dismissal of Macy’s breach-of-confidentiality-agreement claim against Martha Stewart Living Omnimedia generated some headlines last week. Bloomberg has a nice summary of the decision, which was issued from the bench.
  • “Dispute Involving 3-D Printers And Covenant Not To Compete Proves That Details Matter,” advises Josh Durham for Poyner Spruills’ Under Lock & Key Blog.
  • “Devicor, Major Player in Medical Device Industry, Loses Non-Compete Case Against Former Employee,” reports Jonathan Pollard for the non-compete blog.
  • “Employees still use online file sharing, even if companies prohibit its use,” warns Lucas Mearian for ComputerWorld.
  • “Protecting Trade Secrets: How many shades of gray do you need to count?” asks Neil Wilkoff for IP Finance.
  • “6th Circuit Addresses Reasonable Protection of Trade Secrets,” advises Eric Ostroff in his Trade Secrets Law Blog.
  • “Nebraska Court Addresses Meaning of ‘Solicitation’ in Non-Compete Agreement,” reports Ken Wentz for Jackson Lewis’ Non-Compete & Trade Secrets Reporter.
  • “Why Courts Like Non-Solicits over Non-Competes,” advises Rob Radcliff in his Smooth Transitions Blog.
  • “No-Hire Provisions In Settlement and Commercial Agreements — Are they Legal?” asks Robert Goldstein for Epstein Becker’s Trade Secrets & Non-Compete Blog.
  • “Does the Alabama Trade Secrets Act Limit Remedies for Theft of Information?” asks Gill Egan for Burr & Forman’s Non-Compete Trade Secrets Blog.
  • “Settlements (Part 2 of 3): 5 Reasons Non-Compete Cases Should (and Do) Settle,” advises Kenneth Vanko in his Legal Developments in Non-Competition Agreements.

Cybersecurity Posts and Articles:

  • In “Civil Liberties Fears Dooms House Cybersecurity Bill,” The New York Times Bits Blog reports that President Obama is threatening to veto CISPA because of privacy concerns.
  • “Amendments to CISPA a Threat to Cybersecurity?” asks Stewart Baker in Covington’s Cyberblog.
  • “Spending Bill’s China Cybersecurity Provision Is Unclear,” advises H. Deen Kaplan, Thomas L. McGovern and Harriet P. Pearson, Hogan Lovells LLP for Law360.
  • “King & Spalding Blocks Email Access Amid Security Concerns,” reports Beth Winegarner for Law360.

Computer Fraud and Abuse Act Posts and Cases:

  • “Shameful: Tech Companies Fighting Against Necessary CFAA Reform And CISPA Fixes,” complains TechCrunch.
  • “Hacking the Law: Fights Over Cyber-Security and a Silicon Valley Divide,” reports Rachel Swan for SFWeekly.
  • “Amending the Computer Fraud and Abuse Act,” proposes Peter Toren for Bloomberg.
  • For the latest on developments in the U.S. v. Nosal trial, see “Ex-KFI Worker Recounts Trade Secret Theft In Hacking Trial’ by Beth Winegarner for Law360 and “Prosecutors Get Key Testimony From Ex-Lover in Hacking Trial,” by Vanessa Blum for The Recorder.

Wow, it was a busy week. Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • Federal prosecutors were dealt a severe blow in the Economic Espionage Act case brought against affiliates of the Pangang Group (a company with ties to the Chinese government), as U.S. District Court Judge Jeffrey White quashed summons against them in the U.S. v. Liew case.  As reported by Bloomberg and Law360, this is the second time that summons have been quashed and it increasingly appears that the government will not be able to serve, let alone prosecute, these companies for their alleged role in the theft of DuPont’s titanium dioxide trade secrets.
  • “New Jersey Legislators Propose Banning Non-Compete Agreements With Employees Who Can Claim Unemployment,” reports Jessica Mendelson for Seyfarth Shaw’s Trading Secrets Blog. Also see Law360’s article, “NJ Bill Targets Noncompete Restrictions On Unemployed.”
  • Honey, I stole the trade secrets!  “Can an Employee Use a Spouse to Circumvent Restrictive Covenants? Georgia Court of Appeals Says ‘No,'” advises Amy Dehnel for Berman Fink Van Horn’s Georgia Non-Compete and Trade Secret News.
  • “Merrill Lynch Says Ex-Advisers Stole Client Info,” reports Law360, when they joined competitor Wells Fargo.
  • “Wisconsin Researcher Accused of Economic Spying for China,” reports Bloomberg.
  • “Plaintiff’s Foreign Operations Result in ‘Lessened’ Deference to Choice of Home Forum in Trade Secret Misappropriation Case,” advises John C. Law, Ph.D. of McDermott Will & Emery for the National Law Review.
  • “Frisby-Eaton Whistleblower Settles with Frisby, Tolling Agreement Persists with Eaton,” advises Alison Grant for The Plain Dealer and Todd Sullivan for his Trade Secrets Blog.
  • “Get Smart About Noncompetes,” advises Alan Bush for The Texas Lawyer.
  • Don’t forget the importance of “Trade Secrets and Due Diligence,” a reminder by Eric Ostroff for his Trade Secrets Law Blog.
  • For a recent non-compete case out of Florida’s Fifth District Court of Appeal, see “A Court’s Order Must Comply With The Restrictive Covenant It Seeks To Enforce,” by Kain & Associates’ ComplexIP.com.
  • “Enforcing a Non-Compete Agreement in Florida: What Evidence is Relevant?” asks Jason Cornell for Fox Rothschild’s South Florida Trial Practice Blog.
  • “Non-competes: HR’s version of the Prenup,” proclaims Steve Boese for Fistful of Talent.
  • “5 Privacy and Data Security Measures That Can Protect Your Company Against Trade Secret Theft,” recommends Lindsey Tonsager for Covington’s Inside Privacy Blog.
  • Kenneth Vanko has the first of three posts on why certain non-compete and trade secrets cases may not settle for his Legal Developments in Non-Competition Agreements Blog.
  • And for the litigators, “Don’t Forget about E-Discovery When Moving to The Cloud,” advises Jay Yurkiw for Porter Wright’s Technology Law Source Blog.

Cybersecurity Posts and Articles:

  • As many of you may have noticed last week, The Wall Street Journal launched a Risk & Compliance Reporter that will cover, among other things, developments in cybersecurity.  It is worth bookmarking. To that end, here is one of the introductory posts, “Three Tactics for Cyber defense” by Mark G. Graff.
  • “How To Mitigate The IP Risks Of Data Breaches,” advises Carol Anne Been and Andy Blair of Dentons for Law360.
  • In an op-ed piece for The New York Times “Closing the Door on Hackers,” Marc Maifret, CTO for BeyondTrust wonders whether software companies are incentivized to allow hacking.
  • “Insider Theft: the Real Cyber Threat?” asks The Wall Street Journal’s Corruption Currents Blog.  The post quotes Mike Dubose of Kroll as estimating the average time between an internal breach and its discovery is 32 months.
  • “As more hackers target lawyers, here’s how to protect client data,” recommends Rachel Zahorsky for the ABA’s Techshow.
  • “U.S. Undersecretary to Discuss Hacking With Chinese Officials,” reports Bloomberg.
  • “Silicon Valley Fights Restrictions on Chinese Tech,” reports The Wall Street Journal.
  • “A Different Approach To Foiling Hackers? Let Them In, Then Lie To Them,” recommends Andy Greenberg for Forbes. (And don’t forget to at least buy them a drink).

Computer Fraud & Abuse Act Posts and Cases:

  • The trial in the prosecution of David Nosal is underway in San Francisco and expected to go about 12 days. Here are some of the articles covering it: “In High-Tech Hacking Trial, a Battle of Low-Tech Openings,” notes Max Taves, who is covering the Nosal trial, for The Recorder. Also check out Vanessa Blum’s article, “Amid Calls for Reform, a Rare Trial of Hacking Law,” also for The Recorder.
  • “Here are eight cyber crooks who got less prison time than Andrew Auernheimer,” advises Dan Kaplan for SC Magazine.
  • “NY Times Reporter Jenna Wortham Accidentally Reveals How She Violated Both The CFAA & The DMCA,” reports Techdirt.
  • “7th Circ. Won’t Resurrect Employer Email Hack Suit,” reports Law360, as the plaintiff was unable to demonstrate that the alleged invasion of privacy cost him more than $5,000.

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • “Always be the good guy.” That is the title of an excellent post by Brian Bialas for Foley & Hoag’s Massachusetts Noncompete Law Blog that should serve as an important reminder to lawyers that in injunctive proceedings, which are so dependent on the exercise of equity, that your client (employer or employee) have the moral high ground.
  • “House Dems Push For China Trade Secret Theft Designation” reports Law360.  Congressmen Sander Levin ( D-Mich.) and Charles Rangel, (D-N.Y.) asked acting U.S.Trade Representative (USTR) Demetrios Marantis  to consider designating China as a “priority foreign country” under Section 182 of the Trade Act of 1974.  According to Law360, the law requires the USTR to identify countries that have inadequate protection of intellectual property rights, and those with the most egregious IP protection records can be targeted as priority. Once the USTR designates a priority foreign country, the trade agency is required under Section 301 of the act to complete an investigation, the results of which may lead to President Obama imposing import duties or taking other action. The Congressmen said that, “as evidence mounts” that the Chinese government is engaging in cybertheft, China may deserve the special designation.
  • Liu Sixing was sentenced to five years by a New Jersey federal judge for stealing defense trade secrets from L-3 Communications, reports the BBC. The trade secrets included information on U.S. missile, rocket and drone technology.
  • New blogger Erik Ostroff advises “Federal Circuit Addresses Uniform Trade Secrets Act Discovery Rule” in his Trade Secrets Law Blog.
  • “Worker stole trade secrets to ‘lure away’ clients, tobacco company says” reports Ken Bradley for the Knowledge Effect Blog for Thomson-Reuters.
  • “Enviros Can’t Make Wyo. Reveal Halliburton Fracking Formula” advises Law360.
  • For those in New York, Neal Dlausnera and David Fisher ask “Are Restrictive Covenants Enforceable Against Employees Terminated Without Cause? ‘Hyde’ indicates the answer may be yes.” In their fine article for The New York Journal, Neal and David consider the recent case of Hyde v. KLS, which may have eroded New York’s longstanding ban on non-competes against terminated employees. (For more on the Hyde case, see my post last year).
  • “Protecting Company Information When Employees Bail: California Alternatives to Employee Non-Compete Agreements” advise Robert Milligan and Jessica Mendelson for Seyfarth Shaw’s Trading Secrets Blog.
  • “Plaintiffs’ Attorneys, Rest Easy: Cease and Desist Letters Likely Aren’t Defamatory,” reports Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • “Litigating Theft of Trade Secrets before the International Trade Commission,” details Peter Toren.
  • “7 Steps to Enhance Post-Employment Restrictive Covenants,” reports Jeffrey Boxer for Corporate Counsel.
  • At last, something they can agree on: the latest on “Apple Inc. (AAPL), Samsung And Their Trade Secrets,” and their appeal to the Federal Circuit reports Michelle Jones for ValueWalk.
  • “The non-compete that didn’t happen,” advises Rob Radcliff for his Smooth Transitions Blog.

Cybersecurity Posts and Articles:

  • “New U.S. law says government agencies will need OK before buying Chinese IT equipment” reports Danielle Walker for SC Magazine.
  • “How to Avoid Getting Duped By A Hacker,” advises The Wall Street Journal’s Digits Technology Blog. 
  • “The Question of ‘International Law of Cyberwar,” posits Stewart Baker for Steptoe’s Cyberblog.

Computer Fraud and Abuse Act Posts and Cases:

  • “The Computer Fraud and Abuse Statute is a Failed Experiment,” laments Eric Goldman in a guest post for Forbes.
  • “Another Court Construes the CFAA Narrowly and More of My Thoughts on the Statute,” ponders Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog. Ravindra Shaw provides her take on the same case out of New York, in her post for Jackson Lewis’ Non-Compete & Trade Secrets Report Blog.

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • Does a law firm have to reveal its client’s non-compete to the client’s business partners? In “Texas Firm Beats Fraud Suit For Keeping Mum On Noncompete,” Law360 reports that the answer is “no.” The Texas Court of Appeals held that there was no duty to disclose the client’s non-compete by the law firm and its attorney when they negotiated legal documents with those third parties.
  • “Non-Compete Fight in the World of Surgical Robotics: MAKO Surgical Sues Competitor, Former Employee,” advises Jonathan Pollard for the non-compete blog.
  • “FBI arrests NASA contractor employee trying to flee to China,” reports The Washington Examiner.
  • “Stryker Exec Who Jumped Ship Must Hand Over Trade Secrets,” reports Law360.
  • “Protecting Trade Secrets with a Mobile Workforce and Telecommuters,” reports Cliff Atlas for Jackson & Lewis’ Non-Compete & Trade Secrets Report.
  • Even The Economist is writing about the importance of trade secrets, asking, “Can you keep a secret? To patent an idea, you must publish it. Many firms prefer secrecy.”
  • “Mediating Non-Competes in the Medical Device Industry,” explains Michael Greco for Fisher & Phillips’ Non-Compete and Trade Secrets Blog.
  • Will the ability to preserve an invention as a trade secret lead patentholders to withhold the best mode of that invention in their patent applications? In “Patent law’s ‘best mode’ requirement a conundrum for attorneys,” Erin Geiger Smith warns that could be the case for Bloomberg.
  • “5 ways in-house lawyers can support innovation at their companies: Inside counsel have a duty to help drive innovation to success, within the limits of existing law and policy,” advises Eric Esperne in Inside Counsel.
  • Want to enforce a non-compete against a Chinese employee? You need to read, “China Employee Non-Competes. Do Not Try This At Home,” by Dan Harris for his China Law Blog.

Cybersecurity Posts and Articles:

  • “After a Data Breach, Do You Need an Investigator or a Lawyer?” asks Catherine Dunn for Corporate Counsel.
  • “Take Chinese Hacking to the WTO,” urges James P. Farwell for The National Interest.
  • “Infographic: How Criminals Guess Your PIN,” warns Gina Smith for Tech Page One.

Computer Fraud and Abuse Act Posts and Cases:

  • “U.S. v. Nosal: Back In the District Court, the Defendant Isn’t as Fortunate,” reports Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • “The Split in the Circuit Courts Over the Proper Interpretation of the Computer Fraud and Abuse Act Actually Goes Three Ways,” updates Brian Bialas for Foley & Hoag’s Massachusetts Noncompete Law Blog.
  • Is journalist Matthew Keys the latest Aaron Swartz? asks Garance Burke in his article for The Huffington Post entitled, “Matthew Keys’ LA Times Hack: Security Breach Or Harmless Prank?”
  • And in another high profile CFAA prosecution, Orin Kerr writes, “United States v. Auernheimer, and Why I Am Representing Auernheimer Pro Bono on Appeal Before the Third Circuit,” for The Volokh Conspiracy.

In an interesting trade secret case out of New York Supreme Court, Airvana Network Solutions Inc, a Massachusetts broadband network company, has won a preliminary injunction against Ericsson in a trade secrets lawsuit that seeks more than $330 million from the Swedish telecommunications network equipment maker.  On Tuesday, Manhattan State Supreme Court Judge Barbara Kapnick enjoined Ericsson from using certain hardware based on Airvana’s design unless it secures a software license from Airvana.  (A PDF of the opinion can be found below and Law360 has reported on the case fairly extensively).
 
Airvana, founded in 2000 by former Motorola executives, had supplied Ericsson and predecessor Nortel Networks Inc. with hardware and software used to run large wireless data networks.  Under the terms of its agreement with Nortel, Airvana gave Nortel responsibility over the hardware, so long as Nortel used Airvana’s software and paid royalties on any hardware that might be built based on Airvana’s designs.  Ericsson acquired much of Nortel’s wireless equipment business in North America through Nortel’s bankruptcy in 2009, including Nortel’s obligations under the agreement with Airvana
 
In June 2010, Ericsson began working with a joint venture partner, LG Electronics, to develop software that would run on Ericsson’s version of the hardware.  Several months later, Ericsson told Airvana that it no longer needed Airvana’s software because it was developing an alternative solution that would not be based on Airvana’s hardware designs.
 
Airvana alleged that the hardware developed by both Nortel and Ericsson was based on design documents Airvana had transferred as part of their agreement and that the hardware misappropriated the trade secrets of Airvana.

Overcoming Obstacles to Irreparable Injury:  Most of Judge Kapnick’s opinion addresses the parties’ varying interpretations of the agreement and whether Ericsonn’s software was based on the design of the Airvana software, but her analysis of irreparable injury is the most significant part of the opinion.  As those in New York know, proving irreparable injury in the context of a license agreement is very difficult because of New York’s embrace of the Second Circuit’s flawed opinion in Faiveley Transport Malmo AB v. Wabtec Corporation, 559 F.3d 110 (2d Cir. 2009).   As readers of this blog may remember, Faiveley essentially held that a former licensee could misappropriate trade secrets so long as it did not disclose them, a ruling that has been inexplicably followed by New York courts.

It appears that Airvana was able to avoid the deadly embrace of Faiveley by arguing that it would go out of business in the absence of injunctive relief ordering payment of royalties by Ericsson.  Of course, the loss of a plaintiff’s enterprise is the quintessential example of irreparable injury, since a monetary judgment has little or no value to a company that has been forced out of business.   However, proving irreparable injury still can be difficult since license disputes by their nature have readily calculable damages by virtue of their previous royalty stream.

The Takeaway:  Never underestimate the power of the “going out of business” claim, even in a licensing dispute.  Ericsson attempted to argue that Airvana’s financial predicament was largely of its own “irresponsible” over-leveraging, an argument that seems to have fallen flat.  Surprisingly, it does not appear, at least from the opinion, that Ericsonn argued that the damages were readily calculable by virtue of the $330 million demand in the complaint.

Airvana v. Ericsonn.pdf (1.68 mb)

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • Add Illinois to the list of states considering legislation over their non-compete laws, as Kenneth Vanko advises in “A Brief Commentary on Illinois’ Proposed Noncompete Agreement Act” in his Legal Developments in Non-Competition Agreements Blog. Ken reports that, unlike the legislation in Minnesota, Michigan and Massachusetts which seeks to scale back or limit non-competes, the proposed legislation would tend to benefit employers.
  • “Schwab Says Ex-Advisers Diverted $47M In Accounts To Rival,” reports Law360.  Epstein Becker’s Peter Altieri has a post about the dispute as well.
  • “DuPont Trade-Secret Prosecutors Add Charges Against Liew,” reports Bloomberg.
  • “Recent Non-Compete Case Highlights Pennsylvania’s ‘Worthless Employee Doctrine’ advises Jonathan Pollard for the non-compete blog. This poorly-named doctrine holds that an employer cannot enforce a non-compete against an employee that it just terminated for poor performance.
  • The Unintellectual Property Blog has a post about a recent software trade secret dispute in Delaware against Cisco. In ExpertUniverse v. Cisco, the court applied the California Uniform Trade Secret Act and dismissed ExpertUniverse’s claims because it failed to adequately describe its trade secrets and demonstrate misappropriation.
  • “Want to avoid a prosecution under the Economic Espionage Act? You might want to consult “Economic Espionage Act: Seven Tips to Close a Fast-Growing Compliance Gap” by Lauren M. Papenhausen and Benjamin Franklin of McDermott, Will & Emery, LLP for Bloomberg Law.
  • Looking for a primer on forensic computer examinations?  Then check out “Nuts and Bolts for Terms Commonly Used in Trade Secret Computer Forensic Investigations” by Jonathan Karchmer for Seyfarth Shaw’s Trading Secrets Blog.
  • “It takes a village to protect trade secrets,” advises Naomi Fine of Pro-Tech for Forbes.
  • “Protecting Your Closely Held Business,” recommends Peter Vilmos for Burr & Forman’s Trade Secrets Non-Compete Blog.
  • In “Trade Secrets for Sale,” Douglas Alexander proposes a robust and aggressive trade secret protection program for EBN.
  • In “A Little-Publicized Change in Patent Law on Secret Prior Art,” Paul F. Prestia details changes in the America Invents Act that may permit an inventor to preserve an invention as a trade secret indefinitely for Corporate Counsel.  For more on this issue of the newly revised section §102(a)(1), see my post last fall.

Cybersecurity Posts and Articles:

  • Lots of articles on the Obama Administration upping its calls for China to address the reported cybersecurity attacks.  The New York Times is reporting that “Cyberattacks Prominent in Obama Call With New Chinese President.” Also check out “U.S. Demands That China End Hacking and Set Cyber Rules,” also by The Times, and “Obama Aide Demands China Stop Hacking” by The Wall Street Journal.  The Journal also had an op-ed piece this week by John Wohlsetter entitled “Chinese ‘Hackers’ Is a Misnomer. They’re Spies.”  Finally, Todd Sullivan provides his thoughts and takes the Administration to task for taking so long to single out China.
  • “How to avoid being hacked: Strong passwords and other security tips” recommends Anick Jasdenun for SiliconValley.com

Computer Fraud and Abuse Act Posts and Cases:

  • Looking for an update of recent CFAA cases? Then check out Shaw E. Tuma’s excellent summary here.
  • “When leaving your job, make sure you do this if you really want to violate the Computer Fraud and Abuse Act!”, another fine post by Shawn Tuma.

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • “Eaton-Frisby fight that started with trade-secrets theft claims set for trial in Mississippi,” reports Alison Grant for The Cleveland Plain Dealer. Todd Sullivan also has his take on the case in his Trade Secrets and Employees Defection Blog.
  • “Judge Trims Fuhu’s Trade Secrets Suit Over Toys R Us Tablet” reports Law360.
  • For an update on the Eagle v. Morgan dispute over ownership of a LinkedIn account, see “Federal Court Questions Whether Damages Exist in LinkedIn Account Ownership Dispute,” by Jessica Mendelson for Seyfarth Shaw’s Trading Secrets Blog.
  • “MGA Maneuvers to Rescue Big Bratz Trade-Secrets Award,” advises Amanda Brondstadt for The American Lawyer.
  • “Can the public interest trump a non-compete?” asks Rob Radcliff in The Smooth Transitions Blog, and his answer is “yes,” at least in the healthcare industry.
  • “Trade Secrets Injunction Order Demonstrates Difficulty of Balancing Competing Interests” advises Kenneth Vanko in his Legal Developments in Non-Competition Agreements Blog.
  • Fisher & Phillips’ Michael Greco has his monthly post on highlights in trade secret and non-compete law for February 2013.
  • And Brian Bialas has a similar post of 10 recent noteworthy trade secret and non-compete cases and posts for Foley & Hoag’s Massachusetts Noncompete Law Blog.

Cybersecurity Posts and Articles:

  • “Unintended Consequences of ‘Bring Your Own Device,'” advises Susan Ross for Corporate Counsel.
  • And given the recent news of cyberattacks, David Stewart has decided to revisit the debate over whether U.S. companies should be permitted to “hackback” against foreign cyberspies and crooks in Steptoe’s Cyberblog.

Computer Fraud and Abuse Act Posts and Cases:

  • “Attorney General: Aaron Swartz Case Was a ‘Good Use of Prosecutorial Discretion,’” advises David Kravets for Wired.
  • “Thinking Of Bringing A Computer Fraud And Abuse Act Claim In Federal Court? Consider This Recent Opinion,” warns Josh Durham for Poyner Spruill’s Under Lock & Key Blog.
  • And for an account of a reluctant witness in the Aaron Swartz prosecution, see Quinn Norton’s post for The Atlantic entitled, “Life Inside the Aaron Swartz Investigation.”

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Trade Secret and Non-Compete Posts and Articles:

  • There is a lot of good stuff analyzing the Obama Administration’s trade secrets initiative from last week.  You should check out out Peter Toren’s post, Morrison & Foerster’s Dan Westman and Jessica Childress’ analysis, Jessica Mendelson’s post for Seyfarth Shaw’s Trading Secrets Blog, Press Millen’s post in Womble Carlyle’s Trade Secrets Blog, and the article, “Private Sector’s Role In White House Trade Secrets Plan” by David Fagan of Covington Burlington for Law360.
  • For the latest in the epic DuPont v. Kolon saga, see “Judge Kills DOJ’s Summons Of Kolon In Trade Secrets Action,” as reported by Law360 and Todd Sullivan in his Trade Secrets and Employee Defections Blog.
  • “Pfizer Gets New Trial After $39M Trade Secrets Verdict,” reports Law360.
  • Interested in the latest on Massachusetts’ proposed non-compete statute?  Then check out Brian Bialas’ post at Foley& Hoag’s Massachusetts Noncompete Law Blog, where Brian has the latest language proposed under the bill.
  • Speaking of non-compete statutes, Kenneth Vanko analyzes the proposed Michigan non-compete statute, which is modelled after New Hampshire’s recent statute requiring an employer to give notice of a non-compete to a prospective employee before an offer of employment.
  • “Race to California Courthouse Fails in Recent Non-Compete Dispute,” reports Jonathan Pollard in the non-compete blog.
  • Epstein Becker’s Trade Secrets & Noncompete Blog reports on an unfortunate employee whose employer’s merger with another company triggered his non-compete. Because his newly-merged employer failed to take steps to safeguard the former employer’s protectible interests, the U.S. District Court of Connecticut enforced the covenant not to compete.
  • Can a non-signatory to a covenant not to compete move to compel arbitration of that provision? A California federal court has answered in the affirmative, ordering that the company of a former employee can also invoke arbitration as to claims arising out of that agreement. Kenneth Vanko’s Legal Developments in Non-Competition Agreements Blog and Paul Freehling for Seyfarth Shaw’s Trading Secrets Blog have posts on the case.
  • For the litigators, “Anonymous Yelp Review Counts as Evidence” advises Jacob Gershman for The Wall Street Journal Law Blog.

Cybersecurity Posts and Articles:

  • “In Cyberspace, A New Cold War,” advises The New York Times.
  • “If China wants respect abroad, it must rein in its hackers,” warns The Economist, although it also notes that “Old-fashioned theft is still the biggest problem for foreign companies in China.”
  • Are we worrying too much about China? Jon Evans thinks so, in an article for TechCrunch entitled “The Chinese Are Coming! The Chinese Are Coming!”
  • But then again, one can’t be too careful: “Data Security for Lawyers Traveling to China,” warns Alan Cohen for Corporate Counsel.
  • “Employees May Be a Company’s Greatest Cybersecurity Vulnerability,” recognizes Catherine Dunn for Corporate Counsel.
  • “Keeping your data Cloud-secure,” advises JJ Milner for the Global Micro Blog.

Computer Fraud and Abuse Act Posts and Cases:

  • “Aaron Swartz Prosecutors Weighed ‘Guerilla’ Manifesto, Justice Official Tells Congressional Committee,” reports Ryan Reilly for The Huffington Post.

Here are the noteworthy trade secret, non-compete and cybersecurity stories from the past week, as well as one or two that I missed over the past couple of weeks:

Cybersecurity Posts and Articles:

  • After the Obama administration’s announcement of its initiative to combat international trade secret theft, the other big news this week was The New York Times front-page article calling out China’s army for its role in hacking U.S. companies. In “Chinese Army Unit Is Seen as Tied to Hacking Against U.S.,” The Times cited a report by the security firm Mandiant that fingered Unit 61398 of the Peoples Liberation Army as having a role in 141 attacks in recent years.
  • Spearphishing — i.e., using targeted attacks against employees based on information gleaned from social media — was used in these cyberattacks, according to an article by Kim Zetter for Wired, “Chinese Military Group Linked to Hacks of More Than 100 Companies.”
  • “Claims of cyberstealing by China prompt administration to develop more aggressive responses,” reports The Washington Post.
  • “Cyberwar With China Is Here, Like It or Not,” laments Arik Hesseldahl for All Things Digital.
  • “U.S. ready to strike back against China cyberattacks,” reports Associated Press.
  • “Successful hacker attack could cripple U.S. infrastructure, experts say,” reports Erin McClam for NBC News.
  • “Cloud Data Security: How to Analyze your Risk,” recommends Emma Byrne for Forbes.

Trade Secret and Non-Compete Posts and Cases:

  • In the most recent social media decision in the trade secret and non-compete context, the U.S. District Court of Oklahoma has recently found that a former employee’s Twitter invitations and Facebook posts did not violate the provisions of a non-solicitation agreement.  Venkat Balasubramani of the Technology & Marketing Law Blog (Feb. 18 post) and Seyfarth Shaw’s Justin K. Beyer both have posts on this decision (if time permits, I may do a post with my thoughts on this decision this weekend).
  • Ernst & Young has been sued for allegedly stealing the trade secrets of its client, Express Scripts, after having been engaged to provide consulting services to Express Scripts in its acquisition of Medco Solutions last year, reports Todd Sullivan in his Trade Secrets & Employee Defections Blog. Ernst & Young says a former employee did violate its policies.
  • “South Carolina Court of Appeals Upholds Physician Non-Compete and Forfeiture Provisions,” reports Parker Poe’s EmployNews.
  • In another healthcare trade secret case, “Indiana Univ. Health Misused Trade Secrets, Suit Says” reports Law360.
  • “The End of Noncompete Agreements in Minnesota?” asks Mark E. Dooley for Thompson Hall as he describes a recent bill proposed in Minnesota to ban non-competes along the lines of California.
  • “Analysis of a Winning Argument for Enforcing a Non-Compete Agreement at the Preliminary Injunction Stage,” reports John Paul Nefflen for Burr & Forman’s Noncompete Trade Secrets Blog.
  • “Is Mattel raising the white flag in Bratz copyright case?” asks Alison Frankel in her On The Case Blog.
  • Considering what discovery you might need for your next trade secrets or non-compete case? Then check out Kenneth Vanko’s post, “Some Thoughts On Pursuing Expedited Discovery,” which provides some practical pointers on what you need to do.
  • “5 Trade Secret Trends That Could Shape 2013,” predict Randall Kahnke, Kerry L. Bundy and Peter C. Magnuson of Faegre Baker Daniels LLP for Law360.

Computer Fraud and Abuse Act Posts and Cases:

  • “IP: Why companies need clear policies against giving computer access to non-employees,” advise James Ware and Mindy Ware for Inside Counsel.