December was unusually busy and 2023 started with a bang courtesy of the Federal Trade Commission’s (FTC) proposed rule banning noncompetes.  Here are the noteworthy cases and posts from last month, with several notable posts regarding the FTC’s big announcement on Thursday, for good measure:

Noteworthy Defend Trade Secrets Act Cases, Federal Trade Secrets Opinions and Related Commentary:

  • Courts continue to scrutinize claims of irreparable injury in trade secret cases, and no court runs a tighter ship than the U.S. District Court for the Southern District of New York.  In Tomgal LLC v. Castano, District Court Judge John Koeltl of the U.S. District Court for the Southern District of New York denied an injunction request, reasoning that irreparable injury did not exist because any injury arising from the misappropriated trade secrets could be easily calculated.  Judge Koeltl found “every unit of inventory that [defendant] Fashion Code sells to a Robin Ruth distributor is a sale that Robin Ruth did not make,” i.e., profits from the sale of the products containing the misappropriated trade secrets could be easily monetized. Judge Koeltl also rapped the plaintiff’s knuckles on laches grounds, finding that a 7-month delay was substantial and unreasonable.
  • If you don’t identify your trade secrets with particularity, you are not going to get an injunction.  That is the simple message that many federal courts are sending to trade secret owners, and a recent decision by District Court Judge Nugent of the U.S. District Court for the Northern District of Ohio is the latest. To date, most of the discussion regarding trade secret identification has been at the discovery stage but now courts are reinforcing that message by denying early requests for an injunction. In Collar Jobs, LLC v. Slocum, Judge Nugent denied the request for an injunction against a former joint venture partner, expressing concern that “it is not entirely clear what Collar Jobs’ ‘trade secret’ is.”   He also questioned the novelty of the alleged “platform” trade secret before him, which appeared to be a combination trade secret of customer and prospect data.
  • So Judge Nugent’s opinion begs the following question: should the DTSA be amended to include a requirement that trade secret identification is provided early in a case?  In an article for Law360, Willenken LLP’s Amelia Sargent details recent rulings by the U.S. Courts of Appeal for the Seventh Circuit and Ninth Circuit recognizing the need for identification and advocates for that amendment.  It’s a good read and Amelia’s points are reasonable and sound.
  • A recent decision out of Massachusetts cuts against the trend of decisions broadly interpreting the extraterritorial reach of the DTSA.  In Sysco Machinery Corp. v. Cymtek Solutions, Inc., District Court Judge Leo Sorokin of the U.S. District Court for Massachusetts ruled the sale of products in the U.S. that were made using the alleged trade secrets, without more, did not qualify as “an act in furtherance” of misappropriation under the DTSA.  According to Judge Sorokin, the defendant Cymtek used the misappropriated trade secrets improperly to make competing machines in Taiwan, but all of that conduct occurred in Taiwan or outside the United States; as a result, on this record, he found that there was neither “misappropriation” in the United States nor an “act in furtherance of the offense . . . committed in the United States” as required under §1837(2) of the DTSA.  Contrast this ruling to the decisions described in my September 2021 post.  Tough to reconcile in my judgment.


Continue Reading Monthly Wrap Up (January 9, 2023): Noteworthy Trade Secret and Restrictive Covenant Posts, Cases and Developments

One of the primary arguments for enacting the Defend Trade Secrets Act (DTSA) in 2016 was the perceived need for the protection of the trade secrets of U.S. companies abroad.  These issues received significant media attention with the focus far and away on China; by way of example, 60 Minutes cited the Justice Department as saying “the scale of China’s corporate espionage is so vast it constitutes a national security emergency, with China targeting virtually every sector of the U.S. economy, and costing American companies hundreds of billions of dollars in losses — and more than two million jobs.”  A consensus emerged that existing civil trade secret remedies at the state court level were inadequate.  These concerns led to calls for a robust federal statute that would provide a civil remedy empowering federal courts to assert their jurisdiction over parties outside the United States.  An important decision issued by the U.S. District Court for the Northern District of Illinois last year, Motorola Solutions v. Hytera Communications Corp.,  2020 U.S. Dist. LEXIS 35942 (N.D. Ill. Jan. 31, 2020), paved the way for other federal courts over the past year to exercise jurisdiction over international actors and international conduct under the DTSA.  This blog post summarizes these recent decisions.
Continue Reading Trade Secrets Without Borders: The Defend Trade Secret Act’s Promise as an Extra-Territorial Statute Finally Comes to Pass

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 Tappy’s Revenge: What You Need to Know About the DOJ’s Momentous Trade Secret Indictment of Huawei

Here are the noteworthy trade secret and restrictive covenant posts from September and some of October:

Legislative Developments
  • Massachusetts is once again contemplating multiple bills regarding non-competes as well as a possible adoption of what appears to be the DTSA advises Russell Beck in his Fair Competition Blog.  Russell and his team also have summaries of legislative activity in Maryland, Maine, Michigan, New York, Oregon, Pennsylvania, Washington and West Virginia, among others.


Continue Reading Monthly Wrap Up (October 27, 2017): Noteworthy Trade Secret and Restrictive Covenant Posts from Around the Web

Friday Wrap-Up (July 19, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web
Continue Reading Friday Wrap-Up (July 19, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

Friday Wrap-Up (June 28, 2013): Noteworthy Trade Secret, Covenant-Not-to-Compete and Cybersecurity News from the Web
Continue Reading Friday Wrap-Up (June 28, 2013): Noteworthy Trade Secret, Covenant Not to Compete and Cybersecurity News from the Web

Thursday Wrap-Up (June 20, 2013): Noteworthy Trade Secret, Non-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

Thursday Wrap-Up (June 13, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web
Continue Reading Thursday Wrap-Up (June 13, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

Thursday Wrap-Up (May 30, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web
Continue Reading Thursday Wrap-Up (May 30, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web

IP Commission Report: Blue Ribbon Panel Advocates Getting Tough With China, Supports Federal Trade Secret Statute And Even “Hacking Back”
Continue Reading IP Commission Report: Blue-Ribbon Panel Advocates Getting Tough With China, Supports Federal Trade Secret Statute And Maybe Even “Hacking Back”