Non-Disclosure Agreements

To establish a trade secret claim, the trade secret owner (usually an employer) must show that it used reasonable measures to protect that information’s secrecy.  As a result, the question of whether that owner’s efforts were sufficiently reasonable is frequently the point of contention in trade secret litigation, as the parties argue over whether the owner did enough to prevent the potential disclosure or use of those trade secrets.  There are a multitude of questions that can arise:  Did the owner limit the access of its employees to the trade secrets on a “need to know” basis?  If the information was stored electronically, did the owner use adequate electronic safeguards such as passwords, encryption or multi-factor authentication?  If the trade secrets are tangible or visible to the eye, were the the trade secrets or the facilities in which they were stored under lock and key and were visitors prohibited?  And perhaps most importantly, did the owner require employees or third parties with access to that information to sign non-disclosure agreements (NDAs) or confidentiality provisions to protect those trade secrets?  The use of NDAs has long been considered a key protection, as courts and juries can readily appreciate a written agreement that sets out the trade secret owner’s expectations about protecting that information.  A recent decision by the U.S. Court of Appeals for the Second Circuit, Turret Labs USA, Inc. v. Cargosprint, LLC, 2022 U.S. App. LEXIS 6070,. Case No. 21-952 (March 9, 2022 2d Cir. 2022), reinforces that courts consider these agreements to be a critical safeguard and that a trade secret’s owner’s failure to have them in place may prove fatal to a trade secret owner’s claims.
Continue Reading Turret Labs USA, Inc. v. CargoSprint, LLC: The Second Circuit Affirms the Importance of Non-Disclosure Agreements in Trade Secret Cases

A recent opinion from the U.S. District Court for the Northern District of Illinois has stirred up a hornets’ nest of commentary because it appears to recognize the viability of the inevitable disclosure doctrine under the Defend Trade Secrets Act (DTSA).  Those familiar with the DTSA will recall that the inevitable disclosure doctrine was supposed to be prohibited under the DTSA because of California Senator Diane Feinstein’s concern that the doctrine might be enforced against California residents.  Now, in what appears to be the first federal appellate court opinion construing the DTSA, the U.S. Court of Appeals for the Third Circuit may have further muddied the waters about the inevitable disclosure doctrine in Fres-co Systems USA, Inc. v. Hawkins, Case No. 16-3591, ___ Fed. Appx. __ (3rd Cir. 2017), 2017 WL 2376568 (June 1, 2017) (a link to the opinion can found here).
Continue Reading Fres-co Systems v. Hawkins: Did The Third Circuit Just Create More Confusion Around The DTSA’s Ban On The Inevitable Disclosure Doctrine?

Michigan-2Legislative efforts to ban non-competes in Massachusetts and Minnesota have garnered lots of media attention over the past year or so, and now, a Michigan legislator has introduced a bill seeking a similar ban for Michigan’s companies and residents. Michigan House Bill 4198, introduced just over two weeks ago by State Representative Peter Lucido

Mitigating Your Trade Secret Risk When Hiring an Employee From a Competitor: The Trade Secret Litigator’s Five Golden Rules for On-Boarding A New Employee (Part II)
Continue Reading Mitigating Your Trade Secret Risk When Hiring an Employee From a Competitor: The Trade Secret Litigator’s Five Golden Rules for On-Boarding A New Employee (Part II)

Cloudy, with a Chance of Litigation: The Weather Channel’s Trade Secret Woes Illustrate The Challenges of Licensing Database Information
Continue Reading Cloudy, with a Chance of Litigation: The Weather Channel’s Trade Secret Woes Illustrate The Challenges of Licensing Database Information

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

AMD v. Feldstein: Massachusetts Federal Court Finds Misappropriation Does Not Require Proof of Actual Use of Trade Secrets
Continue Reading AMD v. Feldstein: Massachusetts Federal Court Finds Misappropriation Does Not Require Proof of Actual Use of Trade Secrets (Hint: What Should Happen When An Employee Downloads One Million Files Before Leaving)

Thursday Wrap-Up (January 24, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web
Continue Reading Thursday Wrap-Up (January 24, 2013): Noteworthy Trade Secret, Non-Compete and Cybersecurity News from the Web