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Mealey's Trade Secret

October 15, 2020
Warranty Company Obtains Injunction In Trade Secret Misappropriation Suit

DENVER — A federal judge in Colorado on Oct. 13 granted a real estate warranty provider’s motion for preliminary injunction in a breach of contract and trade secret misappropriation lawsuit, ruling that the plaintiff has sufficiently shown that it is likely to succeed on the merits of its claims and that it will suffer irreparable harm if such relief is not granted (Home Buyers Warranty Corp., et al. v. Debra Sue Gentry, et al., No. 20-395, D. Colo., 2020 U.S. Dist. LEXIS 189058).
October 14, 2020
Software Company: Former Employee Stole Trade Secrets To Form Competitor

COLUMBUS, Ohio — A software company that designs software-as-a-service platforms to businesses for the development of target direct mail campaigns sued its former executive vice president and an industry competitor in Ohio federal court on Sept. 29, alleging that the defendants misappropriated its trade secret information in an effort to develop a competing product and lure customers away from the company in violation of state and federal trade secret laws (NFocus Consulting Inc. v. Benjy Uhl, et al., No. 20-5106, S.D. Ohio).
October 09, 2020
Florida Panel Overturns Dismissal Of Production Company’s Trade Secrets Claim

MIAMI — A Florida trial court erred in dismissing a production and marketing company’s state law trade secret misappropriation claim against a cruise line because the cruise line failed to sufficiently show that the proprietary processes and techniques the company alleged the cruise line misappropriated were not protected trade secrets, a Florida appellate panel ruled Oct. 7 (Poet Theatricals Marine LLC, et al. v. Celebrity Cruises Inc., No. 3D19-26920, Fla. App., 3rd Dist., 2020 Fla. App. 14081).
October 06, 2020
Insurer: Competitor Violated Protocol, Misappropriated Policyholder Information

KANSAS CITY, Kan. — A provider of insurance products to senior citizens sued an industry competitor in Kansas federal court on Oct. 2, alleging that the competitor and the health insurance provider that acquired it violated state and federal trade secret laws when they violated the terms of a court-approved protocol, poached the plaintiffs' employees and encouraged them to misappropriate the insurer's confidential and trade secret policyholder information (Bankers Life and Casualty Co. v. American Senior Benefits LLC, et al., No. 20-2488, D. Kan.).
September 29, 2020
Judge Orders Preliminary Injunction; Insurer Seeks Dismissal Of Trade Secret Suit

LAS VEGAS — The same day a federal judge in Nevada granted a software provider's motion for a preliminary injunction against its insurer customer in a trade secret misappropriation dispute, the insurer on Sept. 23 moved to dismiss eight of the 11 claims brought against it (ImageKeeper LLC v. Wright National Flood Insurance Services LLC, No. 20-1470, D. Nev., 2020 U.S. Dist. LEXIS 175011).
September 25, 2020
Texas Federal Judge Won't Reconsider Patent Anticipation Ruling

HOUSTON — Two defendants on Sept. 23 failed to persuade a federal judge in Texas to revisit his February summary judgment holding that a header ring patent is not anticipated, when the judge denied a motion for reconsideration (Utex Industries Inc. v. Dr. Troy Wiegand, et al., No. 18-1254, S.D. Texas, 2020 U.S. Dist. LEXIS 174272).
September 25, 2020
Defendant In Tech Company's Trade Secret Suit Appeals $5.7M Damages Award

TAMPA, Fla. — A technology company's industry competitor on Sept. 4 appealed a Florida federal jury's award of $5.7 million in damages stemming from the defendant's alleged misappropriation of the company's trade secrets in developing competing systems that were nearly identical to those of the company (Financial Information Technologies Inc. v. iControl Systems USA LLC, No. 17-190, M.D. Fla.).
September 24, 2020
Former Cryptocurrency Exchange Employee Obtains Dismissal Of DTSA Claim

SAN FRANCISCO — A federal judge in California dismissed a cryptocurrency exchange's Defend Trade Secrets Act (DTSA) claim against a former employee on Sept. 22, ruling that the exchange failed to sufficiently plead that the defendant actually misappropriated any confidential or trade secret information (Payward Inc. v. Nathan Peter Runyon, No. 20-2130, N.D. Calif., 2020 U.S. Dist. LEXIS 173907).
September 24, 2020
Court Lacks Necessary Jurisdiction Over Trade Secret Claims, Defendants Say

LAS VEGAS — A federal district court in Nevada lacks the necessary jurisdiction over a breach of contract and trade secret misappropriation lawsuit brought by an equipment rental company against a former outside sales representative and an industry competitor because neither of the defendants has the required connection to the forum state, the defendants argue in a Sept. 21 motion to dismiss (Ahern Rentals Inc. v. Samuel Eure, et al., No. 20-1680, D. Nev.).
September 23, 2020
Ex-Hemp Company CEO Sued Over Sale Of Secret Strain In Violation Of DTSA

EUGENE, Ore. — A joint owner of a failed hemp production manufacturing joint venture sued the failed business's former CEO in Oregon federal court on Sept. 21, alleging that the CEO and other related parties misappropriated and sold the failed company's trade secret hemp strain to a Canadian company in violation of the federal Defend Trade Secrets Act (DTSA) (Big Wuf Enterprises LLC, et al. v. Go Farm Hemp LLC, et al., No. 20-1634, D. Ore.).
September 23, 2020
Software Company Says Former Employee Raided Its Trade Secrets

GREENVILLE, S.C. — An insulin management software company's former senior executive violated state and federal trade secret laws by raiding the company of its confidential information and trade secrets pertaining to its pricing and contract details for all of its accounts and using this information to compete with his former employer after obtaining employment as CEO of its chief competitor, the company alleges in a Sept. 18 complaint filed in South Carolina federal court (Glytec LLC, et al. v. Raymie McFarland, et al., No. 20-3321, D. S.C.).
September 22, 2020
Allegations In Tesla Model 3 Trade Secrets Suit Against Former Employee Trimmed

RENO, Nev. — Although a former Tesla Inc. employee has sufficiently shown that his alleged theft of company trade secrets pertaining to the company's Model 3 automobile and subsequent release of that information to a reporter could not have caused the declines in Tesla's stock price to which its damages expert testified, a federal judge in Nevada on Sept. 17 ruled that she was not persuaded by any of the other arguments proffered by the defendant in his summary judgment motion (Tesla Inc. v. Martin Tripp, No. 18-0296, D. Nev., 2020 U.S. Dist. LEXIS 170855).
September 22, 2020
Panel Upholds District Court's Trade Secret Suit Findings In Revised Opinion

NEW ORLEANS — In a revised opinion, a Fifth Circuit U.S. Court of Appeals panel on Sept. 17 ruled that a Texas federal court did not err in finding that a company did not use its former employee's patented and trade secret technology to develop a competing product because although the proclaimed legal issue raised by the former employee and the company he formed was a factual one, the plaintiffs "failed to carry their burden of proof at trial" (In the Matter of: ATOM Instrument Corp., No. 19-20151, 5th Cir., 2020 U.S. Dist. LEXIS 30065).
September 16, 2020
Ex-Worker Violating Terms Of Trade Secrets Suit Deal, Biotech Company Alleges

SAN FRANCISCO — A biotechnology company's former employee is breaching the terms of a permanent injunction and judgment in a trade secret misappropriation lawsuit based on his current employment arrangement with an industry competitor, the biotechnology company alleges in an Aug. 27 complaint filed in California federal court (AllCells LLC v. BioIVT LLC, et al., No. 20-6044, N.D. Calif.).
September 16, 2020
Equity Compensation Services Provider Seeks Injunction In Trade Secrets Row

CHICAGO — A provider of equity compensation services asks a federal judge in Illinois in a Sept. 11 motion to grant its request for a preliminary injunction against former employees in a trade secret misappropriation lawsuit, arguing that overwhelming evidence shows that the defendants misappropriated the company's trade secrets for its peer tracker software to develop a competing product (Aon plc, et al. v. Infinite Equity Inc., et al., No. 19-7504, N.D. Ill.).
September 14, 2020
Law Firm Sues Former Employee For Trade Secret Law Violations In Poaching Scheme

SAN DIEGO — A law firm sued one of its former attorneys, a client and three of the client's senior executives in California federal court on Sept. 10, alleging that the client and its executives engaged in a scheme to poach the former employee, hire him as its in-house counsel and misappropriate the company's confidential and proprietary information and/or trade secrets in violation of an employment agreement the attorney signed with the law firm and in violation of state and federal trade secret laws (Whiteslate LLP v. Derek Dahlin, et al., No. 20-1782, S.D. Calif.).
September 09, 2020
CBD Products Manufacturer Refiles Trade Secret Suit After Securing Counsel

WEST PALM BEACH, Fla. — A cannabidiol-based (CBD) products manufacturer refiled a previously dismissed trade secret misappropriation lawsuit in Florida federal court on Sept. 3, alleging that a former customer and others misappropriated the manufacturer's proprietary formulas for its CBD products and began marketing a substantially similar CBD product using those trade secrets in violation of state and federal trade secret laws (Healthcare Resources Management Group LLC v. EcoNatura All Healthy World LLC, et al., No. 20-81501 S.D. Fla.).
September 04, 2020
Appeal Of Permanent Injunction In Trade Secrets Dispute Dismissed As Moot

ST. LOUIS — An Eighth Circuit U.S. Court of Appeals panel on Sept. 3 dismissed as moot an appeal of a Missouri federal court's issuance of a permanent injunction in a trade secret misappropriation lawsuit against a consulting and sales for optimization services and software products provider's former employee and an industry competitor, ruling that the terms of the permanent injunction have expired because the appellants failed to seek a stay of the injunction before filing their appeal (Perficient Inc. v. Thomas Munley, et al., No. 19-2951, 8th Cir., 2020 U.S. App. LEXIS 28089).
September 03, 2020
Professor Sentenced To 18 Months' Imprisonment For Stealing Trade Secrets

SAN JOSE, Calif. — A federal judge in California on Sept. 1 sentenced a Chinese professor to 18 months in prison and ordered the defendant to pay $476,834.81 in restitution after finding him guilty of economic espionage and theft of trade secrets and conspiracy to commit both offenses stemming from his involvement in a scheme to misappropriate semiconductor technology from two U.S. companies (United States v. Hao Zhang, No. 15-106, N.D. Calif.).
September 03, 2020
6th Circuit Says Copyright Infringed, Trade Secret Injunction Proper

CINCINNATI — In an Aug. 21 ruling, the Sixth Circuit U.S. Court of Appeals left intact a final judgment that copyrighted database-script source code was infringed by Carrier Corp. in its effort to develop heating, ventilation and air conditioning (HVAC) testing software (ECIMOS LLC v. Carrier Corporation, Nos. 19-5436, -5519, 6th Cir., 2020 U.S. App. LEXIS 26722).
August 31, 2020
Majority Of Claims In Trade Secret Misappropriation Suit Preempted, Judge Rules

SAN DIEGO — Although a pharmacy benefit management (PBM) services provider and its subsidiaries have sufficiently pleaded allegations to support their claims under the Defend Trade Secrets Act (DTSA) that a former business partner and its subsidiary and others violated federal trade secret law by breaching the terms of a joint venture (JV) agreement by misappropriating the provider's trade secrets to create a competing PBM platform, eight of the plaintiffs' remaining claims are preempted by the California Uniform Trade Secrets Act (CUTSA) and must be dismissed, a federal judge in California ruled Aug. 27 (MedImpact Healthcare Systems Inc., et al. v. IQVIA Holdings Inc., et al., No. 19-1865, S.D. Calif., 2020 U.S. Dist. LEXIS 155996).
August 28, 2020
Texas Panel Remands Trade Secret, Fraud Claims To Lower Court For New Trial

SAN ANTONIO — A Texas appellate panel ruled Aug. 26 on rehearing that remand and a new trial are warranted in a breach of contract trade secret misappropriation lawsuit that previously resulted in a nearly $720 million judgment on certain claims because a jury question asking jurors to determine whether the title insurer misappropriated those trade secrets under a "use" or "acquisition by improper means" theory allowed the jury to reach its findings on the question based on invalid theories (Title Source Inc. v. HouseCanary Inc., No. 04-19-44-CV, Texas App., 4th Dist., 2020 Tex. App. LEXIS 6835).
August 26, 2020
Mobile Application Owner Appeals Orders In Trade Secret Suit To 9th Circuit

LOS ANGELES — The owner of a group-scheduling mobile application has appealed three summary judgment orders that led to the dismissal of all federal claims in a trade secret misappropriation lawsuit against certain of its former employees and competitors StubHub Inc. and its parent company, eBay Inc., according to an Aug. 24 notice of appeal filed in California federal court (Calendar Research LLC v. StubHub Inc., et al., No. 17-4062, C.D. Calif.).
August 26, 2020
Digital Music Distributor: Former Exec Provided Competitor With Trade Secrets

FRESNO, Calif. — A distributor of digitalized music sued its former chief operations officer and an industry competitor in California federal court on July 29, alleging that the former executive misappropriated its confidential recording codes and metadata in violation of state and federal trade secret law by providing the proprietary information to the competitor so that it may exploit the trade secrets to compete with the plaintiff in the digitalized music industry (Colonize Media Inc. v. Tate A. Palmer, et al., No. 20-1053, E.D. Calif.).
August 25, 2020
$140M Damages Award In Trade Secrets Row Upheld; Punitive Damages Award Vacated

CHICAGO — Although a federal jury was provided with sufficient evidence to support a software developer's assertion that an industry competitor stole its confidential information and trade secrets and used this information to develop a comparative analysis of its product to the developer's to advance its business in the United States, the jury was not provided with evidence that would allow it to determine that the competitor misappropriated any of the developer's other information, a Seventh Circuit U.S. Court of Appeals panel ruled Aug. 20 in partially overturning a federal district court's damages award in a trade secret misappropriation lawsuit (Epic Systems Corp. v. Tata Consultancy Services Ltd., et al., Nos. 19-1528 and 19-1613, 7th Cir., 2020 U.S. App. LEXIS 26473).