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Mealey's Trade Secret

July 23, 2020
Tax Planner Failed To Plead Existence Of Trade Secret, Panel Rules

BOSTON — A federal district court erred in finding that defendants in a trade secret misappropriation and breach of contract lawsuit brought by a tax planning and consulting firm were liable for trade secret misappropriation because the plaintiff failed to sufficiently plead the existence of a trade secret, a First Circuit U.S. Court of Appeals panel ruled July 21 (TLS Management and Marketing Services LLC v. Ricky Rodriguez-Toledo, et al., No. 19-1104, 1st Cir., 2020 U.S. App. LEXIS 22732).
July 23, 2020
Adviser Sues Real Estate Investment Trust For Contract Breach, DTSA Violations

NEW YORK — An advisory firm that provides management services to a real estate investment trust (REIT) sued the REIT in New York federal court on July 21, alleging that the defendant breached the terms of a management agreement and intends to misappropriate certain intellectual property owned by the plaintiff in violation of the Defend Trade Secrets Act (DTSA) and New York common law (PRCM Advisers LLC v. Two Harbors Investment Corp., No. 20-5649, S.D. N.Y.).
July 21, 2020
Michigan Trade Secret Law Claim Remains In Printer Company's Trade Secret Suit

DETROIT — A federal judge in Michigan on July 7 ruled that neither a printing and imaging devices and software manufacturer nor its former employees are entitled to summary judgment on claims that those defendants misappropriated the company's trade secret information when they left their employment there to accept similar position with an industry competitor (Konica Minolta Business Solutions U.S.A. Inc. v. Lowery Corp, d/b/a Applied Imaging Systems Inc., et al., No. 15-11254, E.D. Mich., 2020 U.S. Dist. LEXIS 120082).
July 22, 2020
Claims In Home Decor Company's Trade Secret Suit Pared Down

CHICAGO — A federal judge in Illinois on July 20 ruled that a producer of home decor products' state law trade secret misappropriation claim against a former business partner and an industry competitor is not time-barred because the plaintiff has sufficiently shown that its claim did not start accruing until 2018 (Chartwell Studio Inc. v. Team Impressions Inc., et al., No. 19-6944, N.D. Ill., 2020 U.S. Dist. LEXIS 126748).
July 21, 2020
Texas High Court Declines Review Of TCPA Ruling In Trade Secrets Dispute

AUSTIN, Texas — The Texas Supreme Court on July 17 declined review of a state appellate court’s ruling that the Texas Citizens Participation Act (TCPA) does not apply in a trade secret misappropriation lawsuit stemming from communications between a recycling company formed by former employees of an industry competitor and scrap metal suppliers the industry competitor had alleged were contacted based on confidential and trade secret information obtained by the former employees prior to departing to start their competing business (Geomet Recycling LLC, et al. v. EMR [USA Holdings] Inc., et al., No. 20-0141, Tex. Sup.).
July 20, 2020
Spoliation Sanctions Stand In Copyright Infringement, Trade Secret Dispute

RICHMOND, Va. — A federal district court did not err in issuing spoliation sanctions in a copyright infringement and trade secret misappropriation lawsuit against a former employee of a software company, his wife and the competing company they owned because any less drastic sanctions would have failed to properly address the prejudice suffered by the company, the Fourth Circuit U.S. Court of Appeals ruled July 16 (QueTel Corp. v. Hisham Abbas, et al., No. 18-2334, 4th Cir., 2020 U.S. App. LEXIS 22124).
July 20, 2020
Discovery Stay Granted In Rental Equipment Provider's Trade Secret Suit

SEATTLE — A federal judge in Washington on July 9 granted a motion to stay discovery in a breach of contract and trade secret misappropriation lawsuit brought by a provider of construction equipment rental services against a former employee and an industry competitor, ruling that the competitor has shown “good cause” for granting such relief (Ahern Rentals Inc. v. Travis Mendenhall, et al., No. 20-542, W.D. Wash., 2020 U.S. Dist. LEXIS 120948).
July 17, 2020
L’Oréal Appeals $66M Patent, Trade Secret Judgment To Federal Circuit

WASHINGTON, D.C. — In a July 2 appellant brief, L’Oréal USA Inc. tells the Federal Circuit U.S. Court of Appeals that it was entitled to judgment as a matter of law (JMOL) on allegations that it misappropriated four trade secrets relating to hair care products, citing a Delaware federal judge’s own finding that a patent assignee-plaintiff “did not prove the value of any trade secret except maleic acid as an active agent” (L’Oréal USA Inc. v. Liqwd Inc., et al., No. 20-1382, Fed. Cir.).
July 16, 2020
Digital Music Provider’s Trade Secret Claims Dismissed On Jurisdictional Grounds

LOS ANGELES — A provider of digital music services to DJs has failed to sufficiently plead that a federal district court has federal jurisdiction over claims against a European competitor because it has not properly shown that the defendant had minimum contacts with California “sufficient to justify requiring the company to defend the action” in the state, a federal judge in California ruled July 13 in dismissing the action without leave to amend (Beatport LLC v. SoundCloud Ltd., No. 19-847, C.D. Calif., 2020 U.S. Dist. LEXIS 123719).
July 16, 2020
Company Sues Over Alleged Misappropriation Of Cement Truck Cleaning Tech

LOS ANGELES — A company sued a number of related parties in California federal court on July 14, alleging that the defendants misappropriated its trade secret information for the development of a cement truck internal cleaning system they obtained as part of an agreement to construct the system and are in the process of developing a substantially similar system using the company’s trade secret information in violation of federal trade secret law (Core Insight Systems Inc. v. Global Barrier Services Inc., et al., No. 20-1246, C.D. Calif.).
July 13, 2020
Judge Compels Arbitration Of Trade Secrets Claims Against Chinese Manufacturer

LOS ANGELES — A federal judge in California on July 8 dismissed a U.S. auto parts distributor’s complaint and motion for a preliminary injunction to enjoin the alleged misappropriation of trade secrets by a Chinese manufacturer, its U.S. subsidiary and employees and granted a defense motion to compel arbitration of the claims after finding that an arbitration clause consented to by the parties was in effect at the time the dispute arose (Pilot Inc. v. TYC Brother Industrial Co. Ltd., et al., No. 20-2978, C.D. Calif., 2020 U.S. Dist. LEXIS 120083).
July 10, 2020
Organization’s Counterclaims In Trade Secrets Dispute Found To Be Insufficient

LINCOLN, Neb. — Ruling that a group purchasing organization for more than 600 pharmacies has failed to provide any factual support for its counterclaims that a former employee breached the terms of an employment agreement he signed and misappropriated the organization’s trade secrets when he resigned and began developing a competing company, a federal judge in Nebraska on July 8 granted the former employee’s motion to dismiss the counterclaims against him (Thomas Jackson v. Smart-Fill Management Group Inc., et al., No. 20-3019, D. Neb., 2020 U.S. Dist. LEXIS 119299).
July 09, 2020
Consulting Firm’s Trade Secret Law Claims Survive Dismissal Bid

SAN JOSE, Calif. — A federal judge in California on July 6 ruled that a consulting firm has sufficiently alleged that a former employee and an industry competitor misappropriated the firm’s trade secrets when the employee left his employment with the plaintiff, began working for the competitor and engaged in a scheme to misappropriate the firm’s trade secrets in violation of state and federal trade secret laws (Krypt Inc. v. Ropaar LLC, et al., No. 19-3226, N.D. Calif., 2020 U.S. Dist. LEXIS 118207).
July 08, 2020
Magistrate Judge Recommends $20M Damages Award In Trade Secrets Lawsuit

NEW YORK — A federal magistrate judge in New York on July 1 issued a report and recommendation that a New York federal district court should award more than $20 million in compensatory damages for lost profits and punitive damages, plus post-judgment interest, to a company in a trade secret misappropriation lawsuit against a former employee of its exclusive distributor, ruling that the company’s submission of new evidence is sufficient to show the existence of lost profits “to a reasonable certainty” (Continental Industries Group Inc. v. Mehmet Altunkilic, No. 14-790, S.D. N.Y., 2020 U.S. Dist. LEXIS 116763).
July 08, 2020
Judge Upholds Report, Recommendation In Tech Company’s Trade Secret Suit

SHERMAN, Texas — A federal judge in Texas on July 6 ruled that a technology company’s “narrow objection” to a federal magistrate judge’s ultimate finding that the plaintiff must show the required “use” of its trade secrets by the defendant in stating its state and federal trade secret law claims is without merit and partially granted the defendant’s summary judgment motion (Accresa Health LLC v. Hint Health Inc., No. 18-536, E.D. Texas, 2020 U.S. Dist. LEXIS 117620).
July 07, 2020
Claims In Premature Ejaculation Product Trade Secret Suit To Proceed

NEWARK, N.J. — A federal judge in New Jersey on June 25 ruled that a manufacturer of sexual wellness products is not entitled to summary judgment on a federal trade secret law claim filed against it by an industry competitor for allegedly misappropriating the competitor’s trade secret information for its premature ejaculation (PE) product because genuine issues of material fact exist as to whether the competitor has sufficiently stated the claim (Absorption Pharmaceuticals LLC v. Reckitt Benckiser LLC, No. 17-12872, D. N.J., 2020 U.S. Dist. LEXIS 113123).
July 07, 2020
Ice Cream Franchisor’s Trade Secrets Suit Transferred To Delaware Court

PHILADELPHIA — A federal judge in Pennsylvania on June 19 ruled that transfer of a franchisors’ trade secret misappropriation lawsuit against franchisees to Delaware federal court is proper based on the Third Circuit U.S. Court of Appeals’ multifactor balancing test (Sweet Charlie’s Franchising LLC v. Sweet Moo’s Rolled Ice Cream LLC, No. 19-4618, E.D. Pa., 2020 U.S. Dist. LEXIS 107675).
July 02, 2020
Kylie Jenner’s Cosmetics Company Named In Secret Sauce Trade Secret Theft Suit

LOS ANGELES — A cosmetics manufacturer that specializes in promoting new cosmetics through ecommerce and social media platforms sued a cosmetics company owned by media personality and socialite Kylie Jenner in California state court on June 30, alleging that the company, an industry competitor and others have engaged in a scheme to steal and misappropriate its proprietary business model in violation of California trade secret law (Seed Beauty LLC, et al. v. Coty Inc., et al., No. 20-721, Calif. Super., Los Angeles Co.).
July 02, 2020
Trade Secret Law Claims Against Former Bankers Survive Dismissal Bid

ORLANDO, Fla. — A federal judge in Florida on June 29 ruled that a community bank and its parent company have sufficiently alleged that several former employees violated state and federal trade secret laws when they engaged in a scheme to misappropriate the bank’s confidential and proprietary customer information before abruptly resigning from their positions and accepting employment with a competing bank (Seacoast Banking Corp. of Florida, et al. v. Matthew Diemer, et al., No. 20-0057, M.D. Fla.).
June 30, 2020
Most Claims In Advisory Firm’s Trade Secret Suit Survive Summary Judgment Bid

PHILADELPHIA — A federal judge in Pennsylvania on June 26 substantially denied a summary judgment motion filed by defendants in a trade secret misappropriation and breach of contract lawsuit, ruling that although a majority of an independent advisory firm’s claims must be decided by a jury, its claim for unjust enrichment is duplicative of its breach of contract claims and must be dismissed (Dietrich & Associates Inc. v. John R. Neison, et al., No. 18-5034, E.D. Pa., 2020 U.S. Dist. LEXIS 112534).
June 30, 2020
Fracking Companies: Financial Agents’ Deal Making Violated Contract, Trade Secrets

WILMINGTON, Del. — Hydraulic fracturing companies sued financial services providers in the Delaware Chancery Court on June 9, contending that they violated their fiduciary and contractual duties and numerous state laws governing trade secrets when they commingled funds and engaged in transactions outside the scope of the agreement they had entered (Lone Pine Resources LP, et al. v. William S. Dickey, et al., No. 2020-0450, Del. Chanc.).
June 29, 2020
Corrosion Prevention Product Maker Files Suit For Trade Secret Misappropriation

HOUSTON — A developer and manufacturer of corrosion prevention products sued three former employees and two industry competitors in Texas federal court on June 23, alleging that the defendants misappropriated the company’s confidential and trade secret information in the developing competing products in violation of state and federal trade secret laws (Corrosion Prevention Technologies LLC v. Loren L. Hatle, et al., No. 20-2201, S.D. Texas).
June 25, 2020
Illinois Contacts Allow For Jurisdiction In Trade Secrets Suit, Company Argues

CHICAGO — Defendants in a trade secret misappropriation lawsuit are not entitled to have claims against them dismissed for lack of personal jurisdiction because any injury they may have caused to an industry competitor stemming from their alleged misappropriation of its X-ray tube technology trade secrets has directly arisen from their contacts with the State of Illinois, the plaintiffs argue in a June 22 opposition brief filed in Illinois federal court (Philips Medical Systems [Cleveland] Inc., et al. v. Jose Buan, et al., No. 19-2648, N.D. Ill.).
June 24, 2020
Chinese American Wants Racially Biased Trade Secrets Theft Indictment Dismissed

BOSTON — An American citizen of Chinese descent asked a federal judge in Massachusetts on June 22 to dismiss a criminal indictment charging him with stealing trade secrets from his former employer, arguing that he has been selectively targeted by the FBI based on his racial background (United States of America v. Haoyang Yu, et al., No. 19-cr-10195, D. Mass.).
June 23, 2020
Alabama High Court Panel Finds Preliminary Injunction In Trade Secret Suit Moot

MONTGOMERY, Ala. — A preliminary injunction against a former employee of a construction company that builds cold-storage facilities prohibiting him from soliciting any employees or clients of his former employer is moot because the two-year period prohibiting him from engaging in such activities contained in a restrictive covenant has expired, an Alabama Supreme Court panel ruled June 22 (Joshua Rogers v. Burch Corp., No. 1190088, Ala. Sup., 2020 Ala. LEXIS 90).