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Mealey's Trade Secret

June 19, 2020
Lancet Maker Sues Business Partner Over Alleged Misuse Of Trade Secrets

CHICAGO — A manufacturer of lancing devices and lancets sued its former business partner in Illinois federal court on June 11, alleging that the defendant misappropriated the manufacturer’s trade secret and proprietary information to set up competing business and steal the plaintiff’s customers (Facet Technologies LLC v. Asahi Polyslider Co. Ltd., No. 20-3435, N.D. Ill.).
June 19, 2020
Documents In Log Deemed Protected By Attorney-Client Privilege

KANSAS CITY, Mo. — A federal judge in Missouri on June 10 held that although 36 documents contained in a privilege log and sought by a company in a legal malpractice and aiding and abetting trade secret misappropriation lawsuit are protected by attorney-client privilege, the judge would conduct an in camera review of the documents to determine whether they were subject to the joint-client exception (Energy Creates Energy LLC, et al. v. Brinks Gilson Lione P.C., et al., No. 18-913, W.D. Mo., 2020 U.S. Dist. LEXIS 101900).
June 19, 2020
Iowa Panel Rejects Vodka Maker’s Sanctions Appeal In Trade Secrets Dispute

DES MOINES, Iowa — A trial court did not abuse its discretion in denying a vodka maker’s request for attorney fees and sanctions pursuant to Iowa law after the plaintiff voluntarily dismissed the defendant from the action because the plaintiff’s claims in its pleadings were not frivolous in nature, an Iowa appellate panel ruled June 17 (Oz Spirits LLC v. Swell Liquor LLC, et al., No. 19-0513, Iowa App., 2020 Iowa App. LEXIS 642).
June 19, 2020
Panel Sends Contract, Trade Secret Claims Back To District Court

NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on June 17 ruled that a federal district court erred in granting a company’s motion for summary judgment on a breach of contract claim filed by a product developer in a trade secret misappropriation lawsuit because the lower court improperly construed the terms of the parties’ confidentiality agreement in concluding that no such breach existed (Hoover Panel Systems Inc. v. HAT Contract Inc., No. 19-10650, 5th Cir., 2020 U.S. App. LEXIS 19044).
June 19, 2020
Composite Materials Maker Sues Rival, Others For Trade Secret Misappropriation

BEAUMONT, Texas — A manufacturer of composite materials used in the oil and gas industry sued an industry competitor and two former employees in Texas federal court on June 5, alleging that the former employees, with the assistance of the competitor, stole the plaintiff’s trade secrets and intellectual property as part of a corporate raiding scheme in violation of state and federal trade secret laws (NRI ATM LLC v. Plant Services Inc., et al., No. 20-248, E.D. Texas).
June 17, 2020
Trade Secret Claims Do Not Infringe On Free Speech, Texas Panel Rules

DALLAS — A Texas appellate court panel on June 12 ruled that a former employee of a medical billing company and his current employer have failed to show that a trial court erred in denying their motion to dismiss a trade secret misappropriation lawsuit based on their argument that the company’s claims infringe on their rights to free speech and association in violation of the Texas Citizens Participation Act (TCPA) (Collaborative Imaging Inc., et al. v. Zotec Partners LLC, et al., No. 05-19-01256-CV, Texas App., 5th Dist., 2020 Tex. App. LEXIS 4364).
June 17, 2020
Sports Goods Retailer’s Injunctive Relief Request In Trade Secret Suit Denied

ALLENTOWN, Pa. — A federal judge in Pennsylvania on June 15 denied a motion for temporary restraining order (TRO) and preliminary injunction in a trade secret misappropriation and breach of contract lawsuit filed by a sporting goods retailer against its former employee, a design firm and others, ruling that the plaintiff’s request for injunctive relief is based largely on “assumptions” of wrongdoing on the part of the defendants (Schuylkill Valley Sports Inc. v. Corporate Images Co., et al., No. 20-2332, E.D. Pa., 2020 U.S. Dist. LEXIS 103828).
June 15, 2020
Judge Adopts Recommendation Against Dismissing Trade Secret Law Claims

WILMINGTON, Del. — A federal judge in Delaware on June 10 overruled defendants’ objections to a federal magistrate judge’s report and recommendation that allowed certain claims in a trade secret misappropriation lawsuit to proceed, ruling in each instance that the magistrate judge’s rulings were correct (Progressive Sterilization LLC v. Turbett Surgical LLC, No. 19-627, D. Del., 2020 U.S. Dist. LEXIS 101885).
June 15, 2020
Panel Upholds Issuance Of Preliminary Injunction In Trade Secrets Dispute

CINCINNATI — A federal district court did not abuse its discretion by failing to allow a defendant to respond to a motion for preliminary injunction in a trade secret misappropriation lawsuit because the defendant had been given an opportunity to file such a response but failed to do so, a Sixth Circuit U.S. Court of Appeals panel ruled June 12 (RGIS LLC v. Keith Gerdes, No. 19-2051, 6th Cir., 2020 U.S. App. LEXIS 18629).
June 12, 2020
Texas Appellate Panel Remands Trade Secret, Fraud Claims For New Trial

SAN ANTONIO — A Texas appellate panel on June 3 partially overturned a state trial court’s $706.2 million jury award in a breach of contract and trade secret misappropriation lawsuit, ruling that although a Texas trial court did not err in entering a take-nothing judgment on a title insurer’s breach of contract claim against a provider of property appraisal software, data and analytic tools, a new trial was necessary regarding the defendant’s trade secret misappropriation and fraud claims (Title Source Inc. v. HouseCanary Inc., No. 04-19-00044-CV, Texas App., 2020 Tex. App. LEXIS 4116).
June 11, 2020
Tech Company Sues Former Employee For Alleged Trade Secret Misappropriation

TRENTON, N.J. — A public sector financial technology (FinTech) platform company sued a former employee and an industry competitor he formed in New Jersey federal court on June 9, alleging that the former employee misappropriated the company’s trade secret information to build a competing business and destroy the plaintiff’s business in violation of state and federal trade secrets law (Statistical Zero Group LLC v. Sergio Marrero, et al., No. 20-7030, D. N.J.).
June 04, 2020
S.C. High Court: Plaintiffs Failed To Plead Elements Of Trade Secrets Claim

COLUMBIA, S.C. — A South Carolina trial court did not err in ruling that a company failed to sufficiently show that its former member and two companies for which he worked violated the state’s trade secret law when he removed certain of the company’s trade secrets contained on two company-owned laptops and a Blackberry device because the company failed to show that the trade secrets had the required independent economic value for a showing of trade secret misappropriation, the South Carolina Supreme Court ruled June 3 (David Wilson v. John Gandis, et al., No. 27980, S.C. Sup., 2020 S.C. 88).
June 04, 2020
Drilling Company Says Fracking Patents Infringed, Trade Secrets Misappropriated

HOUSTON — A drilling company that provides services to hydraulic fracturing operators on June 3 sued a former consultant, alleging that he misappropriated trade secrets to which he had access during the time was under contract with the company and later infringed patents for products and procedures by registering those patents in his own name (Abaco Drilling Technologies LLC v. PV Fluid Products Inc., et al., No. 20-1946, S.D. Texas).
June 03, 2020
Company Hits Former CEO With Trade Secrets Suit Over Sale Of Counterfeit Product

SAN FRANCISCO — A technology company sued its former CEO in a California federal court on June 2, alleging that the defendant misappropriated the company’s trade secrets, violated the terms of a separation agreement between the parties and has continued to misrepresent himself as an employee of the company in order to sell counterfeit versions of the company’s hands-on learning tool for children in Asia in violation of state and federal trade secrets laws (Piper Inc. v. Mark Pavlyukovskyy, No. 20-3663, N.D. Calif.).
June 03, 2020
Judge Won’t Give Software Developer Another Chance To Identify Trade Secrets

CHICAGO — Opining that although a software developer has been given numerous opportunities to sufficiently identify trade secrets a former business partner is alleged to have misappropriated when it developed its own rebate portal processing system using the developer’s trade secrets, a federal judge in Illinois on May 31 held that the developer has failed to do so (NEXT Payment Solutions Inc. v. CLEAResult Consulting Inc., No. 17-8829, N.D. Ill., 2020 U.S. Dist. LEXIS 94764).
June 02, 2020
Questions Prevent Tech Company’s Bid For Injunction In Trade Secrets Dispute

BOSTON — A federal judge in Massachusetts on May 29 ruled that a technology company is not entitled to a preliminary injunction in its breach of contract and trade secret misappropriation lawsuit against a former employee and his present employer, Facebook Inc., because questions exist as to whether the source code and algorithms the defendants are alleged to have misappropriated are truly trade secrets and whether the alleged trade secrets were obtained by the defendants by improper means (Neural Magic Inc. v. Facebook Inc., et al., No. 20-10444, D. Mass.).
June 01, 2020
Former GE Engineer Admits To Stealing Company’s Trade Secrets

ALBANY, N.Y. — A former General Electric Co. (GE) engineer has pleaded guilty to stealing trade secret information relating to GE’s next generation semiconductor technology so that he could use the trade secrets to form his own competing company, according to a plea agreement filed by government prosecutors on May 28 in New York federal court (United States of America v. Yang Sui, No. 20-cr-109, N.D. N.Y.).
May 29, 2020
Judge: Tech Company Failed To Show Trade Secrets Derived Economic Value

OAKLAND, Calif. — A federal judge in California on May 26 ruled that a manufacturer of hardware, software and other electronic devices and its related company have sufficiently pleaded state and federal trade secret law claims against only certain defendants because although the plaintiff had adequately alleged that it owned the trade secrets the defendants’ allegedly misappropriated, it has failed to show the independent economic value of all of the trade secrets at issue (Cisco Systems Inc., et al. v. Wilson Chung, et al., No. 19-7562, N.D. Calif., 2020 U.S. Dist. LEXIS 92497).
May 28, 2020
Trade Secret Claim Trimmed From Lawsuit Over Misused Mailing List

CAMDEN, N.J. — Although the holder of certain trademarks associated with his baseball training and tournament business has sufficiently alleged that his business’s mailing list is a trade secret pursuant to the New Jersey Trade Secrets Act (NJTSA), he has failed to properly show that he took the necessary steps to maintain the secrecy of the mailing list, a federal judge in New Jersey ruled May 27 (Joseph Barth v. Ajay Vulimiri, No. 19-20755, D. N.J., 2020 U.S. Dist. LEXIS 91206).
May 26, 2020
CBD Manufacturer’s Trade Secret Suit Dismissed For Failure To Prosecute

WEST PALM BEACH, Fla. — A cannabidiol-based (CBD) products manufacturer’s failure to obtain replacement counsel within the 20-day time period it was provided requires dismissal of the plaintiff’s trade secret misappropriation lawsuit because the manufacturer is an “artificial entity” and must be represented by counsel, a federal judge in Florida ruled May 21 (Healthcare Resources Management Group LLC v. EcoNatura All Healthy World LLC, et al., No. 19-81700, S.D. Fla.).
May 22, 2020
Non-Source Code Allegations In Trade Secrets Suit Dismissed On Summary Judgment

LOS ANGELES — The owner of a group-scheduling mobile application has failed to state any issue of material fact precluding a federal judge in California from granting summary judgment in favor of former employees and competitors StubHub Inc. and its parent company, eBay Inc., on claims that they violated provisions of federal trade secret law by misappropriating and refusing to return the company’s non-source code information for its application, the judge ruled May 13 (Calendar Research LLC v. StubHub Inc., et al., No. 17-4062, C.D. Calif.).
May 21, 2020
Panel: Court Erred In Dismissing Claims Against Defendant In Trade Secret Suit

LAKE CHARLES, La. — A Louisiana trial court erred in finding that a defendant in a trade secret misappropriation and breach of contract lawsuit was merely a “passive owner” of a rubber and gasket company during time between entering into an act of sale and its execution when she and other defendants are alleged to have misappropriated the company’s trade secrets, a Louisiana appellate panel ruled May 20 in ruling that the trial court erred in dismissing claims against her for violations of Louisiana trade practices and trade secret law (Vesta Halay Johnston, et al. v. Susan Halay Vincent, et al., No. 19-55, La. App., 3rd Cir., 2020 La. App. LEXIS 769).
May 21, 2020
Panel Vacates Magistrate Judge’s Flawed Findings In Trade Secret, Copyright Suit

ATLANTA — A federal magistrate judge erred in determining that although a software company had sufficiently shown that its transformative database is a trade secret in a pair of lawsuits against industry competitors, the company failed to show that the defendants misappropriated the trade secret because he failed to consider multiple alternative types of misappropriation contemplated under Florida’s trade secret law, an 11th Circuit U.S. Court of Appeals panel ruled May 20 in partly remanding the magistrate judge’s findings of fact (Compulife Software Inc. v. Moses Newman, et al., Nos. 18-12004 and 18-12007, 11th Cir., 2020 U.S. App. LEXIS 16052).
May 20, 2020
Defendants In Trade Secret Dispute Seek Dismissal Of State, Federal Law Claims

CHICAGO — Dismissal of state and federal trade secret law claims brought against former employees of a provider of equity compensation services by their former employer is warranted because the plaintiffs have failed to sufficiently show that the defendants improperly acquired, used or disclosed any trade secret information, the defendants argue in a May 15 motion to dismiss filed in Illinois federal court (Aon plc, et al. v. Infinite Equity Inc., et al., No. 19-7504, N.D. Ill.).
May 20, 2020
Video Game Developer’s Trade Secret Claims Survive Dismissal Attempt

SEATTLE — A federal judge in Washington on May 18 ruled that dismissal of a video game developer’s state and federal trade secret misappropriation claims against a former business partner and its CEO stemming from a failed video game development agreement is not warranted because the plaintiff has pleaded plausible claims under both statutes sufficient to survive the defendants’ attempt to dismiss (tinyBuild LLC v. Nival International Ltd., et al., No. 18-805, W.D. Wash., 2020 U.S. Dist. LEXIS 87122).