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Mealey's Trade Secret

March 19, 2020
Former DHS Official Indicted On Government Data Trade Secret Theft Charges

WASHINGTON, D.C. — A former Department of Homeland Security (DHS) acting inspector general has been charged with stealing proprietary software, source code and other information from the DHS containing, among other things, the personally identifiable information (PII) of employees of the DHS and U.S. Postal Service to create software to be sold to the Department of Agriculture, according to an indictment unsealed March 6 in District of Columbia federal court (United States v. Charles Kumar Edwards, et al., No. 20-cr-66, D. D.C.).
March 19, 2020
Former Health Food Services Employee Sued For Trade Secret Misappropriation

LOS ANGELES — A company that develops healthy food and wellbeing services for corporations sued a former employee in California federal court on March 16, alleging that the defendant breached the terms of her employment agreement and misappropriated the company’s trade secrets in violation of state and federal trade secret laws by downloading the company’s trade secret information to her personal computer before accepting a position with an industry competitor (Oh My Green Inc. v. Selena Senora Cuffe, No. 20-2509, C.D. Calif.).
March 19, 2020
Texas Trade Secret Law, Contract Breach Claims Survive Dismissal Bid

WICHITA FALLS, Texas — A federal judge in Texas on March 17 ruled that although an aerial application systems and components manufacturer’s breach of fiduciary duty and unfair competition claims against its former business partner are preempted by its Texas state law trade secret misappropriation claim, the court still has personal jurisdiction over the plaintiff’s remaining misappropriation and breach of contract claims (Texas Transland LLC v. Davidon Inc., No. 19-129, N.D. Texas, 2020 U.S. Dist. LEXIS 45676).
March 18, 2020
Judge: Former Client Failed To Show That Attorney Misappropriated Trade Secrets

DETROIT — A federal judge in Michigan on March 13 ruled that an attorney is entitled to summary judgment on claims that she misappropriated a former client’s trade secret information when she filed a breach of warranty lawsuit against her former client on behalf of another plaintiff using the former client’s case files because the former client failed to show that it owned or kept the case files it alleged she misappropriated confidential (FCA US LLC v. Patrea Bullock, No. 17-13972, E.D. Mich., 2020 U.S. Dist. LEXIS 43632).
March 18, 2020
Facebook, Former Employee Misappropriated AI Trade Secrets, Tech Start-Up Says

BOSTON — A technology company’s former employee breached the terms of his employment agreements by providing the company’s proprietary set of algorithms used in the field of artificial intelligence (AI) to Facebook Inc. in violation of state and federal trade secret laws, the company alleges in a March 4 complaint filed in Massachusetts federal court (Neural Magic Inc. v. Facebook Inc., et al., No. 20-10444, D. Mass.).
March 17, 2020
Judge: Former Employee Misappropriated Firm’s ‘Secret Sauce’ Trade Secrets

NEW YORK — A federal judge in New York on March 12 ruled that a financial services firm has sufficiently shown that a former employee misappropriated its “secret sauce” trade secrets for its confidential and proprietary trading models when he downloaded protected files written by himself and other employees and sent the trade secrets to his personal email account before accepting a position with an industry competitor (KCG Holdings Inc., et al. v. Rohit Khandekar, No. 17-3533, S.D. N.Y., 2020 U.S. Dist. LEXIS 44298).
March 17, 2020
No Manifest Error Found In Take-Nothing Judgment In Huawei Trade Secret Suit

SHERMAN, Texas — A federal judge in Texas on March 12 ruled that a former employee of a subsidiary of Huawei Technologies Co. Ltd. and current employer are entitled to attorney fees and costs in a trade secret misappropriation lawsuit because the judge entered a take-nothing judgment for both sides and, thus, the defendants were not a prevailing party (Huawei Technologies Co. Ltd., et al. v. Yiren Ronnie Huang, et al., No. 17-0893, E.D. Texas).
March 13, 2020
Expired Noncompete Restriction Leads To Appeal Dismissal In Trade Secret Suit

CINCINNATI — A Sixth Circuit U.S. Court of Appeals panel on Feb. 25 dismissed an appeal in a trade secret misappropriation lawsuit filed by a third-party logistics company against a former employee and industry competitor, ruling that the expiration of a six-month noncompete restriction that was part of a preliminary injunction has ended, making any attempt at relief as to that part of the injunction order impossible (Radiant Global Logistics Inc. v. Charles Furstenau Jr., et al., No. 19-1297, 6th Cir., 2020 U.S. App. LEXIS 5666).
March 05, 2020
CBD Cream Maker Opposes Dismissal Of State, Federal Trade Secret Law Claims

WEST PALM BEACH, Fla. — A cannabidiol-based (CBD) products manufacturer’s former customer has failed to show that the manufacturer’s state and federal trade secret law claims are insufficient and should be dismissed because both the “legal and jurisdictional grounds” for the plaintiff’s claims “arise out of” the defendant’s allegedly tortious conduct, the manufacturer argues in a March 3 opposition brief filed in Florida federal court (Healthcare Resources Management Group LLC v EcoNatura All Healthy World LLC, et al., No. 19-81700, S.D. Fla.).
March 04, 2020
Tech Company Awarded $5.7M In Damages In Trade Secret Misappropriation Suit

TAMPA, Fla. — A federal jury in Florida on March 3 awarded a technology company $5.7 million in damages after finding that the company had proven that its industry competitor had misappropriated its trade secrets to develop identical systems to those developed by the plaintiff (Financial Information Technologies Inc. v. iControl Systems USA LLC, No. 17-190, M.D. Fla.).
March 03, 2020
Limited Monetary Sanctions Granted Over Discovery Dispute In Trade Secrets Suit

CHICAGO — A federal magistrate judge in Illinois on Feb. 28 ruled that defendants in a breach of contract and trade secret misappropriation lawsuit brought by a stored energy solutions provider are entitled to limited monetary sanctions covering half of the reasonable attorney fees incurred by the defendants as a result of the plaintiff’s failure to properly collect documents and its issuance of misleading responses to other discovery requests (LiiON LLC v. Vertiv Group Corp., et al., No. 18-6133, N.D. Ill.).
February 28, 2020
Companies Appeal Rejection Of Criminal Immunity Argument In Trade Secret Suit

SAN FRANCISCO — A group of related Chinese companies that argue that they are “instrumentalities of a foreign state” and immune from criminal prosecution under the Foreign Sovereign Immunities Act of 1976 (FSIA) on Feb. 26 asked the Ninth Circuit U.S. Court of Appeals to find that a federal district court lacked subject matter jurisdiction over the U.S. government’s criminal action against them stemming from their alleged scheme to conspire with others to steal trade secrets from E.I. du Pont de Nemours and Co. (United States v. Pangang Group Co. Ltd., et al., No. 19-10306, 9th Cir.).
February 27, 2020
Chinese National Sentenced To 24 Months In Prison Over Theft Of $1B In Trade Secrets

A Chinese national and former associate scientist with a U.S. petroleum company was sentenced on Feb. 27 to 24 months in prison and ordered to pay $150,000 in restitution in connection his alleged theft of more than $1 billion in proprietary and trade secret information from his former employer, according to a U.S. Department of Justice press release (United States v. Hongjin Tan, No. 19-cr-9, N.D. Okla.).
February 26, 2020
Injunction Denied Due To Lack Of Evidence Of Trade Secret Misappropriation

SAN DIEGO — A federal judge in California on Feb. 24 ruled that a company has failed to show that there is a substantial likelihood of success on the merits of its claims for trade secret misappropriation under state and federal law because although it has identified its trade secrets, it has failed to show that its co-founder and an industry competitor misappropriated those trade secrets in filing a patent application (Javo Beverage Co. Inc. v. California Extraction Ventures Inc., et al., No. 19-1859, S.D. Calif., 2020 U.S. Dist. LEXIS 31167).
February 25, 2020
ClearChoice Sues Former Employee Over Post-Employment Access Of Trade Secrets

DENVER — A former regional development manager of a provider of administrative and management services to a network of dental treatment centers improperly accessed the company’s computer network system three times after the termination of her employment, providing her with access to her former employer’s confidential and trade secret patient records and other documents in violation of state and federal trade secret law, the company alleges in a Feb. 21 complaint filed in Colorado federal court (ClearChoice Management Services LLC v. Laura Robertson, No. 20-478, D. Colo.).
February 25, 2020
Cyber Security Developer’s Preliminary Injunction Request Denied

SAN FRANCISCO — Developers of cyber security productions have failed to show that there is a substantial likelihood of success on the merits of their federal trade secret law claim against a former executive and industry competitor who are alleged to have misappropriated the developers’ trade secrets and source code for two products after the former employee left the company to work for the competitor, a federal judge in California ruled Feb. 20 (Proofpoint Inc. v. Vade Secure Inc., No. 19-4238, N.D. Calif., 2020 U.S. Dist. LEXIS 30184).
February 21, 2020
Defendant Seeks Dismissal Of CBD Manufacturer’s Trade Secret Law Claims

WEST PALM BEACH, Fla. — A manufacturer of cannabidiol-based (CBD) products has failed to sufficiently show that a former customer violated state and federal trade secret misappropriation laws when it entered into a direct manufacturing and production relationship with the manufacturer’s business partners and cut the plaintiff out of the business relationship because the manufacturer failed to show that the defendant was provided with any confidential or trade secret information, the former customer alleges in a Feb. 18 motion to dismiss filed in Florida federal court (Healthcare Resources Management Group LLC v EcoNatura All Healthy World LLC, et al., No. 19-81700, S.D. Fla.).
February 21, 2020
Findings On Post-Trial Motions In Trade Secret Suit Survive 8th Circuit Scrutiny

ST. LOUIS — A federal district court did not err in granting a defendant’s motion for judgment as a matter of law on a counterclaim for trade secret misappropriation in violation of Arkansas law that it brought against Walmart Inc. in a breach of contract lawsuit because the defendant sufficiently pleaded the necessary elements of its counterclaim, an Eighth Circuit U.S. Court of Appeals panel ruled Feb. 12 (Walmart Inc. v. Cuker Interactive LLC, Nos. 18-1959 and 18-2081, 8th Cir., 2020 U.S. App. LEXIS 4289).
February 21, 2020
Trade Secret Law Claims Dismissed Against Independent Contractors

PITTSBURGH — A federal judge in Pennsylvania on Feb. 14 adopted a federal magistrate judge’s report and recommendation to dismiss several claims in a breach of contract and trade secret misappropriation lawsuit filed by a tax services provider against two of its former independent contractors and an industry competitor they formed based on a lack of any objections filed in response to the report and recommendation, as well as the judge’s review of the record (Profit Point Tax Technologies Inc. v. DPAD Group LLP, et al., No. 19-698, W.D. Pa., 2020 U.S. Dist. LEXIS 28477).
February 21, 2020
Analytics Services Provider Sues Former Exec In Trade Secret, Contract Dispute

DALLAS — A provider of data-driven analytics, software, services and solutions for financial institutions sued a former senior executive in Texas federal court on Feb. 14, alleging that the defendant violated the terms of an employment agreement and misappropriated the company’s trade secrets when he terminated his employment with the plaintiff and accepted a similar position with an industry competitor (Marquis Software Solutions Inc. v. Jeffrey Robb, No. 20-372, N.D. Texas).
February 21, 2020
Panel Affirms Court’s Dismissal Of Insufficiently Pleaded Trade Secret Claim

NEW YORK — A Third Circuit U.S. Court of Appeals panel on Feb. 12 ruled that a federal district court did not err in dismissing minority shareholders’ trade secret misappropriation claims against former business partners because the minority shareholders failed to sufficiently state that any defendants misappropriated any trade secrets obtained under the terms of a business agreement (Inspired Capital LLC, et al. v. Conde Nast, et al., No. 19-2057, 2nd Cir., 2020 U.S. App. LEXIS 4703).
February 19, 2020
Businessman Gets Prison Term For Conspiring To Steal Competitor’s Trade Secrets

WASHINGTON, D.C. — A federal judge in the District of Columbia on Feb. 10 sentenced a businessman with ties to a Peoples’ Republic of China (PRC) marine technology company who was charged with conspiring with others to steal trade secrets from an American competitor in the marine technology industry to 16 months in prison followed by two years of supervised release, according to a minute entry on the court’s docket (United States v. Shan Shi, et al., No. 17-110[CRC], D. D.C.).
February 19, 2020
Charges Against Remaining Defendants In Trade Secret Theft Lawsuit Dismissed

SAN JOSE, Calif. — Without providing further detail, federal prosecutors in California on Feb. 14 dropped charges against four former employees of technology company Jawbone stemming from their alleged theft of Jawbone’s trade secrets and subsequent misappropriation of those trade secrets while working for industry competitor Fitbit Inc. (United States v. Katherine Mogal, et al., No. 18-cr-0259, N.D. Calif.).
February 19, 2020
Defendants’ Personal Jurisdiction Arguments In Trade Secrets Suit Rejected

CLEVELAND — A federal judge in Ohio on Feb. 18 ruled that a designer and manufacturer of battery chargers and related products for motor vehicles has sufficiently shown that a federal district court has specific jurisdiction over claims made in a trade secret misappropriation lawsuit against an industry competitor alleged to have stolen a notebook from the plaintiff containing trade secret information (The NOCO Co. v. CTEK Inc., et al., No. 19-853, N.D. Ohio, 2020 U.S. Dist. LEXIS 27237).
February 19, 2020
Magistrate Judge Recommends Dismissal Of Contract, Trade Secret Claims

NEW YORK — A federal magistrate judge in New York on Feb. 3 ruled that a defendant in a trade secret misappropriation and breach of contract lawsuit filed by his former employer is entitled to summary judgment claims that he misappropriated the former employer’s confidential and trade secret customer lists in violation of certain restrictive covenants contained in his employment agreement (Markets Group Inc. v. Pablo Oliveira, No. 18-2089, S.D. N.Y., 2020 U.S. Dist. LEXIS 20709).