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Mealey's Trade Secret

July 19, 2019
High Court Review Of Sanctions Ruling In Trade Secrets Dispute Sought

WASHINGTON, D.C. — U.S. Supreme Court review of a federal circuit court’s ruling upholding the issuance of a punitive sua sponte terminating sanctions order (TSO) in a trade secret misappropriation lawsuit is warranted because doing so will allow the Supreme Court to clarify that its ruling in National Hockey League v. Metropolitan Hockey Club Inc. does not authorize the use of civil sanctions to “punish or deter,” petitioners argue in a July 3 petition for writ of certiorari (Loop AI Labs Inc., et al. v. Anna Gatti, et al., No. 19-59, U.S. Sup., 2019 U.S. S. Ct. Briefs LEXIS 2501).
July 18, 2019
Court Has Jurisdiction Over 1 Defendant In Trade Secrets Suit, Judge Rules

NEWARK, N.J. — In a July 2 opinion, a federal judge in New Jersey ruled that a steel rack systems manufacturer has sufficiently shown that the court has personal jurisdiction over the plaintiff’s claims against its former employee in a trade secret misappropriation lawsuit, but not for claims against the former employee’s current employer based on the former employee’s signing of a noncompetition agreement (Frazier Industrial Co. v. Nicklaus M. Logrecco, et al., No. 18-12426, D. N.J., 2019 U.S. Dist. LEXIS 112233).
July 18, 2019
4th Circuit Panel Denies Rehearing In Tortious Interference Dispute

RICHMOND, Va. — Without providing further detail, a Fourth Circuit U.S. Court of Appeals panel on July 16 denied a petition for rehearing filed by a defendant in a lawsuit brought by its former subcontractors who alleged that the defendant conspired with a third party to engage in a bid-rigging scheme using the plaintiffs’ confidential and trade secret information (L-3 Communications Corp., et al. v. Serco Inc., No. 18-1423, 4th Cir.).
July 18, 2019
Prosecutors Seek Dismissal Of Indictment In Theft Of Trade Secrets Suit

BATON ROUGE, La. — Arguing that they have been unable to meet their burden of proof, government prosecutors on July 15 asked a federal judge in Louisiana to dismiss an indictment against two scientists that were alleged to have conspired to steal their former employer’s proprietary Mississippi Delta environmental modeling software (United States of America v. Ehab Meselhe, et al., No. 19-cr-61, M.D. La.).
July 16, 2019
AT&T Hits TV Station Consultant With DTSA, Breach Of Contract Suit

ST. LOUIS — AT&T Services Inc. and DirectTV LLC on July 11 hit a consultant to television stations in retransmission consent negotiations with a lawsuit in Missouri federal court, claiming that the defendant breached the terms of a nondisclosure agreement (NDA) and misappropriated the plaintiffs’ trade secrets by disclosing the terms of AT&T’s confidential rates and contract terms during retransmission consent agreement (RCA) negotiations (AT&T Services Inc., et al. v. Max Retrans LLC, No. 19-1925, E.D. Mo.).
July 16, 2019
Stay Granted In Trade Secrets Suit Pending Resolution Of Related Criminal Action

SAN FRANCISCO — A federal judge in California on July 11 granted a motion for a stay of a trade secrets misappropriation lawsuit filed by a semiconductor producer against a Taiwanese dynamic random access memory (DRAM) products manufacturer and its business partner pending the resolution of a related criminal proceeding against the defendants because the risk of prejudice to those defendants is substantial (Micron Technology Inc. v. United Microelectronics Corp., et al., No. 17-6932, N.D. Calif., 2019 U.S. Dist. LEXIS 74527).
July 12, 2019
Indictment Against Software Developer For Trade Secret Theft Unsealed

CHICAGO — In an indictment unsealed July 10, a federal grand jury in Illinois charged a Chicago-based locomotive manufacturer’s former software engineer with theft of trade secrets in violation of the Defend Trade Secrets Act (DTSA), in connection with his alleged theft of more than 3,000 electronic files containing the company’s proprietary and trade secret information (United States of America v. Xudong Yao, No. 17-cr-795, N.D. Ill.).
July 10, 2019
Summary Judgment Motion On DTSA Claim Denied In Trade Secrets Lawsuit

BATON ROUGE, La. — A federal judge in Louisiana on July 9 denied a motion for partial summary judgment filed by defendants in a trade secret misappropriation lawsuit filed by a gun club and its related entity, ruling that a determination on the plaintiffs’ Defend Trade Secrets Act (DTSA) claim can be better made at trial (Hunters Run Gun Club LLC, et al. v. Eddie D. Baker, et al., No. 17-176. M.D. La., 2019 U.S. Dist. LEXIS 113770).
July 09, 2019
District Court’s Upholding Of Damages Award In Trade Secrets Dispute Affirmed

PHILADELPHIA — A federal district court did not err in denying a defendant’s motion to vacate an award of head start damages in a trade secret misappropriation lawsuit, a Third Circuit U.S. Court of Appeals panel ruled July 3 in rejecting the defendants’ argument that an arbitrator manifestly disregarded several aspects of Texas law in awarding those damages (Sabre GLBL Inc. v. Melody Shan, Nos. 18-2079 and 18-2144, 3rd Cir., 2019 U.S. Dist. LEXIS 19983).
July 09, 2019
Ex-Employees May Subpoena Verizon In Trade Secrets Computer Fraud Suit

COLUMBUS, Ohio — Two former employees of a plastics company have sufficiently demonstrated the need to subpoena Verizon Wireless for certain records supporting their defense against computer fraud and wiretap claims against them related to the alleged theft of company trade secrets, an Ohio federal magistrate judge ruled July 3, granting their motion for expedited discovery (Axium Plastics LLC v. Keith Templin, et al., No. 2:19-cv-02386, S.D. Ohio, 2019 U.S. Dist. LEXIS 111079).
July 03, 2019
Claims Against Tech Company’s Competitors Dismissed For Lack Of Jurisdiction

CHICAGO — A federal judge in Illinois on July 2 ruled that a technology parts manufacturer has failed to show that defendants in a trade secret misappropriation and unjust enrichment lawsuit have sufficient contacts in Illinois for the court to exercise jurisdiction (J.S.T. Corp. v. Foxconn Interconnect Technology Ltd., et al., No. 19-300, N.D. Ill.).
July 03, 2019
Software Developer’s Trade Secrets Found To Be Insufficiently Identified

LOS ANGELES — A federal judge in California on June 28 ruled that a plaintiff in a trade secret misappropriation lawsuit stemming from a failed software licensing agreement has failed to sufficiently identify what trade secrets its former client is alleged to have misappropriated with particularity in making its state and federal trade secrets law claims (InteliClear LLC v. ETC Global Holdings Inc., No. 18-10342, C.D. Calif., 2019 U.S. Dist. LEXIS 109827).
July 02, 2019
Seafood Distributor’s TRO Motion In Bad Faith Dispute Denied

SAN FRANCISCO — A wholesale and retail seafood distributor failed to sufficiently show that there is a substantial likelihood that it will succeed on the merits of its state and federal trade secret law claims against its former employee, direct competitor and others, a federal judge in California ruled June 28 in denying the plaintiff’s motion for a temporary restraining order (TRO) (CleanFish LLC v. Dale Sims, et al., No. 19-3663, N.D. Calif., 2019 U.S. Dist. LEXIS 108946).
July 01, 2019
Trial Court’s Sovereign Immunity Findings In Trade Secrets Dispute Upheld

ATLANTA — A Georgia Court of Appeals panel on June 27 ruled that a state trial court did not err in determining that a plaintiff in a trade secret misappropriation lawsuit against the Board of Regents of the University System of Georgia may bring an action for a violation of Georgia trade secret law under the Georgia Tort Claims Act (GTCA) (Board of Regents of the University System of Georgia v. One Sixty Over Ninety LLC, No A19A0006, One Sixty Over Ninety LLC v. Board of Regents of the University System of Georgia, No. A19A0007, Ga. App., 2019 Ga. App. LEXIS 409).
July 01, 2019
Portion Of Dismissal Motion In Trade Secrets Dispute Found To Be Premature

INDIANAPOLIS — A federal judge in Indiana on June 27 ruled that dismissal of a defendant from a breach of contract and trade secret misappropriation lawsuit stemming from a master services agreement is premature because the court must first determine whether the defendant is liable as part of a joint venture with other defendants in the action (Hill-Rom Services Inc. v. Tellisense Medical LLC, et al., No. 17-4725, S.D. Ind., 2019 U.S. Dist. LEXIS 107719).
June 28, 2019
Citcon Denied Preliminary Injunction In Trade Secret Misappropriation Suit

SAN FRANCISCO — A plaintiff in a trade secret misappropriation lawsuit against certain of its former employees and its direct competitor and U.S. subsidiary has failed to demonstrate a substantial likelihood of success on the merits or that it will suffer irreparable harm if a preliminary injunction preventing the defendants from continuing to misappropriate its proprietary source code is not granted, a federal magistrate judge in California ruled June 25 (Citcon USA LLC v. RiverPay Inc., et al., No. 18-2585, N.D. Calif., 2019 U.S. Dist. LEXIS 106295).
June 28, 2019
Huawei Misappropriated Trade Secrets, But Was Not Unjustly Enriched, Jury Finds

SHERMAN, Texas — A federal jury in Texas on June 26 found that although a technology company has proven the existence of one or more trade secrets, that it owned those trade secrets and that Huawei Technologies Co. Ltd. has misappropriated them, it has failed to show that any of the plaintiffs in the trade secret misappropriation action were unjustly enriched as a result the misappropriation (Huawei Technologies Co. Ltd., et al. v. Yiren Ronnie Huang, et al., No. 17-0893, E.D. Texas).
June 28, 2019
Trade Secret, Patent Experts Vetted By Federal Judge In Wireless Technology Row

SAN FRANCISCO — A California federal judge on June 25 trimmed proposed expert testimony from both sides in a patent infringement and trade secrets misappropriation suit over a project by Google LLC to provide wireless services through the use of balloons in the stratosphere (Space Data Corporation v. Alphabet Inc., et al., No. 5:16-cv-3260, N.D. Calif., 2019 U.S. Dist. LEXIS 106297).
June 26, 2019
Separate Accrual Rule Applies To Trade Secret Claims, Panel Rules

PHILADELPHIA — A Third Circuit U.S. Court of Appeals panel on June 21 partially reversed a federal district court’s grant of summary judgment to a defendant in a trade secrets misappropriation lawsuit, ruling that although any alleged misappropriation that occurred more than three years prior to the complaint being filed is time-barred, a defendant’s continued misappropriation after that time is actionable under the separate accrual rule (Heraeus Medical GmbH v. Esschem Inc., No. 18-1368, 3rd Cir., 2019 U.S. App. LEXIS 18636).
June 24, 2019
Supreme Court Reverses 8th Circuit Ruling On FOIA Confidential Data Disclosure

WASHINGTON, D.C. — A U.S. Supreme Court majority on June 24 ruled that invoking a Freedom of Information Act (FOIA) exemption regarding the disclosure of trade secrets and confidential information requires only a showing that the information was treated as confidential by the parties involved and does not require a showing of “substantial-competitive-harm” (Food Marketing Institute v. Argus Leader Media, No. 18-481, U.S. Sup., 2019 U.S. LEXIS 4200).
June 21, 2019
Design Engineer Hit With 15-Count Indictment In Trade Secret Theft Suit

BOSTON — A semiconductor company’s former design engineer was hit with a 15-count indictment in Massachusetts federal court on June 11 on charges that he stole certain of the company’s trade secrets and confidential information for its monolithic microwave integrated circuits (MMICs) and used the trade secrets to develop products for a competing company he and his wife formed (United States of America v. Haoyang Yu, et al., No. 19-cr-10195, D. Mass.).
June 20, 2019
Aiding/Abetting, Tortious Interference Claims Dismissed In Trade Secrets Suit

ORLANDO, Fla. — A Florida federal judge on June 10 dismissed a trade secrets lawsuit because the plaintiffs made conclusory allegations and failed to show inducement by a competitor to breach a customer contract (Nephron Pharmaceuticals Corp., et al. v. Jennifer Shelly Hulsey, et al., No. 18-1573, M.D. Fla., Orlando Div., 2019 U.S. Dist. LEXIS 96966).
June 19, 2019
Seafood Supplier, Subsidiary Sue Competitor In Trade Secret Dispute

LOS ANGELES — A prepared seafood processing company and its subsidiary sued a competitor formed by two of its former employees in California federal court on June 11, alleging that the competitor misappropriated its trade secrets and used the information to poach one of its largest customers from it in violation of the Defend Trade Secrets Act (DTSA) (High Liner Foods [USA] Inc., et al. v. Haven Foods LLC, No. 19-5060, C.D. Calif.).
June 19, 2019
Defendants In Trade Secret Suit Were Denied Due Process, Panel Rules

PHILADELPHIA — In a nonprecedential opinion, a Third Circuit U.S. Court of Appeals panel on June 4 vacated a federal district court’s grant of a preliminary injunction in a trade secret misappropriation lawsuit, ruling that defendants were denied due process when the lower court issued the injunction without providing sufficient notice to them (Corporate Synergies Group LLC v. Gregory Andrews, et al., No. 18-3246, 3rd Cir., 2019 U.S. App. LEXIS 18187).
June 19, 2019
State, Federal Trade Secret Law Claims Survive Dismissal Bid

FRESNO, Calif. — A federal judge in California on June 18 ruled that dismissal of a state law claim for trade secret misappropriation is not appropriate based on individuals’ roles as agents of the plaintiff’s direct competitor, rejecting the defendants’ argument that the plaintiff failed to sufficiently show that the competitor acquired its trade secrets from someone other than the plaintiff itself (Deerpoint Group Inc. v. Agrigenix LLC, No. 18-536, E.D. Calif., 2019 U.S. Dist. LEXIS 101908).