New Defend Trade Secrets Act

By Samantha Leiner Congress added a new section to the federal criminal trade secret law enacted on May 11, 2016, which allows owners of a trade secret to now file a civil action for misappropriation of that trade secret.  See 18 U.S.C. § 1836(b). The new act is referred to as the Defend Trade Secrets Act of 2016 (DTSA).   Before the addition of the DTSA, trade secret misappropriation issues were governed by state laws, in which 47 states have adopted their trade secret laws from by the Uniform Trade Secret Act (UTSA).   The UTSA was published in 1979, and amended in 1985, in an effort to make the ever-growing state common law on trade secrets more uniform throughout the country.  The three states that have not adopted the UTSA are New York, North Carolina, and Massachusetts. While the DTSA and the UTSA share some common aspects, there are three major differences between them. Filing an Ex Parte Application for

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Feature Comment: New Laws and Procedures Affecting IP Management Strategies

By James G. McEwen[1] Legislation Affecting Trade Secret Owners Enacted Federal Legislation Affecting Trade Secret Ownership and Rights Among other laws affecting trade secret ownership passed in 2007, Congress passed public law 110-175.  Entitled the Openness Promotes Effectiveness in our National Government (OPEN) Act of 2007, the OPEN Act has the potential to cause problems for trade secret owners who rely on the trade secret exemption to the Freedom of Information Act (FOIA), 5 U.S.C. §552(b)(4), to prevent release of trade secrets held by the Government.  By way of background, 5 U.S.C. §552(b)(4) allows the Government to prevent release of trade secret information which would otherwise have to be released under FOIA.  However, in order to prevent release, trade secret owners are generally required, pursuant to Executive Order 12600, to aid the Government to support an assertion that the 5 U.S.C. §552(b)(4) exemption applies to a requested record and in particular to help show that the disclosure would cause competitive

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10th Circuit Finds Trade Secrets Can Be in the Combination of Known Elements

In Hertz v. Luzenac Group, 576 F.3d 1103; 91 USPQ2d 1801 (10th Cir. 2009), Luzenac, a leading seller of talc, has sold various formulations of vinyl silane-treated talc from 1994 to 2002 under the name Mistron 604AV.  From 2002 onwards, Luzenac licensed the production of 604AV to Van Horn, Metz & Co., Inc. (VHM), one of Luzenac’s distributors, wherein Luzenac sold the raw talk used in the 604AV product to VHM.  Luzenac hired Hertz in 1994 to head the technical development and marketing of products that were to become 604AV and hired Lighthart to market and sell the 604 AV product to companies using such coatings.  Luzenac fired Hertz in 1998, however, Hertz won suit against Luzenac under Title VII for firing him in retaliation for his objecting to Luzenac’s religious discrimination.  Lighthart, who left Luzenac in 2001, testified in the case on Hertz’s behalf.  Several years after Hertz was fired from Luzenac, IMI Fabi contracted Hertz’s consulting company to

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Fifth Circuit Finds Use of Confidential Information In Filed Patent Applications Potentially Trade Secret Theft

In Triple Tee Golf, Inc. v. Nike, inc., Nos. 05-10934, 05-11442, 2007 U.S. App. LEXIS 8807 (5th Cir. April 17, 2007), Triple Tee Golf, Inc. developed a confidential design for an adjustable golf club.  In order to have a prototype made, Triple Tee contacted Tom Stites, a golf club designer.  Mr. Stites agreed to produce the prototype, and was shown rough prototype drawings and sketches, which Mr. Stites photographed for later reference.  Subsequently, Mr. Stites was hired by Nike as Director of Product Creation, and notified Triple Tee that he could no longer provide the prototype.  Further, while Triple Tee submitted the design idea to Nike for consideration, Nike returned the submission indicating it was not interested in the design. On a trip to a golf trade show, Mr. Gillig, the owner of Triple Tee, noticed that Nike’s new CPR Woods bore a resemblance to his confidential design which he has submitted to Tom Stites.  Later, Mr. Gillig also found

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Seventh Circuit Holds that, for a Case or Controversy to Exist in Trade Secret Action, There Must Be Evidence of Trade Secret and Value of the Secret

In BondPro Corporation v. Siemens Power Generation, Inc., 2006 U.S. App. LEXIS 23183 (7th Cir. 2006), the 7th Circuit affirmed the district court’s judgment for manufacturer Siemens as a matter of law, finding that BondPro’s claimed trade secret had not been revealed in detail sufficient to show that it had commercial value. BondPro demonstrated to Siemens a particular method of bonding insulation to U-shaped slots that form part of Siemens’ generators, hoping to license the technique.  Siemens, although told by BondPro that this technique was proprietary, later applied for a patent on a similar process.  The Patent Office rejected the application and neither Siemens nor BondPro ever put the method into use.  Yet BondPro sued for theft of a trade secret.  The district court jury found for plaintiff BondPro, but the judge found for the defendant Siemens as a matter of law. BondPro appealed. After resolving several jurisdictional issues that resulted largely from the sloppiness of the lawyers in this

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Preliminary Injunction

Evidence does not justify trial court’s issuance of preliminary injunction, under California’s Uniform Trade Secrets Act, prohibiting defendant’s publication of digital versatile disc decryption software on the Internet, since record indicates that decryption software had been so widely distributed that encryption technology may have lost its trade secret status by time plaintiff sought preliminary injunction.  The case involved the trial court granting DVD CCA’s request for preliminary injunction and entered an order prohibiting defendants from posting, disclosing, or distributing DeCSS (a computer program allegedly containing DVD CCA’s trade secrets) or related proprietary material.  (DVD Copy Control Association Inc. v. Bunner, 69 USPQ2d 1907, Ca CtApp, 2/27/04).

Discovery

Plaintiffs in action for patent infringement are entitled to discovery of information concerning third party’s polymeric films in connection with issue of patent validity, even if it is assumed that information sought is trade secret, since there is no absolute privilege to protect trade secrets from disclosure during discovery, and plaintiffs have established that information is relevant to subject matter of underlying suit and necessary for them to prepare for trial.  (Ex parte Sealed Air Corp., 70 USPQ2d 1575, DC SC 2/5/04).