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Mealey's Trade Secret

August 31, 2020
Majority Of Claims In Trade Secret Misappropriation Suit Preempted, Judge Rules

SAN DIEGO — Although a pharmacy benefit management (PBM) services provider and its subsidiaries have sufficiently pleaded allegations to support their claims under the Defend Trade Secrets Act (DTSA) that a former business partner and its subsidiary and others violated federal trade secret law by breaching the terms of a joint venture (JV) agreement by misappropriating the provider's trade secrets to create a competing PBM platform, eight of the plaintiffs' remaining claims are preempted by the California Uniform Trade Secrets Act (CUTSA) and must be dismissed, a federal judge in California ruled Aug. 27 (MedImpact Healthcare Systems Inc., et al. v. IQVIA Holdings Inc., et al., No. 19-1865, S.D. Calif., 2020 U.S. Dist. LEXIS 155996).
August 28, 2020
Texas Panel Remands Trade Secret, Fraud Claims To Lower Court For New Trial

SAN ANTONIO — A Texas appellate panel ruled Aug. 26 on rehearing that remand and a new trial are warranted in a breach of contract trade secret misappropriation lawsuit that previously resulted in a nearly $720 million judgment on certain claims because a jury question asking jurors to determine whether the title insurer misappropriated those trade secrets under a "use" or "acquisition by improper means" theory allowed the jury to reach its findings on the question based on invalid theories (Title Source Inc. v. HouseCanary Inc., No. 04-19-44-CV, Texas App., 4th Dist., 2020 Tex. App. LEXIS 6835).
August 26, 2020
Mobile Application Owner Appeals Orders In Trade Secret Suit To 9th Circuit

LOS ANGELES — The owner of a group-scheduling mobile application has appealed three summary judgment orders that led to the dismissal of all federal claims in a trade secret misappropriation lawsuit against certain of its former employees and competitors StubHub Inc. and its parent company, eBay Inc., according to an Aug. 24 notice of appeal filed in California federal court (Calendar Research LLC v. StubHub Inc., et al., No. 17-4062, C.D. Calif.).
August 26, 2020
Digital Music Distributor: Former Exec Provided Competitor With Trade Secrets

FRESNO, Calif. — A distributor of digitalized music sued its former chief operations officer and an industry competitor in California federal court on July 29, alleging that the former executive misappropriated its confidential recording codes and metadata in violation of state and federal trade secret law by providing the proprietary information to the competitor so that it may exploit the trade secrets to compete with the plaintiff in the digitalized music industry (Colonize Media Inc. v. Tate A. Palmer, et al., No. 20-1053, E.D. Calif.).
August 25, 2020
$140M Damages Award In Trade Secrets Row Upheld; Punitive Damages Award Vacated

CHICAGO — Although a federal jury was provided with sufficient evidence to support a software developer's assertion that an industry competitor stole its confidential information and trade secrets and used this information to develop a comparative analysis of its product to the developer's to advance its business in the United States, the jury was not provided with evidence that would allow it to determine that the competitor misappropriated any of the developer's other information, a Seventh Circuit U.S. Court of Appeals panel ruled Aug. 20 in partially overturning a federal district court's damages award in a trade secret misappropriation lawsuit (Epic Systems Corp. v. Tata Consultancy Services Ltd., et al., Nos. 19-1528 and 19-1613, 7th Cir., 2020 U.S. App. LEXIS 26473).
August 25, 2020
Former Mars Employee Seeks To Have Trade Secret Claims Arbitrated In Belgium

WASHINGTON, D.C. — Dismissal of claims in a trade secret misappropriation lawsuit against a former employee of confectionery, pet food and other food productsmanufacturer Mars Inc. and an industry competitor is warranted because the claims against the former employee are subject to mandatory arbitration in Belgium and were filed as nothing more than part of a smear campaign against the defendants, the defendants argue in an Aug. 20 motion to dismiss filed in District of Columbia federal court (Mars Inc. v. Jacek Szarzynski, et al., No. 20-1344, D. D.C.).
August 21, 2020
Judge: Company Failed To Show Defendants Stole, Misappropriated Trade Secrets

GRAND RAPIDS, Mich. — A federal judge in Michigan on Aug. 20 ruled that a company that engages in the sale and installation of solar energy panels has failed to sufficiently identify the trade secrets it alleges a former employee and industry competitor stole and misappropriated in violation of state and federal trade secret laws to improperly compete with the company in the solar energy industry (Skywatcher LLC v. Gregory Oliver, et al., No. 19-409, W.D. Mich., 20202 Dist. LEXIS 150642).
August 20, 2020
Judge Awards A Quarter Of Attorney Fees Requested In Trade-Secret Dispute

NEW ORLEANS — Stating that the "time has come" for a trade secret misappropriation lawsuit "to be laid to rest once and for all," a federal judge in Louisiana on Aug. 18 granted a motion for attorney fees and costs filed by defendants, granting them 25 percent of an amount to be determined at a later date after an in camera review of their unredacted attorney time records has been completed (Source Production & Equipment Co. Inc., et al. v. Kevin J. Schehr, et al., No. 16-17528, E.D. La., 2020 U.S. Dist. LEXIS 149827).
August 19, 2020
Multilevel Marketing Company Allowed To Replead Claims In Trade Secrets Dispute

LAS VEGAS — A federal judge in Nevada on July 30 ruled that although a multilevel marketing company has failed to sufficiently plead which claims it is asserting in a breach of contract and trade secret misappropriation lawsuit against two former affiliates as statutorily required, it is likely to be able to correct the deficiencies in its complaint (My Daily Choice Inc. v. Shanna Lee Hunter, et al., No. 20-0809, D. Nev., 2020 U.S. Dist. LEXIS 135671).
August 18, 2020
Panel Rules That Tech Company Failed To Plead Protectable Trade Secret

ST. LOUIS — An Eighth Circuit U.S. Court of Appeals panel on Aug. 17 ruled that a federal district court did not err in denying an agriculture technology company's motion for summary judgment in a trade secret misappropriation lawsuit against its former employees and the industry competitor they formed because the company failed to allege that the trade secrets the defendants are alleged to have misappropriated were protectable within the meaning of state and federal trade secret statutes (Farmers Edge Inc., et al. v. Farmobile LLC, et al., No. 18-2900, 8th Cir., 2020 U.S. App. LEXIS 25962).
August 17, 2020
Thinly Pleaded DTSA Claim Dismissed In AI Developer's Trade Secret Lawsuit

WILMINGTON, Del. — A federal judge in Delaware on Aug. 13 ruled that a developer of artificial intelligence (AI) products for the pharmaceutical industry has failed to sufficiently state its claim for trade secret misappropriation under the Defend Trade Secrets Act (DTSA) with the requisite particularity against drug maker AstraZeneca Pharmaceuticals LP, stemming from the defendant's alleged misappropriation of proprietary information it obtained during discussions regarding AstraZeneca's interest in becoming a customer of the developer (Lithero LLC v. AstraZeneca Pharmaceuticals LP, No. 19-2320, D. Del., 2020 U.S. Dist. LEXIS 145592).
August 17, 2020
Panel Partly Upholds Denial Of Relief In Trade Secret, Copyright Row

ST. LOUIS — Although agreeing with a Minnesota federal judge that claims of copyright infringement and trade secret misappropriation involving payroll source code do not warrant preliminary injunctive relief, the Eighth Circuit U.S. Court of Appeals on Aug. 14 vacated the district court's order in part, with instructions to consider "in the first instance" allegations that the software was wrongfully sublicensed (MPAY Inc. v. Erie Custom Computer Applications Inc., et al., No. 19-2206, 8th Cir., 2020 U.S. App. LEXIS 25816).
August 17, 2020
Vice Chancellor Awards Mobile Trash Franchisors Limited Injunction

WILMINGTON, Del. — Franchisors of a mobile trash compaction business were awarded a limited preliminary injunction by a Delaware vice chancellor on Aug. 13 because "the record does not support a business-stopping injunction" (Smash Franchise Partners, LLC, et al. v. Kanda Holdings, Inc., et al., No. 2020-0302-JTL, Del. Chanc., 2020 Del. Ch. LEXIS 263).
August 17, 2020
Federal Judge Refuses To Dismiss Employer's DTSA, UCL Suit Against Former Employees

SAN DIEGO — A federal judge in California on Aug. 10 refused to dismiss an employer's claims for breach of contract and violations of the Defend Trade Secrets Act (DTSA) and California's unfair competition law (UCL) against its former employees, finding that because the employer sufficiently pleaded its DTSA claim, it sufficiently alleged the unlawful prong of its UCL claim (Power Integrations, Inc. v. Edison D. De Lara, et al., No. 20-410, S.D. Calif., 2020 U.S. Dist. LEXIS 142851).
August 14, 2020
Former Banker Hit With Civil Contempt For Violating TRO, PI In Trade Secret Suit

ORLANDO, Fla. — A federal judge in Florida on Aug. 12 held a former banker in civil contempt for continuing to possess photographs of a handwritten list of customer information he took after being required to turn the list over to his counsel under the terms of a temporary restraining order (TRO) and preliminary injunction (PI) in a trade secret misappropriation lawsuit (Seacoast Banking Corp. of Florida, et al. v. Matthew Diemer, et al., No. 20-0057, M.D. Fla.).
August 14, 2020
Software Provider's TRO Request In Trade Secret Suit Against Customer Granted

LAS VEGAS — A provider of software that tracks flood insurance claims has sufficiently shown that a temporary restraining order (TRO) against its largest customer, which is alleged to have misappropriated its trade secret technology in developing a clone application, is necessary because the software provider has shown that there is a substantial likelihood that it will succeed on the merits of its state and federal trade secret law claims, a federal judge in Nevada ruled Aug. 12 (ImageKeeper LLC v. Wright National Flood Insurance Services LLC, No. 20-1470, D. Nev., 2020 U.S. Dist. LEXIS 144336).
August 14, 2020
In Cross-Appeal, Patent Owner Says Trade Secret Damages Wrongly 'Curtailed'

WASHINGTON, D.C. — In an Aug. 4 corrected cross-appellant brief, a patent assignee and its licensee defended a jury's infringement verdict in their favor but said a federal judge in Delaware "erroneously curtailed the jury's original $22,625,000 award" of damages on allegations of trade secret misappropriation (L'Oréal USA Inc. v. Liqwd Inc., et al., Nos. 2020-1382, -1422, -1689, -1690, Fed. Cir.).
August 13, 2020
Tesla Asks Court To Order Former Worker To Cease Dissemination Of Trade Secrets

RENO, Nev. — Tech giant Tesla Inc. filed an emergency motion on Aug. 10 in Nevada federal court seeking an order in a trade secret misappropriation lawsuit prohibiting a former employee from any further dissemination of confidential information the company alleges he stole in retaliation for his reassignment of job duties during his employment (Tesla Inc. v. Martin Tripp, No. 18-0296, D. Nev.).
August 12, 2020
Company Accuses Former Manager Of Misappropriating Proprietary Algorithm

PITTSBURGH — A real estate referral company sued a former employee and the competing business for which he now serves as CEO on Aug. 7 in Pennsylvania federal court, alleging that the defendants have misappropriated the company's proprietary algorithm used for pairing real estate agents with home sellers and buyers in violation of state and federal trade secret laws (HomeLight Inc. v. YourHome.AI Inc., et al., No. 20-5502, N.D. Calif.).
August 12, 2020
Parties In Payment Processing Company's Trade Secret Suit Granted Dismissal

SACRAMENTO, Calif. — A federal judge in California on Aug. 7 granted a payment processing company's stipulation for dismissal of defendants in a trade secret misappropriation lawsuit in a two-page order, ruling that there is "good cause" to enter such relief against the company's former employees (Granite Payments LLC, et al. v. 1Point Merchant Solutions Inc., et al., No. 18-2727, E.D. Calif.).
August 11, 2020
Panel: Court Properly Construed Arbitration Panel's Ruling In Trade Secret Dispute

NEW ORLEANS — A federal district court did not err in finding that a company did not use its former employee's patented and trade secret technology to develop a competing product, a Fifth Circuit U.S. Court of Appeals panel ruled Aug. 7, rejecting an argument by appellants that the court misconstrued what an arbitration panel had ruled that the former employees' trade secrets included (In the Matter of: ATOM Instrument Corp., No. 19-20151, 5th Cir., 2020 U.S. Dist. LEXIS 24999).
August 10, 2020
Appellant Did Not Breach Separation Contract, Panel Says In Partial Reversal

NEW ORLEANS — The Fifth Circuit U.S. Court of Appeals on Aug. 7 held that a lower federal court erred in finding that a former employee of a digital marketing firm breached the terms of a separation contract but affirmed the lower court's summary judgment ruling in favor of an industry competitor as to the firm's claim for violation of California unfair competition law (UCL) and denial of the firm's motion for a new trial on its trade secret misappropriation claim (Six Dimensions Inc. v. Inc., et al., No. 19-20505, 5th Cir., 2020 U.S. App. LEXIS 25004).
August 10, 2020
Tech Company Properly Pleads Economic Value Of Trade Secrets, Judge Rules

OAKLAND, Calif. — A federal judge in New York on Aug. 5 ruled that a manufacturer of hardware, software and other electronic devices and its related company have substantially cured pleading deficiencies that led to a prior dismissal of their state and federal trade secret law claims against several former employees and an industry competitor, ruling that newly added evidence supports a showing that certain trade secrets that defendants are alleged to have misappropriated maintain independent economic value (Cisco Systems Inc., et al. v. Wilson Chung, et al., No. 19-7562, N.D. Calif., 2020 U.S. Dist. LEXIS 140193).
August 06, 2020
Files Retained By Former Employee Not Shown To Be Trade Secrets, Judge Rules

BALTIMORE — A federal judge in Maryland on Aug. 3 ruled that a group of businesses in the retail jewelry industry has failed to plead that a former employee violated state or federal trade secret laws by failing to turn over files that the group alleges contained confidential business information because the group has not shown that the information he possessed constituted trade secrets under the Defend Trade Secrets Act (DTSA) or the Maryland Uniform Trade Secrets Act (MUTSA) (Albert S. Smyth Co., et al. v. Mark A. Motes, et al., No. 17-677, D. Md., 2020 U.S. Dist. LEXIS 138631).
July 31, 2020
North Carolina Trade Secret Law Claim Passes Muster On Dismissal Bid

RALEIGH, N.C. — A company that installs and maintains electrical transmission and distribution power lines has sufficiently pleaded its claim for trade secret misappropriation pursuant to North Carolina law with the required particularity in alleging that a former employee improperly removed the company's trade secret before his resignation and subsequent acceptance of employment with an industry competitor, a federal judge in North Carolina ruled July 13 (Volt Power LLC v. William "Billy" Butts, et al., No. 19-149, E.D. N.C., 2020 U.S. Dist. LEXIS 124402).