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Mealey's Trade Secret

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).
May 20, 2020
Public Safety Equipment Seller Hits Former Employee With Trade Secret Suit

RIVERSIDE, Calif. — A former employee of a custom apparel retailer that manufactures and sells public safety equipment and uniforms to the military and law enforcement and fire and EMS industries, among others, violated terms of several employment agreements he signed and state and federal trade secret laws by engaging in a scheme to provide an industry competitor with his former employer’s confidential and trade secret information so that the company could start a competing product line, the retailer alleges in a May 15 complaint filed in California federal court (Amwear USA Inc. v. Jeff Schlabowske, et al., No. 20-1038, C.D. Calif.).
May 19, 2020
IT Company Seeks Denial Of Spoliation Sanctions Request In Trade Secrets Suit

NEWARK, N.J. — Calling a motion for spoliation sanctions in a trade secret misappropriation lawsuit filed by a life sciences data company against its industry competitor “hyperbolic and groundless,” a pharmaceutical information technology company on May 15 argues in an opposition brief that a federal judge in New Jersey should deny the motion because no spoliation occurred and the defendant has not violated any court orders and has engaged in no impropriety (IQVIA Inc., et al. v. Veeva Systems Inc., No. 17-177, D. N.J.).
May 18, 2020
Drug Developer’s Fraud, Trade Secret Claims Survive Competitor’s Dismissal Bid

CHICAGO — In a May 13 opinion, a federal judge in Illinois ruled that a drug development company pleaded with sufficient particularity that it took reasonable efforts to maintain the secrecy of its trade secret information pertaining to the production of its cancer treatment drug, rejecting an argument by a former business partner that the company failed to do so as required under Illinois trade secret law (Meridian Laboratories Inc. v. OncoGenerix USA Inc., No. 18-6007, N.D. Ill., 2020 U.S. Dist. LEXIS 84352).
May 18, 2020
Supreme Court Won’t Hear Dispute Over Consent Decree Assignability

WASHINGTON, D.C. — In its May 18 orders list, the U.S. Supreme Court denied a petition for certiorari that challenged findings by the Sixth Circuit U.S. Court of Appeals that a consent judgment relating to trademarks and trade secrets was assignable (M.W. Watermark LLC, et al. v. Evoqua Water Technologies LLC, No. 19-1079, U.S. Sup.).
May 15, 2020
Dismissal Of Trade Secret Law Claims Against Domino’s Upheld On Appeal

SAN FRANCISCO — A federal district court did not err in ruling that a communication options and custom software provider failed to present sufficient evidence creating a triable issue of fact in arguing that Domino’s Pizza Inc. misappropriated its trade secrets when it developed an in-house custom GPS driver tracking system (the solution) for its franchisees using trade secrets the plaintiff had allegedly provided to Domino’s while working to develop a similar system for the pizza maker, a Ninth Circuit U.S. Court of Appeals panel ruled May 14 (Prostar Wireless Group LLC v. Domino’s Pizza Inc., No. 19-15130, 9th Cir., 2020 U.S. App. LEXIS 15439).
May 14, 2020
Franchisor Sues Trash Hauling Business For Trade Secret Misappropriation

WILMINGTON, Del. — A trash hauler and its subsidiary sued an industry competitor and its owners in Delaware state court on April 28, alleging that the defendants engaged in a scheme to misappropriate by entering into discussions under the guise of purchasing a franchise from the trash hauler when, in fact, they were seeking to use the franchisor’s trade secrets and other confidential information to start a competing business (Smash Franchise Partners LLC, et al. v. Kanda Holdings Inc, et al., No. 2020-0302-JTL, Del. Chanc.).
May 14, 2020
Claims In Plumbing Fixture Manufacturer’s Trade Secrets Dispute Trimmed

NEW YORK — A kitchen and bathroom plumbing fixture manufacturer has sufficiently shown that two of its former employees and certain industry competitors misappropriated its confidential and trade secret information in violation of federal and common law, a federal judge in New York ruled May 12 in granting in part and denying in part the defendants’ motion to dismiss (Kraus USA Inc. v. Sergio Magarik, et al., No. 17-6541, S.D. N.Y., 2020 U.S. Dist. LEXIS 83481).
May 12, 2020
Limited Monetary Sanctions Against Stored Energy Solutions Provider Adopted

CHICAGO — A federal judge in Illinois on May 8 adopted a federal magistrate judge’s report and recommendation 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 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., 2020 U.S. Dist. LEXIS 81337).
May 12, 2020
Stipulation Of Dismissal In Autonomous Vehicle Tech Trade Secrets Suit Granted

SAN JOSE, Calif. — A federal judge in California on May 8 granted a joint stipulation and proposed order to dismiss all claims in a trade secret misappropriation lawsuit brought by an autonomous vehicle developer that alleged that certain of its former employees and companies they formed after leaving the company misappropriated the company’s autonomous vehicle technology to assist a company the former employees formed to compete with the plaintiff (WeRide Corp., et al. v. Jing Wang, et al., No. 18-7233, N.D. Calif.).
May 08, 2020
Firm Says Experian Misused Its Trade Secrets To Create Competing Product

SAN DIEGO — Personal and credit data collectors Experian Information Solutions Inc. and Experian Services Corp. engaged in a scheme to collect a residence data analytics firm’s confidential and trade secret information to misappropriate the information and develop a competing current expected credit losses (CECL) product in violation of the parties’ business agreement and state and federal trade secrets law, the firm alleges in a May 6 complaint filed in California federal court (Weiss Residential Research LLC v. Experian Information Solutions Inc., et al., No. 20-861, S.D. Calif.).
May 08, 2020
Permanent Injunction Granted In Window Seller’s Trade Secrets Lawsuit

FORT MYERS, Fla. — A federal judge in Florida on May 6 granted a stipulated joint motion for final judgment and permanent injunction in a breach of contract and trade secret misappropriation lawsuit filed by a windows and doors distributor against its former employee and certain industry competitors, enjoining the former employee from any further disclosure of the distributor’s confidential and trade secret information (LouMac Distributors – U.S. LBM LLC v. Louis Luongo, et al., No. 19-220, M.D. Fla., 2020 U.S. Dist. LEXIS 79752).
May 07, 2020
Rust-Oleum Ordered To Provide Competitor With Test Results In Trade Secrets Suit

MEDFORD, Ore. — A federal judge in Oregon on May 4 granted a motion in a trade secret misappropriation lawsuit to compel Rust-Oleum Corp. to produce test result data that identifies the chemical composition of the formula used in its vehicle restoration products, ruling that although producing those results may be costly for Rust-Oleum, they are important to the outcome of the litigation (Rust-Oleum Corp. v. NIC Industries Inc., No. 18-1655, D. Ore., 2019 U.S. Dist. LEXIS 154998).
May 06, 2020
Judge: Court Has Personal Jurisdiction Over Defendants Under Conspiracy Theory

MINNEAPOLIS — A federal judge in Minnesota on May 4 ruled that although a combustion technology company cannot show that two German defendants lack the sufficient contacts with Minnesota to establish personal jurisdiction in a trade secret misappropriation lawsuit, the company has sufficiently pleaded that the actions of a former employee, who allegedly conspired with the German defendants, may be attributed to the German defendants under a conspiracy theory of personal jurisdiction (DURAG Inc. v. Thomas Kurzawski, et al., No. 17-5325, D. Minn., 2020 U.S. Dist. LEXIS 78014).
May 01, 2020
NASA Supplier’s Interest In Trade Secrets Sufficient Under Pennsylvania Law

PHILADELPHIA — A federal district court did not err in ruling that a NASA supplier can maintain its claim for trade secret misappropriation and that defendants in the action failed to raise a genuine issue of material fact that the confidential information they are alleged to have misappropriated were, in fact, trade secrets under Pennsylvania law, a Third Circuit U.S. Court of Appeals panel ruled April 30 (Advanced Fluid Systems Inc. v. Kevin Huber, et al., Nos. 19-1722 and 19-1752, 3rd Cir., 2020 U.S. App. LEXIS 13903).
April 30, 2020
Free Association, Free Speech Arguments In Trade Secret Suit Fail On Appeal

HOUSTON — Communications between a custom sign manufacturer’s former employee and his current employer that allegedly caused the former employee to breach the terms of an employment agreement and misappropriate his former employer’s trade secrets are not protected as either an exercise of the employee’s right of association or an exercise of his right of free speech under Texas law, a Texas appellate panel ruled April 28 (National Signs Inc. v. John Graff, No. 01-18-00662-CV, Texas App., 1st Dist., 2020 Tex. App. LEXIS 3557).
April 29, 2020
Software Company Files Declaratory Relief Action Against Former Partner

NEW YORK — A software company on April 27 filed a declaratory relief action against its former business partner in New York federal court, seeking a declaration that it did not misappropriate the former business partner’s trade secrets pursuant to state, federal or common law when it developed its own application and platform that had similar functionality to the defendant’s product (MobilizeAmerica Inc. v. 1 Inc., No. 20-3277, S.D. N.Y.).
April 28, 2020
Advertising Network’s Post-DTSA Enactment Claims Survive Dismissal Bid

FORT MYERS, Fla. — An advertising network has sufficiently stated its claim for trade secret misappropriation pursuant to the Defend Trade Secrets Act (DTSA) against a former employee and industry competitor for the defendants’ alleged conduct after the statute’s enactment date but has not done so for any alleged misappropriation before that date because no such federal cause of action existed before that date and because the network had no interest in the trade secrets at issue until obtaining them as part of an asset purchase agreement, a federal judge in Florida ruled April 23 (Spigot Inc., et al. v. Jeremy M. Hoggatt, et al., No. 18-764, M.D. Fla., 2020 U.S. Dist. LEXIS 17973).
April 23, 2020
Majority Of Traffic Safety Company’s TRO Request In Trade Secret Suit Denied

ATLANTA — A federal judge in Georgia on April 22 substantially denied a traffic safety company’s request for a temporary restraining order (TRO) in a trade secret misappropriation lawsuit against an industry competitor, its owner and other related parties, ruling that the plaintiff failed to sufficiently show that two of its former employees misappropriated or threatened to misappropriate its trade secrets when they left their employment with the company and began working for a competitor (AWP Inc. v. Anita Henry, et al., No. 20-1625, N.D. Ga., 2020 U.S. Dist. LEXIS 71015).
April 23, 2020
Sandwich Shop Owner Not Precluded From Bringing Properly Pleaded DTSA Claim

JOHNSTOWN, Pa. — The owner of a chain of sandwich shops has sufficiently shown that its secret sauce recipes, customer information and secret methods are trade secrets pursuant to the Defend Trade Secrets Act (DTSA) and that the chain’s former owner and related parties misappropriated those trade secrets when they opened a competing business, a federal judge in Pennsylvania ruled April 21 (Revzip LLC, et al. Michael McDonnell, et al., No. 19-191, W.D. Pa., 2020 U.S. Dist. LEXIS 70140).
April 23, 2020
Tech Company Sues Former Employee, Others For Trade Secret Misappropriation

PEORIA, Ill. — A technology company sued a former manager, his wife and his competing business in Wisconsin federal court on April 3, alleging that the defendants violated state and federal trade secret laws by engaging in a scheme to improperly obtain the company’s confidential and proprietary information to form the competing business and steal current employees and current and prospective customers from the company (Mavidea Technology Group LLC v. Jammie Warmbir, et al., No. 20-1139, C.D. Ill.).