Top Developments/Headlines in Trade Secret, Computer Fraud, and Non-Compete Law in 2016

27 01 2017

Continuing our annual tradition, we present the top developments/headlines for 2016 in trade secret, computer fraud, and non-compete law. Please join us for our first webinar of the New Year on February 2, 2017, at 12:00 p.m. Central, where we will discuss these new developments, their potential implications, and our predictions for 2017.

1. Defend Trade Secrets Act

 

2. EU Trade Secrets Directive

3. Government Agencies Continue to Scrutinize the Scope of Non-Disclosure and Restrictive Covenant Agreements

4. New State Legislation Regarding Restrictive Covenants

 

5. Noteworthy Trade Secret, Computer Fraud, and Non-Compete Cases

6. Forum Selection Clauses

 

7. Security Breaches and Data Theft Remain Prevalent

8. The ITC’s Extraterritorial Authority in Trade Secret Disputes

 

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The content in this post was found at http://www.tradesecretslaw.com/2017/01/articles/trade-secrets/top-developmentsheadlines-in-trade-secret-computer-fraud-and-non-compete-law-in-2016/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Does Google’s Non-Disclosure Agreement With Employees Overreach? (Guest Blog Post)

24 01 2017

Guest Post by Sharon K. Sandeen

In the lead-up to this year’s Presidential election, there was a lot of chatter about the next “bomb-shell” bit of information that might be revealed about Donald Trump, particularly after his now-infamous pussy-grabbing comments. Recently, Tom Arnold, a contestant on “Celebrity Apprentice,” revealed that he is in possession of a video of the President-elect making additional inappropriate comments, but it has not yet been released due to a Non-Disclosure Agreement (NDA) that all those associated with the production were required to sign, reportedly including a $5 million liquidated damages clause.

For those who value freedom of speech and the press, and information diffusion more broadly, the fact that an NDA might be used to hide pertinent information about a person who is running for political office (and who is about to become the President of the United States) is very troubling. But the concern transcends political discourse, as a Private Attorney General Act (PAGA) lawsuit against Google, recently filed by “John Doe” in San Francisco, reveals. While NDAs have long been used to protect trade secrets, the central issues posed by the lawsuit concern both the legitimate scope of protected information and, more troubling, allegations that Google uses its NDA to intimidate employees.

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The content in this post was found at http://blog.ericgoldman.org/archives/2017/01/does-googles-non-disclosure-agreement-with-employees-overreach-guest-blog-post.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



How to Protect Intellectual Property in the Interviewing Process

7 09 2016

During the recruiting process and job interviews, open dialogues and an exchange of ideas take place between the job applicant and the company. However, when intellectual property is involved, both employers and applicants must walk a fine line between building trust versus over-disclosure. Here are some guidelines every prospective employee and employer should know about intellectual property and the interviewing process.

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The content in this post was found at http://www.ipwatchdog.com/2016/09/04/protect-intellectual-property-interviewing-process/id=72468/ and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Oculus Faces Messy Ownership Claims Over Its Head Mounted Display–Total Recall v. Luckey

3 06 2016

Palmer Luckey, who ultimately developed the much-hyped Oculus Rift, entered into an agreement with a company called “Total Recall”. Although it was not crystal clear, the agreement was technically with Thomas Seidl, one of the partners of Total Recall. The agreement required Luckey to develop a prototype based on feedback from Seidl.

The parties corresponded via email, and Seidl asked for confirmation from Luckey regarding exclusivity:

[j]ust so we are on the same page. With the initial payment . . . I would like excusive rights to your design unless we decide not to use it. I need to cover myself if we pay for development and then end up paying for a competitor.

Luckey responds affirmatively:

[y]es we are on the same page here . . . I am sure we can put together a contract of some sort to finalize it all.

Seidl transferred $798 via PayPal. [Ouch. That Seidl made less than a thousand dollar payment for what turned into a much bigger problem for Luckey is a bummer. Perhaps it will be a minor blip on his radar screen in light of Oculus’s success, but still.]

A few months later, the parties entered into a “Nondisclosure, exclusivity and payments agreement”. It was between Seidl and Luckey and aimed at protecting confidential information, which it broadly defined as “all information or material that has or could have commercial value or other utility in the business in which Disclosing Party is engaged.” It had the standard carveouts from the definition of confidential information. It also included a non-disclosure and exclusivity provision:

The Receiving party shall keep all details including drawings and part suppliers of the Head Mounted Display [a term not defined anywhere in the agreement] confidential and shall not aid any other person or entity in the design of a Head Mounted Display other than the disclosing party. Unless within a twelve month period from 1st july 2011 the receiving party has not received a minimum payment in royalties of 10,000 US dollars by the disclosing party. The exclusivity shall remain in place for a period of 10 years providing a minimum of 10,000 US dollars is paid from the disclosing party to the receiving party per annum.

Luckey developed a prototype and modified the prototype based on feedback from Seidl. Luckey never returned the modified prototype (Seidl does not allege asking for its return). Luckey went on to form Oculus, LLC, and develop Rift, which became a blockbuster on Kickstarter and was ultimately sold to Facebook for 8 figures.

Total Recall asserted a range of contract and tort claims. (The Total Recall partners appear to be involved in some internal dispute regarding their pursuit of this lawsuit, including separate litigation in Hawaii, but the court’s order did not focus on that.)

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Case Citation: Total Recall Techs v. Palmer Luckey and Oculus, 2016 WL 199796 (N.D. Cal. Jan. 16, 2016)

 

The content in this post was found at http://blog.ericgoldman.org/archives/2016/01/oculus-faces-messy-ownership-claims-over-its-head-mounted-display-total-recall-v-luckey.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Utah Supreme Court Lays Out Pro-Plaintiff Presumption of Harm Standard in Trade Secret Cases

20 10 2015

The Utah Supreme Court recently issued a significant decision laying out a presumption of harm evidentiary standard in trade secret cases, which will be very useful for plaintiffs seeking injunctive relief in cases involving trade secret and breach of non-disclosure claims. InnoSys v. Mercer, 2015 UT 80 (August 28, 2015).

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The content in this post was found at http://www.tradesecretslaw.com/2015/10/articles/trade-secrets/utah-supreme-court-lays-out-pro-plaintiff-presumption-of-harm-standard-in-trade-secret-cases/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TradingSecrets+%28Trading+Secrets%29 and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Seyfarth Shaw’s 50 State Desktop Reference Ebook: What Employers Need To Know About Non-Compete and Trade Secrets Law

8 09 2015

 Seyfarth Shaw’s 50 State Desktop Reference Ebook: What Employers Need To Know About Non-Compete and Trade Secrets Law

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The content in this post was found at http://www.seyfarth-ebooks.com/2015-50state/index.html and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.

 



Employer’s Action for Misappropriation of Trade Secrets Against Former In-House Counsel Who Engaged in Competitive Activities Not Subject to Anti-SLAPP Motion

28 08 2015

shutterstock_299407832There are indeed limits to the reach of the anti-SLAPP statute, particularly in the trade secret context.  In West Hills Research and Development, Inc. v. Terrence M. Wyles, a California appellate court ruled that engaging in activity to set up a competing business is not protected activity under the anti-SLAPP statute.

 

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The content in this post was found at http://www.tradesecretslaw.com/2015/08/articles/trade-secrets/employers-action-for-misappropriation-of-trade-secrets-against-former-in-house-counsel-who-engaged-in-competitive-activities-not-subject-to-anti-slapp-motion/  and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Congress Should MOVE To Restrict Employee Non-Compete Clauses (Forbes Cross-Post)

10 07 2015
Newly hired employees routinely must accept non-compete restrictions as a condition of employment, but don’t interpret the ubiquity of non-compete clauses as a signal that they are a good idea. By restricting future competition for employees’ labor, employee non-competition clauses hurt marketplace efficiency just like you’d expect. Indeed, one of the key ingredients in Silicon Valley’s “secret sauce” is California’s long-standing categorical rejection of employee non-competes, compared to other states’ tolerance for such restrictions. Undoubtedly, society would benefit if we eliminated these distortions on marketplace competition for labor.

Fortunately, Congress is taking notice. In an effort to crack down on the overuse of employee non-compete restrictions, several Senators are sponsoring S. 1504, the “Mobility and Opportunity for Vulnerable Employees Act” (or MOVE Act).

The Act has two main provisions. First, the Act makes it illegal to impose non-compete restrictions on “low-wage” employees, generally defined as employees earning less than $15/hour (or minimum wage, if higher) or an annual salary of $31,200. These dollar thresholds escalate over time. Second, for all other employees working in interstate commerce, the law requires employers to disclose that they will require non-compete restrictions early in the job search process. The Act says such disclosure should be “at the beginning of the process for hiring such employee.” Violations are enforced by the Department of Labor.

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The content in this post was found at http://blog.ericgoldman.org/archives/2015/07/congress-should-move-to-restrict-employee-non-compete-clauses-forbes-cross-post.htm and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Oculus and founder sued by Hawaiian head-mounted display startup

22 06 2015

A Hawaii-based company called Total Recall Technologies (TRT) is suing Facebook-owned Oculus Rift and its founder Palmer Luckey, saying that Luckey used confidential information he learned from the company in 2011 to build his own head-mounted display.

In a complaint filed in the Northern California US District Court (PDF), TRT says that its two partners, Ron Igra and Thomas Seidl, developed and patented a method to take video of a real-world scene and display it in a head-mounted display using an “ultra-wide field of view.” Seidl met Luckey in 2010 in connection with his work on developing head-mounted displays, and contacted him in 2011 to build a prototype for TRT.

“At all relevant times, the information provided to Luckey by TRT was confidential, and TRT expected the information to remain confidential,” the complaint says.

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The content in this post was found at hhttp://arstechnica.com/tech-policy/2015/05/oculus-and-founder-sued-by-hawaiian-head-mounted-display-startup/and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.



Florida Court Finds That Employer Without Knowledge That Employees It Just Hired Have Non-Competes Are Not Liable For Tortious Interference With Contract

8 12 2014

A defendant company was unaware, when it hired two individuals, that they had entered into non-competition agreements with their prior employer.  As a result, according to a Florida federal court, the prior employer did not have a valid cause of action against the new employer for intentionally interfering with those non-compete obligations.

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The content in this post was found at http://www.tradesecretslaw.com/2014/07/articles/practice-procedure/a-defendant-without-knowledge-that-employees-it-just-hired-have-existing-non-competes-cannot-be-found-liable-for-tortious-interference-with-contract/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TradingSecrets+%28Trading+Secrets%29 and was not authored by the moderators of freeforafee.com. Clicking the title link will take you to the source of the post.