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Trade Secrets Blog

Welcome to the Holland & Knight Trade Secrets Blog, featuring commentary on timely news in the trade secret arena and analysis on how companies and entrepreneurs can safeguard and protect their assets – especially trade secrets, confidential information, business property and customer relationships, and defend against trade secret claims.

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The public's increasing reliance on anonymous product and company reviews posted online often gives rise to complaints by the subjects of those reviews, especially when the reviews are negative or critical, and threaten to adversely affect the subject's business. The U.S. District Court for the District of Massachusetts (Saylor, J.) recently addressed some of these issues in the course of granting a motion to dismiss in Craft Beer Stellar LLC v. Glassdoor, Inc., Case No. 18-cv-10510, 2018 U.S. Dist. LEXIS 178960 (D. Mass. Oct. 17, 2008), a case in which a California company, Glassdoor, Inc., tried to respond to complaints from a franchisor, Craft Beer Stellar LLC (Craft), about negative reviews of Craft's business, and its owner, posted on Glassdoor's website.
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December 5, 2018
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In a case of first impression, Judge Gregg Costa of the Fifth Circuit, affirming a lower court decision, held that a dismissal without prejudice of a Defend Trade Secrets Act (DTSA) case does not support a prevailing-party fee award. Dunster Live, LLC v. Lonestar Logos Management Company, (5th Cir.-- F.3d -- (2018)) 2018 WL 5916486.
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November 26, 2018
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Massachusetts recently adopted a version of the Uniform Trade Secrets Act (UTSA) that became effective on Oct. 1, 2018. While similar to the UTSA in nearly every respect, the Commonwealth's new trade secret act additionally requires that plaintiffs must, before discovery begins, "identify the trade secret with sufficient particularity under the circumstances of the case to allow the court to determine the appropriate parameters of discovery and to enable reasonably other parties to prepare their defense."
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November 20, 2018
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A trade secret misappropriation claim can arise from the same facts as, and be joined with, a claim for breach of contract by the defendant, such as a breach of a covenant not to compete or breach of a non-disclosure agreement. One issue that has arisen in such cases is whether the trade secret claim can be barred, in whole or in part, by the "economic loss rule."
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November 9, 2018
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In a recent case involving hackers that stole "payment card data" from Chipotle, Judge William J. Martinez in the United States District Court for the District of Colorado found on an issue of first impression that payment card data was not a trade secret and dismissed the claims brought under the Defend Trade Secrets Act (DTSA).
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Judge William Alslup of the Northern District of California recently awarded fees to CloudFlare, Inc. (CloudFlare), a defendant in a trade secret misappropriation case under, in part, the relatively new Defend Trade Secrets Act (DTSA). Swarmify Inc. v. CloudFlare Inc., No. C 17-06957, WHA (N.D. Cal. Sept. 28, 2018).
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It's an old aphorism that "you can't fight City Hall." Now it's time to add a related aphorism: "you can't sue the government under the federal Defend Trade Secrets Act (DTSA) for disclosing your trade secrets" – at least so long as the disclosure is lawful under existing law apart from the DTSA.
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October 17, 2018
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In a recent Holland & Knight webinar, Partners Kara Ariail, Brandon Elledge, and Terry Elling discussed trade secrets and related issues affecting government contractors when employees are hired or leave. In case you missed it, here is the PowerPoint presentation of this webinar.
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Theft of trade secrets typically spurs civil actions against the offender, but theft of trade secrets can also be prosecuted criminally under the Economic Espionage Act, 18 U.S.C. § 1831 et seq. (the “Act”) and other related statutes. Several high-profile arrests, convictions, and indictments have come down in recent months highlighting the Department of Justice’s active enforcement in this area.
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September 21, 2018
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The Defend Trade Secrets Act (DTSA) provides for remedies in the form of damages, an injunction, and fees. 18 U.S.C. § 1836(b)(3). In addition to these remedies, DTSA provides for an ex parte pre-trial seizure of property. This potential remedy is what helped make DTSA unique compared to other Uniform Trade Secrets Act (UTSA)-based claims.
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A recent report from Lex Machina, an IP litigation research company, shows that the United States District Court for the Central District of California had more trade secret lawsuits in the last decade than any other district court in the country.
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New Massachusetts laws govern the protection of trade secrets and the enforceability of noncompete agreements. Massachusetts Gov. Charlie Baker recently signed into law the state's version of the Uniform Trade Secrets Act (UTSA) and a law imposing strict requirements concerning noncompetes. The laws are effective Oct. 1, 2018.
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Prior to the federally enacted Defend Trade Secrets Act (DTSA), companies seeking civil remedies for misappropriation were generally limited to state law causes of action (including, where applicable, a state version of the Uniform Trade Secrets Act), and federal litigation was only possible with diversity jurisdiction or the inclusion of another federal claim. While DTSA changed the substantive and jurisdictional landscape of trade secret litigation in many ways, Congress expressly stated the DTSA should not be construed to pre-empt state law.
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On Aug. 7, 2018, the Eleventh Circuit Court of Appeals affirmed summary judgment in favor of Barker Boatworks, LLC, rejecting Yellowfin Yacht's Florida Uniform Trade Secret Act (FUTSA) claim. In its ruling, the court explained that a trial was not necessary because, among other things, Yellowfin failed to adequately protect its trade secrets by permitting an employee to access Yellowfin's confidential information on his personal laptop and cell phone. The decision is a warning to companies that want to protect their business information.
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August 10, 2018
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The Federal Circuit recently held that a plaintiff seeking disgorgement of defendant's profits as a remedy for trade secret misappropriation has no right to a jury decision on the amount to be awarded; instead, the defendant is entitled to a decision by the trial court on that issue.
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The Uniform Trade Secrets Act (UTSA), a model law governing civil actions for trade secret misappropriation that was first published more than 30 years ago, has helped to protect trade secrets in the numerous states that adopted it.
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August 6, 2018
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Confidentiality agreements or nondisclosure agreements (NDAs) in the workplace have recently been receiving more — and sometimes negative — attention. Employers may want to reflect on how best to utilize these agreements to avoid employee discontent and to improve recruitment. Indeed, the prevalence of NDAs in the workforce is substantial; recent data suggests that one-third of the American workforce is bound by NDAs.
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August 2, 2018
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The Virginia Uniform Trade Secret Act (VUTSA) defines "misappropriation" as: (1) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or (2) disclosure or use of a trade secret of another without express or implied consent by a person.
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Traditionally, trade secret litigation has been based on state law, principally the various state versions of the Uniform Trade Secrets Act (UTSA) which nearly all states have adopted. The landscape changed on May 11, 2016, when Congress enacted the first federal trade secret misappropriation law: the Defend Trade Secrets Act (DTSA).
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July 30, 2018
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From SpaceX's groundbreaking work in the aerospace industry to Uber's disruption of the transportation industry, the interaction between innovative companies and federal, state and local governments is growing – and will continue to do so for the foreseeable future. This creates unique challenges for a corporation that shares its proprietary information with the government but also wants to keep it secret, a trade secret.
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