The Big Apple’s reliance on trade secrets ‘common law’—and some surprising rulings in its courts—have left it an unfavourable choice for claimants, says James Pooley. Most people see New York as a global leader in finance and business. Much less known—except perhaps among trade secret lawyers—is the state’s reputation as an outlier, anchored in outmoded jurisprudence. […]

This month, the Defend Trade Secrets Act (DTSA) turned eight years old. Signed into law by then-President Barack Obama on 11 May, 2016, the DTSA significantly shifted the needle in IP enforcement rights in the United States. Crucially, it gave trade secret holders the option to file civil claims over a trade secret theft in federal courts, […]

I recently returned from a ten-day trip to China, the first time I’ve visited since before the COVID-19 pandemic. Late last year my business book Secrets had been translated into Mandarin by Fang (Helen) Liu, a lawyer/scholar at the Beijing office of law firm TianTai, and published by the Tsinghua University Press. Liu had arranged […]

“The possibility that an inventor who believes his invention meets the standard of patentability will sit back [and] rely on trade secret law . . . is remote indeed.”            — Justice Burger, for the majority in Kewanee v. Bicron (1974) When May rolls around, lots of people – well, trade secret people that is – think about […]

Maintaining control over trade secrets is mostly about risk management, and one dimension of risk lies in having to tell hundreds or thousands of employees to keep quiet and then depend on each of them to do so. Human nature being what it is, risk increases quite a bit when the secret is about something […]

This is what international trade secrets expert, IP Hall Of Famer, and attorney Jim Pooley refers to as “progressive incremental disclosure.” There’s a conundrum, he points out, when you’re up against someone who doesn’t want to sign an NDA and you need to encourage them to do so without spilling what it is that you want to […]

SRS' complaint alleged that PNC employed Tsarnas, formerly its managing director for global business development and head of sales, and Kelly, senior vice president and relationship manager who reported to Tsarnas to break into this market. Both had "intimate knowledge" of how SRS' innovative platforms operated and were subject to strict confidentiality agreements, the plaintiff […]

Several countries are urging the United States to dismantle a cornerstone of its economic success. And the Biden administration may give them exactly what they want. The intention behind the proposal is to ensure people living in developing countries can access the same life-saving medicines available in wealthier nations. It’s an admirable goal, but unfortunately […]

In Part I of this article, we recapped some of the most notable trade secret cases of the past year that dealt with issues such as proving secrecy and exercising reasonable efforts, as well as the publication of a key judicial resource for trade secret cases. Below, we continue with some of the top trade secret […]

Trade secrets in the United States have a fascinating history, during which courts shaped the common law tort as a way to enforce confidential relationships. Now the legal framework is statutory, with some version of the Uniform Trade Secrets Act (UTSA) in effect in every state except New York, and with uniformity in the federal system […]

“The more you tighten your grip, the more slips through your fingers.”            — Princess Leia speaking to Tarkin in the first Star Wars movie Princess Leia wasn’t the first person to use the “tighten your grip” metaphor, but I think she’s the most memorable. To be totally accurate, she warned Tarkin that “more star systems will slip […]

“An approximate answer to the right problem is worth a good deal more than an exact answer to an approximate problem.”            — John Tukey As I was participating in a recent conference of trade secret nerds (yes, we often refer to ourselves that way), I found myself thinking about the Titanic. More specifically, about the […]

“Three may keep a secret, if two of them are dead.”            — Benjamin Franklin It used to be so simple. For centuries, China was able to maintain its monopoly on silk production just by killing anyone who tried to leave the country with knowledge of its secrets. Thirteenth century Venice showered benefits on the Murano […]

James Pooley, frequently serving as a lead counsel in trade secret disputes, was an expert witness for Dril-Quip. He says that this case sends an important message to companies that they should think carefully about their strategies when looking to protect key innovations. Pooley told the courts that while FMC favoured a patenting strategy as […]

“In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . . .”            — 7th Amendment to U.S. Constitution You always remember your first jury trial. Mine happened almost 50 years ago, and I still vividly recall sitting with the partner to […]

James Pooley, a trade secrets expert and attorney who has represented companies including Adobe, GE, and Qualcomm, said the high-profile (and high dollar value) nature of the Apple case is part of the reason issues like talent poaching are being explored so thoroughly. “Cases like this have many dimensions,” Pooley said. “You get treated to […]

James Pooley, an independent attorney in San Francisco, says people don’t fully understand the capabilities of the technology yet. But he points out that this is by no means the first time that businesses have had to consider new technologies when refining their trade secrets strategies. “When I first started out, there were no networks or […]

“Think different”            — Apple 1997 ad campaign for the Mac The story seems to unfold the same way every time, whether the actor is a high-level departing employee or a customer or business partner. When sharing confidential information in a long-term relationship results in the release of a similar product by the recipient, the reaction […]

Trade secret expert James Pooley believes the leak could represent a “major crisis” for the social media platform and suggests that the drastic loss of staff could be a factor. “For a software-based company like Twitter, publication of any significant part of its source code represents a major crisis,” he tells WIPR. “That said, it’s […]

It was a hot August afternoon in 1984, and I had just finished testifying to the California Senate committee considering a new law, the Uniform Trade Secrets Act (UTSA). I had been sent to Sacramento to support this legislation, which was supposed to provide a “uniform” standard among the states. But some lawyers from the […]

It’s getting pretty rough out there for employers who want to control their employees’ behavior. Think back to March 2020, when the pandemic was just beginning and we took a look at this new phenomenon of widespread remote work. We imagined managers wistfully recalling the Renaissance, when artisans could be imprisoned, or even threatened with death, to […]

“He is led by an invisible hand to promote an end which was no part of his intention.”           — Adam Smith When Adam Smith spoke about an “invisible hand,” he was talking about a good thing – the way that free markets harness the laws of competition, supply and demand and self-interest to improve the […]

The proposed ban would upend companies’ approach to protecting their proprietary information, several IP and trade secrets attorneys said. Businesses across the economy would be forced to lean on other mechanisms, such as expensive, time-consuming, and harder-to-prove trade secrets litigation instead, they said. “This is an absolute disaster when it comes to intellectual property protection,” […]

The thing to remember about trade secret law is that it comes from the courts. Even with the Uniform Trade Secrets Act ("UTSA") and the Defend Trade Secrets Act ("DTSA"), judges continue to sculpt this category of intellectual property. And it's critical that they get it right, because for hyperconnected, data-driven businesses, secrecy is the […]

Trade secret jurisprudence, originally conceived in the common law of torts as a way to enforce confidential relationships, now has a sharper focus directed at the property interest of businesses in the data that forms the major portion of their asset base. In the process, trade secrets have taken their place of respect alongside the […]

We talk more about patents, but it is our secrets that we should be worried about. Control of confidential information has been key to business success for centuries. Long before patents were − so to speak – invented in Venice in the 15th century, China had a lock on the production of silk, which at […]

“There must be 50 ways to leave your lover."           — Paul Simon It was February 2017 when Waymo, Google’s self-driving car unit, sued Uber in what would become the biggest trade secret case of the century. Waymo alleged that its former manager, Anthony Levandowski, had organized a competing company while still at Waymo, and before […]

“I think it is right to refresh your memory…”            — Henry David Thoreau I was recently reminded of a contest that we often played in Scouts, called Kim’s Game. Derived from a story in Rudyard Kipling’s 1903 novel Kim, it gave you a few minutes to stare at a tray full of diverse objects you might […]

Jim Pooley was recently interviewed as a guest on the Understanding IP Matters podcast about how companies are increasingly using trade secrets as the basis for competitive advantage. Jim spoke about the value of trade secrets, how they differ from patents, and what companies should do to protect their trade secrets. You can listen to […]

Trade secrets are defined as “information” not generally known that an entity makes “reasonable efforts” to keep secret. The owner also must derive economic value from that secrecy. The secrets are misappropriated if they’re acquired by someone else through improper means.Precedent applying those principles to living things remains slim, but life-based secrecy is growing.“We’re adapting […]

Surprisingly, 50.5% of companies that performed or funded R&D found utility patents “not at all valuable.” Some observers believe that if businesses are not filling patents, they are not disclosing inventions, which is harmful to innovation. “This may be a result of a perception that the value of U.S. utility patents has diminished in recent […]

“What’s in a name?”            — William Shakespeare One of the most frustrating questions I get from clients asks “what is the difference between ‘confidential’ and ‘proprietary’ information?” Or, “how do I help employees distinguish between either of those terms and real ‘trade secrets?’” Then there are people, including some judges, who trivialize the importance of […]

“Risk comes from not knowing what you’re doing.”            — Warren Buffett At this moment, there is a fellow riding a bus in London who will determine the fate of your secrets. To be more precise, he’s on the Clapham bus; but he has no name. In fact, he’s a fictional character originally imagined by 19th Century […]

The World Trade Organization last week approved a deal to loosen intellectual property protections that many policy professionals say will shatter investment and innovation incentives for drugmakers to meet the needs of major health crises. The deal was a blow to vaccine makers such as Pfizer Inc. and Moderna Inc., which fought to keep the current framework that enabled them […]

“All warfare is based on deception. There is no place where espionage is not used.”             — Sun Tzu What does the invasion of Ukraine have to do with COVID-19? Would you believe intellectual property is the link? Stay with me on this; it’s an interesting story. Recently, it was confirmed that the Main Intelligence Department of […]

“It signals that the United States is willing to play footsie with India and South Africa on this essential sort of lie, that pulling back on patent protections globally will somehow solve more problems than it creates, and that’s a delusion. And we’re buying into it,” said James Pooley, a former deputy director general at […]

“Trust, but verify.”            — President Ronald Reagan Trust is getting a lot of attention these days. Of course, it’s always been important in the United States. We declare trust in God on our currency, Scouts have to be trustworthy, and we even seem to trust the algorithm behind cryptocurrencies. On the other hand, we worry […]

“Secrecy is the badge of fraud.”            — Sir John Chadwick What a strange and compelling story. Brilliant young inventor conceives revolutionary machine, raises staggering amounts from investors, is fawned over by the press for a decade, then crashes to earth on revelations of faked demonstrations and technology that doesn’t work. When I learned of the […]

Last year at this time, we thought we had been through the worst of it and, with the new vaccines arriving, that life would return to normal in 2021. Hahaha, how naïve we were! But take heart; some things hold steady through the storm, such as the popular sport of trade secret litigation. Unlike most […]

“It is non-poisonous.”            — 1931 advertisement for Listerine® Question: how do you make money from a secret formula for a product that smells and tastes horrible and that no one wants? Answer: you make everyone believe they have a medical problem that only this stuff can solve. Back in 1879, Joseph Lawrence, a St. Louis […]

“Risk management is about people and processes and not about models and technology.”            — Trevor Levine Have you ever shopped for something dangerous? Back in the 1950s, my mother wanted to buy a pressure cooker to make dinner faster (and use cheaper cuts of meat). That wasn’t an easy decision, because the early models had […]

“It is impossible to unsign a contract, so do all your thinking before you sign.”            — Warren Buffett You may remember 2014 as the year when we all discovered a plague of noncompete agreements threatening our economy. No? Let me help you. In June that year, the New York Times published an expose of sorts relating the story of […]

“Some circumstantial evidence is very strong, as when you find a trout in the milk.”            — Henry David Thoreau I know that some of you want to dive right into how Thoreau came up with that sardonic and mystifying line. We’ll get there, but let’s start with my high school. I was terrible at math […]

DTAS (Defend Trade Secrets Act) claims now constitute almost three-quarters of those filed in suits. The DTSA, signed into law on May 11, 2016, provides litigants a private right of action in federal court for trade secret misappropriation claims. “It’s no surprise that many plaintiffs favor the federal option, with nationwide service of process and […]

“Never mistake activity for achievement.”            — Coach John Wooden We’ve all seen him when driving by the strip mall. Trying to focus on the traffic, our eyes are diverted by “Tube Man,” a 10-foot tall hollow, collapsible stick figure with a fan at the bottom, adjusted so that the body repeatedly folds and then jumps […]

The Biden administration recently announced its support for a proposal before the World Trade Organization that would suspend the intellectual property protections on Covid-19 vaccines as guaranteed by the landmark TRIPS Agreement, a global trade pact that took effect in 1995. The decision has sparked furious debate, with supporters arguing that the decision will speed […]

“Be careful what you ask for because you just might get it.”             — Anonymous All the fuss surrounding the proposal by India and South Africa to suspend the TRIPS Agreement to help them produce vaccines to fight COVID-19 has obscured some critical truths. In spite of the rallying cry “Patents versus People,” it’s not really […]

Five years after legislation significantly improved trade secret protection in the US, Jim Pooleytells IAM in an interview, more policymakers on Capitol Hill are advocating tough policing ofpotential IP theft by Chinese entities - for good and not so good reasons The current US Congress is still in its early days but if the first […]

Patents themselves are publicly accessible, noted James Pooley, intellectual property attorney and former deputy director general of the United Nations' World Intellectual Property Organization. But trade secrets developed by Pfizer/BioNTech, Moderna and others, "cook books" of manufacturing processes such as temperature and growing conditions, have not been made public. That may ultimately be a dual […]

“In a networked world, trust is the most important currency.”            — Eric Schmidt I recently finished Gen. Stanley McChrystal’s book, Team of Teams, in which he describes organizational lessons learned as Commander of the Joint Special Operations Command in Iraq. Arriving in 2003, when Al Qaeda in Iraq (AQI) was outsmarting the best special forces that […]

Decades of expensive and risky research projects have paved the way for today’s breakthroughs When COVID-19 came ashore, glaring gaps in the government’s pandemic preparedness became painfully obvious. Everything from inadequate stockpiles of personal protective equipment to confusing and uncoordinated guidance regarding closures hampered our early response. But while the government floundered, America’s research scientists […]

In over 40 years of handling trade secret disputes, I have seen plenty of “successful” results, but never a time when my client said, “Gee that was fun; let’s do it again!” They may tell me they’re happy with the outcome, but hey, I know that it also feels good to stop hitting yourself with […]

By Stefan Dittmer, Partner, Dentons, Germany, and James Pooley, Professional Law Corporation, USA, Members of the ICC Commission on Intellectual Property, International Chamber of Commerce (ICC) Most kinds of intellectual property (IP), such as patents, copyrights, trademarks and designs, are rights granted by a government. But there is another right that depends only on the choice of an individual business: secrecy. The law protects […]

The Lord of the Rings trilogy ends in suitably spectacular fashion with a battle scene following the retreat of all the good people to “Helms Deep,” a tall stone fortress built into the recess of a massive rock mountain. Seemingly impregnable, the thick wall facing the invaders contains a small flaw: a drainage outlet about five […]

James Pooley, member of the Center for Intellectual Property Understanding and former deputy director general of the World Intellectual Property Organization, understands the full seriousness of cyberespionage. Pooley agrees that COVID has created a riskier environment because employees are away from their usual offices. But the problem is not entirely current, he notes, explaining that […]

“You never have trouble if you are prepared for it.”            — Theodore Roosevelt My head was turned by the recent news of President Trump’s final-day pardon of Anthony Levandowski, the former head of Google’s self-driving car unit who was recruited into Uber with full knowledge that he had downloaded 14,000 confidential files on his way […]

One of the uniquely fascinating aspects of trade secret disputes is that they are laced with unbridled emotions, accusations of treachery, and actors who angrily disagree over basic facts. In other words, they provide a perfect metaphor for the year 2020. Let’s take a look back at the cases this year that are worthy of […]

The World Trade Organization will decide on Thursday whether to approve an Indian and South African proposal that would allow countries to disregard intellectual-property protections on Covid vaccines and therapeutics. Proponents claim the move would increase patients’ access to vaccines, especially in the developing world, by enabling companies to mass-manufacture generic copies of those drugs. […]

“The single biggest problem in communication is the illusion that it has taken place.”            — George Bernard Shaw The conversation begins,“Can you keep a secret?”“Yes, of course,” they say. What happens next? Naturally, you tell them what it is that you are going to trust them with. That’s the way it happens in personal relationships. […]

In the wake of urban unrest in the early 1960s, local governments imposed nightly youth curfews, and a Massachusetts legislator suggested that all radio and television stations begin their 10:00 evening programming with an announcement: “It’s 10:00 PM. Do you know where your children are?” The phrase was quickly picked up across the country and […]

Unlike other forms of intellectual property, trade secrets are rarely clearly defined anywhere before a lawsuit begins, making it critical for counsel for defendants to know what exactly was allegedly stolen. But at such an early stage in the litigation, even overbroad or ambiguous claims of trade secrets require motions seeking clarity, not pre-discovery victory, […]

When people say that “data is the new oil,” they’re talking about new ways of creating wealth. No matter what business you’re in, success today depends on learning everything you can about your customers and competitors. And there’s so much information sloshing around the internet, every industry—from restaurants to manufacturers to sports teams—is busy extracting […]

Tuning in to the recent sentencing of Anthony Levandowski for criminal trade secret theft, I was reminded of the wise observation about relationships, that remembering the ending is a way to forget about the beginning. But while that way of thinking can be a salve for the heart, it’s not so helpful when it comes […]

Intellectual property (IP) protections are one of the few structural issues covered in the phase-one trade agreement between the United States and China. The combination of new commitments under this agreement and growing domestic pressure to strengthen protections for domestic innovators has led some observers to suggest that China may be moving toward more robust […]

Back in ancient times, in this case 1990, John Gray, an obscure “relationship counselor” with a correspondence degree in psychology, was perplexed. The communication problems of the heterosexual couples he worked with were so serious that he couldn’t explain them by individual circumstances. His clients seemed to be talking past each other, almost as if […]

It happened to Japan in the 1950s. Then it happened to Taiwan, and then Korea. Rapidly-developing countries started out relying on copying foreign technologies to drive their economies. But as growth increased and investments in education led the way to domestic innovation, each country found that a framework of strong intellectual property (IP) laws was […]

“Information wants to be free.”            — Stuart Brand Stuart Brand, the creator of the Whole Earth Catalog, is famous for saying in 1984 that “information wants to be free,” which became a battle cry for anti-intellectual property activists. But this is what he actually said: “On the one hand information wants to be expensive, because it’s […]

“Artists work best from home."            — Steve Wozniak If while you’re reading this you are stuck at home or some other location trying to work remotely, give some thought to 18th century self-proclaimed alchemist Johann FriedrichBöttger. As a young and ambitious man living near Dresden, he was convinced that he could actually make gold from base […]

WIPO and the other agencies may sound like obscure bureaucratic outposts, but they help shape standards and rules for global commerce. WIPO logs 250,000 patent applications every year, including more than 55,000 from the United States, and it’s supposed to keep them secret for 18 months until they’re published. The director general “exercises control over every aspect of […]

“Data that is loved tends to survive."            — Kurt Bollacker In last month’s post, Part 1 of this series,we considered the view of European academics that trade secrets are not “intellectual property” because they don’t give the power to exclude others, like patents, copyrights and trademarks do. But considering that trade secrets are treated throughout the […]

“Knowledge conquered by labor becomes a possession – a property entirely our own.”            — Samuel Smiles Sometimes it seems that trade secrets are always fighting for respect. I recently ran into a friend who teaches at a European university. He somehow found a way to squeeze into the conversation a pronouncement: “You know, trade secrets […]

“We’re from the government, and we’re here to help.”            — Anonymous According to Merriam-Webster, the “Word of the Year for 2019 is “they” when used in the singular, typically to avoid ascribing a gender to the person being referred to. The larger point is this: language matters. Since this is a space dedicated to secrecy, […]

“Any sufficiently advanced technology is indistinguishable from a rigged demo.”            — James Klass The spectacular failure of blood-testing firm Theranos is the subject of a riveting book, Bad Blood by investigative reporter John Carreyrou, and an engaging documentary, “The Inventor” on HBO, focusing on Elizabeth Holmes, the once-celebrated wunderkind who dropped out of Stanford at age 19 […]

"....Based on evidence collected and presented in the civil trial, which started with a bang but ended prematurely with a whimper, Levandowski definitely took the files at the heart of the charges. But the case, the first one by a new corporate-fraud strike force in the northern district of California, is not as open and shut as […]

"...Levandowski is a standout among an elite cadre of engineers with expertise in autonomous driving, which is widely considered the future of the auto industry. In 2004, he was part of a UC Berkeley graduate student team that created a self-driving motorcycle to compete in early federally sponsored races. He went on to found a […]

When one company looks at buying another, the potential buyer engages in a “due diligence” process designed to help it fully understand the relevant risks and opportunities before the deal is done. In today’s digital economy, most business assets are intangible, and so intellectual property (IP) is among the most meaningful of the variety of […]

Management of trade secrets is fraught with competing interests. There is the tradeoff between security and inconvenience—for example, the annoying wait for a special code to allow “two-factor identification” when you already have your password handy. There is trusting your employees while knowing they might leave to join a competitor. And there is the tension […]

Over the course of two weeks, the United States has imposed tariffs on hundreds of billions of dollars of Chinese goods and has blacklisted Huawei, the world’s largest telecommunications company, on national security grounds. Google, Intel, Qualcomm and Micron have announced that they will stop doing business with the company. The United States has even […]

In 1994, the United States was winding up the Uruguay Round of trade negotiations leading to the establishment of the World Trade Organization (WTO). Tucked in among the toothbrush and rice tariffs was the Agreement on Trade-Related Aspects of Intellectual Property. The TRIPS Agreement was seen as a breakthrough, setting common standards for protecting IP, […]

The most important and immediate goals for reforming patent eligibility are predictability, predictability and predictability. This framework, coming from legislators who understand the value to our country of a robust and sensible patent system, is exactly the right approach. It will restore much-needed certainty to the acquisition and enforcement of patent rights, reducing costs for […]

We all talk about the importance of data as business assets, but when it comes to buying and selling the companies that own them, we seem not to pay much attention. My anecdotal survey reveals that colleagues who focus on mergers and acquisitions  confess to a lack of focus on trade secrets. This may seem […]

"When I use a word, it means just what I choose it to mean, neither more nor less."            — Humpty Dumpty (to Alice) It seemed like a trade secret trifecta when Congress in 2011 passed the America Invents Act (AIA). Although the statute was aimed at patent reform, it made three helpful changes in how […]

"I am willing to put the case into any shape you choose."            — Lord Ellenborough, 1816 It’s a challenge to resolve business disputes when emotions run high, which includes almost all trade secret cases. So, I was especially pleased when, in a hard-fought litigation where I had been appointed as a “referee” to resolve discovery […]

It’s football season, so of course we should be talking about beer. Specifically, beer secrets. For fourteen years James Clark had an enviable job at Anheuser-Busch, where he had access to the brewer’s confidential recipes. For unexplained reasons he resigned. Instead of joining a competitor, he went to see a lawyer about planning a class […]

I’m sure that many people find it exciting to read about U.S. college athletics, although it’s hard to imagine how that could result in any trade secrets. But consider this: Andy Bitter, a former sports journalist covering the travails and triumphs of the Virginia Tech football team, was recently sued by his former employer, a […]

The Journal spoke with Jim, who shared his thoughts on the importance of trade secret protection in the global economy and how the Defend Trade Secrets Act (DTSA) has affected this practice area in the two years since it was signed into law. The following is an excerpt from the discussion. Thank you for joining us, […]

It was late 2010. The technician, an American in northwestern China, was performing a software check on a wind turbine when he noticed something strange. After the diagnostic program finished running, the turbine was supposed to stop. But this time the blades kept spinning. The same thing happened at the next turbine at the wind […]

It seemed like such a good idea at the time. Quicken Loans affiliate Title Source had signed an agreement with start-up HouseCanary to build specialty software. The relationship deteriorated, and Title Source sued to avoid the $5 million fee it had agreed to pay. To underscore its determination, it served the lawsuit personally on HouseCanary […]

In the wake of Uber’s blockbuster trade secrets lawsuit, prompted by its hiring of the manager of a competitor’s self-driving car program, one of the company’s lawyers published an articlecomplaining about the law that protects “negative information” stored in a person’s head. It was crazy, he argued, to force employees to feign amnesia and to deliberately […]

Here in the U.S. we have a litigation system for pre-trial “discovery” that allows access to virtually every email and every record a company owns.  It costs businesses more than $40 billion every year.  Foreign countries, where there is no “discovery,” sneer at this self-inflicted injury, and foreign companies do all they can to avoid […]

In a boat out on the lake, the little boy says, “Grandpa, why are we holding our poles out here?” I say, “Because that’s where I think the fish are.” “Will we catch any?” “I don’t know. Let’s wait and see.” To anyone familiar with the discovery process in U.S. litigation, involving production of millions […]

There are many lessons to be drawn from Waymo v. Uber litigation. This is perhaps the most important. Lawsuits are about history, while business is about the future. By the standards of most litigation, the suit by Waymo (a Google company) against Uber was fast-tracked, getting to trial within a year after it was filed. […]

When the auctioneer’s hammer went down, the violin sold for almost $16 million. It was one of the masterpieces of Cremona, the small northern Italian town that was the 18th-century center of violin-making. Ever since, the world’s best violinists have insisted that instruments made by Antonio Stradivari and his colleagues demonstrate a uniquely wide dynamic range […]

A light bulb turns on When Thomas Edison was asked about his years of searching for a long-lasting light bulb filament, he said, “I haven’t failed; I’ve just found ten thousand ways that won’t work.” Experimenting with materials ranging from platinum to beard hair, he eventually zeroed in on carbonized thread, and later, bamboo. At […]

Recently a client asked me for advice on setting up a reverse engineering project.  The company had just hired a senior engineer from a competitor that had pulled ahead of them the year before with the release of a next generation product. They needed to respond soon. The new employee was “clean,” they assured me, […]

Patenting and secrecy are the two major methods of protecting technology that supports competitive advantage.[1] While this has been true for decades, the legal landscape in which businesses must choose between them has changed dramatically in recent years, mainly as a result of two forces. The first of these was a series of court rulings […]

Every trade secret case is built around a story. Sure, the plaintiff’s story is different than the defendant’s, even though each draws on the same facts. For the rest of us that don’t have a dog in the fight, helpful lessons are available. But sometimes you have to look hard to find them. Here’s one. […]

It’s never good to get a letter accusing you of taking someone else’s property, or worse a lawsuit that can distract or disrupt your business. The key to a good outcome is to remain calm and make sensible decisions. This may be a challenge because the charges against you are freighted with emotion. You are […]

When I was in Geneva trying to engage developing countries about the value of robust IP laws, occasionally I heard a response like this: “What hypocrites you are! The U.S. economy got its start by stealing from abroad. Why should today’s poor nations be denied the same opportunity to catch up?” The argument stung enough […]

I still remember the day I decided never to do another divorce case. My client called to tell me that her ex was taking the kids to his mother’s house where she would look for holes in their socks and then rip them with her fingers. This surely was grounds for a restraining order! No, […]

The Defend Trade Secrets Act has been in effect for a year, with more than 300 complaints filed in that time. James Pooley looks back on how the law has performed and analyses which issues need to be clarified. On May 11 2016 President Obama signed into law the Defend Trade Secrets Act (DTSA), capping […]

In the recent lawsuit filed against Uber by Waymo for hiring the head of its driverless car project, what would have been a normal discovery dispute over access to a report suddenly became a lot more complicated when the former Waymo executive asserted the fifth amendment, claiming that forcing disclosure of the document could incriminate […]

During a recent seminar I was asked, “What can companies do to stop the loss of trade secrets to places like China?” The questioner seemed stressed and a bit angry, perhaps reflecting a certain frustration that there may not really be an answer. While I can understand the concern, and although there is no way […]

When we think about trade secrets, we usually focus on keeping our own data safe. But an even bigger risk comes from hiring employees who can infect our systems with confidential information from a competitor. Companies often learn this the hard way. Boeing’s hiring several managers from Lockheed led to a $615 million fine and […]

Recently I shared the podium with an FBI agent who was asked what frustrated him the most when trying to help businesses with trade secret theft. His answer was a surprise: they fire the guy too fast! He explained that when you discover someone might be mishandling information, your most important objective is to know […]

Whistleblowers – The first court opinion addressing DTSA whistleblower immunity (18 U.S.C. §1833(2)) was issued on December 6 in Unum Group v. Loftus, 2016 WL 7115967 (D. Mass.). The plaintiff alleged improper taking of company documents by an employee and requested an injunction prohibiting their copying and compelling their return. Although evidence suggested that Loftus […]

Published in the George Mason Law Review, Volume 23, Number 4, Pages 1045-1078

The trade secret laws of most countries – including the recent U.S. federal Defend Trade Secrets Act – contain the same requirement: in order to enforce its rights, a trade secret owner has to show that it has made “reasonable efforts” to protect its information from loss. In other words, before judges get involved in […]

I was giving a talk recently when a senior executive asked me, “If we have the time and resources to focus on just one thing to improve our information security, what would you suggest?” I didn’t hesitate: “Train your workforce.” As we know from multiple studies, the biggest threat to information assets comes from “insiders,” […]

“The greatest victory is that which requires no battle.”            — Sun Tzu Recently I got a call from a client who had just received a letter from a competitor, complaining about an executive the client had hired, and threatening to sue. My client was a young company that had never experienced this sort of threat. […]

It’s a fact of business life that employees leave to join a competitor or start a competing business, armed with confidential information that is suddenly put at risk. While you want to protect those assets, pulling the trigger on litigation may be premature. Unless you have evidence that you’ve been ripped off, a concise warning […]

The new Defend Trade Secrets Act for the first time lets you file your case in federal court. but just because you can do it doesn't necessarily mean you should. Federal court provides a lot of advantages for certain kinds of disputes. But there can be a downside. The easy decision is in a case […]

Well, not quite. But $940 million is a lot of money, and that's how much a federal court jury awarded on April 15, 2016 to Epic Systems, a Wisconsin healthcare software company, against the U.S. subsidiary of Tata Consultancy, part of the Tata Group headquartered in India. There may be a lot of lessons to […]

A new Defend Trade Secrets law may give Latin American companies reason to move computer servers to the United States.

This past week the US Congress passed the Defend Trade Secrets Act (DTSA), less than two weeks after the European Parliament voted through the EU Trade Secrets Directive. What might at first seem like an extraordinary coincidence in fact has a lot to do with pressure applied by industry on both sides of the Atlantic […]

Back in 1974, when a lot of people thought that trade secret law couldn't survive alongside a patent system that encouraged public disclosure, the Supreme Court in the Kewanee case patted us on the head and said, "don't worry," assuring us that anyone with a patentable invention would be crazy to elect secrecy instead. Patents […]

Hardly a week goes by without seeing a post or article by some well-meaning lawyer who insists that the first step in protecting your trade secrets is to know what you have, therefore you need to do an "inventory." That's only half right: knowing what you own is critical, but you don't have to create […]

You can be sure that most of your employees are active on social media. For younger ones, in fact, Facebooking, Instagramming, and Tweeting are as natural as breathing. But suppose an employee shared pictures of your product prototype? Posted a draft patent application your company was about to file? Messaged a Dropbox link with confidential […]

Civil claims for trade secret misappropriation have always been grounded on state law, with only limited access to federal courts. That would change with the Defend Trade Secrets Act (S.1890) now pending in Congress as an amendment to the Economic Espionage Act. The proposed law enjoys broad industry and bipartisan political support, and was favorably […]

The Defend Trade Secrets Act (S.1890) would for the first time allow trade secret plaintiffs to file their cases directly in federal court. The proposed law was favorably reported out of the Senate Judiciary Committee on Jan. 28, but with an important amendment protecting the right of employees to change jobs. Specifically, the bill requires […]

Last Thursday the Senate Judiciary Committee favorably voted out the Defend Trade Secrets Act (“DTSA”), which would amend the Economic Espionage Act (“EEA”) to give trade secret plaintiffs the option of filing civil claims for misappropriation directly in federal court. The vote reflected broad bipartisan support (there are now 27 cosponsors in the Senate) and […]

Last month Caterpillar was hit with a $74 million jury verdict for trade secret misappropriation in the Eastern District of Illinois. The case was filed by Miller, a UK vendor that supplied Caterpillar with "couplers," a product that allowed quick changes of tools on excavators. After Caterpillar told Miller that it was switching to use […]

If you have strategic responsibility for intellectual property, then you may already feel the ground shifting beneath you. Patents have held sway during our professional lifetimes not only as a marker of innovation, but as the main way in which companies protect and exploit their competitive advantage. Not any more. Like an old style of […]

Why We Need a Federal Civil Claim for Trade Secret Misappropriation Trade secret theft has been a federal crime since 1996, covered by the Economic Espionage Act (“EEA”). But civil misappropriation claims remain limited to state court filings under common law or local variants of the Uniform Trade Secrets Act (“UTSA”). Calls for federal jurisdiction […]

We’ve become used to news reports of companies and government agencies being breached by anonymous foreign hackers. But most people were shocked to learn that employees of the St. Louis Cardinals baseball team allegedly compromised the secret database of the Houston Astros, gaining access to scouting reports, player assessments and game strategies. With industrial espionage […]

A review of Talent Wants to Be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding, by Prof. Orly Lobel When I first learned about this book, I was intrigued mostly by the subtitle: not only does talent want to be free (surprise!), but companies that pay the talent should let them go […]

What kind of intellectual property (IP) is most often relied on by business to protect competitive advantage? Most people would answer with one of the best known areas of IP: patents, copyright, trademarks or designs. But they would be wrong. The most common form of protection used by business is secrecy. Why then do trade […]