Thought Leadership on Trade Secrets
Jim Pooley is an active author & speaker on trade secrets and intellectual property. Along with his books, speaking engagements, and press mentions, Jim produces an e-mail newsletter that is syndicated with the popular website IP Watchdog.
Below, you can access all previous editions of the newsletter, as well as journal articles, op-eds, commentaries, and other thought leadership. Subscribe to receive the newsletter in your e-mail inbox.
Filing a trade secret case? Try to avoid New York
November 27, 2024
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. […]
Back When the Supreme Court Got It Right On IP: Kewanee, 50 Years Later
May 12, 2024
“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 […]
Secrecy and Taylor Swift: What Conspiracy Theories Reveal About Our Growing Distrust of Institutions
February 27, 2024
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 […]
Trade Secrets in 2023 Part II: Identification, Misappropriation and Remedies
December 28, 2023
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 […]
What You Need to Know About Trade Secrets in 2023 (Part I)
December 26, 2023
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 […]
When Protecting Everything Means Protecting Nothing
November 28, 2023
“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 […]
Trade Secret Management and the Fear of Missing Something
October 2, 2023
“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 […]
The New Challenge to Employee Confidentiality Agreements
August 28, 2023
“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 […]
Let the Jury Decide: Lessons from Syntel v. Trizetto
July 30, 2023
“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 […]
Planning for Independent Development
May 1, 2023
“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 […]
The Messy Process of Making and Applying the Law
March 29, 2023
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 […]
Trusting the Talent: Imagining a Future Without Noncompete Agreements
February 26, 2023
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 […]
New Federal Law and FTC Rule Will Imperil Trade Secret Protection
January 25, 2023
“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 […]
A Brief History of U.S. Trade Secret Law
December 14, 2022
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 […]
What You Need to Know About Trade Secrets in 2022
December 2, 2022
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 […]
The How and Why of Managing Trade Secrets
November 1, 2022
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 […]
Lessons from the Levandowski Case: Reimagining the Exit Interview as Risk Management
October 30, 2022
“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 […]
The Judicial Balancing Act: How Judges Manage Competing Interests in Trade Secret Cases
September 27, 2022
“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 […]
The Artificial Distinction Between Trade Secrets and ‘Confidential Information’
July 28, 2022
“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 […]
‘Reasonable Efforts’ Require Care and Consistency
June 27, 2022
“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 […]
Government-Forced Technology Transfer Is Almost Always Wrong
March 29, 2022
“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 […]
Learning to Live with ‘Zero Trust’: It’s Not as Depressing as it Sounds
February 23, 2022
“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 […]
Lessons From Theranos and the Trade Secret Defense
January 31, 2022
“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 […]
What You Need to Know About Trade Secrets in 2021
December 14, 2021
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 […]
When the Secret Enables the Brand: The Long-Lasting Listerine License
November 23, 2021
“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 […]
Acquisition Contamination: The Mythology of the ‘Clean Team’
October 29, 2021
“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 […]
Noncompete Agreements: Finding the Balance Between Reasonable Restraints and Free Range Talent
September 26, 2021
“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 […]
Carefully Connecting the Dots: Consider All the Evidence Before Launching a Trade Secret Misappropriation Attack
July 29, 2021
“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 […]
‘Decoupling’ with China is Not the Answer
June 28, 2021
“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 […]
Drawn-Out Negotiations Over Covid IP Will Blow Back on Biden
May 26, 2021
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 […]
The Big Secret Behind the Proposed TRIPS Waiver
May 25, 2021
“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 […]
Who Needs to Know? The Hidden Value of Transparency
April 29, 2021
“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 […]
How Intellectual Property Rights Helped America Fight COVID-19
April 4, 2021
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 […]
How Mediation Can Help Both Sides Win a Trade Secret Case
March 29, 2021
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 […]
Secrecy: the IP right most often used by SMEs
March 25, 2021
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 […]
Trade Secrets and the Insider Threat: Protection Beyond the Perimeter
February 23, 2021
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 […]
Pardon Me? Levandowski Case Highlights Need for Proactive Approach to Avoid Trade Secret Problems in Hiring
January 27, 2021
“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 […]
Take Heed: Lessons from the Top Trade Secret Cases of 2020
December 20, 2020
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 […]
Covid Vaccine Shakedown at the WTO
December 16, 2020
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. […]
When It Pays to Talk About Your Secrets
November 23, 2020
“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. […]
It’s 10:00 PM: Do You Know Where Your Secrets Are?
October 27, 2020
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 […]
Gathering Business Data? Be Careful, Mom is Watching – A Comment on Data Scraping and the Compulife Case
September 20, 2020
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 […]
Don’t Focus on the Fight: When it Comes to Trade Secrets, it’s the Transaction that Counts
August 30, 2020
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 […]
Patents are from Mars, Trade Secrets are From Venus
July 26, 2020
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 […]
Has China Finally Embraced Robust Trade Secret Protection?
June 14, 2020
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 […]
The Transmissibility of Information: How Your Trade Secrets Are Like a Virus
April 28, 2020
“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 […]
Do Your ‘Home Work’: Keeping Trade Secrets Safe While Working Remotely
March 26, 2020
“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 […]
You Own It, Now What Are You Going to Do with It? – Why Trade Secrets Are Treated Like Property: Part 2
February 25, 2020
“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 […]
It’s About Control, Not Exclusion: Why Trade Secrets Are Treated Like Property, Part 1
January 21, 2020
“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 […]
Trusting Your Secrets to the Government
December 23, 2019
“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, […]
The Dark Side of Secrecy: What Theranos Can Teach Us About Trade Secrets, Regulation and Innovation
September 25, 2019
“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 […]
Trade Secret Diligence in M&A
August 5, 2019
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 […]
Five Tips for Keeping Safe with Your Head in the Cloud
July 17, 2019
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 […]
Of Supply Chains and Fireworks: A Trade War with China is Easy to Lose
May 30, 2019
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 […]
Some Progress in the International Effort to Harmonize Trade Secret Protection
April 25, 2019
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, […]
A Lack of Focus on Trade Secrets Can Pose Serious Risks
March 28, 2019
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 […]
Of Secret Sales and Public Uses: The Practical Consequences of the Supreme Court’s Helsinn Decision
February 21, 2019
"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 […]
Trade Secret Disputes: Identifying Mutual Interest in the Face of Major Disagreement
January 25, 2019
"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 […]
Proprietary Techniques vs. Employee Rights: The Struggle to Balance Competing Interests
November 25, 2018
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 […]
Secrets of Social Media: Who Owns Social Media Accounts?
November 12, 2018
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 Blades Just Keep Spinning
July 30, 2018
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 […]
The 700 Million Dollar Boomerang Lawsuit
June 20, 2018
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 […]
How to Change Jobs and Embrace Inefficiency
May 23, 2018
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 […]
The Biggest Trade Secret Loophole You’ve Never Heard Of
May 2, 2018
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 […]
Fishing for Trade Secrets
March 19, 2018
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 […]
Waymo v. Uber Shows Even Epic Battles Can Be Resolved
February 18, 2018
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. […]
Searching for the Secrets of a Stradivarius
January 21, 2018
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 […]
When Failure Becomes an Asset
December 14, 2017
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 […]
The Art of Reverse Engineering
December 4, 2017
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, […]
Choosing Between Patents and Trade Secrets, A Discussion Worth Revisiting
November 1, 2017
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 […]
The Most Dangerous Hire: Lessons from Waymo v. Uber
October 19, 2017
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. […]
How To Respond To A Claim of Trade Secret Misappropriation
August 8, 2017
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 […]
Was America’s Industrial Revolution Based on Trade Secret Theft?
July 5, 2017
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 […]
What Divorce Court Teaches About Trade Secret Litigation
May 25, 2017
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: A Year Later
May 11, 2017
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 […]
When Taking Trade Secrets Becomes A Crime
April 28, 2017
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 […]
Losing Trade Secrets To Foreign Companies: How To Reduce The Risk
March 1, 2017
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 […]
How To Recruit And Hire While Avoiding Data Contamination
February 1, 2017
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 […]
When Employees Leave With Your Secrets
January 28, 2017
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 […]
Quick Notes
January 1, 2017
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 […]
The Myth of the Trade Secret Troll: Why the Defend Trade Secrets Act Improves the Protection of Commercial Information
December 9, 2016
Published in the George Mason Law Review, Volume 23, Number 4, Pages 1045-1078
What Efforts Are "Reasonable" To Protect Your Trade Secrets?
November 21, 2016
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 […]
The Most Cost-Effective Way You Can Protect Your Trade Secrets
October 28, 2016
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,” […]
How Should You React When You've Been Accused of Trade Secret Theft?
September 28, 2016
“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. […]
New Risks in Warning Letters To Departing Employees
August 16, 2016
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 […]
Be Careful What You Wish For
July 18, 2016
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 […]
The Billion-Dollar Trade Secret Verdict
May 28, 2016
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 […]
Trade Secrets Come to the Fore in the US and Europe with New Legislation Set to Hit the Statute Books
May 3, 2016
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 […]
Patents or Trade Secrets Do You Really Have to Choose?
April 28, 2016
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 […]
No, You Don't Have To Inventory All Your Trade Secrets
February 28, 2016
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 […]
Six Ways To Keep Trade Secrets Offline
February 23, 2016
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 […]
New Federal Trade Secret Law Would Protect Whistleblowers
February 23, 2016
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 […]
Trade Secret Bill Resolves 'Inevitable Disclosure' Controversy
February 16, 2016
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 […]
What You Need To Know About the Defend Trade Secrets Act
January 31, 2016
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 […]
The Case of The Buried Non-Disclosure Agreement
January 5, 2016
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 […]
Back in Fashion - Trade Secrets in the Modern Enterprise
December 8, 2015
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 […]
The Myth of The Trade Secret Troll
November 24, 2015
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 […]
Cyber Espionage: Protecting Your Company’s Most Valuable Assets
November 14, 2015
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 Provocative Idea That Turns Out to be Wrong
September 22, 2015
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 […]
Trade Secrets: The Other IP Right
June 8, 2013
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 […]
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