Trade Secrets & Employee Mobility

After a bench trial, a Connecticut state court rejected a violation of trade secret complaint by an employer against a former employee in BTS USA v. Executive Perspectives, Superior Court, Waterbury, Docket No. X10-CV-116010685 (Oct. 16, 2014). The plaintiff, BTU USA, provides training and consulting services to corporate clients using learning maps, computer simulations and board games. The defendant, Executive Perspectives (“EP”), offers essentially the same services and products.

Marshall Bergmann, a former BTS Senior Director who had access to much of BTS’ ...

The size of an injunction bond is not a common topic in appellate cases. Accordingly, a recent decision by the Indiana Appellate Court reversing the trial court’s setting of an injunction bond at only $100 in a non-compete case is noteworthy.

In Donald Moss v. Progressive Design Apparel, Inc., the Indiana Appellate Court affirmed a preliminary injunction which restricted a salesman’s ability to call upon customers of his former employer or disclose confidential information. As part of the trial court’s order granting injunctive relief, the trial court found that the ...

In determining what is an impermissible “solicitation” by a current employee, the Illinois Appellate Court recently drew a distinction between officers and non-officers. See Xylem Dewatering Solutions, Inc., d/b/a Godwin Pumps of America et al. v. Szablewski et al., Case No. 5-14-0080 (Ill. App. 5th  Dist. 2014).

In Xylem Dewatering Solutions, the defendants were accused by their former employer of wrongfully soliciting customers and suppliers on behalf of a competitive business that they were planning to launch. According to the Appellate Court’s decision, while still ...

As we have previously noted, Congress this year is actively considering two bills that would create a federal private right of action for trade secret theft: The Trade Secrets Protection Act (H.R. 5233) and the Defend Trade Secrets Act (S. 2267). These bills have been spurred in large part by increased foreign cyber-espionage affecting American companies.

Although the bills have enjoyed bipartisan support in Congress and in the business community, including from the National Association of Manufacturers, last month a group of dozens of law professors in the intellectual property ...

Co-authored by Ted A. Gehring.

On April 17th, 2012, we blogged about a malicious prosecution claim brought against Latham & Watkins in Los Angeles Superior Court. The suit alleged that the Plaintiffs, William Parrish and Timothy Fitzgibbons, were former officers and shareholders of Indigo Systems Corporation, which was purchased by FLIR Systems, Inc. in 2004. From 2004 to 2006 the Plaintiffs worked for FLIR, leaving in 2006 to start their own business. FLIR retained Latham and sued them for, among other things, misappropriation of trade secrets. The trial court denied FLIR’s ...

When recruiting an executive, or when being recruited, it is best practice for the future employer, the employee and any executive recruiting firm involved in the placement to address head-on the existence of any restrictive covenant limiting the future activities of the employee. The New York State Supreme Court - First Department Appellate Division - yesterday upheld a claim that by not clearly disclosing the existence of a non-solicitation restriction in an executive recruit’s employment agreement, the head hunter involved in the placement could potentially be held liable ...

For some time, the media has covered the prosecution of a former Citadel, LLC employee, Yihao Pu, for allegedly stealing Citadel’s trade secrets. The recent guilty plea of another Citadel LLC employee, Sahil Uppal, highlights the potential consequences of complicity in trade secrets theft.

In his plea deal earlier this month, Uppal admitted that he transferred Citadel’s intellectual property (consisting of computer code) to Pu without Citadel’s authorization or approval. Additionally, Uppal admitted that, after he learned that Citadel representatives had confronted ...

On July 29, 2014, a bipartisan group of members of the U.S. House of Representatives introduced a bill that would create a federal private right of action for trade secret theft. The Trade Secrets Protection Act (H.R. 5233) is a House version of the Senate's Defend Trade Secrets Act (S. 2267), a bill introduced earlier this year.

As we discussed in a previous blog post, in the last couple of years, numerous legislators in Washington have made efforts to amend the Economic Espionage Act, 18 U.S.C. §1831 et seq. (which currently allows only prosecutors to pursue trade secret thieves), to ...