Trade Secrets & Employee Mobility

A recent decision by the Supreme Court, New York County, was remarkable for several reasons, not the least of which was that it completely dismissed a non-compete case at the pleading stage.

A recent decision in Givaudan Fragrances Corporation v. Krivda highlights a conundrum faced by owners of trade secrets seeking to protect them when employees leave for new employers: while courts require the owners to inform such new employers with specificity of the trade secrets misappropriated, the owners must take care not to disclose that information with too much specificity or too soon, because doing either could effectively render the information no longer "secret."

In Angelica Textile Services v. Park, the California Court of Appeal recently addressed the issue of whether a victim of trade secret misappropriation pursuing a CUTSA claim may also pursue other business torts such as breach of the duty of loyalty or conversion against the wrongdoer and found, in a novel way, that CUTSA did not displace a state law claim for conversion of trade secrets.

The Illinois Supreme Court recently announced that it was not going to review an Illinois Appellate Court decision, Fifield v. Premier Dealer Services, Inc., which held that, absent other consideration, two years of employment is required for a restrictive covenant to be deemed supported by adequate consideration - even where the employee signed the restrictive covenant as a condition to his employment offer - and even where the employee voluntarily resigned.

Summary: On September 26, 2013, the Seventh Circuit Court of Appeals affirmed the conviction and four-year prison sentence of a former Motorola engineer for theft of trade secrets under the Economic Espionage Act.

A recent decision from the United States District Court for the Eastern District of Wisconsin reaffirms that the Seventh Circuit's attitude against filing documents under seal is alive and well.

A recent decision from the United Kingdom set strict standards on the conduct of a departing employee in terms of communicating his decision to leave to his superiors and to his colleagues and the legal implications of the timing of both.

A recent Seventh Circuit decision underscores the need to re-evaluate the continued prosecution of trade secret misappropriation cases as the facts unfold in discovery.

In a recent decision from the Southern District of New York, Judge William H. Pauley III rejected the use of the "inevitable disclosure" doctrine as a basis for an independent claim and outright granted a Rule 12(6)(6) motion to dismiss the complaint brought by a California employer against its former New York based employee.

California Courts have discretion to award attorneys' fees to a prevailing defendant in a trade secrets action where the commencement or continued prosecution of a trade secrets action is in bad faith. A recent decision underscores that a plaintiff pursuing a trade secret claim in California must be careful that it can actually identify with some particularity what trade secrets have been misappropriated.