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Mealey's Trade Secret

July 02, 2020
Kylie Jenner’s Cosmetics Company Named In Secret Sauce Trade Secret Theft Suit

LOS ANGELES — A cosmetics manufacturer that specializes in promoting new cosmetics through ecommerce and social media platforms sued a cosmetics company owned by media personality and socialite Kylie Jenner in California state court on June 30, alleging that the company, an industry competitor and others have engaged in a scheme to steal and misappropriate its proprietary business model in violation of California trade secret law (Seed Beauty LLC, et al. v. Coty Inc., et al., No. 20-721, Calif. Super., Los Angeles Co.).
July 02, 2020
Trade Secret Law Claims Against Former Bankers Survive Dismissal Bid

ORLANDO, Fla. — A federal judge in Florida on June 29 ruled that a community bank and its parent company have sufficiently alleged that several former employees violated state and federal trade secret laws when they engaged in a scheme to misappropriate the bank’s confidential and proprietary customer information before abruptly resigning from their positions and accepting employment with a competing bank (Seacoast Banking Corp. of Florida, et al. v. Matthew Diemer, et al., No. 20-0057, M.D. Fla.).
June 30, 2020
Most Claims In Advisory Firm’s Trade Secret Suit Survive Summary Judgment Bid

PHILADELPHIA — A federal judge in Pennsylvania on June 26 substantially denied a summary judgment motion filed by defendants in a trade secret misappropriation and breach of contract lawsuit, ruling that although a majority of an independent advisory firm’s claims must be decided by a jury, its claim for unjust enrichment is duplicative of its breach of contract claims and must be dismissed (Dietrich & Associates Inc. v. John R. Neison, et al., No. 18-5034, E.D. Pa., 2020 U.S. Dist. LEXIS 112534).
June 30, 2020
Fracking Companies: Financial Agents’ Deal Making Violated Contract, Trade Secrets

WILMINGTON, Del. — Hydraulic fracturing companies sued financial services providers in the Delaware Chancery Court on June 9, contending that they violated their fiduciary and contractual duties and numerous state laws governing trade secrets when they commingled funds and engaged in transactions outside the scope of the agreement they had entered (Lone Pine Resources LP, et al. v. William S. Dickey, et al., No. 2020-0450, Del. Chanc.).
June 29, 2020
Corrosion Prevention Product Maker Files Suit For Trade Secret Misappropriation

HOUSTON — A developer and manufacturer of corrosion prevention products sued three former employees and two industry competitors in Texas federal court on June 23, alleging that the defendants misappropriated the company’s confidential and trade secret information in the developing competing products in violation of state and federal trade secret laws (Corrosion Prevention Technologies LLC v. Loren L. Hatle, et al., No. 20-2201, S.D. Texas).
June 25, 2020
Illinois Contacts Allow For Jurisdiction In Trade Secrets Suit, Company Argues

CHICAGO — Defendants in a trade secret misappropriation lawsuit are not entitled to have claims against them dismissed for lack of personal jurisdiction because any injury they may have caused to an industry competitor stemming from their alleged misappropriation of its X-ray tube technology trade secrets has directly arisen from their contacts with the State of Illinois, the plaintiffs argue in a June 22 opposition brief filed in Illinois federal court (Philips Medical Systems [Cleveland] Inc., et al. v. Jose Buan, et al., No. 19-2648, N.D. Ill.).
June 24, 2020
Chinese American Wants Racially Biased Trade Secrets Theft Indictment Dismissed

BOSTON — An American citizen of Chinese descent asked a federal judge in Massachusetts on June 22 to dismiss a criminal indictment charging him with stealing trade secrets from his former employer, arguing that he has been selectively targeted by the FBI based on his racial background (United States of America v. Haoyang Yu, et al., No. 19-cr-10195, D. Mass.).
June 23, 2020
Alabama High Court Panel Finds Preliminary Injunction In Trade Secret Suit Moot

MONTGOMERY, Ala. — A preliminary injunction against a former employee of a construction company that builds cold-storage facilities prohibiting him from soliciting any employees or clients of his former employer is moot because the two-year period prohibiting him from engaging in such activities contained in a restrictive covenant has expired, an Alabama Supreme Court panel ruled June 22 (Joshua Rogers v. Burch Corp., No. 1190088, Ala. Sup., 2020 Ala. LEXIS 90).
June 19, 2020
Lancet Maker Sues Business Partner Over Alleged Misuse Of Trade Secrets

CHICAGO — A manufacturer of lancing devices and lancets sued its former business partner in Illinois federal court on June 11, alleging that the defendant misappropriated the manufacturer’s trade secret and proprietary information to set up competing business and steal the plaintiff’s customers (Facet Technologies LLC v. Asahi Polyslider Co. Ltd., No. 20-3435, N.D. Ill.).
June 19, 2020
Documents In Log Deemed Protected By Attorney-Client Privilege

KANSAS CITY, Mo. — A federal judge in Missouri on June 10 held that although 36 documents contained in a privilege log and sought by a company in a legal malpractice and aiding and abetting trade secret misappropriation lawsuit are protected by attorney-client privilege, the judge would conduct an in camera review of the documents to determine whether they were subject to the joint-client exception (Energy Creates Energy LLC, et al. v. Brinks Gilson Lione P.C., et al., No. 18-913, W.D. Mo., 2020 U.S. Dist. LEXIS 101900).
June 19, 2020
Iowa Panel Rejects Vodka Maker’s Sanctions Appeal In Trade Secrets Dispute

DES MOINES, Iowa — A trial court did not abuse its discretion in denying a vodka maker’s request for attorney fees and sanctions pursuant to Iowa law after the plaintiff voluntarily dismissed the defendant from the action because the plaintiff’s claims in its pleadings were not frivolous in nature, an Iowa appellate panel ruled June 17 (Oz Spirits LLC v. Swell Liquor LLC, et al., No. 19-0513, Iowa App., 2020 Iowa App. LEXIS 642).
June 19, 2020
Panel Sends Contract, Trade Secret Claims Back To District Court

NEW ORLEANS — A Fifth Circuit U.S. Court of Appeals panel on June 17 ruled that a federal district court erred in granting a company’s motion for summary judgment on a breach of contract claim filed by a product developer in a trade secret misappropriation lawsuit because the lower court improperly construed the terms of the parties’ confidentiality agreement in concluding that no such breach existed (Hoover Panel Systems Inc. v. HAT Contract Inc., No. 19-10650, 5th Cir., 2020 U.S. App. LEXIS 19044).
June 19, 2020
Composite Materials Maker Sues Rival, Others For Trade Secret Misappropriation

BEAUMONT, Texas — A manufacturer of composite materials used in the oil and gas industry sued an industry competitor and two former employees in Texas federal court on June 5, alleging that the former employees, with the assistance of the competitor, stole the plaintiff’s trade secrets and intellectual property as part of a corporate raiding scheme in violation of state and federal trade secret laws (NRI ATM LLC v. Plant Services Inc., et al., No. 20-248, E.D. Texas).
June 17, 2020
Trade Secret Claims Do Not Infringe On Free Speech, Texas Panel Rules

DALLAS — A Texas appellate court panel on June 12 ruled that a former employee of a medical billing company and his current employer have failed to show that a trial court erred in denying their motion to dismiss a trade secret misappropriation lawsuit based on their argument that the company’s claims infringe on their rights to free speech and association in violation of the Texas Citizens Participation Act (TCPA) (Collaborative Imaging Inc., et al. v. Zotec Partners LLC, et al., No. 05-19-01256-CV, Texas App., 5th Dist., 2020 Tex. App. LEXIS 4364).
June 17, 2020
Sports Goods Retailer’s Injunctive Relief Request In Trade Secret Suit Denied

ALLENTOWN, Pa. — A federal judge in Pennsylvania on June 15 denied a motion for temporary restraining order (TRO) and preliminary injunction in a trade secret misappropriation and breach of contract lawsuit filed by a sporting goods retailer against its former employee, a design firm and others, ruling that the plaintiff’s request for injunctive relief is based largely on “assumptions” of wrongdoing on the part of the defendants (Schuylkill Valley Sports Inc. v. Corporate Images Co., et al., No. 20-2332, E.D. Pa., 2020 U.S. Dist. LEXIS 103828).
June 15, 2020
Judge Adopts Recommendation Against Dismissing Trade Secret Law Claims

WILMINGTON, Del. — A federal judge in Delaware on June 10 overruled defendants’ objections to a federal magistrate judge’s report and recommendation that allowed certain claims in a trade secret misappropriation lawsuit to proceed, ruling in each instance that the magistrate judge’s rulings were correct (Progressive Sterilization LLC v. Turbett Surgical LLC, No. 19-627, D. Del., 2020 U.S. Dist. LEXIS 101885).
June 15, 2020
Panel Upholds Issuance Of Preliminary Injunction In Trade Secrets Dispute

CINCINNATI — A federal district court did not abuse its discretion by failing to allow a defendant to respond to a motion for preliminary injunction in a trade secret misappropriation lawsuit because the defendant had been given an opportunity to file such a response but failed to do so, a Sixth Circuit U.S. Court of Appeals panel ruled June 12 (RGIS LLC v. Keith Gerdes, No. 19-2051, 6th Cir., 2020 U.S. App. LEXIS 18629).
June 12, 2020
Texas Appellate Panel Remands Trade Secret, Fraud Claims For New Trial

SAN ANTONIO — A Texas appellate panel on June 3 partially overturned a state trial court’s $706.2 million jury award in a breach of contract and trade secret misappropriation lawsuit, ruling that although a Texas trial court did not err in entering a take-nothing judgment on a title insurer’s breach of contract claim against a provider of property appraisal software, data and analytic tools, a new trial was necessary regarding the defendant’s trade secret misappropriation and fraud claims (Title Source Inc. v. HouseCanary Inc., No. 04-19-00044-CV, Texas App., 2020 Tex. App. LEXIS 4116).
June 11, 2020
Tech Company Sues Former Employee For Alleged Trade Secret Misappropriation

TRENTON, N.J. — A public sector financial technology (FinTech) platform company sued a former employee and an industry competitor he formed in New Jersey federal court on June 9, alleging that the former employee misappropriated the company’s trade secret information to build a competing business and destroy the plaintiff’s business in violation of state and federal trade secrets law (Statistical Zero Group LLC v. Sergio Marrero, et al., No. 20-7030, D. N.J.).
June 04, 2020
S.C. High Court: Plaintiffs Failed To Plead Elements Of Trade Secrets Claim

COLUMBIA, S.C. — A South Carolina trial court did not err in ruling that a company failed to sufficiently show that its former member and two companies for which he worked violated the state’s trade secret law when he removed certain of the company’s trade secrets contained on two company-owned laptops and a Blackberry device because the company failed to show that the trade secrets had the required independent economic value for a showing of trade secret misappropriation, the South Carolina Supreme Court ruled June 3 (David Wilson v. John Gandis, et al., No. 27980, S.C. Sup., 2020 S.C. 88).
June 04, 2020
Drilling Company Says Fracking Patents Infringed, Trade Secrets Misappropriated

HOUSTON — A drilling company that provides services to hydraulic fracturing operators on June 3 sued a former consultant, alleging that he misappropriated trade secrets to which he had access during the time was under contract with the company and later infringed patents for products and procedures by registering those patents in his own name (Abaco Drilling Technologies LLC v. PV Fluid Products Inc., et al., No. 20-1946, S.D. Texas).
June 03, 2020
Company Hits Former CEO With Trade Secrets Suit Over Sale Of Counterfeit Product

SAN FRANCISCO — A technology company sued its former CEO in a California federal court on June 2, alleging that the defendant misappropriated the company’s trade secrets, violated the terms of a separation agreement between the parties and has continued to misrepresent himself as an employee of the company in order to sell counterfeit versions of the company’s hands-on learning tool for children in Asia in violation of state and federal trade secrets laws (Piper Inc. v. Mark Pavlyukovskyy, No. 20-3663, N.D. Calif.).
June 03, 2020
Judge Won’t Give Software Developer Another Chance To Identify Trade Secrets

CHICAGO — Opining that although a software developer has been given numerous opportunities to sufficiently identify trade secrets a former business partner is alleged to have misappropriated when it developed its own rebate portal processing system using the developer’s trade secrets, a federal judge in Illinois on May 31 held that the developer has failed to do so (NEXT Payment Solutions Inc. v. CLEAResult Consulting Inc., No. 17-8829, N.D. Ill., 2020 U.S. Dist. LEXIS 94764).
June 02, 2020
Questions Prevent Tech Company’s Bid For Injunction In Trade Secrets Dispute

BOSTON — A federal judge in Massachusetts on May 29 ruled that a technology company is not entitled to a preliminary injunction in its breach of contract and trade secret misappropriation lawsuit against a former employee and his present employer, Facebook Inc., because questions exist as to whether the source code and algorithms the defendants are alleged to have misappropriated are truly trade secrets and whether the alleged trade secrets were obtained by the defendants by improper means (Neural Magic Inc. v. Facebook Inc., et al., No. 20-10444, D. Mass.).
June 01, 2020
Former GE Engineer Admits To Stealing Company’s Trade Secrets

ALBANY, N.Y. — A former General Electric Co. (GE) engineer has pleaded guilty to stealing trade secret information relating to GE’s next generation semiconductor technology so that he could use the trade secrets to form his own competing company, according to a plea agreement filed by government prosecutors on May 28 in New York federal court (United States of America v. Yang Sui, No. 20-cr-109, N.D. N.Y.).