The Fifth Circuit Court of Appeals recently ruled that: (1) a party must “prevail” before it can recover any attorney’s fees under the Defend Trade Secrets Act and (2) a plaintiff’s dismissal of its claims without prejudice does not confer the “prevailing party” status on defendants.
Many small businesses use Google, Microsoft 360, Dropbox or some other similar systems to maintain and manage company records. All of those systems allow the administrator to (1) set restrictions on which employees can access which information within the company; (2) track what the employees do with that information; (3) set restrictions on whether the employees can print, download, copy or share the information with other employees or people outside the company; (4) periodically change passwords to access the system; and (5) many other features that can help business owners prevent their information being shared outside the company.
Credit card data (including cardholder names, credit or debit card numbers, and corresponding CVVs) were akin to passwords and usernames that provided access to something of value,” i.e. an individual’s line of credit with a financial institution or money in an account with a financial institution, and were not “trade secrets” under the Defend Trade Secrets Act.
Trade secrets only have value as long as they stay secret, so once they come into a competitor’s hands or become publicly available, their value is often destroyed.
Few employees realize that when they take their employers’ trade secrets with them prior to leaving their job they may be exposing themselves to criminal liability under the Economic Espionage Act, which makes it a crime to steal trade secrets when (1) the information relates to a product in interstate or foreign commerce (which is virtually any product now days) or (2) the intended beneficiary is a foreign power.
A court order prohibiting defendant from using trade secrets must be broad enough to cover all possible circumstances while narrow enough to include only the illegal activities. Where that line lies depends on the circumstances of each particular case.
The Fifth Circuit recently considered whether the federal copyright and patent laws preempt (trump) Texas common law claim of unfair competition by misappropriation.
Texas’ recent amendments to its trade secrets statute made it the most comprehensive and modern statute in the nation. It is the only statute in the nation that addresses when a competitor can be excluded from the courtroom to prevent disclosure of trade secrets during the lawsuit.
At a bare minimum, all businesses should have a standard confidentiality (non-disclosure) agreement for its employees, vendors, investors, and anyone else who has access to the business’s trade secrets.
It is a well-known fact that when the economy improves, employee mobility rises as well. The most valuable employees – those with a specialized skill set and many years of experience in a particular industry – tend to stay within that industry while moving among…
Until recently, companies suing for trade secret theft ran a risk of having to disclose to their competitors in open court certain aspects of their trade secrets in order to prove their claim. The companies often argued that they shouldn’t have to give up…
Today, President Obama signed into law S. 1890, which will allow companies to sue entities in federal court over allegations of trade secrets theft. Previously, the Senate passed the bill 87-0 on April 4, and the House cleared it by 410-2 on April 27. “Enacting the Defend…