Cases from California

Superior Court of the State of California
Qualcomm Incorporated v. Apple Inc. and DOES 1 through 25

Apple is no stranger to legal disputes involving their innovative products. Recently, Apple was the subject of controversy as it was alleged to have stolen trade secrets from Qualcomm and shared them with Intel Corporation after Qualcomm allowed Apple access to its source code and tools for LTE modem chipsets. Qualcomm is claiming Apple misappropriated their trade secrets in an attempt to preserve the quality of the chips Apple purchases, but change the supplier of the chips from Qualcomm to Intel Corporation for their new iPhones.

A complaint was initially filed in November by Qualcomm claiming that Apple breached a software-licensing contract by sharing confidential details regarding Qualcomm’s chips with engineers at Intel Corporation. A motion to amend the complaint filed on Monday accuses Apple of stealing trade secrets “for the purpose of improving lower-quality modem chipsets, including those manufactured by Intel, a competitor of Qualcomm, to render such chipsets useable in Apple devices with the ultimate goal of diverting Qualcomm’s Apple-based business.”

While the lawsuit is scheduled to be heard in April 2019, the proposal of an amended complaint might push back the anticipated date.

County of Santa Clara, Superior Court of the State of California
Eli Attia Brings Racketeering Charges Against Google

Santa Clara Superior Court of California recently granted a motion for leave to file an amended complaint that allowed Eli Attia and Eli Attia Architect PC (“Plaintiffs”) to successfully bring racketeering claims under the Racketeer Influenced and Corrupt Organization Act (“RICO”) in addition to the trade secret misappropriation and breach of contract claims against Google, Inc. (“Google”). Attia originally filed suit on December 5, 2014.

Eli Attia (“Attia”) is an architect who developed a technology that enables creation of more sustainable buildings faster and with lower cost. He called the technology, “Engineered Architecture” (“EA”). Google X, an affiliate of Google, approached Attia in 2010 and signed a Non-Disclosure Agreement (“NDA”) permitting Google to use Attia’s confidential information “to facilitate technical discussions concerning existing or future product development efforts by the parties.” Shortly after, the parties entered into an Inbound Services Agreement (“ISA”) and a Statement of Work (“SOW”) to build a software system capable of implementing the EA technology using Attia’s trade secrets and his “pre-existing property.” This was dubbed the “Genie Project.”

Attia alleged in the complaint that Google plotted to “squeeze out” Attia from the Genie Project and misappropriated his trade secrets by continuing to use EA and his pre-existing property without permission and compensation. Attia alleged that Google pretended to kill the Genie Project and spun it off into a new company called “Flux Factory” to further develop Attia’s technology.

In the fourth amended complaint filed on July 24, 2017, the Plaintiff’s legal team added racketeering charges against Google by claiming a pattern of trade secret thefts. The complaint uncovered six other cases in which Google engaged in a similar pattern of activity where the tech giant sought inventors, signed an NDA, boxed them out, and misappropriated their trade secrets. In the October 4, 2017 Order after hearing, the Superior Court permitted the addition in the amended complaint. Trial is scheduled for September 2018.

The case is Eli Attia et al. v. Google, Inc. et al., case number 2014-1-CV-274103, in the Superior Court of the State of California, County of Santa Clara.

Fourth Amended Complaint: http://tsi.brooklaw.edu/sites/tsi.brooklaw.edu/files/filings/attia-v-google-inc/20170724fourth-amended-complaint.pdf
Order After Hearing: http://tsi.brooklaw.edu/sites/tsi.brooklaw.edu/files/filings/attia-v-google-inc/20171004order-after-hearing.pdf

County of Santa Clara, Superior Court of the State of California
Tesla Settles Trade Secrets Lawsuit with Ex-Chief of Autopilot Program

In Jaunary 2017, Tesla Motors, Inc. ("Tesla") filed a breach of contract lawsuit against former employee Sterling Anderson, former chief of the company’s Autopilot Program, and Chris Urmson, former CTO of Alphabet Inc.’s self-driving technology. Tesla alleged that Anderson and Urmson attempted to recruit multiple Tesla engineers to their new company, Aurora, and for allegedly stole “hundreds of gigabytes” of confidential Tesla information.

Anderson’s and Urmsons’s goal for Aurora is to develop driverless cars and improve safety for self-driving technology. Tesla claimed in the suit that Anderson violated his employment contract and breached a duty of loyalty to Tesla by recruiting Tesla engineers and using company information to form Aurora.

On April 19, 2017, the parties settled the lawsuit when Tesla agreed to withdraw its suit without damages, attorneys’ fees, or any finding of wrongdoing. Aurora agreed to reimburse Tesla for future ongoing audits conducted to establish that Aurora did not in fact misappropriate Tesla’s trade secrets. Aurora also agreed to pay Tesla $100,000. As per the settlement, Anderson’s contractual obligations to Tesla will remain intact and will also extend to Aurora.

The case is Tesla Motors Inc. v. Anderson et al., case number 17-CV-305646, in the Superior Court of the State of California, County of Santa Clara.

United States District Court for the Northern District of California
Battle of Self-Driving Cars

Waymo LLC, a self-driving car startup under Alphabet (originally known as Google’s Self-Driving Car Project), filed a complaint in California’s Northern District accusing Uber of violating the Defense of Trade Secrets Act and the California Uniform Trade Secret Act, as well as patent infringement. Waymo alleges that a former Google employee, Anthony Levandowski, secretly downloaded 14,000 files of “highly confidential data” from Google’s hardware systems before resigning a month later and launching a self-driving truck startup called Otto. Uber acquired Otto in August 2016 and put Levandowski in charge of its self-driving efforts. Waymost alleges that Levandowski used the information from Google’s system to launch Otto.

The complaint very specifically names the ways in which Levandowski stole the data. The data revolves around a key piece of technology called LiDAR ("Light Detection and Ranging"), which uses high-frequency, high-power pulsing lasers to measure distances between one or more sensors and external objects to build a detailed map of the environment around the car. Waymo has invested millions in its own LiDAR hardware and alleges that Levandowski misappropriated this data in developing Otto and working for Uber.

Filed complaint: http://nyti.ms/2mMwBcA

Superior Court of the State of California
Media Giants Fixated on Fixed-Term Employment Agreements

Twentieth Century Fox (“Plaintiff”) has lodged a complaint against Netflix, Inc. (“Defendant”) in California state court, alleging that Defendant fraudulently and maliciously interfered with the Fixed-Term Employment Agreements Plaintiff had with two of its executive employees: Marcos Waltenberg (formerly Vice President, Promotions) and Tara Flynn (formerly Vice President, Creative). Those agreements were to terminate in 2016 and 2017, respectively, with an additional two-year option period at their initial expiration. Waltenberg joined Defendant Netflix’s payroll, however, in January 2016 and Flynn joined before her option period expired in August 2016.

Netflix is accused of “soliciting, recruiting, encouraging, and inducing” Fox employees to terminate their employment with Fox early. For their part, Fox claims that Netflix’s actions have resulted in irreparable injury to Fox’s ability to contract for a stable workforce (especially with regard to corporate planning), and to its business reputation and goodwill. Twentieth Century Fox seeks compensatory and punitive damages, as well as a permanent injunction enjoining Netflix from interfering with any of its Fixed-Term contracts.
It is worth noting that the agreements at issue in this case are not non-competes.

California has taken the rare stance of voiding all non-compete agreements. California Business and Professions Code section 16600 provides that, “[e]xcept as provided in this chapter, every contract by which anyone is restrained from engaging in a lawful profession, trade or business of any kind is to that extent void.” This puts employers in the position of creating a workaround to employee retention and market advantage. In California, that is often accomplished through Fixed-Term Employment Agreements.

Check back for updates, and read the complaint here: https://www.scribd.com/document/324263613/Complaint-9-16

Santa Clara County, Supreme Court of the State of California
Former Palantir Employee Sued for Misappropriating Trade Secrets

Palantir, a data analytics company headquartered in Palo Alto, California, filed a lawsuit on September 1, 2016 alleging Marc Abramowitz (“the defendant”), one of its early investors, stole trade secrets and used them for his own benefit. Palantir filed the complaint in the Supreme Court of the State of California in Santa Clara County. It alleges that the defendant used confidential information to file false claims with the United States Patent and Trademark Office in order to obtain patents.

Defendant was an early investor with Palantir who regularly discussed some of the company’s sensitive business and trade secrets with company executives. The complaint states that the defendant used his position in the company to steal trade secrets by deceiving senior executives. Furthermore, Palantir alleges that defendant had his lawyers demand access to confidential information pursuant to Palantir’s Investors’ Rights Agreement with the defendant. The complaint states that the defendant then misappropriated this information for his personal gain by filing three patents based on the ideas he stole from Palantir.

Palantir requests a declaratory judgment that the defendant has no right to access the information he demanded under the company’s Investors’ Rights Agreement. The complaint includes multiple claims, some of which include misappropriation of trade secrets, breach of contract, and breach of the Implied Covenant of Good Faith and Fair Dealing.

A link to Palantir's complaint can be found here: http://tsi.brooklaw.edu/cases/palantir-technologies-inc-v-marc-abramowitz/filings/former-palantir-employee-sued-misappropria

United States District Court for the Southern District of California
Trump University Playbooks Not Trade Secret

A federal district court in California granted the Washington Post’s motion to intervene in the case to request the immediate unsealing of court documents relating to Trump University “Playbooks.” These items had been filed as sealed exhibits by Plaintiff Art Cohen (“Plaintiff”) as part of his Class Certification Motion against Defendants Trump University, LLC and Donald J. Trump (“Defendant”).

Plaintiff brings litigation individually and on behalf of others who enrolled in Trump University, a for profit education company teaching real estate tips and practices. Plaintiff alleges that Defendant misrepresented his role in curating Trump University curricula and instructors, and that Defendant is liable for mail and wire fraud. This initial matter was allowed to proceed under the court’s February 21, 2014 ruling, denying Defendant's motion to dismiss the complaint as time-barred under the Clayton Act. At issue now is whether 153 particular pages, from four different documents, contain Defendant’s trade secrets and should therefore remain sealed.

The court granted the Post’s motion to intervene because much of the contested information was duplicative of a 2010 Playbook which had previously been posted online in full by the political news website, Politico, thereby destroying Defendant’s trade secret and confidentiality claims. The Court further found that the Playbooks contained "very routine and commonplace information.” The Court therefore dismissed as moot Defendant’s claims that the special compilation of information itself constituted an “arguable” trade secret (see August 28, 2014 Order, aka "Gallo Order,” in the related case Low v. Trump University, LLC., No. 3:10-cv-00940-GPC-WVG, ECF No. 343). The Court also recognized the public’s strong interest in accessing court materials related to Defendant, who is the presumptive Republican nominee in the 2016 presidential race.

Plaintiff was ordered to file unsealed versions of most playbooks, with only phone numbers and non-corporate e-mail addresses redacted. A sampling of these documents can be found here: http://www.npr.org/sections/thetwo-way/2016/05/31/480214102/trump-university-playbooks-released-by-court-advise-being-courteous-to-media

Check back for updates on this case.

County of San Francisco, Superior Court of California
Jawbone Obtains Preliminary Injunction Against Rival Fitbit in Trade Secrets Dispute

On October 13 2015, San Francisco Superior Court Judge Harold Kahn issued a preliminary injunction, ordering five Fitbit employees who had formerly worked at Jawbone to return Jawbone confidential information they took before leaving. Judge Kahn agreed with Jawbone that the information taken constituted confidential information and that these employees likely breached their confidentiality agreements with Jawbone when they provided the confidential information to their new employer, Fitbit.

This is the first opinion in the ongoing legal battle between rival wearable fitness tracker makers, Fitbit and Jawbone. Since May 2015, Jawbone has filed three complaints against Fitbit, and in turn, Fitbit has filed two complaints against Jawbone.

In May 2015, Jawbone owner Aliphcom Corp. sued rival Fitbit after its announcement of its initial public offering in California State Court. In an effort to “decimate” Jawbone, Jawbone alleged that Fitbit poached its employees and stole its trade secrets. Per the initial Complaint, Jawbone alleged that Fitbit contacted roughly 30 percent of its workforce in early 2015 and of those contacted, at least five employees had left Jawbone to work for Fitbit. Before leaving, Jawbone alleged that these employees downloaded sensitive information - which included business plans, research, product plans, services, customer lists and data - stored it on thumb drives, and then provided it to their new employer, Fitbit.

In June 2015, a week before Fitbit’s IPO, Jawbone filed a second lawsuit in California federal court, alleging that each of Fitbit’s products infringed at least one of three Jawbone patents. Then, in July 2015, Jawbone petitioned the U.S. International Trade Commission to block imports of Fitbit’s products, alleging patent infringement. In August 2015, the ITC posted a short notice online stating that the agency will investigate whether Fitbit has been importing infringing fitness tracking devices.

In response, on September 3rd, Fitbit Inc. accused Jawbone of patent infringement in a suit filed in Delaware federal court and then on September 8th, Fitbit filed another patent infringement suit in California federal court.

California Court of Appeal Third Appellate District
California Courts Affirms Attorneys' Fees for Defendants

As a reminder that attorneys’ fees can be awarded to a defendant under the uniform trade secrets act, where a misappropriation claim is brought in bad faith, a California appellate court, in an unpublished opinion, affirmed such an award on May 13, 2014. The attorney's fees were the sole issue on appeal in a case that had proceeded through two trials, and dates back to 2007. In the second trial, the court awarded defendants attorneys fees and a "lodestar" multiplier of 1.33 even though attorney Peter Scott agreed to represent defendants free of charge in order to settle a malpractice claim by defendants.

Central Division, County of Los Angeles, Superior Court of the State of California
Still Fighting over Dolls: MGA Refiles its Claim Against Mattel in Cal. State Court, Claiming UTSA Violation

In the latest chapter of this saga, MGA Entertainment filed a $1 billion suit against Mattel in a California state court claiming that Mattel engaged in willful and deceptive business practices regarding the Bratz line of dolls. The complaint alleges that for over fifteen years, Mattel employees snuck into trade shows in order to steal advertising lists, price lists and new product concepts. One year ago, a Ninth Circuit panel threw out a $170 million jury award in favor of MGA on grounds that MGA's counterclaim was not properly before that jury; the Ninth Circuit left the door open for MGA to refile.