Recently Filed Cases

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December 1, 2010 | Eastern District of Michigan
Dantec alleges that a direct competitor received stolen information about existing and prospective customers from a former employee

Dantec alleges defendant and direct competitor LaVision received confidential information about existing and prospective customers from a former Dantec salesperson, Michael Kotas who began work for LaVision after he was terminated. Kotas allegedly accessed Dantec's computer systems in order to obtain the information about Dantec’s customers then subsequently deleted electronic information to cover his tracks. Dantec claims that LaVision used the information to solicit business from its customers.

A scheduling/settlement conference is set for April 20, 2011.

September 30, 2010 | Southern District of Texas
Accusation of abuse of confidential consumer info revealed by pharmacy benefit claims process

Six Texas pharmacies have brought suit against CVS Caremark for racketeering and misappropriation of trade secrets, accusing the company of requiring patients to buy maintenance medications at CVS retail pharmacies. The lawsuit, filed in September of 2010, claims that CVS does not maintain a “firewall” between its retail pharmacies and the pharmacy benefits management side of its business as required by the Federal Trade Commission. According to the complaint, each of the plaintiff pharmacies owns a trade secret in its patient lists, prescription files, and integrated patient information. The lawsuit claims that CVS misappropriated this confidential patient information, which was disclosed to CVS through the claims adjudication process.

Defendants moved to dismiss and compel arbitration on December 6, 2010. The deadline for plaintiffs to file their reply to defendants' motion to dismiss and compel arbitration was April 25, 2011.

March 1, 2010 | Southern District of New York
New York Office of the Chief Medical Examiner moves for summary judgment in a suit filed by Gene Godes Forensics for improper sharing of trade secrets

Gene Codes Forensics, Inc. (GCF), a Michigan-based company, has accused the New York Office of the Chief Medical Examiner (OCME) of improperly sharing proprietary information about its software with the FBI. The software, named Mass-Fatality Identification System (M-FISys) was used to help identify victims of the September 11, 2001 (9/11) attacks. According to GCF, OCME employees were extracting information from M-FISys software in order to help the FBI develop its own software. In response, the city claims that 1) it obtained a "perpetual, royalty-free" license to use the M-FISys software for noncommercial purposes; 2) it helped developed the software; and 3) had some ownership rights. The court is currently deciding the defendant's motion for summary judgment.

January 1, 2010 | United States District Court for the District of Delaware
Claims for trade secret misappropriation against a licensee survive motion to dismiss for failure to plead with specificity

Eastman refines further the pleading standard in trade secret cases. In general, there is no heightened pleading standard for trade secret cases after Twombly/Iqbal; a plaintiff is not required “to plead all of the relevant facts in detail.” However, a plaintiff can’t simply point to an area of technology or refer generally to information or business methods. The goal of the pleading standard is to provide notice to defendants of the substance of the claims against them. In the context of claims for trade secret misappropriation, this goal must be balanced with the need to maintain secrecy. Disclosure of the actual trade secret is not required.

Here, the alleged deficiencies in the pleadings were 1) a failure to identify the particular employees alleged to have stolen the trade secrets; 2) a failure to identify the trade secrets that were allegedly misappropriated; and 3) a failure to show use or disclosure of the alleged trade secrets. After a review of the facts set forth by the plaintiff, and case law from other states applying UTSA statutes, the Magistrate judge found that by identifying a group of employees, referring to the alleged trade secrets as information “relating to the manufacture of PET” and Eastman’s “IntegRex technology,” and alleging their use in start-up of a new plant, Eastman had properly disclosed sufficient information to meet the Rule 8 pleading requirements and state a claim.

December 18, 2008 | Southern District of New York
Alleged exploitation of "technological resources" by Oracle competitor

Oracle Systems Corporation, formerly Passlogix (a wholly owned subsidiary of Oracle Corporation that has since dissolved), sued 2FA Technology, LLC. alleging that 2FA threatened illegitimate legal action, breached contractual obligations, exploited Passlogix’s resources, and sought to injure Passlogix's competitive position and reputation. Oracle Systems Corp. filed a motion for partial summary judgment, which is currently pending before the court.

This case is related to 2FA Technology, LLC v. Oracle Corp. (10-cv-9648), a later-filed case by the defendant in this action, currently stayed pending the disposition of the summary judgment motion here.

December 9, 2008 | U.S. District Court for the Northern District of Illinois.
Court Imposes Four-Year Prison Sentence on Ex-Motorola Employee Caught with Trade Secrets and a One-Way Ticket to China

In 2008, Jin was indicted on charges relating to the alleged theft of Motorola’s Trade Secrets. She was recently found guilty, and on August 29, 2012, sentenced to four-years imprisonment.

Jin began working as a software engineer at Motorola beginning in 1998. In February 2006, Jin took medical leave, during which time she accepted employment with Chinese competitor Sun Kaisens. After accepting employment, Jin allegedly returned to work to Motorola under false pretenses: She planned to take her former employer’s technical documents and other confidential, proprietary information on a one-way ticket to her new employer in China. However, Jin was searched at the airport and arrested before she could board her flight. Police recovered over 1,000 electronic and paper documents for her person.

Although U.S. District Judge Ruben Castillo acquitted Jin on espionage charges, she was found guilty of stealing Motorola’s Trade Secrets pursuant to the EEA. Jin’s lawyers argued in favor of a probationary sentence; however, prosecutors recommended a sentence of 70 to 96 months, arguing that Jin’s conduct justified a substantial sentence of imprisonment report. This was actually below the 121-151 month sentencing range set forth in the Pre-Sentence Investigative Report, as it accounted for Jin’s allegedly failing health. The four-year prison sentence -- although less than the government’s recommendation – nonetheless evidences courts’ increasing awareness of the importance of trade secrets to modern companies, and the devastating consequences of their theft.

July 29, 2004 | District Court of the District of New Jersey
Judge rules that a trade secret does not necessarily lose its secret status simply because it has been posted on the Internet

On August 18, 2011, Judge Walls of the District Court of the District of New Jersey held in Syncsort Incorporated v. Innovative Routines International, Inc. that a trade secret does not automatically lose its secret status if it has been posted online. His opinion, instead, offered practical guidance on how to determine whether a trade secret should remain secret after exposure on the Internet.

The case dates back to July 29, 2004, when Syncsort Incorporated (“Syncsort”) filed suit against its competitor in the data transformation market, Innovative Routines International, Inc. (“IRI”). As explained in the complaint, data transformation is the process of taking data in one form and changing it to another, such as by editing, reordering, or aggregating portions of the data. Syncsort’s and IRI’s data transformation programs (SyncSort UNIX and CoSORT, respectively) were incompatible.

Syncsort alleged that IRI misappropriated 1) the SyncSort UNIX command language, an “extensive symbolic system by which a user instructs the SyncSort UNIX program to perform specific data processing and transformation jobs” and 2) the SyncSort Unix Reference Guide that “defines commands, parameters and syntax and formal grammar definitions of the SyncSort UNIX command language.” In 2000, IRI developed software programs, SSU2SCL and RESCRIPT, which translated the SynSort UNIX command language for compatibility with CoSORT. Syncsort alleged that the translation programs were developed using pilfered scripts from the SyncSort UNIX command language and the Reference Guide, which IRI partly obtained from various websites.

IRI challenged that the scripts it found on the Internet had already lost their trade secret status and that Syncsort did not take precautions to maintain the secrecy of the scripts. Judge Walls, however, declared that “public posting of parts of the command language did not destroy the trade secret because the information contained in those postings were insufficient to develop the translator.” He considered the circumstances around each online posting and concluded that Syncsort did not lose its trade secrets. He wrote, “Widespread, anonymous publication of the information over the Internet may destroy its status as a trade secret.... But publication on the Internet may not destroy a secret if it is ‘sufficiently obscure or transient or otherwise limited so that it does not become generally known to the relevant people, i.e., potential competitors or other persons to whom the information would have some economic concern.’ The guiding ‘concern is whether the information has retained its value to the creator in spite of the publication.’”

Importantly, this decision marks a progressive benchmark in the acknowledgment in federal courts of the vast and pervasive nature of the internet. Moreover, Judge Walls also recognized the inevitable interplay with the internet and trade secret information, and how even if available on the internet, information may retain trade secret status if it cannot be replicated and is of some value.

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| United States District Court for the District of Massachusetts
Zebra Enterprise Solutions Changes Venue and Files for Declaratory Judgment

On June 10, 2015, Lynx Systems Developers Inc. (“Lynx”) sued Zebra Enterprise Solutions Corp. (“Zebra”) in the United States District Court for the District of Massachusetts for a number of claims including misappropriation of trade secrets, breach of contract, and fraud. The dispute between the two parties stemmed from a joint venture the parties engaged in to build a system that would track NFL football players’ actions in real time using hardware installed in players’ shoulder pads. The business relationship between the parties disintegrated and the parties then developed competing tracking systems independently. After Zebra won a contract with the NFL, Lynx brought the initial suit in Massachusetts District Court.

Last week, in response to the complaint, Zebra filed a motion to dismiss the suit in Massachusetts District Court and on August 20, 2015, brought a new complaint against Lynx in Santa Clara County Superior Court in Santa Clara, California. Zebra’s complaint pleads for declaratory relief of no (1) trade secret misappropriation, (2) breach of contract, (3) interference with existing and advantageous business relationships, (4) fraud, (5) breach of fiduciary duty, (6) unfair competition or unfair or deceptive acts, (7) unjust enrichment, (8) conversion, and (9) intentional interference with prospective contractual and advantageous business and economic relationships. The California case is filed under docket number 115CV284620.

| United States District Court for the Central District of California
Doll Designer Alleges Hasbro Violated DTSA with “My Little Pony”

Plaintiff Elinor Shapiro (“Shapiro”) alleges that Defendant Hasbro, Inc. (“Hasbro”) misappropriated her trade secrets regarding new versions of the popular doll “My Little Pony.” Shapiro works as a doll creator and made a submission to Hasbro for a new line of pony dolls that are clear, filled with glitter, and light up. The submission included a presentation, marketing plan, and prototypes. Roughly 17 months later, Hasbro released a new line of “My Little Pony” dolls that are clear, light up and filled with different colored glitters. Shapiro argues that this was a misappropriation of information she presented, and has filed two lawsuits against Hasbro.

Shapiro’s first lawsuit, Shapiro v. Hasbro Inc. et al.,, No. 2:15-cv-02964, which is set to go to trial in September 2016, alleges multiple claims including copyright infringement, breach of contract, and multiple California trade secret law violations. Shapiro filed the second lawsuit, Shapiro v. Hasbro Inc. et al., No. 2:16-cv-05750, on August 2, 2016. The second suit drops the copyright infringement claims and focuses more on trade secrets, including a claim under the Defend Trade Secrets Act (DTSA), which took effect in May 2016.

The complaint for Shapiro’s latest lawsuit can be found here: http://tsi.brooklaw.edu/cases/shapiro-v-hasbro-inc-et-al/filings/shapiro-v-hasbro-inc-et-al

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