Cases from Central District of California (Western Division - Los Angeles)

Central District of California (Western Division - Los Angeles)
Employer alleges concerted defections to competitor by former employees, sensitive information in hand

Ikon Office Solutions Inc. ("Ikon") filed a notice of settlement in this case on September 23rd, 2011, but details of the settlement are currently unknown.

Ikon sued two former employees, John Kolacinski and Robert Hornbeck, along with their current employer, Myriad Litigation Solutions LLC, for allegedly stealing client contacts and trade secrets. Ikon Legal Document Services, a division of Ikon Office Solutions, provides litigation support to law firms and in-house counsel. According to the complaint, Kolacinski and Hornbeck coordinated their November 2010 resignations from Ikon to go to work for Myriad, a direct competitor, and copied sensitive business information, such as pricing and contract details, onto flash drives before leaving the office. Ikon alleges that this was done in direct violation of nondisclosure agreements that the employees signed while under its employ.

Ikon filed a motion for Preliminary Injunction on February 17, 2011, but withdrew its Motion on March 28, 2011.

Central District of California (Western Division - Los Angeles)
Start-up TechForward alleges Best Buy misappropriated trade secrets to copy successful buyback program

TechForward Inc., a California based start-up, has filed suit in U.S. District Court for the Central District of California, alleging that Best Buy illegally modeled its buyback program after the startup's own “Guaranteed Buyback Plan” and misappropriated TechForward’s trade secrets to do so. Under the buyback plan at issue, customers can trade in electronic devices that they purchased for store credit. According to the suit, Best Buy had tried to design its own buyback program but failed. After seeking a collaboration with TechForward, the two companies signed a confidentiality and nondisclosure agreement in February 2008. Although a Los Angeles-based pilot program was successful in April 2010, TechForward contends that Best Buy abruptly terminated the relationship in October 2010 and launched its own buyback program on January 10, 2011. According to the suit, successful implementation of an electronics buyback program requires data that TechForward considers highly confidential and proprietary.

In its answer to the amended complaint, defendant Best Buy denies the existence of any trade secrets under California law. Additional motions, including Defendant's motion for summary judgement, have been sealed pursuant to a protective order issued on October 6, 2011.

While ajury trial has been previously set for November 6, 2012, the parties recently petitioned for an accelerated settlement conference now scheduled for September 26, 2012.

Central District of California (Western Division - Los Angeles)
Are LinkedIn Contacts Protectable Trade Secrets?

In a recent District Court opinion in the Central District of California, Judge Pregerson denied a defendant's motion for summary judgment on the issue of trade secret misappropriation under the California Uniform Trade Secrets Act (“CUTSA”), Cal. Civil Code § 3426 et seq. Central to the trade secret claim, is the controversial issue of whether and to what extent LinkedIn contacts are trade secrets.

In the opinion, Judge Pregerson explains that while a list of business contacts can be protected as a trade secret, certain conditions must be met. Essentially, the list must have been difficult to create, and the list cannot be easily obtained through public sources. In this situation, it remains unclear how difficult it was to obtain the information, since many of the individuals the Defendant had contacted, had already been contacted by competitors, and "LinkedIn suggested contacts to [the defendant] automatically."

Also unclear, is the issue of whether the contacts were permissibly made available to the public. Defendant argues the company encouraged him to have a LinkedIn account, and his LinkedIn contacts would have been viewable to "any other contact he has on LinkedIn." In contrast, Plaintiff argues that LinkedIn information is "only available to the degree that the user chooses to share it."

These issues will likely be decided when the case goes to trial, and could have a serious impact on the role that LinkedIn currently plays in the corporate world.