Cases from Other federal statute

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

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

United States District Court for the Eastern District of Pennsylvania
Jury Awards Fig Jam Maker Millions in First DTSA Verdict

On February 24, 2017, a federal jury handed down the first verdict under the Defend Trade Secrets Act (DTSA). Dalmatia Import Group and Maia Magee (“Plaintiffs”) develop and sell various flavors of high quality fig jam. After their business relationship deteriorated, Plaintiffs sued their former distributors, Foodmatch, Inc. and Lancaster Fine Foods, Inc. (“Defendants”). In the suit, Plaintiffs alleged that Defendants’ competing fig jam impersonated Plaintiff’s product, more specifically, that Defendants stole the recipe for Plaintiff’s fig jam. Furthermore, Plaintiffs claimed that Defendants sold and distributed rejected jars of Plaintiff's fig spread, using Plaintiff’s trademark, without consent.

Plaintiffs brought claims for breach of contract, trademark infringement, counterfeiting, and misappropriation of trade secrets. After a four-week trial in the United States District Court for the Eastern District of Pennsylvania, the jury found Defendants liable for misappropriation of trade secrets, trademark infringement and counterfeiting. The jury awarded Plaintiffs $2.5 million in damages, which Plaintiffs’ attorneys estimate will double to roughly $5 million after the damages are trebled. Plaintiffs' attorneys also stated the court will issue an injunction enjoining Defendants from using Plaintiff’s trade secrets in the future.

The case is Dalmatia Import Group v. Foodmatch, Inc. et al., 16-cv-02767 (E.D. Pa. Feb. 24, 2017).

Northern District of California
Court Grants Ex Parte Seizure Order In Part under the Defend Trade Secrets Act (DTSA)

Defendants Richard Sultanov (“Sultanov”) and Paul Ostling (“Ostling,” collectively, “Defendants”) are former employees of OOO Brunswick Rail Management (“BRM”), a Russian limited liability company. In the Complaint, filed on January 4, 2017, BRM and Brunswick Rail Group Limited (“BRL”) (collectively “Brunswick”) allege that both Sultanov and Ostling misappropriated trade secrets throughout November and December 2016 citing the Defend Trade Secrets Act (DTSA) 18 U.S.C. Section 1836 et. seq. as a basis for federal jurisdiction. On this same day, Brunswick filed an ex parte application for a temporary restraining order (“TRO”) requesting seizure of Defendants' property containing Brunswick's trade secrets currently in Defendants' possession.

Brunswick alleges further that after observing Sultanov's behavior, which the court describes as “unusually secretive,” Brunswick reviewed his work email account and found that he had “sent several confidential documents to his personal email account without authorization; he then deleted the sent messages and emptied his trash folder.” In its ex parte application, Brunswick asserts that "Sultanov and Ostling have already disclosed and plan to continue to disclose the trade secrets to creditors in order to disadvantage Brunswick in its ongoing negotiations related to Brunswick’s debt restructuring." In reviewing Brunsick's ex parte application, the court found that the record reveals Sultanov was communicating by phone with Ostling (a former employee of Brunswick) and a new representative of one of Brunswick’s creditors, "whom Sultanov was explicitly prohibited from contacting." Brunswick's investigation also brought to light that Ostling received "unauthorized confidential materials at his personal email account (via his former personal assistant, who remained at Brunswick), which he then forwarded to the creditor’s representative and to Sultanov." Brunswick request return of its "company-issued mobile phone and laptop," but Sultanov has refused to comply.

In its decision, issued January 6, 2017, the court granted Brunwick's motion in part and denied in part. The court ordered Rackspace, Inc. and Google, Inc. to preserve all data in Defendants' email accounts. The court also directed Defendants to appear before the court to show cause why a preliminary injunction should not be issued against them and "to bring the electronic devices issued to [Sultanov] by Brunswick, including mobile phones and laptops" to surrender to the custody of the court.

UPDATE:
In subsequent motion practice, the court considered Sultanov's motion to dismiss filed on March 9, 2017. First, Sultanov argued that the court lacked both general and specific personal jurisdiction over him. Second, Sultanov asserted that his use of gmail did not confer specific personal jurisdiction over him, that his data is not in California nor would it matter if it were, and Google's terms of service also do not confer personal jurisdiction over Sultanov. Finally, Sultanov argued that exercising specific personal jurisdiction over him is not reasonable because he is a Russian citizen living in Moscow, Russia.

On June 6, 2017, the court granted Defendants' motion to dismiss without leave to amend because Brunswick failed to make a prima facie showing that personal jurisdiction exists. The court examined a $13,000 deposit in Sultanov's California checking account from Ostling around the same time as his alleged misconduct. The court posited that the "timing raises questions about the nature of the payment and its connection to the events underlying Brunswick’s allegations." In spite of this, the court held that "to establish personal jurisdiction in California, Brunswick must show more than the fact that Sultanov received a payment at a bank account that is associated with an address in Monterey. Despite having had the opportunity to conduct jurisdictional discovery— including discovery of Sultanov’s bank accounts and other financial information—Brunswick has not established that the claims in this case arise out of the payment from Ostling." Upon reaching its decision, the court directed the clerk to close to case.

Complaint: http://tsi.brooklaw.edu/cases/ooo-brunswick-rail-mgt-et-al-v-sultanov-et-al/filings/complaint
Seizure Order: http://tsi.brooklaw.edu/cases/ooo-brunswick-rail-mgt-et-al-v-sultanov-et-al/filings/ex-parte-seizure-order
Motion to Dismiss Order: http://tsi.brooklaw.edu/cases/ooo-brunswick-rail-mgt-et-al-v-sultanov-et-al/filings/motion-dismiss-order

U.S. Supreme Court
Samsung Electronics Co. Ltd. Et al v. Apple Inc.

On Tuesday, December 6, 2016, In the Samsung Electronics Co. Ltd. Et al v. Apple Inc. case, case number 15-777, the U.S. Supreme Court, reversed a Federal Circuit ruling that found that Samsung must pay its profit from the entire phones found to infringe Apple’s design patents, which covered the front face of the phones and the arrangement of icons on the home screen.

Justice Sonia Sotomayor said that owners of design patents are not always entitled to the total profits from the infringing product sold to consumers. In this case, the device has multiple components and thus the award may be limited to those specific features that infringed.

Chief Justice John Roberts also commented that “It seems to me that the design is applied to the exterior case of the phone. It’s not applied to all the chips and wires… so there shouldn’t be profits awarded based on the entire price of the phone.”

Apple did not dispute that it is entitled to profits only from the infringing articles of manufacture, but said that Samsung bared the burden to prove that the relevant article of manufacture was something less than the entire smartphone and failed to do that. The Supreme Court did not resolve whether, for each of the design patents at issue in the case, the article of manufacture was the smartphone or a component of the phone. This issue has been left to the Federal Circuit on remand.

The patents-in-suit are U.S. Patent Numbers D593,087, D604,305 and D618,677. The case is Samsung Electronics Co. Ltd. et al. v. Apple Inc., case number 15-777, in the U.S. Supreme Court.

Austin Division, United States District Court for the Western District of Texas
Texas Agency Sued in Trade Secrets Lawsuit

On November 17, 2016 pharmaceutical giant Pfizer, Inc. (“Pfizer”) sued Texas’s Health and Human Services Commission (“HHSC”) in federal court. Pfizer alleges that the HHSC misappropriated confidential information regarding its prices and rebate information for Texas Medicaid when it revealed the information to state lawmakers.

Pfizer claims the HHSC sent confidential detailed information regarding its drug prices and rebate protocol to two state senators. In its complaint, Pfizer argues this was a violation of 42 U.S.C. §1396r-8(b)(3)(D), which, in part, states that information disclosed by manufacturers or wholesalers is confidential, and cannot be disclosed a state agency. Furthermore, Pfizer alleges the HHSC violated a Texas law, which also prohibits the unauthorized disclosure of information obtained by the HHSC regarding drug rebate negotiations or other related trade secrets. Pfizer also claims that the HHSC has refused to specifically disclose which company information it released to the senators. Pfizer expresses concern in its complaint that the pricing information released would give competitors an unfair advantage in bidding situations.

Pfizer seeks a declaratory judgment in its favor and injunctive relief to prevent further release of its confidential information.

The case is Pfizer, Inc. v. Texas Health and Human Services Commission et al.

Pfizer’s complaint can be found here:
http://tsi.brooklaw.edu/cases/pfizer-inc-v-texas-health-and-human-services-commission-et-al/filings/pfizer-inc-v-texas-healt

US International Trade Commission
Jawbone Loses Fight to Ban Fitbit Imports

According to a ruling issued by the US International Trade Commission (ITC), Fitbit did not steal Jawbone's trade secrets, and the ITC will not revive Jawbone's efforts to seek an import ban on fitness-tracking devices by Fitbit for allegedly misappropriating trade secrets.

The trade secrets case between Jawbone and Fitbit began in July 2015 when Jawbone initially accused Fitbit of infringing six of its patents and of poaching its employees to use their knowledge of Jawbone's trade secrets. Jawbone hoped that the ITC would ban Fitbit from importing its products to the US from its overseas manufacturing partners. Fitbit manufactures its devices overseas and imports them to the US.

Administrative Law Judge Sandra Lord found in August 2016 that Fitbit had no violated the Tariff Act because "no party has been shown to have misappropriated any trade secret." Violating the Tariff Act would have given the commission the ability to block importation of products that infringe U.S. intellectual property. The ruling by the ITC in October 2016 confirms the previous ruling and is the full commission's third ruling in Fitbit's favor in the past five months.

UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA-TAMPA DIVISION
DTSA Remedies Potentially Available Even When Misappropriation Began Before Its Enactment

A federal district court in Florida has ruled that in cases of continuous misappropriation where a plaintiff can establish that at least one occurrence took place after the effective date of the Defend Trade Secrets Act (May 11, 2016), that plaintiff is entitled to at least partially recover under the DTSA. Neither party raised the question of whether this butts against the notion that you cannot apply a statute retroactively.

In this case, Plaintiff Adams Arms, which specializes in military-grade rifles, alleges that Defendant Unified Weapon Systems, Inc. ("UWS") both improperly acquired and disclosed its trade secrets. Adams Arms says that its rifles’ unparalleled reliability is the result of certain mechanical processes, mixes of parts, and the vendors used to supply them. Plaintiff disclosed this information to Defendants because they had been working together to win a bid with the Peruvian military. They also granted a tour of their facility, and handed over pricing information. Prior to this exchange, in 2014, parties executed a "Mutual Confidentiality and Nondisclosure Agreement," which was to be binding upon the companies and their representatives and officers.

However, relations between the parties soured when Defendant began locking Plaintiff out of meetings with the Peruvian client, and—Plaintiff alleges—attempted to sell to the client UWS rifles that were actually retooled Adams Arms rifles, following Plaintiff’s mechanics and designs.

Plaintiff Adams Arms seeks to recover under the DTSA, while Defendants believe the trade secrets misappropriation claim (Count 5 of the complaint) should be dismissed because the UTSA governs all incidents prior to May 11, 2016. The Court rejected Defendants’ motion to dismiss. Judge Hernandez Covington said that UWS signed a contract with the Peruvian military after May 11th, using the Adams Arms designs, specifications, and processes, which enables Plaintiff’s disclosure claim to advance in court. However, all trade secrets were acquired pre-DTSA, so Plaintiff’s misappropriated acquisition claims cannot be remedied under that statute.

Read the full case here: https://www.bloomberglaw.com/public/desktop/document/Adams_Arms_LLC_v_Un...

United States District Court for the District of Connecticut
Oil Company Files Federal Lawsuit After Former Employee Takes Position at Competitor

Maxum Petroleum (“Plaintiff”) filed a lawsuit in federal court for misappropriation of trade secrets under the Defend Trade Secrets Act (DTSA) and Connecticut’s Uniform Trade Secrets Act. The complaint alleges that defendant Stephen Hiatt (“Hiatt”), a former employee, wrongfully accepted a position with a competing company that would inevitably cause him to disclose insider knowledge about Plaintiff.

Plaintiff is an oil company. Stephen Hiatt worked as the Vice President of Sales for Plaintiff’s energy department for 25 years. According to Plaintiff’s complaint, Hiatt agreed not to take a position with a competitor that would require him to share information about Plaintiff’s pricing and customers. Hiatt stopped working for Plaintiff on August 31 and took a position with Chemoil, a competing company, last week. Plaintiff learned about Hiatt’s new position through email.

Plaintiff contends that by accepting the position at Chemoil, Hiatt misappropriated trade secrets under the DTSA, the Connecticut Uniform Trade Secrets Act, and brought claims for breach of contract and a violation of the Connecticut’s Uniform Trade Practices Act. Plaintiff filed the suit in the United States District Court for the District of Connecticut.

A copy of Plaintiff's complaint can be found here:
http://tsi.brooklaw.edu/cases/maxum-petroleum-inc-v-hiatt-et-al/filings/oil-company-files-federal-lawsuit-after-former-emplo

Eastern District of Texas
Cellular Communications Equipment LLC v. Apple Inc.

Apple, Inc. must pay a subsidiary of Acacia Research Corp, a large patent licensing company, $22.1 million after a federal jury found that it had willfully infringed a cellular network-related patent. An Eastern District of Texas jury found that Apple Inc.'s iPhones and iPads infringe a patent on wireless communication technology owned by a subsidiary of Acacia Research Corp.

Plaintiffs, Cellular Communications Equipment, filed suit in 2014 alleging that Apple's mobile devices infringed six patents. At the time of trial, only one patent remained. The patent at issue (U.S. Patent No. 8,055,820) was acquired by Cellular Communications Equipment and covered technology for managing the resources used to send data over communications network and increasing the efficiency of communicating.

The jury said that Apple did not prove with clear and convincing evidence that any asserted claims of the patent are invalid as obvious or based on improper inventorship. Since the jury found that Apple's infringement was willful, the judge could ultimately award plaintiff Cellular Communications Equipment LLC three times the damages, or $66.4 million.