Cases from Other federal statute

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).

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.

United States International Trade Commission
International Trade Commission Quashes Jawbone's Requested Import Ban Against Fitbit

On August 23, 2016, the United States International Trade Commission (ITC) struck-down Jawbone's request for an import ban against Fitbit products. Judge Dee Lord determined that because the competitors' cross-filings for patent infringements had all been invalidated, there was no longer any basis for trade secret misappropriation and therefore nothing to substantiate a violation of section 337 of the Tariff Act of 1930, as amended 19 U.S.C. § 1337.

The ITC's initial findings will be made public within 30 days, after the parties have a chance to redact confidential information. Jawbone is expected to challenge these findings by asking for a review from the full Commission, with the aim of halting importation of Fitbit products in the U.S. (the ITC cannot award monetary compensation). Jawbone representatives also say the company will pursue a broader trade secrets case in state court. Check back for updates.

The ITC's official notice can be found here: https://www.usitc.gov/press_room/documents/337_963_id.pdf

Click here for additional coverage re: the ongoing Jawbone and Fitbit dispute: http://tsi.brooklaw.edu/cases/aliphcom-inc-dba-jawbone-v-fitbit-inc-et-al

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF MISSOURI
Defend Trade Secrets Act Takes a Bite Out of Fast Food Tussle

Panera, LLC (“Plaintiff”) has filed a complaint against Papa John’s International, Inc. and Michael Nettles (“Defendants”) for misappropriation of Panera’s trade secrets and other confidential information. Plaintiff alleges misappropriation under the Defend Trade Secrets Act and Missouri Uniform Trade Secrets Act, as well as raises counts of breach of contract and tortious interference with contractual relations regarding a non-compete which Nettles had signed. Plaintiff seeks immediate injunctive relief against Defendants.

Plaintiff Panera is a Delaware limited liability company with its principal place of business in Missouri. It serves made-to-order sandwiches, salads, soups, and other baked goods in its 2,000-plus branded stores across the United States and Canada. It considers its customer-facing technological innovations to be an integral part of its consumer appeal in a competitive market. Defendant corporation Papa John’s is also a Delaware company, but it is headquartered in Kentucky and—according to the complaint—likewise makes its “dough” products in a technology-driven, customer-centric environment. Co-defendant Michael Nettles recently moved from Missouri to Kentucky to begin work for Papa John’s. Previously, he had been Panera’s Vice President of Architecture in its Information Technology department from July 2012-July 2016, a position that allowed him access to Panera’s most sensitive and proprietary technologies.

Plaintiff alleges that Nettles misused or will misuse information including, but not limited to, Panera’s thought processes, visions, and schematics for its technology systems. Further, Plaintiff asserts Nettles has an intimate knowledge of Panera’s strategic plans for the next 2-4 years and that he is currently in violation of a non-compete agreement he (like all high-level executives at the company) signed in 2013, which prohibits him for working for a competitor company for a period of one year after ending his employment with Panera. According to the complaint, Nettles asked to be released from the non-compete when he was offered a job at Defendant company, but Panera’s CEO declined to do so. Instead, the CEO offered to help Nettles get a job with a company not in direct competition with Plaintiff. However, encouraged by Papa John’s—who Plaintiff asserts had actual knowledge of the strict non-compete—Nettles accepted the high-level position at Papa John’s. He then allegedly made copies of Panera’s sensitive information and stored them on his personal devices, where they remain.

Plaintiff seeks a preliminary injunction to restrict Nettles from disclosing or further disclosing trade secrets and confidential information to Papa John’s. If Plaintiff is successful in asserting its breach of contract claims under contract theory and also as a matter of public policy, Nettles would be enjoined from beginning employment with Defendant corporation for a period of one year from July 1, 2016. Plaintiff seeks a permanent injunction after trial, prohibiting disclosure of trade secrets and requesting the return of any such information to Panera. Plaintiff asks that Defendants cover its reasonable costs and attorney’s fees.

The complaint can be found here: https://www.scribd.com/document/318937409/Panera-lawsuit-vs-Papa-John-s-...

Update: August 15, 2016
A federal judge ordered Michael Nettles to discontinue working at the Louisvlle-based pizza chain. According to the order, Nettles must cease and desist "advising, consulting, or working for Papa John's," either directly or indirectly. The order also restricts Papa John's from seeking advice, consulting or employing Nettles and requires Nettles to pay a $200,000 security bond.

Additionally, according to the judge's order, a third-party forensic analyst will analyze Nettles' personal devices including his personal laptop. Nettles and Papa John's have been ordered to pay half of the analyst's cost and Panera will cover the remaining half.