***
After two weeks, a lot to catch up on...
Abuse of Non-Competes
The big newspaper story on non-competes came in the Saturday New York Times, which discussed the proliferation of non-compete agreements across a range of industries and job positions. The article highlights lawyers' seemingly insatiable appetite to pursue opportunistic litigation at the expense of workers' careers - presumably just to meet their own individual billable-hour budgets. Lawyers are not mouthpieces for their clients' irrational behavior. They have obligations to the court and their adversaries - even if 90 percent of the dolts out their practicing law believe it or not. I certainly hope many of my professional colleagues would read this article and then look at themselves in the mirror for a change.
On a related topic, Jason Shinn has a great post in his Michigan Employment Law Advisor that discusses the need to address non-compete overreaching through enhanced fee-shifting opportunities. Jason feels that a bad-faith fee-shifting clause, akin to what trade-secret law generally allows, would help deter opportunistic non-compete cases. I agree, but of course would like to see a more flexible standard that looks at the objective speciousness of the suit (or threat to sue) rather than one focused on the plaintiff's state of mind.
On a related topic, Jason Shinn has a great post in his Michigan Employment Law Advisor that discusses the need to address non-compete overreaching through enhanced fee-shifting opportunities. Jason feels that a bad-faith fee-shifting clause, akin to what trade-secret law generally allows, would help deter opportunistic non-compete cases. I agree, but of course would like to see a more flexible standard that looks at the objective speciousness of the suit (or threat to sue) rather than one focused on the plaintiff's state of mind.
Waymo/Uber Trade Secrets Litigation
The big litigation story, once again, involves the trade-secrets suit between Google (really, its Waymo unit) and Uber over driver-less car technology. At the epicenter is Anthony Levandowski, who on his way out of Google downloaded 14,000 documents to his personal computer. That is the heart of Waymo's trade-secret claim, even though Levandowski himself is not a defendant in the case. Last Thursday, Judge Alsup issued an Order of Referral - a rare step in civil trade secrets cases - in which he referred the matter to the United States Attorney for possible criminal investigation.
Judge Alsup also entered an order on Waymo's application for interim relief. The order grants partial injunctive relief in Waymo's favor, but does not halt Uber's self-driving car operation. The trade secrets aspect of the order is a tough read, because much of the analysis is redacted. However, the court did bar Levandowski from working on the LiDAR technology. As the court notes, Uber had already removed Levandowski from this work so the balance of harms in granting the narrow(er) injunction tilted heavily in Waymo's favor.
The Defend Trade Secrets Act - Year 1 in Review
We recently passed the one-year anniversary of the Defend Trade Secrets Act's enactment. And predictably, there is no shortage of first-year developments. Greenberg Traurig published a lengthy piece which has some interesting commentary specific to California suits. It also provides a nice comparison of the DTSA and the state-law Uniform Trade Secrets Act.
Paul Mersino of Butzel Long in Detroit wrote a nice one-year summary piece in Crain's Detroit. Paul litigated and prevailed on one of the first applications for an ex parte seizure order - the most noticeable feature of the DTSA.
A Latham & Watkins Client Alert outlines "5 Lessons Learned as the Defend Trade Secrets Act Turns One." This commentary focuses mainly on the activity to date concerning ex parte seizure order applications, as well as the litigation surrounding acts of misappropriation that pre-date the statute's enactment but continue on past it.
The most interesting anniversary post, though, comes from the PatentlyO Blog, which breaks down the analytics concerning one year of DTSA claims. Notably, the Northern District of California and the Northern District of Illinois have the highest concentration of DTSA suits. The author, Professor David Opderbeck, surmises the prevalence of financial institutions in Chicago may be the cause for Illinois' surprise appearance on the list. It certainly isn't our boom in population growth...
Illinois Inevitable Disclosure Opinion
Maxwell Goss published a guest column on PatentlyO about a new case in the Northern District of Illinois called Molon Motor and Coil Corp. v. Nidec Motor Corp., No. 16 C 03545. Goss concludes that Judge Chang's opinion in Molon Motor may open the door a bit for courts to recognize "inevitable disclosure" under the Defend Trade Secrets Act. That would appear to run counter to the text of the DTSA, which generally prohibits injunctive relief prohibiting a person from entering into an employment relationship and which bars limitations on employment based solely on what the person knows. Goss tries to reconcile Judge Chang's opinion with the DTSA's limitations on injunctive relief by claiming that the court did not deal with a motion for preliminary injunction and instead dealt with a motion to dismiss.
I think there's a danger of overreading the Molon Motor opinion. Rather than deconstructing the procedural posture of the case, it seems much more straightforward to just recognize that the plaintiff filed suit under both the DTSA and the Illinois Trade Secrets Act. At least as of now, a state-law claim can proceed under the inevitable disclosure theory. The court's commentary concerning the DTSA is limited to a separate issue in the case - whether the act of misappropriation occurred before the law went into effect. It simply never analyzes the limitation on the injunctive relief available under the federal claim.
Eventually, it will be interesting to see if Illinois courts re-evaluate the inevitable disclosure doctrine. If not, we'll have an odd mix of federal and state claims where inevitable disclosure injunctions are available under one type of claim but not under another - without any real meaningful distinction in the statutory language enabling such injunctions.
The Defend Trade Secrets Act - Year 1 in Review
We recently passed the one-year anniversary of the Defend Trade Secrets Act's enactment. And predictably, there is no shortage of first-year developments. Greenberg Traurig published a lengthy piece which has some interesting commentary specific to California suits. It also provides a nice comparison of the DTSA and the state-law Uniform Trade Secrets Act.
Paul Mersino of Butzel Long in Detroit wrote a nice one-year summary piece in Crain's Detroit. Paul litigated and prevailed on one of the first applications for an ex parte seizure order - the most noticeable feature of the DTSA.
A Latham & Watkins Client Alert outlines "5 Lessons Learned as the Defend Trade Secrets Act Turns One." This commentary focuses mainly on the activity to date concerning ex parte seizure order applications, as well as the litigation surrounding acts of misappropriation that pre-date the statute's enactment but continue on past it.
The most interesting anniversary post, though, comes from the PatentlyO Blog, which breaks down the analytics concerning one year of DTSA claims. Notably, the Northern District of California and the Northern District of Illinois have the highest concentration of DTSA suits. The author, Professor David Opderbeck, surmises the prevalence of financial institutions in Chicago may be the cause for Illinois' surprise appearance on the list. It certainly isn't our boom in population growth...
Illinois Inevitable Disclosure Opinion
Maxwell Goss published a guest column on PatentlyO about a new case in the Northern District of Illinois called Molon Motor and Coil Corp. v. Nidec Motor Corp., No. 16 C 03545. Goss concludes that Judge Chang's opinion in Molon Motor may open the door a bit for courts to recognize "inevitable disclosure" under the Defend Trade Secrets Act. That would appear to run counter to the text of the DTSA, which generally prohibits injunctive relief prohibiting a person from entering into an employment relationship and which bars limitations on employment based solely on what the person knows. Goss tries to reconcile Judge Chang's opinion with the DTSA's limitations on injunctive relief by claiming that the court did not deal with a motion for preliminary injunction and instead dealt with a motion to dismiss.
I think there's a danger of overreading the Molon Motor opinion. Rather than deconstructing the procedural posture of the case, it seems much more straightforward to just recognize that the plaintiff filed suit under both the DTSA and the Illinois Trade Secrets Act. At least as of now, a state-law claim can proceed under the inevitable disclosure theory. The court's commentary concerning the DTSA is limited to a separate issue in the case - whether the act of misappropriation occurred before the law went into effect. It simply never analyzes the limitation on the injunctive relief available under the federal claim.
Eventually, it will be interesting to see if Illinois courts re-evaluate the inevitable disclosure doctrine. If not, we'll have an odd mix of federal and state claims where inevitable disclosure injunctions are available under one type of claim but not under another - without any real meaningful distinction in the statutory language enabling such injunctions.
No comments:
Post a Comment