Update on Trade Secret Law - 2017 Presented by Roch Ripley Partner, Intellectual Property

Agenda Topic 1. Developments in the US: The Defend Trade Secrets Act 2. Notable cases since the enactment of the DTSA 3. Upcoming changes to EU trade secret laws 4. Developments in Canada 5. Other recent Canadian cases

Developments in the US: The Defend Trade Secrets Act Before the DTSA: No choice but to sue in state court No independent federal cause of action State laws differ from state to state

Developments in the US: The Defend Trade Secrets Act Purpose of the DTSA: Uniformity Independent federal cause of action Additional tool for companies to enforce IP rights

Notable cases since the enactment of the DTSA Dalmatia Import Group v. Foodmatch, Inc. et al., 16-cv-02767 (E.D. Pa. Feb. 24, 2017) First jury verdict under the DTSA Allegation that Defendants stole the recipe for Plaintiff’s fig jam Awarded $2.5 million in damages Could reach $5.2 million in total damages, plus attorney fees, after enhancements for trademark counterfeiting

Notable cases since the enactment of the DTSA Adams Arms, LLC v. Unified Weapon Sys., Inc., 8:16-cv-1503-T- 33AEP Military arms manufacturer alleging misuse of confidential information disclosed during bidding process prior to enactment of DTSA Evidence of use of confidential information after enactment of DTSA Doctrine of Continuous Misappropriation Where misappropriation occurred at least once after the effective date of the DTSA, plaintiff is entitled to at least partial recovery

Notable cases since the enactment of the DTSA Molon Motor & Coil Corporation v. Nidec Motor Corp., 2017 WL 1954531 (N.D. Ill. 5/11/2017) Plaintiff sued direct competitor on the grounds that they hired one of the plaintiff’s former employees Doctrine of Inevitable Disclosure Where employee’s duties with new employer are substantially the same, it is plausible to allege that they will rely on former employer’s trade secrets No evidence of actual misuse of confidential information

Notable cases since the enactment of the DTSA GlobeRanger Corp. v. Software AG Inc., 15-10121 (September 2016) Trade secret claims are not pre-empted by federal copyright law Software company obtained $15 million judgment from district court in trade secret misappropriation action Defendant appealed, arguing that federal copyright laws pre-empted trade secret claim Decision was affirmed, finding no pre-emption

Notable cases since the enactment of the DTSA GlobeRanger Corp. v. Software AG Inc., 15-10121 (September 2016) Reasoning: Trade secret claims seek to protect different rights than those protected under federal copyright law Trade secret claims were not based on copying, included an element of unauthorized access (different from copyright), and therefore not pre- empted

Upcoming changes coming to EU trade secret laws Directive of the European Parliament and Council EU countries must bring into force the laws and administrative provisions necessary to comply with the Directive by 9 June 2018 aims to standardize the national laws in EU countries against the unlawful acquisition, disclosure and use of trade secrets

Developments in Canada TDC Broadband Inc. v. Nova Scotia (Attorney General) (2016), 2016 NSSC 206 Small tech company developed, with assistance of government subsidy, system to provide wireless internet access to unserviced areas of Nova Scotia Government used information gained in that relationship in subsequent RFP for provision of similar services Disclosed non-public information to the supplier’s competitors in the RFP process

Developments in Canada Novartis Pharmaceuticals Canada Inc. v. Mylan Pharmaceuticals ULC, 2016 FC 1091 Novartis moved for an order to amend protective order so that it may use confidential information for the purposes of litigation in Portugal Mylan opposed Held: “In the circumstances, I am not satisfied that what Novartis proposes to do is a particularly fair use of this Court’s process and I find that the public interest is better served by dismissing Novartis’ motion to vary the terms of the protective order.”

Developments in Canada Google Inc. v. Mutual, 2016 BCSC 1169 In U.S., VideoShare alleged that Google, YouTube and Vimeo infringed two of its patents regarding the sharing of streaming videos. Google denied infringement One of the defences mounted by Google was that the VideoShare invention was not patentable due to “prior art” – an earlier video system, created by software developer in BC BC software developer sought a protective order over back-end never-public source code that was sought in the course of U.S. litigation

Developments in Canada Google Inc. v. Mutual, 2016 BCSC 1169 Held: B.C. court agreed the source code should be made available for inspection under the terms of a protective order, which included the following controls: The Source Code shall initially only be made available for inspection and not produced except in accordance with the order; The Source Code is to be kept in a secure location at a location chosen by the producing party at its sole discretion; There are notice provisions regarding the inspection of the Source Code on the secure computer; The producing party is to test the computer and its tools before each scheduled inspection; The receiving party, or its counsel or expert, may take notes with respect to the Source Code but may not copy it; The receiving party may designate a reasonable number of pages to be produced by the producing party; Onerous restrictions on the use of any Source Code which is produced; The requirement that certain individuals, including experts and representatives of the parties viewing the Source Code, sign a confidentiality agreement in a form annexed to the order.

Developments in Canada Niagara (Regional Municipality) Police Services Board and NRPA (Rathonyi), Re, (2016 CarswellOnt 21553) Police service suspected employee of leaking information to Union Conducted invasive search of almost 20,000 of her emails — and a misconduct investigation that came to nothing Police service was ordered to pay its own employee $5,000 in damages Also awarded $10,000 in damages for violations of the collective agreement and the implication inappropriate activity

Other recent Canadian cases Hamilton v. F&M Management Ltd., (2017 BCSC 1606) Teva Canada Ltd. v. Janssen Inc., 2017 FC 437

Contact Roch Ripley Partner Intellectual Property roch.ripley@gowlingwlg.com +1 604 683 6498