Shhh! It’s Time for Trade Secret Cases Steve Baron

Cenveo Corp. v. Southern Graphic, et al ( )  Court = US DC Minnesota  Plaintiff = Cenveo  Defendants = Southern Graphic and indiv.  Fight = Cenveo wants to stop SG from working with past and current Cenveo clients and using proprietary info.  Court to decide whether to enter preliminary injunction.

Cenveo Corp. v. Southern Graphic ( )  Court decides:  Grants preliminary injunction in part and denies in part.  What are alleged trade secrets:  Job history information  USB flash drive

ClearOne v. Chiang (2007)  Court = USDC Utah  Plaintiff = ClearOne = Maker of wideband code  Defendants = Biamp licenses object code from Wideband  The fight’s about whether the code is a trade secret  The posture: Biamp files a motion to dismiss

ClearOne v. Chiang (2007)  Biamp says: it can’t read the object code; only machines can read object code.  Court says: who cares. It doesn’t matter.  Biam says: object code was publicly available.  Court says: who cares. Even if object code available, the source code (human readable) may still be protectable trade secret.  Result: Motion to dismiss complaint denied.

Taco Bell v. TBWA (2009)  DWsAHE/ DWsAHE/ DWsAHE/

Taco Bell v. TBWA (2009)  Court = Ninth Circuit Court of Appeals  Plaintiff/Appellant = Taco Bell  Defendant/Appellee = TBWA  They’re fightin’ about who should pay for the use of the psycho chihuahua character.  The confidential TS is the concept of using a psycho chihuahua as a Taco Bell mascot

Taco Bell v. TBWA (2009)  Underlying case: Wrench v. Taco Bell  Jury finds that Taco Bell breached and implied confidentiality agreement.  Awards Wrench $30 million, which mounts to $42 million with interest.

Taco Bell v. TBWA (2009)  This case:  Question presented: Is Taco Bell’s ad agency, TBWA, liable for “indemnity” to Taco Bell?  Trial court granted summary judgment for TBWA.  Ninth Circuit agrees: TBWA not aware of implied contract b/t Taco Bell and Wrench.

Spring Design, Inc. v. Barnesandnoble.com (N.D. Cal. Dec. 27, 2010 ) Spring Design and B&N discuss doing a reader together; talks break off Both come out with a reader; Spring Design sues for trade secret misappropriation and Unfair competition. B&N files for summary judgment (dismissal). Gets dismissal on 1 of 4 patents (due to a public patent filing), but loses on the other claims that might set the case aside. NDA’s were signed that cause the court to be willing to examine the claims of fact. Pretty typical here: the side that loses at summary judgment will sometimes settle rather than go to trial: B&N settles with a licensing agreement.

Trade Secrets Take Away  Any information can fall within the ambit of trade secrets if its secret, you take reasonable steps to maintain secrecy and the info has economic value  (e.g. source code, customer data, pre-public ad campaign)  Non-competes should be reasonable in scope and geography.  Even if you don’t sign a contract, you owe a “duty of loyalty” to your employer and a duty to maintain confidentiality.  When you leave a company, don’t download company data onto your own computer or a flash drive.  There’s no worse way to start a new employment relationship than to invite a lawsuit against you and your new employer.

Trade Secrets Take Away  Be careful what information you get and from whom.  In the world of advertising, it ain’t over til we’ve sorted out who has to pay $40 million.  E.g Taco Bell or its Ad Agency?  Where a company (Taco Bell) supplies content to its agency but fails to disclose that it had a contract with the creator of the content not to disclose, no indemnity.  Understand what it means to indemnify another party  i.e. Assume the legal responsibility to pay if they get hit by a money judgment

Trade Secrets Take Away  Once the cat’s out of the bag, it’s tough to get it back in.  Court’s favor injunctive relief in trade secret cases.  You can’t cover your tracks on a computer so don’t try.  Computer forensic experts will get you  You may subject yourself to claims under the Computer Fraud and Abuse Act

Quote of the Day  “Do not tell secrets to those whose faith and and silence you have not already tested.”  Elizabeth I