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In this blog post, we will look at the federal courts and the need to evaluate the protection of customer lists as trade secrets. Contextually speaking, the federal statute is in place for the purposes of misappropriation.

In order to meet the standard of a misappropriation, there must be:

(1) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means or  (2) disclosure or use of a trade secret of another without express or implied consent. When the alleged misappropriation is based on disclosure or use, the person who disclosed the information must have: “(i) used improper means to acquire knowledge of the trade secret; (ii) at the time of the disclosure or use, knew or had reason to know that the trade secret was; (I) derived from or through a person who had used improper means to acquire the trade secret; (II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or (III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or (iii) before a material change of the position of the person, knew or had reason to know that—(I) the trade secret was a trade secret; and (II) knowledge of the trade secret had been acquired by accident or mistake.” 18 U.S.C. § 1839(5).

Customer lists can be considered one of the most valuable assets that a company can have.  Theft or trade of such information can cost some companies up to hundreds of thousands, if not millions.  That is why there has been a move to guard the trading of this within the United States of America.  The scope of the internet and the way we interact in the current climate is affected by digital marketing, online purchasing and through the selling of products via social media.  This often requires tracking of customers via a list or database of clientele that is accumulated by business over the years.

In the past, violations have been met with a lawsuit.  Now there has been a change in legislation and at a Federal level.  Misappropriation now equals a breach of law in the absence of a suit.  Previously, such claims were subject to diversity in legislation. Under the legislation, a company whose customer list is misused is entitled to equitable relief, actual damages, punitive damages, and attorney fees. Continue reading ›

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Uber settled its legal fight after being accused of plotting to steal self-driving technology, which is considered to be the way of the future. It took more than four days in court, which included arguments and testimony. An overall case worth stood at $245 million.  The settlement was mainly concerning the trade secrets. The case was between Google’s parent company, Alphabet, and could be considered one of the most intense legal fights of Silicon Valley. This is especially since it concerns a startup vs. one of the biggest technology giants’ parent. The overall potential of the industry is trillion-dollars that are predicted to transform transportation.

The case showcased what many in Silicon Valley normally struggle with: the sudden rise of start-ups, the workings of the rich companies, the rivalries, and competition for talent.  Continue reading ›

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When Google’s ride-sharing company, Waymo, sued Uber for using Waymo’s trade secrets, it used as evidence the lidar (light detection and ranging) sensor Uber was designing for its self-driving vehicles. Waymo saw the design by accident when the manufacturer (who was making the lidar systems for both Uber and Waymo) accidentally sent Waymo a mock-up of Uber’s lidar system. Although Uber claimed the design was fairly standard, Waymo alleged it was too similar to their own to be a coincidence.

According to Waymo, Uber allegedly obtained knowledge of Google’s self-driving trade secrets when they bought Otto, a self-driving truck company. Otto was founded by Anthony Levandowski, who used to work as an engineer for Google to develop their self-driving technology. Just a few months after he started Otto, his company was bought by Uber and Levandowski became an employee of Waymo’s competitor.

Waymo alleged files regarding their self-driving technology went missing from Google’s servers around the time Levandowski quit his job with Google. The fact that he started working for Uber a short time later, and that Uber’s self-driving technology looked suspiciously like their own, was enough to prompt Waymo to suspect that Levandowski leaving Google to start his own company, which was then bought by Uber, was all part of an elaborate plot for Uber to steal trade secrets from Google. Continue reading ›

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Owners of a cat became rich by marketing their cat as a “Grumpy Cat.” As a result, all sorts of products including toys and even a movie were made in the name of being a visibly, unhappy cat.  In a one of a kind suit and type of case, copyright infringement was discussed when it came to a cat.

The corporate entity that handled all licensing for Grumpy-cat took a beverage company to suit for violations made in the business of selling coffee.  The beverage company had a valid contract that was enforceable and permitted the production of “Grumpy Cat.” Problems came when Grenade Beverage decided to extend that agreement to a line of Grumpy Cat-branded ground coffee without Grumpy Cat Ltd.’s prior consent and approval.  As such the question arose as to the infringement of trademark and of copyright.  The lawsuit began over the sale of coffee that was unlicensed and marketed under its name. The time span of litigation lasted for over two years. In addition, there was a failure to provide an accounting of sales and profits with no pay a percentage of profits.  Shirts were also being sold in the name of that coffee.

This is one of those cases where a lot of time and money that went into having these contracts and joint ventures chartered.  However, it was all done for a cat and in the name of its face.  Prior to the commencement of litigation, exactly all terms and conditions had been laid out for every variation of the Grump Cat image and brand each time they wanted a new item branded with the cat’s name.  The brand name had even extended to memes.  Internet culture shapes behavior and the culture that we are talking about.  People had started to co-opt into memes which have now become the talk of legal rulings.  Once upon a time, memes were free and harmless.  Back then, no one would admit to owning anything. The intellectual property associated with Grumpy Cat has changed all that.  Any time that someone wants to co-opt a meme, it must be legally sanctioned.  Continue reading ›

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The already expensive battle to acquire engineers with knowledge and experience in the field of self-driving cars just cost Uber another estimated $245 million, not including the money they spent defending their legal battle against Waymo for a year before the parties agreed on a settlement.

As engineers get closer to developing the technology necessary to produce viable self-driving automobiles, it’s becoming increasingly clear that, not only is self-driving technology the future, it is going to be a very lucrative future. It has driven up the costs of engineers in the field to unprecedented heights, but Uber may have topped them all by spending $590 million to buy an entire self-driving truck company from Anthony Levandowski, a former Google engineer. The terms of the agreement were for Levandowski to receive an additional $250 million in Uber stock if Otto reached certain performance goals, but before that could happen, Levandowski was fired from Uber for refusing to cooperate in the investigation into the alleged stolen Google files.

Levandowski and Travis Kalanick, the founder and former CEO of Uber, had allegedly been hanging out and brainstorming ideas for self-driving technology even when Levandowski was still working for Google. Kalanick recently testified in court that he had wanted to hire Levandowski, but Levandowski wanted to break out on his own. Continue reading ›

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There’s nothing illegal about a high-level employee moving from one company to a competing company (especially in California, which bans non-compete agreements). But businesses do still have the right to protect their trade secrets and legitimate business interests in the form of confidential information, especially when it comes to experimental technology.

So although Anthony Levandowski was perfectly within his rights to quit his position developing self-driving technology at Waymo (a division of Google’s parent company, Alphabet) to go work for Uber to develop similar technology, that’s not what Levandowski wanted to do, according to Travis Kalanick’s testimony in a recent corporate lawsuit.

Kalanick, the founder and former CEO of Uber, recently testified in court that he regularly hosted what he called a “jam sesh” at his home. He would invite other Uber executives to his house and they would brainstorm business ideas together. Kalanick testified that Levandowski would sometimes attend these jam sessions while he was still employed by Google. Kalanick said he had wanted to hire Levandowski, but Levandowski wanted to break out on his own and form his own company. Kalanick then came up with a solution in which he could get Levandowski to work for him while still allowing Levandowski to feel as though he had the freedom he wanted. Continue reading ›

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With the rise of social media and “personal branding,” everyone has begun to recognize the need to protect their name as part of their own brand. For many people, not only does it control opportunities for income, but it also reflects their reputation in general and their standing in the community.

But the need to protect one’s good name has been around for centuries and celebrities (such as actors, musicians, writers, etc.) have been working to control how their names are used since long before the internet came on the scene. The members of the band, the Eagles, have been especially careful about protecting their names from misappropriation. They’ve spent decades working hard to build and maintain their reputations and they’re not about to let anyone else infringe on all that hard work – and possibly compromise it in the process.

Among the lawsuits, the band members have filed to protect their names is one filed by Don Henley against Duluth Trading Co. The clothing maker allegedly put out an email ad for their Henley T-shirts that made Henley’s name into a pun by telling customers to “Don a Henley and Take It Easy,”

The last part of the phrase refers to the song, “Take It Easy,” which became the band’s breakthrough hit song. However, although Henley did co-write a number of songs for the famous band, “Take It Easy” was not one of them. Instead, Glenn Frey and Jackson Browne wrote the song and Frey sang it. Continue reading ›

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The constitutional basis on which pharmaceutical legislation has been enacted is being challenged.  Many Pharmaceutical Manufacturing companies are afraid that this new law has the capability of dictating health care policies when it comes to the governing of prices at which drugs can be sold. The complaint as filed has indicated that the sole determinant of price fixing should be manufacturers only, the inclusion of other entities reduces competition.  To them, it is believed that prices can be thwarted as a result.

Other core belief systems are challenged including what lies in the public interest of the health forum and increases the scope for debate on the matter.  Should having affordable access to medicine matter or does competition and profit for companies that gain matter? Whether public policy overrides or the victimization of the pharmaceutical companies will be seen.

The pharmaceutical company believed it was in its best interest to sue so that the legislationn is not enacted in other states. California is considered a state that is of high influence and for such reasons, a national trade group that represents 37 drug companies tried to defeat the bill.This same trade group for drugmakers cited concerns within its lawsuit that California’s law illegally tries to dictate national health policy. It further went to indicate that because the law is tied to a national measure of drug prices, advance notification requirement could restrict drugmakers’ ability to raise prices in other states. In what seems an otherwise futile attempt to sue, the main rationale behind the suit is also to ensure that the implementation does not become as at the national level, thereby reducing profit margin for such companies.  The law requires pharmaceutical companies to notify insurers and government health plans at least 60 days before a planned price increase of more than 16 percent during a two-year period and to explain the rationale for the increase. The information would be available on a government website. Continue reading ›

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It is unsurprising that under federal law, military servicemembers have the right to resume their civilian jobs when their service ends. But servicepeople also enjoy a right that most civilians don’t: The right to be placed not in the same position they held when their employment was interrupted, but the position they would have attained absent their military service.

This right underlies The Uniformed Services Employment and Reemployment Rights Act (USERRA), which guarantees that an individual who leaves his job for military service cannot be denied any “benefit of employment” as a result of that service, and a recent ruling by the Ninth Circuit Court of Appeals.

Dale H. was a pilot for FedEx Express when he was called up for Air Force Reserve duty in February 2003, during the Gulf War.  Dale had piloted Boeing 727 aircraft, but just prior to his deployment had been selected for training as a first officer to fly MD-11 aircraft, at a higher pay grade.

Upon his return from service in late 2006, Dale resumed his FedEx job and successfully completed the MD-11 training, becoming an MD-11 First Officer in February 2007.

Several months before Dale returned to FedEx, the company and the pilots’ union had negotiated a collective bargaining agreement (CBA) whereby FedEx pilots than on “active pay status” would receive signing bonuses applicable to their pay grade, including employees on military leave.

Upon Dale’s return, he received the 727 pilot’s bonus of $7,400. He sued FedEx under USERRA, claiming he should have been paid the $17,700 bonus received by MD-11 pilots, which was denied him only as a result of his military service. Dale argued that but for his deployment, he would have completed his originally scheduled MD-11 training and been eligible for a signing bonus at that pay grade under the terms of the CBA. Continue reading ›

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Sometimes things happen outside a business owner’s control that affects the business. It’s understandable, but that does not justify failing to reveal to investors if the company is suffering financially as a result. In fact, executives and board directors of publicly traded companies are required to disclose the financial state of the company to their investors on a regular basis.

After the documentary, “Blackfish,” was released, SeaWorld’s business suffered significantly, but executives and board directors allegedly refused to reveal to shareholders the effect the documentary was having on the amusement park’s business.

The documentary details the story of Tilikum, a performing killer whale that was held captive in amusement parks for decades, including SeaWorld, where he famously killed a trainer – the first trainer to die at SeaWorld, although not the first time Tilikum had been involved in a death in a marine park.

Contrary to their name, killer whales have never been known to kill humans in the wild, leading many to wonder what causes them to attack when in captivity. The film examines the lives Tilikum took, before they were cut short, the cruel treatment of killer whales held in captivity, and the pressures of the sea-park industry, which makes billions of dollars every year. Continue reading ›

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