Trade Secret Law Developments

Idaho Officials Cite Trade Secret Protection to Prevent Disclosure of Grass-Burning Sites

State officials continue to be creative in characterizing information that they do not want to disclose as "trade secrets."  Details here.

Gift Ideas for the Security-Conscious

When you want to be absolutely sure that no one can copy your files, use this (or just give the disk to my 2 year old).

Another "John Doe" Trade Secret Suit

In a case that appears similar to Apple's "John Doe" litigation, marine electronics maker Raymarine has, according to this report, sued a current or former employee that allegedly posted trade secret information on the internet.

Fourth Circuit Holds that Preliminary Injunction Hearing Cannot be Consolidated With Trial on the Merits Unless Clear Notice is Provided by the Court

The parties in AttorneyFirst, LLC v. Ascension Entertainment, Inc., 2005 WL 1349535 (4th Cir. 2005), conducted a preliminary injunction hearing in a case involving alleged breach of a confidentiality agreement and trade secret misappropriation.  The Court determined that a preliminary injunction was not warranted, and, pursuant to Civil Rule 65(a)(2), consolidated the hearing with trial on the merits and entered judgment for defendant.  The Court claimed in its opinion that it had provided notice to the parties based on some ambiguous comments during the hearing.

The Fourth Circuit reversed the decision, finding that the parties must be given clear and unambigous notice in a manner that would allow them to adjust their presentation to account for all of the merits issues.  That standard was not met by the Court's comments at the hearing.

Microsoft Contends that Its Trade Secrets are Jeopardized by the EU's Code Sharing Demand

According to a report in yesterday's Seattle Times, the last significant disagreement between EU regulators and Microsoft regarding implementation of the EU's antitrust judgment concerns Microsoft's refusal to agree to the EU's demand that it make some of its Windows code available as open source software.  Apparently, Microsoft is concerned that allowing such access would destroy trade secret protection for the software.

See full article here.

California Appellate Court Upholds Criminal Conviction for Theft of Trade Secrets

According to testimony in People v. Chew, in 2003, Norcent accountant Paul Chew confronted Norcent's owner in a parking lot and demanded a $50,000 payoff in return for his silence about purported financial misdeeds at the company.  When she refused his demand, Chew returned to his office and left the company with a briefcase full of company documents.  (At trial, Chew denied that the conversation had occurred.)  A later conversation between them at a Starbucks was recorded, and Chew reiterated his demand for a payment.  Chew was convicted of trade secret theft (under California's statute) and attempted extortion for the conversation at Starbucks.  Chew received a concurrent two year sentence for each conviction.

In a decision announced on June 7, the 2nd District Court of Appeals in California affirmed the judgment in People v. Chew, 2005 WL 1332208 (Cal.App. 2 Dist. 2005).

Compuware Seeks Default Against IBM for Late-Disclosed Evidence

Although the case had reportedly been settled in March (see this post), the Compuware-IBM trade secret dispute is apparently headed for trial.  According to this report, Compuware is now seeking a default judgment based on IBM's recent disclosure of source code that IBM had previously claimed that it did not have.

Refusal to Disclose Breathalyzer Trade Secrets Leads to Acquittals

The State of Florida is losing DUI cases in Seminole County because the courts there have held that if the State cannot prove how its breath-alcohol measuring device works, it cannot convict a DUI defendant.  The State cannot produce the evidence because the manufacturer protects it as a trade secret.  Story here.

Are Trade Secrets the Best Legal Tool for Protecting Software?

An interesting take on the disadvantages of using trade secret law to protect software: 

Trade secrets, a previous favorite of software developers, are also insufficient in an era where interoperability is increasingly important. Attempting to maintain trade secret protection while sharing code and other valuable information becomes very complex and inefficient. Further, trade secrets burden the developer with demonstrating their means of protecting that secret and the consistency of that protection. In the real world this is a question of resources, an advantage smaller firms do not have.

Full article here.

UK Court Equates Unauthorized Papparazzi Photos to Misappropriation of Trade Secrets

This is a new one.  According to this report, a UK judge found that by taking unauthorized photos at the wedding of Michael Douglas and Catherine Zeta Jones, Hello! magazine was misappropriating a trade secret, since the bride and groom had sold the exclusive rights to OK! magazine.  Apparently, the case was later reversed.