A recent decision in the Northern District of Illinois gave life to the inevitable disclosure doctrine under the Defend Trade Secrets Act. Inevitable disclosure is a common law doctrine by which a court can prevent a former employee from working for a competitor of his or her former employer where doing so would require the employee to depend upon his or her former employer’s trade secret information. See, e.g., PepsiCo, Inc. v. Redmond, 54 F.3d 1262 (7th Cir. 1995). To date, some commentators have suggested that the inevitable disclosure doctrine is not available under the DTSA because of language in the statute indicating that any injunction granted under the statute to prevent trade secret misappropriation may not “prevent a person from entering into an employment relationship,” and that any conditions placed on employment must be based on “evidence of threatened misappropriation and not merely on the information the person knows.” The Northern District of Illinois’s decision in Molon Motor and Coil Corp. v. Nidec Motor Corp., No. 16 C 03545 (N.D. Ill. May 11, 2017), however, suggests that the inevitable disclosure doctrine may continue to be useful for trade secret plaintiffs asserting claims under the DTSA.
A recent decision in the Western District of Kentucky highlights the importance of explaining in a complaint under the Defend Trade Secrets Act why the allegedly misappropriated information qualifies for trade secret protection. The decision is an important reminder that it is not enough to simply call something a “trade secret” in a complaint under the DTSA. Rather, a plaintiff must plausibly allege how the information qualifies as a trade secret. Where a plaintiff fails to do so, the complaint is susceptible to dismissal with prejudice under Fed. R. Civ. P. 12(b)(6).
The Defend Trade Secrets Act (DTSA) civil seizure mechanism provides victims of trade secret theft with a tool to immediately freeze dissemination of stolen proprietary information. Using civil seizure, a court may direct federal marshals to seize property necessary to prevent the promulgation of stolen trade secrets. Civil seizure can only be employed in “extraordinary circumstances,” however, and a request for civil seizure has never been granted, though only a handful of requests have been made under this DTSA mechanism, which is still less than a year old (the most recent request was denied in the Northern District of California in OOO Brunswick Rail Mgt., et al. v. Sultanov, et al., No. 5:17-cv-00017 (N.D. Cal. Jan. 6, 2017)).
The story of civil seizure and the DTSA does not end there. Continue Reading The DTSA and Civil Seizure Under Federal Rule of Civil Procedure 65
As regular readers of the Global IP Matters blog will know, our cross-disciplinary Trade Secrets team recently published an article through the ABA’s Business Law Today newsletter focused on the Defend Trade Secrets Act (DTSA). Other publications have inquired about our background in the space and have requested articles with slightly different takes on the impact of the law. On October 26, two such articles were published, one in Bloomberg BNA’s Daily Labor Report and the other in the Boston Patent Law Association’s Fall newsletter.
The importance of the DTSA to business segments across organizations cannot be underestimated, a point driven home by the varying audiences of those three disparate publications – one targeted to corporate counsel generally, another toward human resources and employment-focused lawyers, and the third toward patent and technology attorneys.
Each article on the DTSA takes a slightly different approach and we invite you to read the one (or ones) which match most closely your business focus. If you have questions about the law, do not hesitate to reach out to our experienced team who will be happy to field them.
Boston Patent Law Association’s Fall Newsletter – The DTSA: Examining the DTSA’s Language, Use, and Future
Bloomberg’s BNA Daily Labor Report – Explaining the Defend Trade Secrets Act