Search Results for: DTSA
The Extraterritorial Reach of Trade Secret Law
by Dennis Crouch
A new petition for certiorari asks the Supreme Court to resolve a critical question about the global reach of U.S. trade secret law: Does the Defend Trade Secrets Act (DTSA) allow American companies to recover damages for trade secret misappropriation that occurs outside the United States? The case, Hytera Communications Corp. v. Motorola Solutions, Inc., stems from a massive jury verdict against Chinese radio manufacturer Hytera for stealing Motorola's trade secrets and source code. [Read the Petition]. The district court awarded damages for both copyright infringement and trade secret misappropriation -- with most of the money coming from Hytera's foreign sales. On appeal, the Seventh Circuit split on the two forms of IP - finding that the non-us-originated damages were fine for DTSA violations, but prohibited under U.S. Copyright law. Hytera petitioned to the Supreme Court only on the DTSA issue.
The Defend Trade Secrets Act and Inevitable Disclosure
What the Defend Trade Secrets Act Means for Trade Secret Defendants
Implementing and Interpreting the Defend Trade Secrets Act
Guest Post: Where we Stand with Trade Secret Enforcement in Federal Courts
[Update] Defend Trade Secrets Act of 2016: Markup and Commentary
Extra-Territorial Application of the Defend Trade Secrets Act
Immediate action for Human Resource Departments on the Defend Trade Secrets Act
THE MYTH OF THE TRADE SECRET TROLL
Trade Secret Protection in the Digital Age: When Does Web Scraping Cross the Line?
Trade Secret Misappropriation Preliminary Injunction Reversed
By Dennis Crouch
The Federal Circuit has reversed a preliminary injunction order in a trade secret misappropriation case, finding that the district court abused its discretion by failing to properly evaluate the likelihood of success on the merits and the balance of harms. Insulet Corp. v. EOFlow, Co., No. 2024-1137 (Fed. Cir. June 17, 2024). The appellate court held that the district court's analysis was deficient in several key respects, including not addressing the statute of limitations defense, defining trade secrets too broadly, and not sufficiently assessing irreparable harm and the public interest.
This classic trade secret case involves former employees left to join a competitor. As free humans, they are permitted to take their skill and wisdom to the new jobs, but are forbidden from misappropriating trade secret knowledge. That line drawing is particularly difficult, and one reason why many employers moved toward contractual non-compete agreements. The case is also complicated because the defendant here admit to reverse engineering that apparently lead to some substantial similarities between the products.
The decision highlights a high bar for obtaining a preliminary injunction, even in trade secret cases involving competitors where we previously may have assumed irreparable harm. The Federal Circuit here explained that lower courts are required to individually evaluate each of the four injunction factors - likelihood of success on the merits, irreparable harm, balance of hardships, and public interest. Conclusory assertions of competitive harm are insufficient to show irreparable injury. For trade secret claims in particular, the alleged trade secrets must be defined with specificity. But, this proof is often difficult at the preliminary injunction stage of a case when the particular knowledge used by the defendant has not been fully discovered.
The Federal Circuit has been seen as largely supporting strong trade secrecy rights. However, this decision may put a damper on forum shopping attempts.