Trade Secrets

Marvin Gaye vs Ed Sheeran: What the Copyright Lawsuit Means for the Music Industry

May 3, 2023 | Peter S. Lubin and Patrick Austermuehle

The family of Marvin Gaye rocked the music world in 2015 when they sued Robin Thicke and Pharrell Williams for copying elements of Gaye’s hit, “Got to Give It Up,” in their own hit, “Blurred Lines.” Up until the jury sided with Gaye’s family, most musicians had assumed the musical elements in question were public domain.

That lawsuit seems to have opened up the floodgates, given the number of copyright lawsuits that have been filed in the music industry in the past eight years. Not all the lawsuits have ended in the plaintiffs’ favor, but enough have to give musicians pause when writing a new song.

The latest copyright lawsuit to make headlines in the music industry involves another Gaye song, “Let’s Get It On.” Instead of Gaye’s family, this copyright lawsuit has been filed by the family of Ed Townsend, who was the primary songwriter and owned 2/3 of the royalties on the song.

The case hinges on two chord progressions that are similar, but not identical. Even a musical expert testifying on behalf of the plaintiffs admitted the two chords have slight differences, but he maintained that they are interchangeable.

An attorney for the plaintiffs showed the jury a video of Sheeran performing a mashup of the two songs in question. The attorney claimed that Sheeran’s ability to move seamlessly from one song to the other proves that Sheeran stole the chord progression from the 1973 hit. Continue reading ›

Federal Appellate Court Explores Narrow Exception to Rule 54(b)’s Finality Rule in Trade Secrets Misappropriation Case

January 1, 2023 | Peter S. Lubin and Patrick Austermuehle

In a complicated trade secret misappropriation case involving an evolving cast of characters, United States First Circuit Court of Appeals affirmed the dismissal of trade secret misappropriation claims between former drug development partners. However, the First Circuit found that the district court abused its discretion by denying the plaintiff’s motion to file an amended complaint and consequently vacated the dismissal of trade secret claims against one of the defendant’s U.S. affiliate. In doing so, the Court was forced to explore the often misunderstood “narrow exception” to Rule 54(b)’s finality rule.

The plaintiff, Amyndas, is a Greek biotechnology firm that researches and develops therapeutics targeting a part of the immune system known as the complement system. In 2015, Amyndas entered into a confidential disclosure agreement (CDA) with a Danish biotech firm, Zealand, to develop treatments targeting this complement system. The following year, the parties entered into a second CDA. products as those pursued during its collaboration with Zealand. As part of its collaboration with Amyndas, Alexion requested and received certain confidential information about Amyndas’s complementary therapeutic research, including details about Amyndas’s intellectual property, planned clinical trials, platform and collaboration network.

Seventh Circuit Upholds Preliminary Injunction in Trade Secret Misappropriation Suit

October 1, 2021 | Peter S. Lubin and Patrick Austermuehle

The U.S. Court of Appeals for the Seventh Circuit recently affirmed the imposition of a preliminary injunction obtained by Illinois-based medical device maker, Life Spine Inc., against a former business partner who allegedly misappropriated Life Spine’s trade secrets and gave them to its parent company, a competitor of Life Spine. The outcome affirms that injunctive relief is available to plaintiffs when irreparable harm is plausibly alleged, but also highlights that a company need not personally use the trade secrets to be found liable under the Defend Trade Secrets Act (DTSA), 18 U.S.C. §1836 et seq., and the Illinois Trade Secrets Act (ITSA), 765 ILCS 1065/1 et seq.

This trade secret misappropriation case arises from a short-lived business relationship between two companies that sell spinal implant devices. Life Spine makes and sells a spinal implant device known as the ProLift Expandable Spacer System. Life Spine partnered with Aegis Spine, Inc. to distribute the ProLift to hospitals and surgeons. In the distribution agreement, Aegis promised to protect Life Spine’s confidential information, act as a fiduciary for Life Spine’s property, and refrain from reverse engineering the ProLift. Unbeknownst to Life Spine, Aegis allegedly funneled information about the ProLift to its parent company, L&K Biomed, Inc., to help L&K develop a competing spinal implant device.

Shortly after L&K’s competing device hit the market, Life Spine filed suit against Aegis alleging claims of trade secret misappropriation and breach of contract. Following a nine-day evidentiary hearing, the district court ruled in favor of Life Spine and entered a preliminary injunction against Aegis and its business partners, preventing them from marketing the competing product. Aegis appealed arguing that a company cannot have trade secret protection in a device that it publicly discloses through patents, displays, and sales. The Seventh Circuit disagreed. Continue reading ›

Apple Sues Former MacBook Designer for Alleged Trade Secrets Theft

September 10, 2021 | Peter S. Lubin and Patrick Austermuehle

No company should ever overlook the value of trade secrets. Those that do rarely achieve or maintain market dominance. One company that has undoubtedly achieved market dominance is Apple, which in late 2020 achieved a market capitalization that eclipsed $2 trillion. One reason for Apple’s dominance is its legendary protection of its intellectual property, including its trade secrets. One former veteran product designer found out just how serious Apple is about protecting its trade secrets when Apple recently filed a trade secret misappropriation lawsuit against the designer and his new employer alleging that the former product designer stole the company’s trade secrets to help his new employer, Arris Composites, and then leaked those secrets to the media to advance his own financial interests.

The former product design architect being accused of trade secret theft is Simon Lancaster who worked at Apple for more than 10 years and helped design the MacBook Pro that is nearly ubiquitous at coffee shops and college campuses across the country. The lawsuit accuses Lancaster of selling trade secrets and details concerning unreleased Apple products to an unnamed journalist in exchange for publicity for his own start-up company.

According to the Complaint, Lancaster used his seniority and position of trust to gain access to internal meetings and documents outside the scope of his job responsibilities that contained Apple’s trade secrets. He then allegedly fed those trade secrets to a journalist who published the insider information citing an unnamed “source at Apple.” The lawsuit does not reveal the identity of the journalist. Continue reading ›

Selling Top Fashion at Low Prices Comes with Its Own Price to Pay … in the Courts

August 15, 2021 | Peter S. Lubin and Patrick Austermuehle

You may or may not have heard of Shein, the fast-fashion company out of China providing its customers with the highest fashions for the lowest prices, but if you haven’t heard of it yet, chances are good you’ll be hearing about it very soon. While Shein might not exactly be a household name (yet), it’s very quickly working its way up the ladder, having just replaced Amazon as the most downloaded shopping app.

The fast-growing fashion company has no intention of slowing its growth any time soon, and going up against Amazon is one of its key strategies. While many manufacturers consider partnering with Amazon essential to getting their products in front of customers, Shein sees greater value in having a more direct relationship with their consumers, and as a result, having direct access to their customers’ data. Access to (and proper use of) that data, combined with their ability to produce cheap versions of clothes and accessories from designer brands in a matter of days, has been critical to the fashion start-up’s success.

Shein’s ability to cheaply reproduce top fashions is not new, but the speed with which it is able to do so certainly is. While other companies providing high fashion at affordable prices, such as Forever 21, have long been accused of stealing designs and infringing on the patents and copyrights of other designers, Shein is the first company with the ability to reproduce patterns and designs from the runway (and even the social media accounts of certain designers and influencers) in a matter of days. They credit their data analysis with their ability to reproduce top fashions for a fraction of the price in a matter of days. Continue reading ›

Multiple Courts Consider whether Juries Should Decide Disgorgement of Profits in Copyright Infringement Cases but Reach Different Conclusions

July 20, 2021 | Peter S. Lubin and Patrick Austermuehle

A recent decision in the case of Huffman v. Activision, a case we previously covered here, has created a split among federal courts on the issue of who gets to decide the issue of disgorgement of profits in copyright infringement cases. The court in Huffman ruled that a jury is entitled to decide the issue. Other courts to recently consider the issue have come to the opposite conclusion finding that the court should decide the issue, not a jury. These differing answers to the same question may be teeing up the issue for the Supreme Court to settle the question once and for all.

As we have previously detailed, Huffman involves claims by retired professional Booker T that video game developer, Activision, infringed on his copyrights. Specifically, Huffman has alleged that Activision’s video game character, David “Prophet” Wilkes, in Call of Duty: Black Ops 4 infringed his own “G.I. Bro” character. Huffman requested that the issue of disgorgement of Activision’s profits be decided by a jury. Activision moved to strike Huffman’s jury demand.

In its motion, Activision argued that Section 504(b), the section of the Copyright Act dealing with disgorgement of an infringer’s profits, does not provide a statutory or constitutional right to a jury trial. Activision’s motion was filed on the heels of a decision on essentially the same issue in the case Navarro v. Procter & Gamble in which the court in that case found no right to a jury on the issue of disgorgement of an infringer’s profits under Section 504(b). Despite concerning the same issue, the district court disagreed with the reasoning and conclusion of the Navarro court and denied Activision’s motion.

The plaintiff in Navarro is Anette Navarro, a world-renowned photographer, from Cincinnati, Ohio. She filed a copyright infringement suit against Procter & Gamble (P&G) and Walmart alleging that the companies willfully infringed on her copyrights in certain photos that she provided to P&G for use pursuant to licensing arrangements between the parties. Navarro claims that P&G violated the terms of the license by using them on products and in geographic areas beyond those permitted in the license agreements and also continued to use her photographs after the licenses expired.

She sought both actual damages and disgorgement of the defendants’ profits under Section 504(b) of the Copyright Act. P&G and Walmart sought to strike her jury demand with regard to disgorgement of profits, arguing that nowhere does Section 504(b) mention juries. They also argued that there was no constitutional right to a jury under the Seventh Amendment because it only provides a right to a jury for “legal” remedies, not “equitable” remedies which the companies argued disgorgement was. Continue reading ›

Illinois Court Upholds Sanctions for Pursuing Trade Secrets Claims in Bad Faith

February 12, 2021 | Peter S. Lubin and Patrick Austermuehle

Statutory fee-shifting is usually meant to incentivize plaintiffs to bring claims involving important rights but relatively low monetary damages. Some statutes provide for fee-shifting not only to successful plaintiffs but also to successful defendants. As the recent decision in the case of Multimedia Sales & Marketing, Inc. v. Marzullo illustrates, plaintiffs considering bringing trade secret misappropriation claims in Illinois courts would be wise to review their claims before filing so to ensure that their claims are not meritless.

The plaintiff in the lawsuit, Multimedia Sales & Marketing, Inc., is a radio advertiser who sued a competitor, Radio Advertising, Inc., along with three former employees who left Multimedia to work for Radio Advertising. Multimedia alleged that the former employees misappropriated Multimedia’s potential customer lead lists or renewal lead lists, which these individuals allegedly used to attempt to woo away Multimedia’s existing and potential customers. Multimedia claimed the lists were protectable trade secrets under the Illinois Trade Secrets Act (ITSA), 765 ILCS 1065/1 et seq.

The trial court disagreed and granted the defendants summary judgment finding that the lists (1) did not qualify as a trade secret under ITSA, and (2) were not “secret” because Multimedia widely shared them with numerous parties including radio stations. Following the grant of summary judgment, the defendants filed a motion for attorney’s fees as permitted by Section 5 of the ITSA. The trial court granted the defendants’ motion and awarded them $71,688 in attorney’s fees. Multimedia then appealed the ruling that the lists did not qualify as trade secrets as well as the award of attorney’s fees. Continue reading ›

Auto Parts Manufacturer Can’t Sue for Theft of Trade Secrets in Illinois

August 22, 2020 | Peter S. Lubin and Patrick Austermuehle

A manufacturer of electrical connectors for automobiles sued another manufacturer and several competitors alleging theft of trade secrets. The plaintiff alleged that it had a contract to supply connectors to Bosch for use in cars manufactured by General Motors. After several years of performance under the contract, the manufacturer alleged that Bosch passed its designs off to its competitors in an effort to find a company to manufacture the required connectors at a cheaper price. The manufacturer sued in Illinois, but the district court found that it lacked jurisdiction over the case because the alleged theft did not take place in Illinois, and the fact that the connectors were used in vehicles that were ultimately sold in Illinois car dealerships was too attenuated to support jurisdiction. The 7th Circuit affirmed the decision on appeal.

In 2005, General Motors retained engineering company Bosch to build a “body control module” for some of its cars. A body control module is a computer system that controls certain electronic functions inside a car, like its locks and its power windows. To build the body control module, Bosch required a “183-pin connector,” an electrical adapter that can connect 183 electrical circuits. Bosch turned to Illinois company J.S.T. Corporation for the task. J.S.T. accepted the contract and designed and built for Bosch a 183-pin connector. J.S.T.’s connectors performed well and Bosch retained J.S.T. as its sole supplier of connectors for years. Continue reading ›

Appellate Court Rules that ADM Failed to Show Likelihood of Success on Non-Disclosure and Trade Secret Claims

March 18, 2020 | Peter S. Lubin and Patrick Austermuehle

When a high-level employee left Archer Daniels Midland (ADM) to start his own consultancy company, ADM filed suit against the former employee alleging that his new business violated the non-disclosure agreement he signed. A trial court sided with ADM and enjoined the former employee from engaging in consultancy activities. In a case recently added to the official reports, an Illinois appellate court reversed finding that ADM failed to establish a likelihood of success on its claim that the former employee’s activities would violate the NDA he signed.

Lane Sinele worked at ADM for 28 years. At the time he left, he was the manager of national accounts for ADM’s sweetener division. In that position, he represented ADM soliciting, procuring, and servicing buyers of sweeteners. While employed by ADM, Sinele had access to ADM’s Tableau database, a customer profitability database, which contained information about freight systems, manufacturing costs by facility, individual customers’ procurements of corn, manufacturing costs of the corn products, customers’ margins, and margins by location. ADM considered the information contained in its Tableau database to be trade secrets. To maintain their secrecy, ADM limited access to the database to salespeople, like Sinele, and then only for those customers for which that salesperson had responsibility.

In 2018, Sinele left ADM and formed his own consultancy business in which he planned to act as an agent of sweetener buyers in their negotiations with the five major sweetener manufacturers, of whom ADM is one. Shortly after leaving ADM, Sinele sent an email to his former boss requesting a meeting with ADM to negotiate on behalf of two of Sinele’s clients who happened to be ADM customers whose accounts Sinele handled while at ADM. ADM responded by filing suit against Sinele shortly thereafter. Continue reading ›

Self-Driving Car Pioneer Charged with Trade Secrets Theft

December 1, 2019 | Peter S. Lubin and Patrick Austermuehle

Earlier this year, a federal grand jury indicted pioneer of self-driving car technology and serial entrepreneur, Anthony Levandowski, with trade secret theft. The United States Attorney’s Office for the Northern District of California charged Levandowski with 33 counts of theft and attempted theft of trade secrets from Google under 18 U.S.C. § 1832 of the Economic Espionage Act (EEA).

According to the indictment, Levandowski allegedly downloaded more than 14,000 files containing crucial information about Google’s autonomous-vehicle research before leaving the company in 2016. The indictment also alleges that Levandowski then made an unauthorized transfer of the files to his personal laptop. Some of the files that Levandowski allegedly took from Google included private schematics for proprietary circuit boards and designs for light sensor technology, known as Lidar, which is used in self-driving cars.

Levandowski joined Uber in 2016 after leaving Google when Uber bought his new self-driving trucking start-up, “Otto.” Levandowski has repeatedly asserted that he never disclosed the download, nor made use of the information while he was at Uber. If convicted, Levandowski faces a maximum sentence of 10 years and a fine of $250,000, plus restitution, for each violation, according to the U.S. Attorney’s office.

Levandowski’s attorneys issued a statement on his behalf stating he is innocent of the charges.

“He didn’t steal anything, from anyone,” the statement reads. “This case rehashes claims already discredited in a civil case that settled more than a year and a half ago. The downloads at issue occurred while Anthony was still working at Google—when he and his team were authorized to use the information. None of these supposedly secret files ever went to Uber or to any other company.” Continue reading ›